Greek PM warns of energy shock in Europe amid Iran war

The European Union must support a diplomatic solution to the war in Iran, but also prepare for the worst, at the meeting of EU leaders on Cyprus, Prime Minister of Greece Kyriakos Mitsotakis said at the XI Delphi Economic Forum on Thursday.

In a discussion with European Council President Antonio Costa, Mitsotakis warned that energy prices would climb significantly higher if the Strait of Hormuz remains shut for a long time, as would inflation, while growth rates would drop, affecting all European countries, CE Report quotes ANA-MPA.

"Greece is doing better than other countries in Europe, but no country can be considered protected against a shock of such magnitude," the Greek premier underlined

In addition, Greece could not accept the idea that an open sea channel would be subject to tariffs or payment.

"We have a huge commercial fleet. This would create a catastrophic precedent. We must therefore expend every effort for a diplomatic solution. But we must also be prepared - and this will be discussed tomorrow - for a possibly worse outcome. We saw what happened with the war in Ukraine. We saw how dependent we were on Russian natural gas," Mitsotakis said, referring to the European Union leaders' meeting on Cyprus on Thursday.

Energy autonomy

Circumstances provide an opportunity to Greece to redefine its strategic autonomy and resilience in the European energy sector. Decarbonization is not enough, he said.

"We need a Plan B in case this crisis spreads, becuase the economic repercussions will be significant. No EU member state can be forever relying on its societies without some form of European support," the Greek premier insisted.

The Greek PM also spoke of Greece's RES production and of the fragmented European energy market, which meant that countries producing cheap energy did not necessarily want to share it. He also revealed that nuclear energy will become part of the solution and that Europe must also develop its own technology instead of importing it.

This war is not Europe's war, Mitsotakis said, and underlined that the issue of shipping was a priority in the UN Security Council. "I could never imagine that this would be so timely today. But we must guarantee that we have an active role in this issue, especially as Europe - not just because of Greece, but of other countries, too - is a global superpower in shipping. This is a field in which we can play a role," he added.

Lebanon, Gaza

Among other issues, the PM said that Greece could participate in a multinational force that monitors a ceasefire, and called on EU member states to provide funds for Europe's strategic autonomy. In Lebanon, humanitarian aid should be provided and Europe be active in rebuilding Gaza, with the goal of a two-state solution.

"Lebanon needs help. If we think that we can be a geopolitical player by simply issuing statements from Brussels, we will not go far. The same is true for Egypt and Libya, where we have a vital interest in stability. We are progressing, but the EU is a unique entity: you have 27 member states. Unavoidably, some initiatives will be 'coalitions of the willing'," Mitsotakis said.

On Ukraine, Europe stood united, but "other cases may call for more flexible solutions," he said, expressing satisfaction that the issue of a loan to Ukraine was being resolved. Greece supported it, despite its historical ties with Russia, because we believe in international law. We will continue to support Ukraine. And we want a solution through negotiations, not from a position of weakness."

Europe's basic priorities are competitiveness and defense, both of which need boosting, the Greek leader said.

"Relations with the US must become more balanced, with a stronger Europe. China dominates in critical raw materials. We must reduce dependencies, but also focus on sectors where we can be competitive. We must not create energy dependencies again on unreliable suppliers. Greece is seeking its own natural gas and cooperates with global companies. If we find natural gas in Greece, it will be good not just for Greece, but for Europe as well," Mitsotakis asserted.