Double digits are already in the majority of inflation rates in Europe. In fact, in most of the eastern part of the continent is already over 20%According to July data from Eurostat. Although the shadow of this growing inflationclosely linked to the growth in energy prices, spreading to the rest of the continent, reaching important economies such as Great Britain or Germany, bringing them under control Political stability in Europe.
Investment Bank gave the last jug of cold water Citigroup, which yesterday predicted that UK inflation would hit 18.6% in 2023. The last time prices on the British island exceeded 18% was in 1976, when a global supply shock of oil has hit the global economy. The former EU member exceeded 10% inflation at the end of July, another 40-year high.
But City forecasts show there is no sign of a ceasefire, quite the contrary. “Risks continue to grow“Warns Benjamin Nabarro, economist at this investment bank. The United Kingdom is suffering the consequences of Brexit and a turbulent internal political crisis which makes it even more vulnerable to other problems facing the whole world. However, the old prospects for the continent are not much better.
Also yesterday, Germany’s central bank, the Bundesbank, predicted that inflation would continue to press the accelerator European economic engine in the months to come, as long as it could be above 10% in the autumn. According to the latest data from the European statistical agency, Eurostat, Germany July ended with an inflation rate of 8.5%, still below the euro zone average. However, with such an industrialized economy, germanic locomotive It is also one of the most vulnerable economies to changes in the energy market and, in particular, to any disruption in the supply of Russian gas, with which Putin is slowly transforming Europe and the West in a period of economic sanctions promoted against it. After playing wear out. country and himself.
crisis in germany
“The high level of uncertainty regarding gas supplies this winter and the sharp rise in prices are likely to have a severe impact on homes and businesses,” the Bundesbank warned in its monthly report. So far, post-pandemic inertia has meant that both European economies have weathered Moscow’s onslaught better than expected, but autumn is approaching and the aftermath of war is beginning to show signs of fatigue. And if the German economy suffers, all of Europe suffers.
Politically, the still unstable Italian government fell first as a direct result of the war in Ukraine and the upcoming elections are shaking all of Europe, with the extreme right closest to the Kremlin holding all the aces to s seize power. . that the third European economy is under the reins of the former banker Mario Draghi For populist Giorgia Meloni, she is not alone destabilizing factor for the continentPresident of France, Emmanuel Macron is in the short hours after losing the legislative elections and the German chancellor, Olaf ScholzoThe house has so many open facades that it has little time to think about filling the hole left by its predecessor at the top of the European Union.
Problems for European leadership
To all this must be added the constant boycott of the Hungarian President, Victor OrbanoFor community decisions and recent announcements from the Polish leader Matusz Moraviecki, which compared the European Union to Putin’s Russia. Brussels has to deal with all this, which with the departure of Draghi has lost another pillar in the European Council, with which to promote common measures that can serve to mitigate the consequences of a crisis that affects everyone again and again. first signs of lack of unity and leadership They were accompanied by the approval of the latest sanctions package, which Orban vetoed until he managed to stay out. But that too, Energy saving plan this winterA strategy that the community executive has put in place tailor-made for Berlin and the rest of the country without adequate consensus.
If prices continue to climb above 10% until next winter, the social difficulties to come in the foreseeable future will not help to calm the waters. According to the ECB’s forecast at the beginning of the summer, wages in Europe will increase by around 3% this year. The calculation is simple: loss of purchasing power It’s nothing to consider.
if he Bills that increase by more than three times the salary, unions and social agents will be seen with full force to pull demand. But if companies Production cost The cocktails have all the ingredients to reverse the recovery, and the reason why, even after seeing how their labor costs are skyrocketing. instability in societies that have begun to suffer financial fatigue Results of a war on the borders of Europe that penetrates directly into their homes, their businesses and their work.