What impact does the dangerous situation in the Red Sea have on the global economy? The EU Commission sees no reason to panic, at least with regard to consumers.
According to EU Trade Commissioner Valdis Dombrovskis, the Houthi attacks on merchant ships in the Red Sea have so far had no visible impact on the prices of goods and energy in Europe. However, transport costs are rising, he said on Tuesday after an informal meeting of EU trade ministers in Brussels.
The reason is that shipping companies are now allowing their ships to sail around the Cape of Good Hope. Traffic in the Red Sea recently fell by 22 percent within a month and is likely to continue to decline. This must be passed through if ships want to take the shortest sea route between Asia and Europe.
“The broader economic impact, the impact on consumer prices and the EU economy in general will depend greatly on the duration of this crisis,” explained Dombrovskis. It is now important to discuss measures to protect merchant shipping in the Red Sea.
Preparations have been underway in the EU for weeks. Following an EU agreement in principle, a military operation to secure commercial shipping in the Red Sea is to begin next month and help end attacks by the militant Islamist Houthis from Yemen. The militia wants to force an end to the Israeli attacks in the Gaza Strip by shelling ships, which followed the unprecedented massacre by the Islamist Hamas in Israel on October 7th.
According to current plans, the EU operation will involve sending European warships and airborne early warning systems to the region to protect cargo ships. However, participation in the US attacks against Houthi positions in Yemen is not planned.
According to government sources, Germany wants to take part in the military operation with the frigate “Hessen” – provided that the Bundestag issues a corresponding mandate after the EU plans have been completed. The ship is equipped, among other things, with anti-aircraft missiles. It was specifically designed for escort and maritime control. According to the Bundeswehr, it can use its special radar to monitor airspace the size of the entire North Sea.
Source: Stern
