Stubb: Iran war could trigger economic shock worse than COVID

Finnish President Alexander Stubb has warned that the ongoing conflict involving Iran could trigger a severe global economic downturn, while also highlighting growing geopolitical instability and fractures within the Western alliance.

In an interview with Politico, Stubb described the risk of a “self-inflicted global recession,” cautioning that the economic consequences of the Iran war could surpass those of the COVID-19 pandemic.

“I think we’re now in a situation whereby this could be a self-inflicted global recession,” Stubb said. “It shows you what happens when you act outside the framework of international rules and norms.”

He stressed that global markets are deeply interconnected, particularly through energy supply chains, meaning instability in one region can rapidly affect economies worldwide.

“Everything is linked to everything: Oil price to gas price, to food price, to fertiliser price, to price of pharmaceuticals, the list goes on.”

Stubb also criticised US President Donald Trump’s foreign policy approach, arguing that a transactional “America First” strategy is ill-suited to managing complex global challenges.

“Diplomacy is rarely a transaction,” he said. “What we’re seeing now is the demise of international institutions or rules exactly at a time in history when we need them more than ever.”

Addressing the broader security landscape, Stubb warned that global conflicts are increasingly interconnected and risk escalating further, though he stopped short of describing the situation as a world war.

“I would not like to talk about World War III — yet.”

He noted that the war in Iran is diverting attention from Ukraine, where peace talks appear to have stalled, raising concerns about prolonged instability in Europe.

“For understandable reasons, the war in Iran is taking a lot of oxygen out of what’s going on in Ukraine… it seems like the peace talks are now on hold.”

Stubb made clear that Finland’s priority remains Ukraine rather than involvement in the Middle East conflict.

“This might sound a bit harsh, but Iran is not my war… Ukraine is my war.”

He also pointed to a shifting dynamic in transatlantic relations, suggesting that the traditional unity between Europe and the US is weakening under current policies.

“We are probably seeing not a rupture, but a rift in the transatlantic partnership.”

By Tamilla Hasanova