Germany warns of world economic ‘catastrophe’; OECD cuts UK growth forecast | News

European powers and bodies warn of economic collapse as the war on Iran nears one-month mark.

Fears of economic strain are growing across Europe as the United States-Israel war on Iran nears the one-month mark.

On Thursday, German ⁠Defence ⁠Minister Boris Pistorius described the conflict as an economic “catastrophe”, while the United Kingdom’s economic growth prospects this year received a sharp downgrade.

Speaking at a meeting with Australian Defence Minister Richard Marles on Thursday, Pistorius said Germany was “ready ‌to secure any peace”.

“If ⁠it comes to a ⁠point where we have a ceasefire, we ⁠will discuss every kind of ⁠operation to ⁠secure the peace,” he said. “To make it crystal clear, this war is a catastrophe for the world’s economies. The impact is absolutely evident already now.”

The Organisation for Economic Co-operation and Development (OECD) on Thursday warned that the global economy, which was on a route towards growth, is now veering from that path.

The Paris-based international body ⁠cut its 2026 forecast for British economic growth by half a percentage point to 0.7 percent, compared with a 0.4 percentage point downgrade for the eurozone and ⁠a 0.3 percentage point upgrade for the US.

“Planned fiscal tightening and higher energy prices are anticipated to keep growth subdued in the United Kingdom, though the impact will be attenuated by lower policy rates next year,” the OECD said in ‌its report.

‘It’s not our war,’ says Germany

In Australia, Pistorius also addressed reporters at Parliament House in Canberra, saying the US had not consulted Germany before it, along with Israel, waged a joint war on Iran on February 28.

“Nobody asked us before. It’s not our war, and therefore we don’t want to get sucked into that war,” he said. “There is no strategy, there is no clear objective, and the worst thing from my perspective is there is no exit strategy.”

He urged the US and Iran to end the conflict and said Germany would discuss operations to secure freedom of navigation in the Strait of Hormuz if there was a ceasefire.

“But the time has not yet come, and therefore we appeal for a ceasefire as soon as possible,” he added.

Iran insists that the strait remains open to “non-hostile” ships. The collapse of maritime traffic through the waterway has prompted the biggest global energy crisis in decades.

European Commission President Ursula Von der Leyen has called for negotiations with Iran and an end to hostilities, as the bloc urged member states to start early on meeting next winter’s gas storage targets.

Natural gas prices in the European Union have risen by more than 30 percent since the start of the war, spiking after Israel’s attack on Iran’s critical South Pars gasfield and subsequent Iranian assault on Qatar’s Ras Laffan.

Spanish Prime ‌Minister Pedro Sanchez called for an end to the war on Wednesday, saying it presented a “far worse” scenario than the invasion of Iraq in 2003.

“This is not the same scenario as the illegal war in Iraq. We are facing something far worse. Much worse. With a potential impact that is far broader and far deeper,” he told parliament.

The left-wing prime minister has been one of the strongest critics in Europe of the US-Israel attack on Iran, describing it as “unjustifiable”.