Yannis Stournaras, governor of the Bank of Greece and a member of the European Central Bank's Governing Council, warned that the ongoing war in the Middle East is exerting a damaging economic effect on Europe and should be treated as a catalyst for closer integration across the bloc.
Speaking in Frankfurt, Stournaras said recent geopolitical events amount to repeated warnings for European policymakers that the Union's institutional framework requires reform. He called for measures that would strengthen the EU's ability to absorb and respond to external shocks.
"Within a period of a few months, there have been more than one wake-up calls to European policy makers that institutional changes are imperative," Stournaras said.
Central to his recommendations is the introduction of joint borrowing by the EU. Stournaras argued that issuing common debt would lower financing costs for the bloc as a whole and create a mechanism to fund projects that serve collective European interests.
He specified the kinds of expenditures he believes are appropriate for joint financing, naming defence, green energy and strategic investment as areas of high importance suitable for well-defined, common European purposes.
"Our objective should be to issue joint debt to pursue well-defined common European purposes of high importance, such as enhancing defence, green energy, and strategic investment," he said.
Stournaras also touched on the longer-running debate inside the EU over deeper integration. He noted that initiatives such as creating a banking union or a capital markets union have been discussed for years, but that meaningful progress has been thwarted because a small number of member states have opposed such steps.
The central message from Stournaras was that recent geopolitical turmoil - which he characterized as having tangible economic costs for Europe - reinforces the case for institutional reform and collective financing tools. He framed joint debt issuance as a tool to reduce borrowing costs and to enable coordinated investment on matters that affect the bloc collectively.
Context limitations: The comments reflect Stournaras's assessment that the Middle East conflict is a drag on Europe's economy and his view that institutional changes, including joint debt issuance, are necessary. The remarks reiterate previously debated integration measures and the impediment posed by opposition from some member states; they do not specify legislative steps, timelines, or detailed design of proposed joint borrowing instruments.