All posts tagged: eurozone

Eurozone inflation fell less than expected in February – POLITICO

Eurozone inflation fell less than expected in February – POLITICO

Published by skeptic

The reading will reinforce the view of those within the ECB who have said it’s too early to begin discussing rate cuts. Austrian National Bank Governor Robert Holzmann told POLITICO this week that no such discussion is likely before June. Growth in service prices, where wage pressures are typically easier to spot, slowed marginally to 3.9 percent, corroborating earlier data from some of the bloc’s biggest member states. “Those services prices are sticky, now responsible for half of headline inflation, which will make the ECB uncomfortable,” Pepijn Bergsen, EU macro policy analyst at Medley Advisors, wrote on X. Headline inflation is expected to be bumpy throughout the early part of 2024, with large base effects tending to exaggerate the underlying trend of a return to stability. Pay negotiations and their effects on prices are also a key factor, with workers seeking to recover lost purchasing power after two years in which wages have failed to keep pace with prices. Top policymakers have put great emphasis on developments in wages, hoping for a moderation in pay rises and for …

EU cuts forecasts for eurozone growth ― for the third time – POLITICO

EU cuts forecasts for eurozone growth ― for the third time – POLITICO

Published by skeptic

Slower growth comes on the back of households counting the pennies as they are confronted with higher borrowing rates and decreasing state help to cover energy costs, which shot up after Russia invaded Ukraine two years ago. “After a bruising 2023, the European economy has emerged a little weaker than expected, although the rebound should speed up gradually this year and into 2025,” Commission Executive Vice President Valdis Dombrovskis said in a statement. The Commission did its best to put a positive spin on the data. Eurozone growth will begin to “stabilize” in the second half of this year and increase by 1.5 percent in 2025, the forecast said. Inflation, meanwhile, is set to slow faster than expected despite ongoing tensions in the Red Sea. By the end of 2025, inflation should fall to 2.2 percent from 2.7 percent this year, just above the European Central Bank’s 2 percent target. The Commission acknowledged that its positivity is still vulnerable to geopolitical risks. The conflict in the Middle East could worsen and the cost of shipping …

Going green won’t make you richer – POLITICO

Going green won’t make you richer – POLITICO

Published by skeptic

Wunsch said the majority of Europeans were aware of the need to act but that it was important they were told the truth. The green transition represents a negative supply shock with costs similar to the energy shock witnessed in the 1970s that caused a huge rise in the price of oil, he said. Carbon prices and the cost of greener sources will make energy in Europe five to eight times more expensive than in the U.S., he said. Authorities should stop living in denial and explain who will have to pay for these higher costs if they want to retain credibility, Wunsch said. “Without credibility, the first concrete signs of emerging problems will encourage popular anger and protest.” They should focus on cutting the regulatory burden in the case of climate rather than calling for more funding, Wunsch said. “Throwing massive amounts of money problems just to mitigate their effects is not a panacea.” Source link

Eurozone narrowly avoids recession as German economy shrinks | Eurozone

Eurozone narrowly avoids recession as German economy shrinks | Eurozone

Published by skeptic

The 20-nation eurozone has narrowly avoided recession after the region’s economy flatlined at the end of 2023, official figures show. Zero growth in the single currency zone in the final quarter of last year followed a 0.1% economic contraction in the third quarter, meaning that recession – defined as two consecutive quarters of contraction – was just averted. Economists polled by Reuters had expected the eurozone’s economy to shrink by 0.1% in the fourth quarter. The eurozone’s two biggest economies both performed poorly in late 2023, with Germany contracting by 0.3% and France posting no growth for a second successive quarter, according to Eurostat, the EU’s statistical agency. There was better news from the other two members of the eurozone’s “big four”. Italy, which had been expected to stagnate, recorded growth of 0.2%, while Spain expanded by 0.6% – three times the 0.2% forecast. Of the smaller eurozone economies, Portugal grew by 0.8% in the final quarter, Austria expanded by 0.2%, while Ireland’s economy contracted by 0.7% – its fourth successive quarterly fall in 2023. …

Christine Lagarde makes a poor central banker, ECB staff say  – POLITICO

Christine Lagarde makes a poor central banker, ECB staff say  – POLITICO

Published by skeptic

contentonly Voiced by artificial intelligence. FRANKFURT — On the global stage, European Central Bank President Christine Lagarde still exudes the air of an international rockstar of finance, but back home her records just won’t sell.  Most participants in a trade union survey of ECB staff, seen by POLITICO, said they don’t think she’s the right person to head the ECB now, with 50.6 percent of respondents ranking her overall performance in the first half of her eight-year term as “very poor” or “poor.” That’s a stark contrast to the glowing reports her predecessors Mario Draghi and Jean-Claude Trichet received in similar surveys at the end of their mandates. Less then one in 10 ranked Draghi “very poor” or “poor,” while 55 percent rated his performance “very good” or “outstanding.” Only 14.5 percent of respondents ranked Trichet as “very poor” or “poor.” Comments in the survey, which included responses from 1,159 of the ECB’s roughly 4,500 staff, point to widespread unhappiness about her wading too deeply into politics and using the ECB to boost her personal agenda, …

