Nicosia: Finance Minister Makis Keravnos highlighted the impact of elevated inflation on the cost of living and stressed the need for close collective monitoring of developments and readiness to act, during EU meetings in Dublin.

According to Cyprus News Agency, the meetings of the Eurogroup and the Informal EU Economic and Financial Affairs Council (Ecofin) concluded in Dublin on Saturday. On Friday, Ministers discussed recent economic developments and economic policy priorities, with the participation of the Chair of the European Parliament's Committee on Economic and Monetary Affairs.

In his intervention, Keravnos highlighted the impact of elevated inflation on households' cost of living, stressing the need for close collective monitoring of the situation and readiness to adopt appropriate policy measures to provide short-term support to economies and mitigate the negative effects. At the same time, he said such measures should not undermine efforts to safeguard the sustainability of public finances over the medium term and strengthen economic resilience over the longer term.

In this context, Keravnos raised concerns over the impact of the conflict in the Middle East, which he said had increased uncertainty, creating downside risks to growth and upside risks to inflation. He also questioned whether greater emphasis should be placed on a more active role for European diplomacy, making it more dynamic and preventive in efforts to de-escalate tensions and help bring conflicts to an end.

Keravnos said efforts at both national and EU level should also focus on the timely implementation of structural reforms and investment, particularly on advancing the Savings and Investments Union, digital finance, the promotion of innovation and the deepening of the Single Market.

According to the Ministry, the informal Ecofin meeting began with a working lunch, during which Ministers exchanged views on the competitiveness of the European banking sector, following a presentation of the European Commission's recent report. Keravnos acknowledged the progress made in strengthening the resilience of Europe's banking sector and reiterated Cyprus' longstanding support for completing the Banking Union.

He said ways should be explored to address the fragmentation of banking services and simplify procedures, with the ultimate aim of creating a genuinely European banking system. At the same time, these efforts should be accompanied by credible European safeguards regarding banks' capital and liquidity levels, particularly for host member states, he said. The long-term objective, Keravnos added, should remain the establishment of a European Deposit Insurance Scheme.

On Friday afternoon, ministers met jointly with central bank governors to discuss the future of financial-sector innovation in Europe. According to the press release, most Ministers agreed that innovation and the increasing use of technology in financial services could offer significant opportunities to reduce costs and speed up transactions without compromising transaction security.

Finance Ministers and Central Bank Governors also agreed that greater use of technology in the financial sector carries risks that need to be identified, assessed and addressed through effective supervision that safeguards monetary sovereignty, financial stability and the protection of investors and consumers.

On Saturday morning, EU Finance Ministers discussed the impact of artificial intelligence on the labour market, the public sector, energy and the geopolitical environment. Keravnos said artificial intelligence offered significant opportunities to boost productivity and economic growth. The aim, he said, should be to facilitate the adoption of AI in order to strengthen the resilience and competitiveness of the European economy.

Turning to energy, Keravnos noted that data centres, which are essential for the expansion of AI technologies, require large amounts of energy as well as water for cooling. Against this backdrop, he said finance ministers should ensure that the development of AI technologies does not create distortions elsewhere in the economy. The ultimate goal, he concluded, should be to combine faster growth in green energy production with wider AI adoption, helping to strengthen competitiveness without undermining social cohesion in Europe.