How do we Europeans respond to this new crisis, the one in Iran? Like horses, galloping? Or retreating like crabs? The Commission is stitching together a response plan. With sensible measures, especially energy saving, since the effects of the Iran situation may be prolonged. The question is whether it will remain between the obvious and nothing.
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Let us remember the 2020 pandemic. At the beginning, “in Europe we did not have a clear roadmap on how to address the issue, beyond [canceling] major events,” reflects the president of the EIB and then first Spanish vice president, Nadia Calviño, in her useful Two Thousand Days in Government (Plaza y Janés, 2025).
And indeed, she argues, in economic policy there are manuals to overcome “the most catastrophic imaginable scenario, war”: full military production, public push for food and basic products, and for the dispossessed; investment to rebuild the productive apparatus… The allies found the key in Franklin Roosevelt. The Keynesian recipe: investment and public spending at full throttle.
But that scenario was and is different from a pandemic, which paralyzes everything without destroying anything. The response in 2020 was different but similar: protect companies (tax deadlines); employment (ERTE); the vulnerable (minimum income). Contrary to the restrictive fiscal motto of the Great Recession of 2008: reduction of social spending, fiscal austerity, monetary tightening… until Mario Draghi’s “I will do whatever it takes” in July 2012.
The International Energy Agency compares this shock with the sum of the oil crises of 1973 and 1979 (OPEC), and that of 2022 (invasion of Ukraine). Thus, saving recipes proliferate for the better. And less so those of supply diversification, little to cut there.
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There we also have references. That of Paul Volcker’s ultra-restrictive monetary policy. He reversed inflation, which had skyrocketed, since between 1973 and 1981 the price of oil had multiplied by 12 (Roberto Centeno, “Oil and the World Crisis”, Alianza, 1982). But, without mitigation, killing growth and employment: the unemployed in 1982 rose to 30 million in the OECD, tripling those of 1973.
It is neither the example, nor should we be fooled by the return of the hawks who ― brandishing the real danger of stagflation, stagnation with inflation ― suggest, without specifying them, the same recipes of monetary drought and fiscal castor oil.
The response required is to a mixed chaos of war and energy threat. Brutal war, but nesting in the core of the world supply. And gas-oil collapse, perhaps less abrupt than in 2022 when the pipeline cut with Russia, and sanctions; maybe even less prolonged.
We will know how to choose, as Brussels points out ― following the Governments ― in the catalog of immediate measures. But they will only succeed if they are articulated in a deep revitalization of the Green Deal, against the setbacks suffered. The future solution is to become independent from oil. Without falling into nuclear simplism, clean of emissions but dirty in waste. Spain demonstrates this with its much cheaper electric energy. And clean.
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