In the foreseeable future, geopolitical tensions and the fragmentation of financial and commodity markets could lead to a new wave of production disruptions and higher prices for internationally traded goods and commodities, with further impact on supply chains. Many countries may be forced to implement policies favouring the reshaping of the main supply chains to reduce external dependency or confine their international dependency to a narrow set of partners.



The war of Russia on Ukraine has inflicted a major blow to the world’s geopolitical equilibrium by ending globalization as we have known it since the fall of the Berlin Wall in 1989. Since February 2022, the world has become more polarized and international markets appear to be segmented. The contraposition between Western economies, on one side, and Russia and its allies on the other, changes the nature and structure of international trade, with some geopolitical areas possibly gaining new importance. In this perspective, the Mediterranean could once again gain a new centrality. The changes in the EU’s energy strategy and in production value chains will open up new trajectories of possible market integration between the northern and southern shores of the Mediterranean basin. Under the pressure of geopolitical turmoil, Euro Med countries and the EU overall may build through South Med countries a stronger bridge with sub-Saharan countries and the African continent overall, paving the way for new growth and development opportunities for all parties involved.

After the pandemic, the war and the rise in inflation are further shocks whose combined effect can harm the growth prospects of the Mediterranean region and further reduce the fiscal space of many governments in the area. This may hinder public investments in crucial sectors such as health and education, while the rise in interest rates and in the degree of uncertainty may ¶{p. 90}discourage private investment, jeopardizing the digital and energy transitions in many economies. After all, the development of the Mediterranean area requires both the political stability of the most fragile countries and policies aiming at greater integration of the economies concerned.