Gas and Oil Price Shocks in Europe – Due to the War in Ukraine, or Political Hesitation?
Chamber of Industry and Commerce for Munich and Upper Bavaria, Max-Joseph-Str. 2, 80333 Munich
![Portrait Daniel Gros](https://www.ifo.de/sites/default/files/styles/1_to_1__600x600/public/2022-05/Gros-Daniel_MED_16zu9.jpg?h=827f73f4&itok=91O_ZcwO&c=1689235855)
General Information on the Presentation
The event was part of the series "Economic Consequences of the Russian Invasion of Ukraine".
The war in Ukraine is a geopolitical watershed. The world could disintegrate into an American-dominated bloc and a Chinese-dominated bloc. The war fundamentally changes the outlook for security and prosperity. There is a threat of stagflation, a combination of weak growth and high inflation. How should policymakers respond? Monetary policy faces a dilemma: Raising interest rates can curb inflation but would further dampen growth. Fiscal policy can only redistribute the burden of rising prices; it cannot eliminate it. In terms of energy policy, diversification of energy imports leads to greater security of supply, but also higher costs. In addition, military spending is rising.
- What consequences does the war have for Germany as a location for energy-intensive industries?
- In which policy fields and in which measures should the scarce resources flow?
- And what role does the EU play?