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Euro Zone PMI in September Shows Lowest Economic Growth Since 1997: Recent Trends and Outlook for 2024

The Euro zone PMI in September 2023 showed the lowest economic growth since 1997. This is a worrying sign for the European economy, which is already facing a number of challenges, including the war in Ukraine, high inflation, and rising energy prices.

This article will explore the recent trends in the Euro zone PMI, the outlook for 2024, and the potential consequences of a recession or depression in the Euro zone.

Recent trends in the Euro zone PMI

The Euro zone PMI is a composite index that measures business activity in the manufacturing and services sectors. It is compiled by S&P Global from responses to monthly questionnaires sent to survey panels of manufacturers and service providers in Germany, France, Italy, Spain, the Netherlands, Austria, Ireland, and Greece.

The PMI is a key indicator of economic health, and a reading above 50 indicates expansion, while a reading below 50 indicates contraction.

The Euro zone PMI has been falling in recent months, and in September 2023 it fell to 47.1, its lowest level since April 2020. This indicates that economic activity in the Euro zone is contracting at the fastest pace since the early days of the COVID-19 pandemic.

The manufacturing PMI fell to 43.4 in September 2023, its lowest level since May 2020. This indicates that manufacturing activity in the Euro zone is contracting at the fastest pace since the early days of the COVID-19 pandemic.

The services PMI fell to 48.4 in September 2023, its lowest level since June 2020. This indicates that services activity in the Euro zone is contracting at the fastest pace since the early days of the COVID-19 pandemic.

Outlook for 2024

The outlook for the Euro zone economy in 2024 is highly uncertain. The war in Ukraine is still ongoing, and there is no end in sight. Inflation is at a record high, and energy prices are soaring.

In light of these challenges, many economists are forecasting a recession in the Euro zone in 2024. If a recession does occur, it is likely to be severe, as the Euro zone economy is already facing a number of headwinds.

Potential consequences of a recession or depression in the Euro zone

A recession or depression in the Euro zone would have a number of negative consequences, including:

  • Increased unemployment
  • Business closures
  • Decreased consumer spending
  • Lower tax revenue
  • Higher government debt
  • Social unrest

A recession or depression would also have a negative impact on the global economy, as the Euro zone is a major trading partner of many countries around the world.

Conclusion

The Euro zone economy is facing a number of challenges, including the war in Ukraine, high inflation, and rising energy prices. The Euro zone PMI in September 2023 showed the lowest economic growth since 1997, which is a worrying sign.

Many economists are forecasting a recession in the Euro zone in 2024. If a recession does occur, it is likely to be severe, as the Euro zone economy is already facing a number of headwinds.

A recession or depression in the Euro zone would have a number of negative consequences, including increased unemployment, business closures, decreased consumer spending, lower tax revenue, higher government debt, and social unrest. It would also have a negative impact on the global economy.

Policy recommendations

There are a number of things that policymakers can do to mitigate the risks of a recession or depression in the Euro zone, including:

  • Providing financial support to businesses and consumers
  • Investing in infrastructure and education
  • Raising interest rates to bring inflation under control
  • Reducing government spending to reduce the budget deficit

It is important to note that there is no guarantee that these measures will be successful in preventing a recession or depression. However, they are some of the steps that policymakers can take to try to reduce the impact of these economic shocks.

Eurozone Economy in Recession in 2023

The Eurozone economy shrank by 0.1% in the first quarter of 2023, according to revised data from the EU’s statistics agency Eurostat. This marks the second consecutive quarter of contraction, which officially puts the Eurozone into a recession.

The main driver of the recession was rising inflation, which has eroded consumer spending power. Inflation in the Eurozone hit a record high of 8.1% in May, and is expected to remain elevated for the rest of the year.

The recession is also being exacerbated by the war in Ukraine, which has disrupted supply chains and led to higher energy prices. The war is also weighing on consumer confidence, which has fallen to its lowest level in two years.

The European Central Bank (ECB) has said that it will raise interest rates in July in an effort to combat inflation. However, it is unclear whether this will be enough to prevent the recession from deepening.

