The euro zone is in technical recession, with GDP in the first quarter at -0. 1%. It can be worse.
The Russian war in Ukraine has packed a blow to Europe with the costs and the shortage of power that leads to closed factories and steel. But the worst scenarios for the markets have never taken their position exactly how the Bear issue was presumed.
“Investors have lost the execution track market,” explains Albert Marko, spouse of the Mavarinas Management Group, a Florida -based fund based on coverage. “European markets have caught the rear winds of a drop in the dollar, weather situations to maintain the herbal fuel costs of hyperinflacia and the source of revenue of correct luxury products. Just look at the graphics in the inventory of luxury brands and see how this sector has joined European markets. »
The inflation of consumer costs in France fell to an annual change of 5. 1% in May 2023, to 5. 9% in April and greater than the consensus of 5. 5%. Germany inflation is now 6. 1%, its lowest point in 12 months. And British inflation has decreased even more than 7. 8% in April.
German Chancellor Olaf Scholz, left, talks to French President Emmanuel Macron, right, prior to a … [+] joint dinner in a restaurant in Potsdam near Berlin, Germany, Tuesday, June 6, 2023. Their country’s unemployment rate is nearly double that of the U.S. (Michael Kappeler/DPA via AP, Pool)
The inflation rates of Europe are all higher than those of Brazil, China, India and Saudi Arabia. Electricity costs fall in France and Germany, but are incredible three to 4 times to 3 to 4 to what they were before the Covid, which weighs in the GDP of the euro zone.
And this GDP stagnates.
In number terms, European Union GDP is producing less value than it did in 2021. Its unemployment rate is worse than the U.S. In some countries, it is nearly double that of the U.S. rate.
Germany and Belgium’s unemployment rate is around 5.6%. France is 7.1%. Portugal is 7.2%. Spain is now an emerging market. It’s unemployment rate is worse than Latin American countries at 13% as of the end of the first quarter.
The unemployment rate in the United States 3. 7 % in May. Colombia has an unemployment rate of 10 %.
In a recently released report, the World Bank said there is now a “cost of living” crisis in Europe. The Guardian led this on its behalf today in the negative expansion rate in the Eurozone.
The war in Ukraine has contributed significantly to the crisis with floods of refugees in substandard states such as Romania, reasonable fuel finishing, and the loss of Russian markets.
European countries responded to this crisis with social assistance and subsidies, which involved moratoriums on energy price increases, reduced public transport fees, and caps on electricity and natural gas prices for households and businesses. Poorer EU members like Slovakia, Slovenia have had it tougher, with higher inflation leading to higher costs of living for the working class there, the report said.
EU member Poland’s inflation is over 13% as of May, and unemployment is around 5%. It has been one of the country’s hardest hit by the inflow of Ukrainian migrants fleeing the war, according to the International Rescue Committee. Some 12 million refugees crossed into the Polish border since February 24, 2022 to spread throughout Europe, and 1.5 million remain in Poland.
“In terms of Europe’s outlook, I don’t see much good coming from there,” says Vlad Signorelli, head of Bretton Woods Research. “The European Central Bank is still going to raise rates. Regarding the NATO lockstep, I can’t think of any EU member country other than Hungary saying, ‘let’s stop sanctions and get this war over with’,” Signorelli says. Hungary’s leadership has been calling for this since July 2022. “Russian sanctions are not working as advertised,” Signorelli says.
Even so, the EU is its eleventh circular of opposite sanctions to Russia. According to reports, Grece has thrown his lot with Hungary and lately opposes new sanctions, Politico Europe said on May 26.
The German philosopher Oswald Spengler, writing in his vintage dismantling of European leaders entitled “The decline of the West” World War I, said that if Europe did not point to its own policy according to the prosperity and shared economic security of its citizens. , will follow the dangers of wars and civilians. Ukraine is not precisely in the EU, but it is a component of Europe and in the EU door port. This provides maximum value in Europe, actually more than the main beer of war outside the doors of Moscow, the United States, had to pay.
From the Covid crisis, Europe has changed to Top Gear to reinvent himself. and is turning the hard automotive industry. In April, the EU was the first to approve a carbon tax on imports to compensate for the use of fossil fuels in manufactured goods. European consumers will position the bill.
Then, there is the EU’s sustainable corporate governance initiative, which would oblige European corporations to ensure that the EU’s social and human rights criteria apply their channel supply. In Germany, this now applies to 150 corporations, but the number deserves to succeed at 15,000. Many European corporations are postponing the measures, saying they make it harder to compete with foreign brands that don’t have similar tariff regulations.
As Europe’s biggest manufacturing country, Germany has taken a heavy toll from the destruction of the Nord Stream pipeline in September 2022, but also due to its own decision to stop using nearby gas and oil from Russia. Now with the green push they are taking on, Germany’s auto parts industry will go the way of the dinosaur as electric cars require fewer parts. (But Mercedes Benz in India will still make cars with internal combustible engines, as if India is on a different planet.) Moreover, the U.S. is providing subsidies to BMWs and Mercedes Benz EVs if they are made and sold in the U.S.
