Iran War Exacerbates EU Business Fears: 75% of CEOs See Harm to Prospects

A new study by the European Round Table for Industry (ERT) reveals that the Middle East conflict has further eroded confidence among EU business leaders, with soaring energy prices compounding existing challenges.

Two-thirds of CEOs and chairs surveyed believe EU business conditions deteriorated over the past six months, and over half of the 57 respondents expect further worsening this year. This marks the longest period of declining business confidence since the Covid-19 pandemic in 2020.

Sara Murray, managing director at The Conference Board, called the findings a «clear warning signal» for the region's business outlook, despite some improvements in sales expectations and investment. The US-Israeli war on Iran, which has impacted global oil and gas markets, led nearly three-quarters of CEOs to cite energy insecurity as the greatest geopolitical risk and believe it has damaged their companies’ short-term prospects.

EU CEOs are significantly more pessimistic than their counterparts outside Europe, with only 11% holding a positive view of the EU’s economic prospects beyond three years, compared to 34% in China, 44% in the US, and 70% in India. ERT Secretary General Anthony Gooch Gálvez attributes this pessimism to skepticism about the EU’s ability to integrate its single market across goods, services, energy, capital, and the digital sphere.