The recession in the Eurozone is a major setback for the region, which has been struggling to recover from the COVID-19 pandemic. The recession is likely to lead to higher unemployment and slower economic growth. It is also likely to have a negative impact on the global economy.

Here are some of the key impacts of the Eurozone recession:

  • Higher unemployment: The recession is likely to lead to higher unemployment in the Eurozone. The unemployment rate in the Eurozone is currently at 7.2%, and is expected to rise to 7.5% by the end of 2023.
  • Slower economic growth: The recession is also likely to lead to slower economic growth in the Eurozone. The European Commission has forecast that the Eurozone economy will grow by 2.7% in 2023, down from 3.8% in 2022.
  • Negative impact on the global economy: The recession in the Eurozone is likely to have a negative impact on the global economy. The Eurozone is a major trading partner for many countries, and the recession is likely to lead to lower demand for goods and services from other countries.

What can be done to prevent the recession from deepening?

There are a number of things that can be done to prevent the recession from deepening. These include:

  • The ECB should raise interest rates more aggressively in order to combat inflation.
  • The European Union should provide more financial support to countries in the Eurozone that are struggling.
  • Governments in the Eurozone should implement policies to boost economic growth, such as infrastructure investment and tax cuts.

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The Eurozone Business Magazine is a leading source of news and analysis on the economic and business trends in the Eurozone. As the Eurozone continues to recover from the economic crisis of the late 2000s, there are still a number of risks that businesses operating in the region need to be aware of. In this article, we will explore some of the key risks facing Eurozone businesses and provide insights on how companies can mitigate these risks.

What is the Eurozone?

Before we dive into the risks facing Eurozone businesses, it’s important to understand what the Eurozone is. The Eurozone is a monetary union consisting of 19 European Union (EU) member states that have adopted the euro as their currency. These member states share a common monetary policy and have a single currency, which is managed by the European Central Bank (ECB).

There are 20 countries in the eurozone. The eurozone is a currency union of 20 member states of the European Union (EU) that have adopted the euro (€) as their primary currency and sole legal tender, and have thus fully implemented EMU policies. The 20 eurozone members are Austria, Belgium, Croatia, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain. The seven non-eurozone members of the EU are Bulgaria, Czech Republic, Denmark, Hungary, Poland, Romania, and Sweden.

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The Eurozone is one of the largest and most important economic regions in the world, with a population of over 340 million people and a combined GDP of around €11.2 trillion. The Eurozone is home to many leading global companies and is a major trading partner for countries around the world.

Business Risks in the Eurozone

Despite the recovery of the Eurozone economy in recent years, there are still a number of risks facing businesses operating in the region. Some of the key risks include:

  1. Economic Uncertainty

One of the biggest risks facing Eurozone businesses is economic uncertainty. The Eurozone economy is still recovering from the 2008 financial crisis and the subsequent debt crisis that affected many of the member states. Although the economy has been growing in recent years, there are still concerns about the sustainability of this growth and the potential for another downturn.

Uncertainty about the economic outlook can have a significant impact on businesses, as it can make it difficult to plan for the future and make investment decisions. Companies may be hesitant to invest in new projects or expand their operations if they are unsure about the direction of the economy.

To mitigate the risk of economic uncertainty, businesses should closely monitor the economic indicators in the region and be prepared to adjust their strategies if necessary. This may involve diversifying their operations or focusing on markets that are more stable.

  1. Political Instability

Another risk facing Eurozone businesses is political instability. The Eurozone is made up of many different countries, each with its own political system and priorities. This can make it challenging for businesses to navigate the regulatory environment and anticipate changes in government policy.

The rise of populist and nationalist movements in many Eurozone countries has also increased the risk of political instability. These movements often advocate for policies that are less friendly to businesses, such as protectionist trade policies or higher taxes.

To mitigate the risk of political instability, businesses should stay up-to-date on political developments in the region and build relationships with key policymakers. They should also be prepared to adjust their operations in response to changes in government policy.

  1. Brexit

The United Kingdom’s decision to leave the European Union (EU), known as Brexit, has created a significant risk for businesses operating in the Eurozone. The UK is a major trading partner for many Eurozone countries, and the uncertainty surrounding Brexit has created challenges for businesses that rely on trade with the UK.

