Business
Prolonged Iran Conflict Could Weaken Euro and Trigger Recession, Economists Warn
Economists are warning that the ongoing war in Iran could have severe consequences for the euro and the European economy if the conflict continues beyond the “four weeks” projected by former US President Donald Trump. The hostilities, which began at the end of February, have already triggered an energy price shock, affecting oil, petrol, diesel, and gas. Rising energy costs are hitting consumers and energy-intensive industries such as chemicals and steel, putting additional pressure on the German economy, which was already facing modest growth forecasts.
The euro, currently trading around $1.16, is under particular pressure. Economist Daniel Stelter warned that an extended conflict would further weaken a euro already affected by low growth, high debt, and political uncertainty. “Capital would flow into dollar investments considered safe,” he said. Carsten Brzeski, chief economist at ING Bank, added that if the conflict disrupts oil supplies through the Strait of Hormuz for several weeks, oil prices could exceed $100 per barrel, pushing the euro down to $1.10–$1.12 per dollar. This would represent a 5–8 percent drop, the lowest levels since the 2022–23 energy crisis triggered by the Ukraine war.
Such a decline would make holidays in the US more expensive for Europeans and increase the cost of imports such as oil, electronics, and raw materials. Stelter warned of even more severe scenarios, suggesting that the euro could temporarily fall below parity with the dollar, reaching $0.90–$0.95, if the war leads to prolonged regional instability.
Germany could face particularly serious economic consequences. Stelter said higher energy prices act like an additional tax, reducing consumption and investment. In a prolonged blockade scenario, Germany could fall into a deep recession, with the wider eurozone at risk of at least a technical recession. Extended disruptions would also strain bond markets and interest rates, potentially forcing the European Central Bank (ECB) to intervene more aggressively to prevent a debt crisis.
The war’s impact on global energy supplies could trigger an “energy black swan,” causing sudden shortages and price spikes that ripple through the global economy. German exports could collapse despite a weaker euro if higher energy prices reduce demand in major markets such as China, India, and the US.
The ECB faces a complex challenge: if the conflict is short-lived, it could lower interest rates to support growth. If the war drags on, inflationary pressures from energy prices would limit the bank’s ability to cut rates, leaving the euro under pressure and economic momentum stalled. Stelter said this scenario could lead to stagflation, with rising inflation and falling growth simultaneously.
A rapid end to hostilities within four to five weeks and minimal damage to critical energy infrastructure in Saudi Arabia and Qatar could help stabilize the euro. However, resistance from Iran’s leadership raises the risk of a prolonged conflict with serious economic implications for Europe.
Business
Kennedy Center to Close for Repairs After Judge Blocks Trump Naming Plan
Most of Washington’s Kennedy Center will close for renovations after its board voted Tuesday to shut the landmark performing arts venue, hours after a federal judge blocked another attempt to add President Donald Trump’s name to the building.
The decision followed a ruling by US District Judge Christopher Cooper, who said the Kennedy Center board could not install a memorial to Trump or change the institution’s name without approval from Congress. The judge had previously ordered Trump’s name removed after it was added to the building’s facade.
“Simply put, Defendants cannot install memorials for President Trump or anyone or anything else at the Kennedy Center without Congress’s blessing,” Cooper wrote in his latest ruling.
Trump has said the renovation work, for which Congress has allocated $257 million, will not proceed unless the courts allow the board to move forward with plans to recognize him on the building. He said the Justice Department would appeal Cooper’s decision.
The board, which Trump chairs after replacing members with his appointees, voted to close the venue as it faces extensive repair needs and financial difficulties. Trump participated in the board’s virtual meeting, where the dispute over the institution’s future produced tense exchanges with Rep. Joyce Beatty, an Ohio Democrat and ex-officio board member who has opposed efforts to add Trump’s name.
The Kennedy Center has argued that the building requires major work. A partial ceiling collapse in a main hallway earlier this month added to concerns about the condition of the facility. Reuters reported that the closure could last as long as two years.
The dispute over the building’s name began after Trump’s return to the White House. The board first added his name to the facade, but Cooper ruled in May that the change was unlawful because Congress had established the Kennedy Center as a memorial to President John F. Kennedy. Workers removed Trump’s name in June, leaving scaffolding and a tarp covering part of the facade.
In August, the board voted to add an inscription describing the center as restored and renovated by Trump and proposed renaming the plaza outside the venue. It also considered another inscription if the Trump Kennedy Center Fund raised $100 million. Cooper’s latest ruling blocked those plans.
The court dispute has coincided with financial problems at the institution. Court filings have described declining ticket sales and contributions, while several artists and organisations have canceled performances or moved activities elsewhere. The board has argued that Trump’s involvement and fundraising are important to the center’s financial future.
The Kennedy Center, which opened in 1971, hosts major performing arts organisations and events including the annual Kennedy Center Honors. Its future now depends on the renovation process, the court appeal and decisions over how the institution will be financed and managed.
