Eurogroup President Kyriakos Pierrakakis defended on Thursday the European Commission's proposal to relax fiscal rules and facilitate new energy investments, an initiative he considers "fully justified" given the impact of the crisis in the Middle East and the need to strengthen European energy security.

"The Commission's proposal shows that we are now at that point," Pierrakakis stated upon arriving at the meeting of Eurozone Economy and Finance Ministers in Luxembourg, when asked about his now favorable stance on the Community Executive's plan, driven mainly by Spain and Italy.

The Eurogroup President linked this initiative to the conclusions of the International Monetary Fund (IMF), whose Managing Director, Kristalina Georgieva, is participating in the meeting to analyze the economic situation of the euro area. "What does the IMF tell us? That the impact of the crisis has been 12% lower thanks to energy investments made since 2022," noted Pierrakakis, who believes these figures support the advisability of allowing new investments in this area.

The European Commission announced last week that it will allow member states to request an extension of the national escape clause for defense spending, with the aim of also including measures to reduce dependence on imported fossil fuels and strengthen European energy security.

When asked about the economic context, the Greek minister assured that the euro area has shown "considerable" resilience despite the deterioration of the international scenario. Pierrakakis has ruled out, for now, that the bloc is facing a stagflation scenario.

"The euro area has proven to be quite resilient," he stated, although he admitted that some trends point in that direction. "We are certainly not in a stagflationary environment," he clarified.

The Eurogroup President nevertheless warned that the crisis in the Middle East continues to affect European households and businesses and poses a risk to growth. Although markets are reacting with relative calm, he urged not to underestimate the challenges arising from the situation in the region.

The meeting of Eurozone Finance Ministers will also address energy security and technological sovereignty, two issues that Pierrakakis has placed among the European Union's economic priorities.

In this regard, he stressed that "the economies that will lead in technology will be the economies that will lead growth" and argued that Europe must improve its capacity to create and develop both "European champions" and "global champions".