The price pressures across Europe are accelerating, with the latest data pointing to firms forced to pass on higher costs to consumers. The longer the West Asia crisis persists, the higher the inflation surge pressure in the eurozone. In this next report, we dive into the details of eurozone's price pressures based on the latest P-M-L business survey data. 

Eurozone Inflation Trends Under Close Watch 

The eurozone suffered the biggest inflation jump in March since Russia invaded Ukraine in 2022. That is according to economists assessing the fallout from the escalating war in West Asia.

Eurozone Inflation: Historic Energy Crisis Fueling Inflation Eurozone 

The eurozone suffered the biggest inflation jump in March since Russia invaded Ukraine in 2022. That is according to economists assessing the fallout from the escalating war in West Asia.


Eurozone Inflation: Historic Energy Crisis Fueling Inflation Eurozone

Bulgaria becomes the 21st country to ditch the national currency, the Bulgarian lev, to the euro as its legal tender on January 1, 2026, marking a pivotal moment in its integration with the European Union. The lev remains the legal tender in January until February 1, when the euro will become the sole official currency. The displays (lev and euro) will continue until August 2026. Until now, only six countries in the 27-member EU still use their own currencies: The Czech Republic, Denmark, Hungary, Poland, Romania and Sweden.<h2>Why is it significant?</h2>Bulgaria became a member of the European Union on January 1, 2007. Now, 19 years after its political integration, this financial integration can be interpreted as a geopolitical and ideological signal to Russia at a volatile moment. The euro is "not just a currency but a strategic choice", said the Bulgarian Prime Minister Rosen Zhelyazkov in November. He added that it strengthens Bulgaria's position in Europe.Bulgaria's past was tied to the Eastern Bloc in terms of the USSR's sphere of influence. Bulgaria's communist regime was entirely in sync with the East's leader in Moscow and was also a member of the Warsaw Pact and COMECON. At the end of the 80s, the USSR was engaged with problems from stagnation in the economy and opposition from the West in politics. Mikhail Gorbachev chose to abandon the Brezhnev Doctrine and show unwillingness to intervene by force to maintain the communist government in Bulgaria in power, and the result was a politically unstable nation. Centralised planning failed to adapt, and capitalist ideology swept in, making the Soviet model of economy obsolete. It propagated that liberal democracy was the natural endpoint of history.&nbsp;<h2>How is Bulgaria performing?</h2>However, political volatility still remains in Bulgaria; it has already held seven parliamentary elections since 2021. Bulgaria is amongst the poorest and most corrupt countries in the Eurozone. On December 11, Bulgarian Prime Minister Rosen Zhelyazkov resigned following mass protests against the 2026 budget and corruption allegations.&nbsp;Citizens are split about the Eurozone Accession between the pro-EU and Eurosceptic groups. Around 46.8 per cent of Bulgarians opposed the euro adoption, and 46.5 per cent supported it. Opponents argue that these will end the national identity, Bulgaria will remain at the periphery of the European Union and make it susceptible to economic shock. Supporters suggest that these will include them in the rich club and improve their living standard.&nbsp;"For such fundamental projects, the government of any democratic country takes into account the opinion of the public," Rossitsa Rangelova, professor at the Bulgarian Academy of Sciences'&nbsp;Economic Research Institute, told DW, noting that "the Bulgarian authorities have categorically rejected referendums as a form of public opinion over the years and still find ways to ignore them."The Balkan country of 6.4 million people estimates a 3 per cent GDP growth by the end of 2025 and subsequently 2.7 per cent and 2.1 per cent in 2026 and 2027, respectively. The country has a sovereign debt-to-GDP ratio at about 26.3 per cent by Q2FY25, still among the lowest in the bloc, whereas the average sovereign debt for the EU is from 81-88 per cent, specifically owing to high debt countries like Greece, Italy, France, Belgium and Spain.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;

Bulgaria becomes the 21st eurozone member in 2026. Why the euro shift is a geopolitical signal, how the economy is performing, and public concerns.

