The global economy has entered an era of “fragility and volatility”, with the Eurozone, the United States and China reporting an economic slowdown. This is the warning of the International Monetary Fund.
The head of the institution draws attention to the fact that monetary and fiscal policies must be coordinated.
The most alarming news comes from Germany and Great Britain, countries where millions of Romanians also live. There, inflation continues to rise, and many companies are at risk of going out of business, due to bills and even possible power shortages.
“The resources and flexibility of the Union budget are extremely limited. The European budget (for seven years) was not designed to respond to the current challenges”, said the head of the European Commission. Ursula von der Leyen insisted that a budgetary rectification is needed to respond to emerging needs and the new geopolitical situation.
Warnings of financial institutions
At the same time, financial institutions are intensifying their warnings about the risk of a global recession.
Kristalina Georgieva, managing director, International Monetary Fund (IMF): “At the IMF, we have calculated that approximately one third of the world economy will report economic decline for at least two quarters in a row. And that means a global loss, from now until 2026, of four trillion dollars, as much as the GDP of Germany.”
For his part, the director of the World Bank emphasized that, since the last report, the planet has 70 million more poor people.
David Malpass, President of the World Bank: “Major economies in Europe are already slowing down. And we still don’t know what will be next year. Another finding is the 4% decrease in average income.”
Among the most alarming news comes from Berlin.
“We must avoid at all costs the gas shortage in winter by stimulating energy saving”
Siegfried Russwurm, head of the Federation of German Industry: “We are sliding towards recession, that’s why the concern of the federal government to ease the burden of price increases is the right direction. At the same time, we must avoid at all costs the gas shortage in winter by stimulating energy saving.”
And yet the German state will pay the gas bill for the month of December for all households and small and medium-sized enterprises, according to a two-stage capping of prices, on the recommendation of experts appointed by the Government. Under the scheme, the full payment in December will be followed next spring by a differentiated subsidy scheme.
Veronika Grimm, economist: “This means a monthly subsidy for paying the bill, so that, for domestic consumption, the cost drops to 12 euro cents per kwt/hour. Don’t even think that we will ever return to the price of seven eurocents per kwt/hour.”
The European Union’s gas warehouses exceeded an average storage level of 90%, above the 80% set by the EU bloc as an objective to guarantee a safe volume in autumn and winter, in the context of uncertainty related to supplies from Russia.
“Energy supply remains problematic”
Michael Vassiliadis, Chairman of the Mining, Chemical and Energy Industrial Union: “Energy supply remains problematic, despite storage filling.”
Before it gets better, it will get worse. From November 1, the European embargo for Russian oil comes into force, which will significantly increase the pressure on consumers. Due to the strike of TotalEnergie employees, the French are already feeling the shortage of gasoline. Since last week, the queues around gas stations are getting longer. Over 40% of the stations have already run out of fuel.
The situation is getting darker in Great Britain too, where the Truss government’s babbling about fiscal policy has had disastrous effects. The Bank of England was once again forced to intervene to ensure financial stability in the United Kingdom. The pound is losing ground again, and inflation for staple foods has reached 14%, a record for the last 50 years.
Source: PROTV news
Publication date: 11-10-2022 19:17
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