Brexit has also created uncertainty about the future of the EU itself, as it has raised questions about the stability of the bloc and the willingness of other countries to remain members.

To mitigate the risk of Brexit, businesses should assess their exposure to the UK market and consider diversifying their operations to reduce their reliance on the UK. They should also closely monitor the negotiations between the UK and the EU and be prepared to adjust their operations in response to any changes in the trading relationship between the two.

  1. Currency Risk

Another risk facing businesses operating in the Eurozone is currency risk. As the Eurozone has a single currency, businesses that operate across multiple countries may be exposed to fluctuations in exchange rates. This can have a significant impact on the profitability of a business, as changes in exchange rates can affect the cost of goods, the value of assets, and the price of exports.

To mitigate the risk of currency fluctuations, businesses can use hedging strategies, such as forward contracts or options, to protect against adverse movements in exchange rates. They can also consider diversifying their operations across multiple currencies to reduce their exposure to any one currency.

  1. Cybersecurity Threats

The increasing reliance on digital technologies in the Eurozone has created a significant risk for businesses in the region. Cybersecurity threats, such as data breaches and cyberattacks, can cause significant damage to a business’s reputation and financial standing.

To mitigate the risk of cybersecurity threats, businesses should implement robust cybersecurity measures, such as firewalls, antivirus software, and employee training programs. They should also regularly review and update their cybersecurity policies to stay ahead of emerging threats.

The Eurozone is a complex and dynamic region, with a number of risks facing businesses operating within it. Economic uncertainty, political instability, Brexit, currency risk, and cybersecurity threats are just a few of the risks that companies need to be aware of.

To mitigate these risks, businesses should closely monitor the economic and political developments in the region, diversify their operations across multiple countries and currencies, and implement robust cybersecurity measures. By doing so, companies can navigate the challenges of operating in the Eurozone and position themselves for long-term success.

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18 August 2023 – Eurozone inflation at 5.3% in July versus 5.5% in June, according to Eurostat.

Services inflation, however, increased to 5.6% from 5.4%.

ECB is expected to increase interest rate again at some point this year if not in September 2023.

2 August 2023 – Eurozone manufacturing activity is at its lowest level in over 3 years.

New orders and output in Eurozone manufacturing are now falling at their fastest rate since the financial crisis 2008, not counting the collapse in activity during Covid lockdown.

23 July 2023 – The European Central Bank’s (ECB) decision to require European banks to provide weekly liquidity data from September is a sign of the times.

What are the responsibilities of the ECB?

The global financial system is in a state of flux, with rising interest rates, high inflation, and the ongoing war in Ukraine all posing risks to financial stability. The ECB’s move is a way to ensure that it has the latest information on the liquidity positions of European banks so that it can take action if needed to prevent a financial crisis.

There are both good and bad signs in the ECB’s decision. On the one hand, it is a sign that the ECB is taking the risks to financial stability seriously. The ECB has been criticised in the past for being too slow to react to financial crises, and this move shows that it is determined to be more proactive this time around.

On the other hand, the ECB’s decision could also be seen as a sign that a financial crisis is on the horizon. If the ECB is requiring weekly liquidity data from banks, it is likely because it is concerned about the banks’ ability to meet their short-term funding requirements. This could be a sign that the banks are already facing liquidity problems, or that they are at risk of facing liquidity problems in the near future.

It is too early to say whether the ECB’s decision is a good or bad sign in terms of the new timetable for the next financial crisis in the banking sector. However, the move is a reminder that the global financial system is still vulnerable to shocks, and that regulators need to be vigilant in monitoring the situation.

Here are some of the potential implications of the ECB’s decision:

  • It could lead to higher costs for banks. Banks will need to invest in systems and processes to collect and report weekly liquidity data. This could add to their operational costs.
  • It could make it more difficult for banks to raise short-term funding. If investors see that banks are having trouble meeting their liquidity requirements, they may be less willing to lend to them. This could make it more difficult for banks to access the short-term funding they need to operate.
  • It could increase the risk of a bank run. If investors lose confidence in a bank’s ability to meet its liquidity requirements, they may start withdrawing their deposits. This could lead to a bank run, which could force the bank to close.

