The energy shock reduces the real income of households in the Eurozone and curbs the growth of consumption, thus transferring the cost of the crisis to the citizen.
The European Commission's Spring Report illustrates the blow of high prices for each country, with some in a stronger position and others in a weaker position.
According to the Commission's forecasts, inflation in the EU will reach 3.1% this year, a full percentage point higher than previously expected, mainly due to soaring energy prices.
Greece is forecast to see the biggest price deterioration in 2026, due to the war in Iran, as inflation is expected to rise to 3.7% in 2026, fuelled by a sharp increase in energy prices, remaining above the eurozone average, the Commission says in its spring forecast.
Headline inflation in Cyprus is forecast to rise to 3.6% in 2026 and decline to 2.2% in 2027.
The sharp rise in oil prices has caused energy costs to rise, although reductions in VAT and excise duty on energy may help limit further increases in energy prices, the Commission says. Also, the weaker outlook for tourism is expected to mitigate service inflation, as companies could offer more competitive prices to attract inbound tourists.
In Germany, inflation is forecast to reach 2.9% in 2026 and fall to 2.7% in 2027. The outbreak of the conflict in the Middle East in March 2026 caused a sharp increase in fuel prices, the Commission says, driving energy inflation.
The reduction of fuel taxation introduced in May 2026 for two months will only provide temporary relief, it is noted.
In France, on average, headline inflation is forecast to reach 2.4% in 2026 and 1.8% in 2027.
In Italy, according to the Commission's forecasts, the sharp monthly increase in energy prices since March 2026 is expected to be quickly passed on to other goods and services, driving headline inflation to 3.2% in 2026. However, moderating energy commodity prices is expected to bring headline inflation below 2% in 2027.
In Latvia, due to higher energy inflation, inflation is expected to rise to 3.6% in 2026 and fall to 2.2% in 2027.
In Lithuania, based on the Commission's spring forecast, inflation is expected to rise to 4.4% in 2026, from 3.4% in 2025, following a sharp rise in energy prices due to the conflict in the Middle East. Food prices are expected to rise due to higher fuel, transport and fertilizer costs. Headline inflation in 2027 is expected to be 2.7%.
For the Slovenian economy, the Commission's forecasts indicate that inflation rose to 2.5% in 2025, due to higher food and service prices. It is projected to increase further, reaching an average of 3.5% in 2026 and declining to 2.5% in 2027.
On an annual basis, Portugal's headline inflation is forecast to reach 3.0% in 2026 and will decline to 2.3% in 2027. Core inflation excluding energy and food is expected to increase at a slower pace to 2.4% in both 2026 and 2027. In Spain, inflation is forecast to rise sharply in 2026, reaching 3%, driven by a sharp increase in energy prices and a gradual pass-through in food and industrial prices.
However, it is forecast to fall to 2.5% next year as energy inflation gradually subsides.
In the Netherlands, according to the Commission's spring forecast, inflation is forecast to rise to 3.2% in 2026 due to rising energy prices and is expected to fall to 2.5% in 2027.
