The European Parliament's Economic and Monetary Affairs Committee on 23 June 2026 held an exchange of views on the economic and fiscal implications of the Middle East crisis, revealing disagreements over the ECB's monetary policy response and the need for targeted fiscal support. ECB Executive Board member Philip R. Lane defended the central bank's data-dependent rate hikes as appropriate given persistent inflation, while S&D MEP Thomas Bajada questioned the reliance on rate increases for supply-driven inflation and called for greater flexibility on state aid for islands like Malta. European Commission Director General Maarten Verwey presented the spring forecast, which revised EU growth down to 1.1% and inflation up to 3%, cautioning against untargeted fiscal measures and highlighting limited fiscal space due to higher debt and defence spending. OECD Director Åsa Johansson outlined two scenarios—a time-limited disruption with gradual recovery and a prolonged disruption severely cutting growth—urging temporary, targeted support and reduced fossil fuel dependence.
EPP MEP Luděk Niedermayer questioned why the energy price impact was milder than feared; Verwey cited well-supplied markets, strategic reserve releases, and adaptability. The committee will continue monitoring, with the Commission proposing to expand the national escape clause for defence and energy security spending. The debate exposed a cleavage between those favouring continued monetary tightening to curb inflation and those advocating for more accommodative policy and targeted fiscal flexibility to support vulnerable economies. Next steps include further committee monitoring and a Commission proposal to expand the escape clause.