Nicosia, Cyprus. Geopolitical instability, rising defence needs and efforts to strengthen Europe’s competitiveness and resilience dominated discussions at the informal Economic and Financial Affairs Council meeting in Nicosia on Saturday.
Geopolitical uncertainty
Speaking after the meeting, Finance Minister Makis Keravnos said the gathering took place against a backdrop of increasing geopolitical uncertainty, highlighting the need for strategic autonomy, resilience and coordinated investment across the European Union.
“The prolonged instability in the Middle East, which affects energy markets, transport routes, trade flows and ultimately the day-to-day functioning of our economies, reminds us that Europe cannot afford complacency,” Keravnos said.
Fiscal sustainability and investment
He said Europe’s ambitions were growing in areas such as defence, the green transition, digital transformation, energy security and competitiveness, while fiscal space remained limited.
“For this reason, better coordination, smarter policies and stronger mobilisation of private capital are essential,” he said, adding that member states agreed fiscal sustainability must remain a central objective of EU economic and fiscal policy coordination despite growing investment pressures.
Asked whether the effects of the Middle East crisis and the disproportionate burden faced by certain member states had been discussed, Keravnos said the EU seeks to take into account national particularities and vulnerabilities when designing investment measures.
“All issues are on the table,” he said, adding that measures must remain targeted and temporary while avoiding problems linked to fiscal discipline.
Reforms and competitiveness
According to Keravnos, discussions also reaffirmed a commitment to accelerating reforms at both national and EU level “to ensure investment needs are met without jeopardising fiscal sustainability”.
“In a time of global uncertainty, Europe must demonstrate unity, determination and the ability to act decisively,” he said.
European Commissioner for Economy and Productivity Valdis Dombrovskis said strengthening Europe’s competitiveness remained one of the European Commission’s central priorities.
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