The European Commissioner for Economic Affairs stated that, due to a surge in energy prices triggered by the conflict involving the U.S., Israel, and Iran, the EU economy is confronting the risk of stagflation. Commissioner for Economic Affairs Dombrovskis remarked, “The outlook is shrouded in high uncertainty,” noting that the EU economy faces the risk of stagflation—a scenario characterized by the coexistence of slowing economic growth and rising inflation. “This situation could arise even if disruptions to energy supplies prove relatively brief.” Given that the economies of EU member states have already been subjected to multiple shocks—and now face the urgent imperative to increase defense spending—most EU nations possess very limited policy space.