Bulgaria becomes the 21st country to ditch the national currency, the Bulgarian lev, to the euro as its legal tender on January 1, 2026, marking a pivotal moment in its integration with the European Union. The lev remains the legal tender in January until February 1, when the euro will become the sole official currency. The displays (lev and euro) will continue until August 2026. Until now, only six countries in the 27-member EU still use their own currencies: The Czech Republic, Denmark, Hungary, Poland, Romania and Sweden. Why is it significant? Bulgaria became a member of the European Union on January 1, 2007. Now, 19 years after its political integration, this financial integration can be interpreted as a geopolitical and ideological signal to Russia at a volatile moment. The euro is "not just a currency but a strategic choice", said the Bulgarian Prime Minister Rosen Zhelyazkov in November. He added that it strengthens Bulgaria's position in Europe. Bulgaria's past was tied to the Eastern Bloc in terms of the USSR's sphere of influence. Bulgaria's communist regime was entirely in sync with the East's leader in Moscow and was also a member of the Warsaw Pact and COMECON. At the end of the 80s, the USSR was engaged with problems from stagnation in the economy and opposition from the West in politics. Mikhail Gorbachev chose to abandon the Brezhnev Doctrine and show unwillingness to intervene by force to maintain the communist government in Bulgaria in power, and the result was a politically unstable nation. Centralised planning failed to adapt, and capitalist ideology swept in, making the Soviet model of economy obsolete. It propagated that liberal democracy was the natural endpoint of history. How is Bulgaria performing? However, political volatility still remains in Bulgaria; it has already held seven parliamentary elections since 2021. Bulgaria is amongst the poorest and most corrupt countries in the Eurozone. On December 11, Bulgarian Prime Minister Rosen Zhelyazkov resigned following mass protests against the 2026 budget and corruption allegations. Citizens are split about the Eurozone Accession between the pro-EU and Eurosceptic groups. Around 46.8 per cent of Bulgarians opposed the euro adoption, and 46.5 per cent supported it. Opponents argue that these will end the national identity, Bulgaria will remain at the periphery of the European Union and make it susceptible to economic shock. Supporters suggest that these will include them in the rich club and improve their living standard. "For such fundamental projects, the government of any democratic country takes into account the opinion of the public," Rossitsa Rangelova, professor at the Bulgarian Academy of Sciences' Economic Research Institute, told DW, noting that "the Bulgarian authorities have categorically rejected referendums as a form of public opinion over the years and still find ways to ignore them." The Balkan country of 6.4 million people estimates a 3 per cent GDP growth by the end of 2025 and subsequently 2.7 per cent and 2.1 per cent in 2026 and 2027, respectively. The country has a sovereign debt-to-GDP ratio at about 26.3 per cent by Q2FY25, still among the lowest in the bloc, whereas the average sovereign debt for the EU is from 81-88 per cent, specifically owing to high debt countries like Greece, Italy, France, Belgium and Spain.

Bulgaria becomes the 21st eurozone member in 2026. Why the euro shift is a geopolitical signal, how the economy is performing, and public concerns.

Bulgaria adopts the Euro in 2026, becoming the 21st member of the Eurozone

The European Central Bank is likely to cut interest rates again on Thursday, arguing that inflation within the eurozone is now largely tamed and the economy is stagnating.

That would be the first successive reduction in 13 years and emphasise a policy shift for the euro zone's central bank from inflation-fighting to sheltering economic growth, which has lagged well behind that of the United States for two years in a row.

The latest batch of economic data is likely to have sealed the deal within the ECB in favour of a rate cut since business activity, sentiment surveys, and inflation readings for September came in below estimates.

Several of the ECB officials, including the president herself, Christine Lagarde, have signalled the possibility of a fresh cut in borrowing costs, which is likely this month after recent releases, thus leading investors to fully discount the move.

"The trends in the real economy and inflation support the case for lower rates," Holger Schmieding, an economist at Berenberg, said.

A quarter-point cut on Thursday would take the rate that the ECB pays on banks' deposits to 3.25 per cent, while money markets nearly fully price in three further cuts by March 2025.

Lagarde and colleagues are unlikely to provide any explicit clues about what to look forward to on Thursday, repeating their mantra that decisions will be taken "meeting by meeting" responding to incoming data.

But most ECB watchers think the die is cast for cuts at every meeting.

