Ecofin talks focus on uncertainty and fiscal challenges

Finance Minister Makis Keravnos addressed the Ecofin council meeting in Brussels on Tuesday, highlighting the growing uncertainty facing the European and global economy.

Keravnos, who chaired the session, said discussions would focus on the impact of geopolitical developments on the global economy, building on earlier exchanges at the Eurogroup.

“Finance ministers are meeting in an environment of increased uncertainty due to the conflict in the Middle East and the ongoing war in Ukraine,” Keravnos said.

He explained that the debate would examine economic consequences and potential policy responses, reflecting the rapidly evolving international landscape.

The minister also outlined key items on the Ecofin agenda, including market integration and the supervisory package, noting that efforts have been made under the Cypriot EU presidency to accelerate progress.

Moreover, the Cypriot minister confirmed that a document containing specific questions would be presented to facilitate discussion among member states.

Keravnos also referred to the issue of VAT fraud, expressing hope that progress would be achieved during the meeting.

He said the objective is to enhance the ability of the European Anti-Fraud Office (OLAF) and the European Public Prosecutor’s Office to intervene more quickly and effectively.

Asked about the risk of stagflation in Europe, Keravnos stressed the need for vigilance.

“Developments are constantly changing and require close monitoring to avoid such a scenario,” Keravnos said.

“It is not possible to make safe predictions as the situation is evolving rapidly,” he added.

As part of the council’s work, ministers are also expected to exchange views on the economic and fiscal impact of Russia’s invasion of Ukraine.

The council is further set to adopt an implementing decision approving Denmark’s amended recovery and resilience plan, within the framework of the Recovery and Resilience Facility.

The presidency and the European Commission will also brief ministers on the main outcomes of the G20 finance ministers and central bank governors meeting held on April 16, 2026.

The discussions come at a time when policymakers across Europe are grappling with rising geopolitical risks, inflationary pressures and economic uncertainty.

A day earlier, the Finance Ministry welcomed the findings of the International Monetary Fund (IMF) following its mission to Cyprus between April 22 and May 4, 2026, stating that the economy has shown resilience and strong fiscal performance.

At the same time, it stressed that any changes to the foreclosure framework must protect vulnerable borrowers without enabling abuse.

“Any revision must not create opportunities for strategic defaulters at the expense of the economy, consistent borrowers and taxpayers,” the ministry said.

It also warned that broad foreclosure exemptions or freezes could undermine the effectiveness of the debt recovery system.

The ministry also agreed that fiscal policy should become more efficient and investment focused, particularly under the new European economic governance framework.

Regarding energy, it acknowledged ongoing challenges and confirmed that targeted actions are underway to ensure supply security and reduce electricity costs.