The European Central Bank has sent an alarm signal via the Greek central bank governor Yannis Stournaras, a member of the ECB's governing council. The risk of the eurozone entering recession is real. If the war in Iran drags on, the possible scenario is stagflation - simultaneous stagnation and inflation.

Stournaras mentions „inflation shocks comparable to the post-COVID" period, and companies that are already planning for such scenarios. The bottom line - projected eurozone inflation for this year is 2.7 percent, but with upside potential if disruptions continue in the supply of fuel, hydrogen and helium - all three critical for European industry.

For the Balkans - which aren't in the eurozone, but whose currencies are pegged, directly or indirectly, to the euro - the consequences are twofold. First, directly higher prices for fuel, petrol, gas, and natural gas for households. Second, indirectly - reduced foreign investment, because in a recession European corporations don't open new plants in Skopje, Sofia or Belgrade. They close the old ones.

The question our ministers rarely ask out loud is - do we have a plan for a stagflation scenario? We have „energy security strategies" sitting in ministry drawers. We have „macroeconomic stability plans". But when inflation is running at 8 percent, GDP is dropping by 1, and the state coffers are empty - what are the concrete measures? Help for the most vulnerable? Price freezes? Temporary tax breaks?

The same kind of questions came up in 2022, in 2008, and in 1997. The answer is always the same - reaction, not prevention. The Balkans live in a mode of permanent adjustment, not strategic planning. That's the price of being a small economy with limited reserves. But at the same time, it's the responsibility of politicians who deliver speeches instead of plans.