The ECB’s decision is a significant development, and it is one that will be closely watched by the financial markets. It remains to be seen whether the move will help to prevent a financial crisis, or whether it will actually make a crisis more likely. However, one thing is for sure: the ECB is taking the risks to financial stability seriously, and it is determined to be more proactive this time around.

In addition to the potential implications for banks, the ECB’s decision could also have implications for the wider economy. If banks are forced to raise their lending rates in order to cover their increased costs, this could lead to higher interest rates for businesses and consumers. This could in turn dampen economic growth.

Overall, the ECB’s decision is a sign of the times. The global financial system is in a state of flux, and the ECB is taking steps to ensure that it is prepared for any potential shocks. However, it remains to be seen whether the move will be enough to prevent a financial crisis.

15 June 2023 – The European Central Bank raised interest rates for the eighth successive time as expected today and signalled further policy tightening to come.

The ECB has now increased borrowing costs by a combined 4 percentage points in a year, its fastest pace on record. ECB increased the deposit rate by 25 basis points to a 22-year high of 3.5%.

Prior to today’s announcement, markets had priced in another 25 basis point ECB rate hike in July or September and saw a moderate chance of another move later this year, perhaps in September or October.

2 May 2023 – Euro zone inflation accelerated last month from 6.9 percent to 7.0 percent according to Eurostat

Wages are also rising which increases risk of rising inflation and rising interest rates to combat rising inflation. ECB policymakers are split between a 25 and a 50 basis point interest rate increase. Nearly all 26 members of the Governing Council appear to agree that more policy tightening is required after a record 350 basis points of interest rate increases since July 2022.

Core inflation, excluding volatile food and fuel prices was 7.3 percent last month. Processed food, alcohol and tobacco inflation was 14.7 percent last month.

2 May 2023 – Euro zone factory activity contracted further in April

The HCOB final manufacturing Purchasing Managers’ Index (PMI), compiled by S&P Global, fell to 45.8 in April from March’s 47.3, well below the 50 mark that suggests growing factory activity. Eurozone factory activity has contracted for 10 months in a row.

4 April 2022 – Euro zone producer prices fell for a fifth consecutive month and by more than expected in February, almost entirely due to declining energy prices.

Producer prices are an early signal of inflationary trends because their changes are usually transferred onto final consumers.

Consumer inflation dropped by the most on record to 6.3% in March, but underlying inflation hit a new all-time high. The European Central Bank wants to keep inflation at 2.0% and has been raising interest rates repeatedly to curb price growth.

3 April 2023 – Activity at struggling factories across the euro zone fell further last month as consumers feeling the pinch from rising living costs cut back, according to a survey which did show the cost of manufacturing fell for the first time since mid-2020.

S&P Global’s final manufacturing Purchasing Managers’ Index (PMI) fell to 47.3 in March from February’s 48.5, just ahead of a preliminary reading of 47.1 but below the 50 mark separating growth from contraction for a ninth month.

16 September 2022 – Euro zone inflation hit another record high of 9.1% in August, EU statistics office Eurostat confirmed.

Euro zone inflation at highest rate since the euro was created in 1999.

The European Central Bank ECB, whose inflation target is 2 percent, last week raised its key interest rates by an unprecedented 75 basis points and promised further hikes, prioritising control of inflation over recession avoidance and higher Eurozone unemployment.

8 September 2022 – The European Central Bank ECB increased interest rates by 0.75 percent

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The European Central Bank ECB increased interest rates by 0.75 percent

18 August 2022 – The European Central Bank has said that launching a government-controlled digital currency, popularly known as a central bank digital currency (CBDC), was the “only solution” to guarantee a smooth continuation of the monetary system.

The ECB’s remarks were part of the Working Paper Series by the institution looking into monetary policy, financial stability, and their connection to CBDCs. The ECB gathered data from 15-0 academic papers on the matter.

