Interview with Philip R. Lane, Member of the Executive Board of the ECB, conducted by Sébastien Ruche on 15 September 2026
22 September 2026
How does the ECB assess the ongoing energy crisis?
Essentially, we experienced an initial wave of energy price increases in March and April this year, and then some optimism after the United States and Iran signed the Memorandum of Understanding on 17 June to bring the conflict to an end.
But then the war continued…
Indeed. We are now seeing a second wave of price increases, not just for oil but also for gas. That’s why we indicated on 10 September that we expect the energy shock to last longer than we had anticipated in March. At the time, markets expected the peak of the energy shock to come around June, followed by a recovery in the second half of the year. Although there was a temporary recovery over the summer, geopolitical risks now appear to be elevated again. As a result, we think that because of this second wave of rising energy prices, inflation is likely to be higher for longer, before falling back towards our target from mid-2027 onwards.
Do you see any impact on the prices of other goods, such as electricity, or on services prices?
So far, between February and now, no. So that’s the good news. However, because we are now facing a second wave of energy price increases, we think there will be upward pressure on food, energy more broadly – including electricity – and goods in general, while pressure on services remains contained.
The economy has been quite resilient so far. Do you think that will continue?
We think that if the shock does turn out to be larger and more persistent this autumn, that will hold back the economy. But, if the energy shock is not so severe, we do think there are positive elements for the economy. We are seeing a lot of government spending in parts of Europe, for example the German infrastructure and defence package and the Next Generation EU programme. And even though we are not at the centre of AI activity, there are enough European firms involved in AI for the economy to benefit. For us, the baseline is that the European economy should continue to grow at a steady but modest pace provided the energy shock does not become more severe.
When do you expect a resolution to this crisis?
We are not political science experts, so we share the same uncertainty as everyone else. Our baseline reflects the market view as captured in the price of oil and gas. The future curve for oil and gas basically points to a resolution later this year. The situation won’t go back to normal, but there will be some improvement compared with the current situation. That said, there’s a lot of uncertainty around that baseline.
While the dominant issues are the war in the Middle East and the energy shock, we also have to take into account the temporary positive effect from government spending and maybe a longer-term positive effect from AI. AI is creating a lot of uncertainty for individuals, but I think it will help raise living standards overall. Some occupations are going to suffer, but for the economy as a whole I think the net effect will be positive.
Is the additional government spending you mentioned a concern for the ECB, with the prospect of rising government debt?
Germany has the fiscal space it needs for this spending. The Next Generation EU programme is specific European funding, so it doesn’t create the same kind of concern about debt sustainability. However, it is important to underline that, while government spending is providing a temporary boost, this is going to fade out over time.
