The Middle East war highlights how vital the green transition in energy is for Europe’s resilience and competitiveness, European Central Bank policymaker Olli Rehn said on Tuesday.
“Slowing the green transition now would be a serious mistake,” the Bank of Finland governor said.
Rehn said it remained unclear what effect the war would have on inflation over the medium term, although a rise in headline inflation this year would be unavoidable.
“Interest rate decisions are not locked in beforehand,” he said, adding the ECB was closely monitoring developments in the Middle East conflict and its spillover effects on the economy.
The strength of the war’s impact on each of the euro area countries varied, Rehn said.
“The impact on the Finnish economy is moderated by the fact that Finland has made more rapid progress in the energy transition than many other countries,” he said.