"The implicit signal is likely to be that another cut is very likely in December unless the data improve," Paul Hollingsworth, an economist at BNP-Paribas, said.

Inflation &amp; Growth

The ECB can now rightly claim to have nearly tamed the worst inflation rise in a generation.

Prices grew by just 1.8 per cent last month. While inflation may edge above the ECB's 2 per cent target by the end of this year, it is likely to stay there or slightly lower for the foreseeable future.

But the economy has paid a heavy price for this.

The high interest rates have sucked investment and economic growth, which has battled for nearly two years. The latest statistics, which also include those on industrial output and bank lending, suggest more of the same in the coming months.

The labour market, which has been exceptionally strong, is also starting to look a bit soft with the vacancy rate - or the proportion of vacant jobs as a share of the total - abating from record highs.

This has thrown fuel on the fire of pressure mounting on the ECB to ease policy before it's too late.

"Now we face a new risk: undershooting target inflation, which could stifle economic growth," Portuguese central banker Mario Centeno said recently. "Fewer jobs and reduced investment would add to the sacrifice ratio already endured."

The problem is that some of this weakness stems from structural issues - including energy costs that are too high and low competitiveness hobbling Europe's industrial powerhouse, Germany.

These challenges cannot be overcome with lower interest rates alone, although they can help at the margin by making capital cheaper.

"We cannot ignore the headwinds to growth," ECB board member Isabel Schnabel said. "At the same time, monetary policy cannot resolve structural issues."

This article includes reporting from Reuters.

The European Central Bank is likely to cut interest rates again on Thursday, arguing that inflation within the eurozone is now largely tamed and the economy is stagnating.

The European Central Bank is likely to cut interest rates again on Thursday, arguing that inflation within the eurozone is now largely tamed and the economy is stagnating. That would be the first successive reduction in 13 years and emphasise a policy shift for the euro zone's central bank from inflation-fighting to sheltering economic growth, which has lagged well behind that of the United States for two years in a row. The latest batch of economic data is likely to have sealed the deal within the ECB in favour of a rate cut since business activity, sentiment surveys, and inflation readings for September came in below estimates. Several of the ECB officials, including the president herself, Christine Lagarde, have signalled the possibility of a fresh cut in borrowing costs, which is likely this month after recent releases, thus leading investors to fully discount the move. "The trends in the real economy and inflation support the case for lower rates," Holger Schmieding, an economist at Berenberg, said. A quarter-point cut on Thursday would take the rate that the ECB pays on banks' deposits to 3.25 per cent, while money markets nearly fully price in three further cuts by March 2025. Lagarde and colleagues are unlikely to provide any explicit clues about what to look forward to on Thursday, repeating their mantra that decisions will be taken "meeting by meeting" responding to incoming data. But most ECB watchers think the die is cast for cuts at every meeting. "The implicit signal is likely to be that another cut is very likely in December unless the data improve," Paul Hollingsworth, an economist at BNP-Paribas, said. Inflation & Growth The ECB can now rightly claim to have nearly tamed the worst inflation rise in a generation. Prices grew by just 1.8 per cent last month. While inflation may edge above the ECB's 2 per cent target by the end of this year, it is likely to stay there or slightly lower for the foreseeable future. But the economy has paid a heavy price for this. The high interest rates have sucked investment and economic growth, which has battled for nearly two years. The latest statistics, which also include those on industrial output and bank lending, suggest more of the same in the coming months. The labour market, which has been exceptionally strong, is also starting to look a bit soft with the vacancy rate - or the proportion of vacant jobs as a share of the total - abating from record highs. This has thrown fuel on the fire of pressure mounting on the ECB to ease policy before it's too late. "Now we face a new risk: undershooting target inflation, which could stifle economic growth," Portuguese central banker Mario Centeno said recently. "Fewer jobs and reduced investment would add to the sacrifice ratio already endured." The problem is that some of this weakness stems from structural issues - including energy costs that are too high and low competitiveness hobbling Europe's industrial powerhouse, Germany. These challenges cannot be overcome with lower interest rates alone, although they can help at the margin by making capital cheaper. "We cannot ignore the headwinds to growth," ECB board member Isabel Schnabel said. "At the same time, monetary policy cannot resolve structural issues." This article includes reporting from Reuters.

