War on Gaza raises regional escalation concerns for European economy

By Al Mayadeen English
Source: The Telegraph
19 Oct 2023 21:54

The war on Gaza raises concerns about simultaneous energy price crises and a resurgence of the migration issue, which could further strain the EU's stability and economic recovery.

The Schwelgern coking plant, one of the largest coking plants in the world, is in operation for German steel producer thyssenkrupp Steel Europe in Duisburg, Germany, Wednesday, Oct. 11, 2023 (AP)

The European economy is already facing challenges, including economic stagnation, and doesn't need additional geopolitical turmoil. However, there's a growing concern that the war on Gaza to escalate into a regional war, Sam Ashworth-Hayes wrote in an opinion for The Telegraph.

US leaders are actively engaged in the region to prevent further escalation, but recent events like the explosion at a Gaza hospital have disrupted diplomatic efforts, Sam says.

The presence of a second US carrier group in the region serves both as a show of support for "Israel" and a deterrent against potential adversaries.

Highly unpredictable

According to Sam, the situation is precarious, and it could quickly escalate into a broader regional conflict, involving multiple parties and potentially even Iran.

The unpredictability of events on the ground, the involvement of groups like Hezbollah, and Iran's willingness to intervene all add to the risk.

If a multi-front regional war were to erupt, it would be catastrophic not only for those directly involved but also for Europe.

Overwhelmed

The EU has faced a series of challenges over the past decade, from economic crises to political turmoil, the migration crisis, and Brexit.

Now, the war on Gaza raises concerns about simultaneous energy price crises and a resurgence of the migration issue, which could further strain the EU's stability and economic recovery.

Financial markets are currently showing heightened tensions but not a full-blown crisis, with Brent crude oil prices rising modestly. However, the concern is that the situation could spiral out of control, particularly if Iran's allies become involved, leading to rapid increases in energy prices and inflation.

The disruption may not follow the model of the 1973 oil embargo but could involve targeted attacks on production facilities and shipping, potentially destabilizing global energy markets.