The discussion paper written by Toni Ahnert, a research economist at the ECB, Katrin Assenmacher, the head of the monetary policy strategy division at ECB, and Peter Hoffman of the financial research division assessed interest in the “economics of money and payments,” noting that it had risen significantly over the past 15 years. The paper later assesses the intention behind creating CBDCs and the privacy issues surrounding these projects.

The paper noted that CBDCs would “guarantee a smooth continuation of the current monetary system.” This continuation would happen as physical money detached from its economic fitness and as cryptocurrency, and large fintech platforms continue to comprise a large part of the financial system.

Additionally, there was no regulatory alternative that promised to remove the threat of a two-layer monetary system. Currently, cash is only available physically, making it less practical to fit in the digital economy.

Moreover, there was a need to develop a CBDC that would reach the desired level of adoption. Moreover, regulatory action was needed to support these CBDCs in achieving their goals.

3 August 2022 – Euro zone retail sales fell in June according to European Union’s statistics office Eurostat.

The fall in Eurozone retail sales was more than twice as fast as financial experts expected.

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Worsening consumer experience in the Eurozone can be anticipated as producer prices, the prices of goods leaving the factory gates, are accelerating. This foretells increasing consumer inflation in the Eurozone and presumably interest rates assuming the European Central Bank ECB does actually want to try to control inflation in the Eurozone countries.

1 August 2022 – Manufacturing activity across the euro zone contracted last month for first time since June 2020

29 July 2022 – Consumer price growth in the 19 countries sharing the euro currency accelerated to 8.9 percent in July from 8.6 percent in June according to Eurostat.

The European Central Bank ECB target for inflation is 2 percent.

29 July 2022 – Professor of public finance at Berlin’s Technical University, Markus Kerber, tells Reuters that the European Central Bank ECB Transmission Protection Instrument (TPI) is illegally financing Italy and other southern Eurozone debt-laden countries.

The German academic behind the European Central Bank’s biggest court setback is reported as telling Reuters he is considering legal action against the ECB’s new bond-market shield, which he sees as “blatant” aid to Italy and other debt-laden states.

The ECB will openly become the underwriter of state debt. This is a blatant case of state financing (editor = against law).

Reuters news agency

The Transmission Protection Instrument (TPI), which will let the ECB buy bonds from countries that come under what it deems unjustified market pressure, provided they follow the European Union’s economic prescriptions.

Italy is widely seen as “too big to save” by means such as the euro zone bailout fund, which would not be able to cope with the costs of supporting its government in a debt crisis like the one that rocked the bloc a decade ago.

He also criticised the ECB’s decision to buy bonds from Italy, Spain, Portugal and Greece with some of the proceeds it receives from maturing German, French and Dutch debt, in a bid to cap those spreads.

“If the ECB says that a yield spread of more than 2 percentage points between Italy and Germany is unwarranted, it is replacing the markets,” Kerber said in interview. “How would the ECB even know that?”

27 July 2022 – European Union EU not so unified in voluntarily agreeing to cut gas use by 15 percent to try to prevent blackouts this winter.

Some countries have been granted exemptions and others have said they’re not going to voluntarily reduce gas consumption.

If EU member states do not voluntarily reduce gas consumption, the EU will bring in legislation to mandate to members cutting of gas consumption.

24 July 2022 – Only way to save Italy and perhaps other southern countries in Eurozone is via an anti-fragmentation tool that bails out southern countries at the expense of northern countries and breaks the fundamental finance rules for the Eurozone.

The Eurozone is probably in a recession now that could even turn into a lengthy depression as uncontrolled inflation and shrinking corporate profits turn into rising unemployment and significant corporate and personal debt defaulting across the south of Europe. The political risk is at best the Eurozone splits into two-speed zone, north and south. At worst, the political risk is the breakup of the Eurozone.

The unelected ECB is trying to save the Eurozone from collapse and stamping on the democratic rights of Eurozone citizens. At the same time Italy will be forced into perpetual bankruptcy under its growing mountain of debt. Eventually Italy will choose to leave in short-term or be allowed to go bankrupt by the rest of the Eurozone members unwilling to bailout Italy in the medium to long term – be effectively kicked out the big boys club. Alternatively, the Eurozone may just implode altogether in next few years.