Bulgarian PM hints country may miss eurozone entry date – POLITICO

Bulgarian PM hints country may miss eurozone entry date – POLITICO

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Bulgarian Prime Minister Nikolay Denkov on Saturday said his country may fumble the January 1, 2025, target date to join the EU’s currency zone. The country’s target date to adopt the euro was “not sacred,” Denkov said during an appearance on the Bulgarian radio station Darik Radio. “What is sacred is not the date but having a clear direction and working on it. This is good for business, good for citizens, good for welfare, and good for the control of financial institutions,” Denkov said. Denkov also underlined that the ruling government coalition is doing everything it can to get the euro accession process up to speed. Last year, Bulgaria scrapped its target date to adopt the euro of January 2024 as its inflation rate failed to meet the standard and it had yet to implement certain legal changes. “The date is when all the Maastricht criteria are met. Maybe January 1, 2025, would be one possible date,” Commission Vice-President Valdis Dombrovskis said last February on the matter. In December, EU member states reached an agreement …

Belgian government breaks deadlock over renewal of central bank governor mandate – POLITICO

Belgian government breaks deadlock over renewal of central bank governor mandate – POLITICO

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The parties in Belgium’s coalition government have reached an agreement to renew Pierre Wunsch’s mandate as governor of the National Bank of Belgium (NBB). The agreement was reached at a meeting attended by government ministers, a Belgian official, speaking on condition of anonymity, told POLITICO. The renewal will allow Wunsch to participate at next meeting of the ECB Governing Council on January 25, avoiding international embarrassment for the country, which took over the rotating presidency of the EU Council at the start of the year. The government had failed to meet a deadline for extending Wunsch’s term at the beginning of this year amid political wrangling over other appointments within the administration between the seven parties that make up Prime Minister Alexander De Croo’s government. Last week the NBB’s Council of Regency asked Wunsch to stay at the helm of the bank temporarily as a caretaker until the government was able to break the deadlock. The bank had condemned the political impasse, calling the situation “highly exceptional” and saying that “this temporary solution is suboptimal …

European country warned against joining ‘unflattering’ Eurozone as future hangs in balance | World | News

European country warned against joining ‘unflattering’ Eurozone as future hangs in balance | World | News

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Czech politicians are facing a stern warning about the potential drawbacks of adopting the euro, as the country grapples with a decision on whether to join the Eurozone. A report released by the Czech National Bank (CNB) highlights the “unflattering” economic conditions within the Eurozone, cautioning against hasty decisions amid the uncertain future of the currency union. The CNB’s report underscores the lack of progress in deepening the economic and monetary union, emphasising the incomplete architecture of the euro area. It further warns about the unpredictable nature of the future development of the monetary union. The fiscal positions of most Eurozone countries are deemed “unflattering,” with lingering budget deficits from the coronavirus crisis and debt levels in some nations reaching precarious levels, according to the analysis. “The questions of the appropriate timing of the Czech Republic’s possible entry into the euro area and the impact of such a move on the Czech Republic can thus be answered only with great difficulty,” the report states. Furthermore, the Czech Republic currently falls short of meeting the Maastricht …

‘I fought to stop UK ditching pound – new eurozone figures show it’s a good job we didn’t’ | Politics | News

‘I fought to stop UK ditching pound – new eurozone figures show it’s a good job we didn’t’ | Politics | News

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The challenges facing the ailing eurozone, where inflation unexpectedly ticked up yesterday, vividly illustrate why Britain was right to steer clear 25 years ago, a former MEP who campaigned vociferously against the idea has said. But Rupert Lowe, a former Brexit Party MEP, believes Britain is still not reaping the full benefits of life outside the bloc – because it remains shackled to EU rules in too many areas. As a member of the Referendum Party in 1997, Mr Lowe campaigned alongside Sir James Goldsmith in 1997, when the issue was firmly on the agenda. After the election of that year, resulting in a Labour landslide, HMT Treasury, concluded that Britain’s economy was not ready for membership, with then-Chancellor Gordon Brown believed to have vetoed the idea. The Referendum Party, which called for a referendum on the European Union which happened 20 years later, only took 2.6 percent of the vote – but is widely reckoned to have deprived the Tories of up to 16 seats. Mr Lowe, now the business spokesman for Reform UK, …

Eurozone Price Pressures Edged Higher to End the Year

Eurozone Price Pressures Edged Higher to End the Year

Published by Sam

What It Looks Like in Germany, France and Spain: The effect from Europe’s largest economies. In Germany, inflation jumped at an annual rate of 3.8 percent, up from 2.3 percent in November. But the increase was less than expected and driven by a statistical quirk: Energy costs in late 2022 were pushed to particularly low levels by one-time payments to households. For this year, economists are forecasting only minimal economic growth for Germany, believing that consumers will hold back on spending and exports will be hurt by uncertainty in global markets. In France, where government support for energy costs were also withdrawn, consumer prices increased to 4.1 percent from 3.9 percent in November. Price increases in Italy fell slightly, to 0.5 percent. Last week, Spain reported that consumer price increases in December held steady at 3.3 percent. Overall Inflation Eases: Food prices are main driver of price increases but continue to slow. Energy prices in the eurozone shrank 6.7 percent from the previous December, when they jumped at an annual rate of 25.5 percent. The …