Business
Brent Crude Climbs Above $108 as Hormuz Strike and Saudi Pipeline Shutdown Raise Supply Fears
Brent crude prices climbed above $108 a barrel on Monday as growing disruption around the Strait of Hormuz raised fresh concerns about global oil supplies.
Brent crude for October and November deliveries rose by more than 3% during morning trading, extending gains from the previous week when prices moved back above the $100 mark. US West Texas Intermediate crude for October delivery also advanced, rising about 2.3% to around $102 a barrel.
The latest increase followed Saudi Arabia’s announcement that its East-West oil pipeline had been temporarily shut after drone attacks. The pipeline transports crude across Saudi Arabia to ports on the Red Sea, providing an alternative route that allows exports to bypass the Strait of Hormuz.
The closure comes as shipping through the strategic waterway faces growing risks. An unnamed merchant vessel was struck in the strait on Sunday, killing one crew member and injuring three others, according to Iranian authorities.
Shipping conditions have changed significantly since the conflict began. Vessels are required to obtain permission from Iran to pass through the waterway, while Tehran is also considering a system for charging transit service fees. Ships that do not comply have faced attacks, while US forces have carried out periodic strikes along Iran’s coastline.
Diplomatic efforts to address the situation have also suffered a setback. Oman postponed planned talks between Iran and Gulf states concerning the future of the waterway, which is one of the world’s most important routes for seaborne oil shipments.
The disruption is already affecting fuel markets beyond the Gulf. In the United States, the national average price of diesel surpassed $6 a gallon on Friday for the first time, rising from about $5.85 a week earlier and roughly 60% above the $3.71 recorded a year ago.
US petrol prices have also reached record levels, averaging about $4.22 a gallon after rising over the Labor Day weekend.
President Donald Trump has blamed Ukraine for part of the diesel supply pressure, saying Ukrainian President Volodymyr Zelenskyy should stop targeting Russian diesel infrastructure. Ukraine has attacked more than 20 Russian refinery targets this summer, while Russia responded by banning diesel exports.
According to Lipow Oil Associates, Russia’s export restrictions have removed about 800,000 barrels per day of diesel supply, while disruptions linked to the Strait of Hormuz have affected around 1.2 million barrels per day.
The broader impact on crude supplies is even greater. Oil flows through the Strait of Hormuz have fallen from about 20 million barrels per day before the war to roughly 7 million. The conflicts have also disrupted refineries representing about 5 million barrels per day of capacity, adding to pressure on global fuel markets.
Business
Google Plans €13 Billion Investment in Finland Data Centres
Google is set to invest at least €13 billion in data centres and digital infrastructure in Finland over the next two years, marking the company’s largest single investment in Europe as it expands its capacity for artificial intelligence and other digital services.
The investment will support data centres and related infrastructure in the Finnish municipalities of Hamina, Kajaani, Muhos and Vaala. Google also plans to fund clean energy projects as well as initiatives focused on biodiversity, education, research and workforce development.
The company said the decision reflects Finland’s strong position in developing energy-efficient infrastructure for artificial intelligence. The new facilities will support a range of Google services, including its Gemini chatbot.
Construction is expected to take place during 2027 and 2028. Google estimates the investment could contribute around €3.6 billion annually to Finland’s gross domestic product and support more than 37,000 jobs. About 16,000 of those positions are expected to be linked directly to construction work.
Once construction is completed, Google expects its facilities and related economic activity to support around 7,000 jobs each year. These positions are expected to include technical and facility roles, equipment suppliers and workers in nearby shops, restaurants and other services.
Finnish Prime Minister Petteri Orpo welcomed the announcement, saying the investment demonstrated the country’s strengths and could generate benefits beyond the immediate spending.
“The value of the data economy extends far beyond direct investment into spurring innovation, research and development,” Orpo said. He added that closer cooperation with Google could produce long-term benefits for both sides.
Why Finland is attracting data centres
Finland’s climate and energy supply are major factors behind its appeal to technology companies. Data centres consume large amounts of electricity and produce substantial heat, making cooling a major operational cost.
The country’s cold climate can help reduce cooling requirements, while its energy system includes nuclear power, wind and hydropower. The combination of relatively stable electricity supplies and favourable conditions for cooling has encouraged a growing number of data centre projects across Finland.
Google has maintained a presence in the country since 2009, when it acquired a former paper mill in the coastal city of Hamina and converted the site into a data centre. The company has expanded the facility over the years.
The latest investment comes as Finland faces weak economic growth and record unemployment. For Orpo’s government, attracting major technology investments has become an important economic priority.
With the country’s data economy offering prospects for investment, employment and research, Google’s announcement is expected to strengthen Finland’s position as a major European hub for digital infrastructure and artificial intelligence.
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