5 July 2022 – What is going on with Dutch farmers?

Dutch farmers protest 2022

20 June 2022 – The risk of an abrupt correction on Europe’s financial and housing markets is high, European Central Bank President Christine Lagarde said today.

“Risks to financial stability have perceptibly increased since the beginning of this year,” she said in her capacity as the Chair of the European Systemic Risk Board, the European Union’s financial risk watchdog.

17 June 2022 – Euro zone inflation rose to a record high 8.1 percent last month, more than four times the European Central Bank’s ECB target.

Eurozone has no plans to increase interest rate until July at the earliest. The ECB has a minus 0.5 percent deposit rate designed to force extra money into the Eurozone. Commercial banks are paying the ECB to hold their cash but the ECB wants them to lend it to more businesses in the Eurozone. That’s why deposit rate of interest at ECB is negative. Instead of the ECB monetary policy controlling inflation it’s making it worse!

If the ECB increases interest rate by the 0.25 percent in July it will mean the interest rate is still negative 0.25 percent until September at the next interest rate review date. Current monetary policy for the Eurozone is therefore to keep making inflation worse until September 2022 at the earliest!

Even the little it is doing on quantitative tightening QT is set to be watered down. The southern Eurozone countries like Italy would not survive in the Eurozone if plans to curtail bond buying programme continue as planned. The southern countries would collapse with no access to afford financing. The ECB will muddle something together that it wants to look like QT but it will be business as usual printing cheap money into southern countries forever doomed to have bankrupt economy with the Eurozone, unable to leave and unable to prosper without permission from France and Germany, who will never give such permission. Southern countries will only be given enough to just survive inside the Eurozone – if France and Germany control the money, they control the southern people and businesses of the Eurozone.

10 June 2022 – Growing Eurozone financial crisis on back of accelerating inflation.

The European Central Bank ECB is currently sitting on government bonds from member states worth around €5 trillion and is currently making net purchases of over €30 billion a month. 

Emergency money supply and quantitative easing QE is the main reason for inflation rising in Euro zone. By mid to end 2021 the ECB should have normalised economic activity encouragement. Trouble os the European Commossoon EC and ECB now thinks it is normal to keep flooding the marketplace with cheap or even free money without a care to the unleashing of uncontrollable inflation destroying value of money. The ECB’s job is to keep inflation at 2 percent, yet it continues to pump petrol onto the inflation fire ripping through Europe. 

The only way to save the Eurozone now is induced Eurozone recession through increased interest rates which will push unemployment up. If inflation starts to fall in the recession, a depression maybe avoided by restarting QE and lowering rates. However if the biting point for the changing money supply continues to be mismanaged countries like Italy will be bankrupted and a two-speed Eurozone will have to be formed at best, at worst the Eurozone will implode.

31 May 2022 – EU leaders say they will block most Russian oil imports by the end of 2022.

The EU-wide ban will affect oil that arrives by sea – around two-thirds of imports – but not pipeline oil, following opposition from Hungary.

Poland and Germany have also pledged to end pipeline imports, meaning a total of 90% of Russian oil will be blocked.

So far, no sanctions on Russian gas exports to the EU have been put in place. The ban on Russian oil imports was initially proposed by the European Commission – which develops laws for member states – a month ago. But resistance, notably from Hungary, held up the EU’s troubled latest round of sanctions.

Russia cut off gas supplies to Dutch firm GasTerra on Tuesday for refusing to pay for supplies in roubles. The EU has said paying in Russian currency breaches sanctions and Gazprom has already cut supplies to Poland, Finland and Bulgaria.

Oil prices climbed on news of the EU embargo, with Brent crude rising above $123 a barrel, its highest level since March.

31 May 2022 – Annual Eurozone inflation in the 19 countries sharing the euro accelerated to 8.1 percent in May.

The false narrative of the European Central Bank ECB and Eurozone political leaders that inflationary pressures in Europe is nothing to worry about has always been and continues to be false.

