Inflation in the 19 countries that use the euro currency eased to 10% this month as fuel and utilities drifted down from painful highs, but it is near the record levels that have robbed consumers of spending power and led economists to predict a recession.
Banks in Italy, Portugal, Greece and Cyprus could suffer some of the biggest increases in non-performing loans while France, Ireland and Luxembourg could be among the best performers, the European Central Bank said in a fresh study on Tuesday.
Nineteen central bank governors from European Union countries are expected to arrive in Cyprus on Tuesday. The Governing Council of the European Central Bank decided to hold its non-monetary policy meeting in Cyprus, scheduled for Wednesday and Thursday, and to be chaired by ECB President Christine Lagarde.
Inflation in the European countries using the euro currency has broken into double digits as prices for electricity and natural gas soar, signaling a looming winter recession for one of the globe’s major economies as higher prices undermine consumers’ spending power.
Inflation in the European countries using the euro currency hit another record in August, fuelled by soaring energy prices mainly driven by Russia’s war in Ukraine.
It was meant to be Europe’s stellar year. A post-pandemic spending euphoria, supported by copious government spending was set to drive the economy and help fatigued households regain a sense of normality after two dreadful years.
Inflation in the European countries using the euro currency shot up to another record in July, pushed by higher energy prices driven partly by Russia’s war in Ukraine, but the economy still managed some meager growth.
The euro’s tumble to parity against the dollar has pushed the European Central Bank back against a wall, leaving its policymakers with only painful and economically costly choices.
The European Union is set on Tuesday to remove the final obstacles to Croatia adopting the euro, enabling the first expansion of the currency bloc in almost a decade.
Croatian lawmakers on Friday approved a law that paves the way for the introduction of the euro currency next year. Croatia is due to replace the Croatian kuna with the euro on January 1, 2023.
Greek central banker Yannis Stournaras said on Wednesday there was a possibility that the European Central Bank (ECB) might raise its base interest rate slightly by the end of the year.
The German government believes that European fiscal rules “have proven their flexibility during the pandemic and that there is no need for fundamental changes,” the former vice president of the country’s Bundesbank Juergen Stark, tells Kathimerini.
The European Commission revised downwards its growth forecasts for Greece in 2022, estimating that the GDP will grow by 4.9% this year, compared to an estimate of 5.2% in the autumn forecast of last November.
Bulgaria’s new centrist government is determined to bring the Balkan country into the eurozone in 2024, Finance Minister Assen Vassilev told Reuters in an interview on Friday.
Former socialist Prime Minister Costas Simitis celebrated the 20th anniversary of the adoption of the euro by Greece, calling it a successful national goal.
Twenty years ago on Saturday, around 300 million Europeans held a brand-new currency in their hands, the euro. From Lisbon to Helsinki to Athens, citizens were able to withdraw euro banknotes from their local ATMs, buy their groceries with euro coins and travel abroad without exchanging currency.
