Iran war squeezes Europe’s economy as growth slumps, prices surge
Key takeaways
- Europe’s economy is slowing sharply as the Iran war drives up energy costs, deepening pressure on households and challenging policy makers.
- Issued on: 21/05/2026 - 17:41Modified: 21/05/2026 - 18:13
- By: FRANCE 24 A board displays the chart of Germany's share index DAX at the stock exchange in Frankfurt am Main, western Germany, on January 19, 2026.
Why this matters: an international story with cross-border implications worth tracking.
Europe’s economy is slowing sharply as the Iran war drives up energy costs, deepening pressure on households and challenging policy makers. Fresh data for May showed euro zone business activity contracted at its fastest pace in more than two years while inflation pressures intensified, raising fears of a prolonged cost-of-living crunch and possible recession.
Issued on: 21/05/2026 - 17:41Modified: 21/05/2026 - 18:13
By: FRANCE 24 A board displays the chart of Germany's share index DAX at the stock exchange in Frankfurt am Main, western Germany, on January 19, 2026. © AFP, Kirill Kudryavtse The energy shock from the Iran war is seeping ever deeper into the European economy, presenting policy-makers with a dilemma as it simultaneously weighs on growth and pushes prices higher, a broad set of data on Thursday showed.