The Middle East imposes a different economic policy on Greece

All the tensions in the Middle East led to an increase in energy prices, and this, combined with the energy problems caused by the war in Ukraine, condemns Europeans to pay dearly for energy.

The development of the crisis in the Middle East has an interesting common feature with the start of the war in Ukraine. The US predicted that Russia would attack Ukraine within days, now they expect that Iran will attack Israel within days.

If this happens, as it did with Russia and Ukraine, the development of this new war is likely to be similar. In other words, it will last a long time and be destructive for everyone, not only for those directly involved, Iran and Israel, but also for all the countries in the region, including, of course, Greece and the European Union as a whole.

It would be a fatal mistake for Iran to get directly involved in a war, and this is so obvious that it will try to avoid it despite the cries for revenge being expressed from all over.

After all, everyone is talking about revenge...

The Israelis are avenging the October 7 attack and subsequent ones, Hamas is avenging the destruction of Gaza, Hezbollah is avenging Israel for the attacks in Lebanon, and Iran is avenging the murderous attacks on its soil.

Everyone wants revenge, and this cycle of revenge will never end. The only chance to de-escalate tension is to find an agreement in the ceasefire talks.

This is extremely difficult, especially now that Israel has assassinated the Palestinian negotiator and Hamas has replaced him with the mastermind of the October 7 attack, Yahya Sinwar, as the head of its negotiating team, angering Israel, which says it is looking for him.

How will Israel negotiate with someone they hold personally responsible for the attack? The prospect of a truce is, therefore, small.

So the only optimistic, let's say, scenario is to limit Iran's revenge to attacks by Hamas and Hezbollah, which it supports, so as not to give rise to a generalised war with Israel, in which the USA will participate, possibly also the UK through the bases in Cyprus.

It will cause a new major crisis within the European Union between the member states that do not have a unified foreign policy for the Middle East.

Of course, maintaining active guerilla wars does not mean that generalised war will be avoided since there are always occasions for "mistakes". So the problem today is not only big but also permanent.

Whatever happens, however, whenever it happens, it is certain that for the European economies, the situation is not good at all. The Middle East is the heart of energy, and the Red Sea and Suez Canal are the heart of shipping.

All the tensions in the Middle East led to an increase in energy prices, and this, combined with the energy problems caused by the war in Ukraine, condemns Europeans to pay dearly for energy.

At the same time, obstacles of all kinds on the trade routes, especially in the Suez Canal, translate into increased transport cost prices via ships.

This means that European production costs will rise, products will become less competitive, and inflationary pressures in Europe will be sustained for a long time. The maintenance of inflation destroys the living standards of the economically weaker sections.

Let's not forget that the Greeks are the poorest Europeans at the moment in terms of income, i.e., we have the lowest income.

And as we are also one of the most expensive countries - due to the government's inability to control the cartels of all sectors - it is clear that the coming months will be very tough for the Greek consumer.

Greece, with low incomes and galloping inflation, no production, totally dependent on imports, with expensive energy, and Turkey on the other side contributing to the crisis in the Middle East.

What can the government do about this situation?

A few things, most importantly to change the focus of its economic policy and turn it towards domestic problems, that is, to see how to relieve the burden on consumers and how to stimulate domestic production instead of celebrating attracting counterproductive foreign investment and for the praises coming from foreign funds and foreign organisations.

Only the Greeks can judge whether the government succeeded or failed in the economy, but the government seems to have forgotten that.

Under the conditions that are taking shape in our region, it is urgent that the government immediately remembers this and turns the economic policy in the right direction.

The article first appeared in Greek on Proto Thema.

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