It is not just:

  • Energy costs from war in Ukraine pulling up the headline inflation figure.
  • Food prices rising cause of war; or
  • Temporary price increases due to supply chain disruption from pandemic.

It is because Europe and the rest of the world’s central banks flooded the marketplace with cheap money, overstimulating the global economy in 2021 when even if the emergency wasn’t over, it was no longer time to stimulate the global economy so aggressively.

Inflation excluding food and energy prices accelerated to 4.4 percent year-on-year in May from 3.9 percent in April, while an even narrower measure, that also excludes alcohol and tobacco, accelerated to 3.8 percent year-on-year from 3.5 percent in April. The ECB target for healthy inflation is 2 percent. The ECB will not formally end a bond purchases scheme (QE) until the end of June. It will not increase interest rate until July at the earliest.

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Even if in 2021 it was not time to normalise interest rates and fully withdraw quantitative easing QE, it was appropriate in 2021 to at least signal with direction of travel with small interest rate increases.

Astonishingly the ECB has yet to increase interest rates to a level that could temper inflation, or stop QE, and Europeans are still drunk on cheap money flowing through business veins. Their hangover is now going to be severe, when it could have been mitigated with earlier withdrawal of monetary supply.

19 May 2022 – The euro zone recorded its first current account deficit in a decade in March.

In the 12 months to March, the current account surplus totalled 1.8% of the bloc’s GDP, down from 2.6% in the preceding 12 months.

13 May 2022 – Gas prices in Europe have jumped after Russia’s state-owned energy firm Gazprom said it would cut shipments through Yamal pipeline, a major supply route from Russia to Germany through Poland.

Gazprom said it was turning the tap off to the Yamal pipeline following fresh sanctions imposed by Moscow against European gas companies.

6 May 2022 – The International Monetary Fund IMF is forecasting the euro zone will grow by just 2.8 percent this year compared to 5.3 percent in 2021, with growth expected to slid further to 2.3 percent in 2023.

3 May 2022 – Euro zone producer prices have risen by more than a third in 12 months.

Prices at the euro zone factory gates have risen by 36.8 percent year-on-year according to Eurostat figures for March.

Eurozone unemployment rate has hit record low of 6.8 percent in March.

Consumer inflation in the Eurozone is at a record high of 7.5 percent in April. Yet the European Central Bank ECB continues to be coy about interest rate rises and Quantitative Tighening QT.

23 April 2022 – Be Careful What You Wish For!

No one wants vulnerable people left exposed. However, do you trust your politicians in Eurozone:

  • Could these new political powers result in protecting people in power who mismanaged the pandemic? Yes!
  • Could these new powers protect morally and financially corrupt politicians from public scrutiny? Yes!
  • Could these new powers mean that we will never ever return to the freedoms our ancestors fought so hard for in Europe over two World Wars? Yes.

Once you give up your rights to free speech to the powerful they will censor things they do not want you to see read watch or know about. They will protect their power we have given to them and we will never get it back.

22 April 2022 – European Central Bank ECB is reluctant to cut money supply in Eurozone via higher interest rates cause it knows the whole pack of cards could collapse

This would pull the rest of the world down with it. Eurozone inflation needs to be controlled to stop destroying value of cash saved, prevent social unrest over higher cost of living and put an end now to unsustainable economic business environment. Trouble is Europe Union is drowning in debt and ECB risks several member countries sovereign debt default by increasing cost of debt repayments by increasing interest rate.

Some Eurozone countries are owed huge amounts of money from other Eurozone countries. The ECB itself has been keeping some highly indebted Eurozone countries afloat by buying their over-valued money raising debt instruments needed to keep public services running and keep paying pensions.

Italy has its highest public debt-to-GDP ration ever. If the ECB increases interest rates it will be harder to climb out its huge debt hole and its banking system also drowning in debt could collapse as businesses go bust and stop repaying debts.

