European Commission Executive Vice-President Valdis Dombrovskis, speaking at the Eurogroup press conference in Nicosia on 22 May 2026, warned that the conflict in the Middle East has triggered a new energy shock affecting inflation, growth, and public finances across the EU. He presented the Commission's Spring Economic Forecast, projecting EU headline inflation at 3.1% this year, easing to 2.4% next year, and GDP growth of 1.1% in 2026, edging up to 1.4% in 2027. Dombrovskis noted that ten Member States recorded deficits above 3% of GDP in 2025, a number expected to rise to thirteen by 2027, with the average EU budget deficit increasing from 3.1% of GDP in 2025 to 3.5% in 2026 and 3.6% in 2027.
Dombrovskis stressed the need to safeguard sound public finances, drawing lessons from past crises to ensure support measures remain temporary and targeted. He called for doubling down on competitiveness to secure long-term prosperity. On the digital euro, he welcomed recent progress in European Parliament discussions and urged maintaining momentum to conclude negotiations by year-end, in line with the "One Europe, One Market" roadmap. The Commission stands ready to provide technical support. On housing, Dombrovskis noted that the Commission's first-ever European Affordable Housing Plan, presented last year, sets out measures to address supply-demand imbalances, emphasizing the need to increase supply by simplifying regulations and permitting procedures and addressing labour shortages in construction.