EU economy chief says European Central Bank will need to respond to inflation rise

European Union economy chief Valdis Dombrovskis said Friday the European Central Bank would need to respond to rising inflation in the bloc amid the energy-price shock triggered by the Iran war.

“It’s clear that the ECB will have to respond to the increase in inflation,” Dombrovskis told reporters in Nicosia in the Greek Cypriot Administration, where EU economic ministers gathered for talks.

He said, however, that the ECB remained independent in making monetary policy decisions.

His remarks came a day after the European Commission cut its growth outlook and raised inflation forecasts for 2026, warning the eurozone economy would slow sharply while facing its fastest price growth since 2023 due to higher energy costs.

Economists and markets expect the inflation shock to push the ECB toward a rate hike at its June policy meeting.

Dombrovskis said the EU economy had shown resilience while reiterating calls for the bloc to reduce dependence on fossil fuels.

Eurogroup President Kyriakos Pierrakakis also expressed confidence in the bloc’s economy but said short-term measures were needed to contain the impact of rising prices.

“We shouldn’t allow this energy crisis to metastasize,” he said.

EU ministers broadly agreed any government support should remain temporary as member states weigh measures to help households and businesses cope with higher energy bills.

Lithuanian Finance Minister Kristupas Vaitiekunas said governments faced a difficult policy trade-off, noting that they “must choose between helping the economy to grow or helping the prices to be more stable.”

Spain and Italy are among EU countries seeking greater flexibility under the bloc’s fiscal rules to allow additional support measures.

“The longer the conflict lasts, the more we will feel its impact, not only on prices but also on economic activity,” Spanish Economy Minister Carlos Cuerpo said.

Austrian Finance Minister Markus Marterbauer said the situation underscored the need for Europe to “become more independent from fossil fuels as soon as possible.”