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It is even possible to argue that the covid pandemic saved Italy, the Eurozone and European Union EU from collapse. It gave the EU the opportunity to pump trillions on euros into the economy to save European banks from collapse prior to pandemic. The EU and the Eurozone has had a temporary reprieve from the threat of economic collapse but as inflation rises the need for higher interest rates grows daily. The unstable top cards of the shakey Eurozone pack of cards are soon to start to fall and the whole lot could come down if there is not some change to the structure of the Eurozone. Most likely in the form of repeated monetary bailouts for weakest economies if, and only if, the richest countries are prepared to bail them out in medium term. Longer term it probably needs root and branch changes such as two tier or two speed Eurozone. The alternative will be total collapse and splintering into separate countries once again. With a weakened Germany and possible changes in France too this weekend, the total collapse maybe sooner than later.

The QE taps are shortly to be switched off. This will force indebted countries like Italy and others into another Eurozone debt crisis which threatens the stability of national banks. This will be compounded as other parts, most parts, slip into recessionary levels of business activity. Out of control Eurozone inflation maybe perceived as a necessary evil in the short-term but the end of that line has come and worse is yet to come.

21st April 2022 – The European Central Bank ECB should end continuation of QE quantitative easing in July 2022 says ECB vice-president Luis de Guindos.

The timing of interest rate rises is not certain but next step will be upwards.

Inflation in Euro zone hit record 7.5percent in March 2022

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With inflation out of control in the Euro zone (as it is only going to rise from 7.5 percent in second half of 2022) the ECB continues to bury its end in the sand hoping it will stop being a problem without need to raise interest rate in June 2022. The ECB needs to raise interest rates in June at the latest and continue to raise rates in 2022 to get a grip on inflation destroying the lives of people in Euro zone, particularly the poor and middle income families.

14 April 2022 – ECB and Eurozone effectively delays tackling rising cost of living.

The ECB says it will eventually raise interest rates. Eventually we will all die! By not naming the date of a change upwards of interest rate in Eurozone, the ECB has effectively delayed the tome it will increase interest rates in Eurozone.

The ECB, in contrast to most central banks, is effectively condemning particularly the poor in Euro zone countries to further rises in cost of living. USA, Canada, UK and many countries in key marketplace of Asia Pacific region have recognised the damaging effects of inflation and have therefore increased interest rates to control inflation. The ECB has thrown the general public to the dogs in favour of more well off investors and big businesses.

13 April 2022 – The European Central Bank ECB may have to announce earlier than planned monetary tightening.

Inflation has risen to 7.5 percent but rising fast from a rate nearly 4 times higher than healthy inflation already! The ECB has a healthy inflation set at 2 percent.

Inflation is so out of control in the Eurozone, there is pressure to bring increased rates earlier than planned. However this is unlikely to come in before 3rd quarter. Interest rate increase take at least 6 months to feed into the economy. Therefore any action to quell inflationary pressures will not take affect until 2023 despite likelihood that inflation could easily rise to double figures by end of 2022 – too late!

What is the inflation in Eurozone?

What is the inflation in Eurozone?
Eurozone Business Risk Management BusinessRiskTV
Trouble Brewing In Eurozone BusinessRiskTV Eurozone Risks Review March 2022

BusinessRiskTV.com Never do today what you can put off until tomorrow does NOT apply to inflationary control! Putting off increasing interest rate today to see if tomorrow fuel and food prices fall will mean either bigger interest rate increases in future than would have been needed and/or longer lasting recession ie an economic depression in Eurozone. Spain: Spanish Business News In English BusinessRiskTV Spain Business Risks

Euro zone inflation was super-fast at 7.5 percent in March 2022. Set to go hypersonic fast later in 2022 due to increasing cost of commodities including fuel and food but also due to ECB reluctance to stem QE and/or increase interest rates.

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17 November 2021 – European Central Bank ECB, in its stability of economy report thinks the Eurozone has created a housing price bubble that could pop.

Eurozone housing market could suffer a correction in house prices in the coming months. Eurozone house prices are increasing at 7 percent, the fastest rate since 2005.

17 November 2021 – ECB President Christine Lagarde does not want to increase Eurozone interest rates in 2022 as she thinks tightening Eurozone monetary policy in 2022 would only choke off economic recovery.

France preparing to fish less in British waters from 2021

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