European Central Bank policymaker Martins Kazaks issued a stark warning, telling the Financial Times that Europe is already "at war" with Russia. He urged policymakers to abandon naivety and prepare for further escalation, framing the conflict as a present reality rather than a future risk.

This perspective directly challenges the more cautious language often used by European leaders. It signals that the central bank is increasingly concerned about the war's profound impact on the region's financial stability and economic outlook, moving beyond just sanctions and energy shocks.

Kazaks's comments suggest the ECB is bracing for sustained pressure from the conflict, which could complicate its primary mandate of controlling inflation. Markets will now watch for any policy shifts as the central bank balances economic growth with the harsh realities of a prolonged geopolitical crisis.