“In Europe, there is still fear that a new economic architecture designed in Washington inevitably favors US manufacturers and workers,” Gideon Rachman wrote in an opinion article five feet in June.
George Friedman, a geopolitical forecaster and founder of Geopolitical Futures, an online publication that analyzes the course of global events, thinks it is an exaggeration to say Europe is shooting itself in the foot.
“Stubbing their toe and pretending agony is more like it,” he says. “Aside from the fact that many economic predictions have proven wrong or were overstated, obsession with the economy leaves a nation distracted from the fact that a major war is being waged near them and they are part of it. And in war shooting yourself in the foot is a minor wound,” he says, adding that the European economy was heavily involved in the war.
The women of the EU. Ursula von der Leyen (L), EU commissioner, is in line with the U.S. on keeping … [+] the Ukraine war going until Russia leaves the country. And Christine Lagarde, head of the European Central Bank, in charge of fighting inflation that is worse than some big emerging markets. (Kai Pfaffenbach/Pool via AP)
German Chancellor Olaf Scholz was booed by constituents recently, called a “war monger” as he grew increasingly angry, shaking fists and raised voice and all. He looked like a mad leader in a World War II documentary.
“Something like food security or power is very difficult to replace your opinion because your corporate security over it,” Ivan Kłyszcz, a Russian foreign policy analyst at Estonia’s International Center for Defense and Security said in an article about Ukraine war fatigue in Euronews in March.
On Feb. 10, the Progressive Alliance of Democrats in the European Parliament held an event called “Feeding Europe in Times of Crisis” where they blamed the EU’s Green Deal strategy called “From Farm to Fork” for putting pressure on food production, and causing a spike in food prices. Some of the goals of that program include making 25% of EU agriculture organic and reducing nitrogen-based fertilizers by 20% by 2030. Incentives and a huge propaganda campaign would be needed to get people to lower animal protein consumption by at least 20% and reduce dairy consumption by around 10%. For Brazil and the U.S. soy farmers – no more soybean imports to Europe if this policy has any legs.
European businesses are increasing against these climate change policies. Last year, Italy was ordered to pay UK-based oil and gas company Rockhopper more than €190 million for the Italian government’s refusal to grant an offshore oil concession in order to fight climate change.
The European Union was created mainly to serve the economic growth of the member states. It actually got its beginnings from the “European Coal and Steel Community” established in 1951. The prioritizing of economic growth allowed Europe to achieve phenomenal wealth just a few years after a massive war. This ultimately led to the creation of the EU in its current form.
But now the EU is more of an extension of the policy platforms put forth by the likes of Davos Man each year at the World Economic Forum. Is Europe a growth story anymore? Few would say so, despite the DAX and CAC run.
The EU has been in a constant state of crisis and disarray since the 2009 PIIGS (Portugal, Italy, Ireland, Greece, Spain) crisis that centered on Greece possibly leaving the EU; then the UK actually going ahead with it and leaving in “Brexit”; then came China-style Covid restrictions and requirements; and now the Ukraine war.
It is true that belief is greater than truth, but truth here also suggests a turning point opposed to the prestige quo.
An edifice of Euro-skeptical parties and right-wing nationalist parties in France, Hungary and Italy is making political team-building guided through Brussels incredibly difficult. The alternative party fur Deutschland (AfD) now gets about 30% in the polls after years after years. of being referred to through right-wing fanatics because of its neo-Nazi wing.
While the war in Ukraine continues, more and more countries outside Europe require end. This will exercise tension in Brussels, even if your policies are hand in hand with Washington.
Some recent titles are considered as a sign of greater “tiredness of war. “
Of course, the end of the war in Ukraine will be right for Europe. It is not known if the markets are already prices, given the distance of the Dow’s advance. Even the FTSE Europe ended Thursday morning despite the GDP news.
“Subsidies, rationing and other economic suppression strategies have allowed Europe to a crisis of power and inflation,” says Marko about the EU economy and the inventory market. “It is not sustainable. “
The last laugh. A year of appointment, investors have made greater in the recession, under any collection of expansion of the EU. [+] That in the United States despite the decrease in inflation here and a much more powerful hard work market.
A community. Many voices. Create a lazy account to pry your thoughts.
Our community is about connecting people through open and thoughtful conversations. We want our readers to share their views and exchange ideas and facts in a safe space.
To do this, follow the publication regulations the situations of use of our site. We have summarized some of those key regulations below. In other words, keep it civil.
Your post will be rejected if we notice that it seems to contain:
User accounts will be blocked if we notice or believe that users are engaged in:
So how can you be a difficult user?
Thank you for reading our community guidelines. Read the full list of publication regulations discovered in our site’s terms of use.