ECB poised for second consecutive rate cut amid economic stagnation

The European central bank took a cautious step towards easing monetary policy today, cutting interest rates for the first time since 2019.

ECB implements first rate cut since 2019, citing 2.6% Eurozone inflation

The Eurozone's economic recovery sputters at the start of the June quarter. While the first quarter likely saw subdued GDP growth after two-quarters of contraction, the June quarter started on a softer footing.

Eurozone's economic recovery remains a stop-and-go affair

The economic growth in the eurozone rebounded in the second quarter, according to the data released by the European Union’s (EU) agency, on Monday (July 31). The report has since led to a rise in European shares with the German blue-chip index or DAX hitting a record high.&nbsp;

<h2>Inflation in eurozone eases</h2>

The EU’s Eurostat data agency said that the growth in the 20 countries that use the euro referred to as the ‘eurozone’ reached 0.3 per cent over the second quarter, April-June period, after recording zero growth in the first three months of the year.&nbsp;

This comes after a long period of stagnation in the eurozone&nbsp;economy as inflation continues to fall from last year’s peak. According to the data, the inflation rate also declined from 5.5 per cent to 5.3 per cent in July.&nbsp;

Earlier this year, the European Commission (EC) winter forecasts also noted that the eurozone will narrowly avoid the technical recession which was expected last year in November as the growth since was 0.1 per cent quarter-on-quarter.&nbsp;

ALSO READ |&nbsp;<a href="https://www.wionews.com/business-economy/european-commission-raises-eurozone-growth-forecast-for-2023-is-expected-to-avoid-recession-561561">European Commission raises eurozone growth forecast for 2023 as inflation eases</a>

However, concerns about the inflation in the eurozone – which continues to be stubbornly high – remained. This is also in addition to fears about the slow growth and stagnated Gross Domestic Product (GDP) reported between April and June in the biggest European economy, Germany.&nbsp;

Meanwhile, the French and Spanish economies grew more than expected. “This won’t be welcome news in Frankfurt, and will help the hawk’s cause,” said Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics.&nbsp;

He added, “Coupled with scary-looking Q2 wage data, we still think that the ECB hawks will successfully push for one final hike in September before the data turn decisively against them. This is a close call.”

In the Eurozone, Belgium had the lowest inflation rate, at 1.6 per cent in July, according to the Eurostat data. However, the food and drink costs continue to rise sharply, at 10.8 per cent when compared with 11.6 per cent in June.&nbsp;

ALSO READ |&nbsp;<a href="https://www.wionews.com/business-economy/eurozones-inflation-tumbles-fuels-rate-cut-debate-in-european-central-bank-599500">Eurozone's inflation tumbles, fuels rate cut debate in European Central Bank</a>

<h2>European stocks rise after report</h2>

After the data by the EU agency was released, European shares rose, including&nbsp;the German DAX as it inched up 0.1 per cent and hit a record high for the second consecutive session, according to Reuters. The rise was attributed to drugs and pesticide maker Bayer.

Additionally,&nbsp;pan-European STOXX 600 and&nbsp;Italy's FTSE MIB index also witnessed a rise&nbsp;on Monday.&nbsp;

<h2>ECB interest rate hikes</h2>

The European Central Bank (ECB), which has also sought to calm the soaring inflation – following in the footsteps of the US Federal Reserve and Bank of England has aggressively raised interest rates – announced its ninth consecutive hike, last week.&nbsp;

While there has been a recent drop in inflation, the figures remain far higher than the ECB’s two-per cent target. After the latest hike, the interest rate stood at 3.75 per cent highest since 2000-01.&nbsp;

ALSO READ |&nbsp;<a href="https://www.wionews.com/business-economy/ecb-hikes-quarter-percentage-points-warns-of-persistence-inflation-620122">ECB hikes interest rate by 0.25 percentage points as inflation spooks Eurozone</a>

While ECB president Christine Lagarde last week indicated that the aggressive interest rate hikes could be paused, analysts suggest another hike is still a possibility which might further constrain economic growth.

Bert Colijn, senior eurozone economist at ING, a global financial institution, said that the recent eurozone GDP reading would not be “a dovish argument” at the next ECB rate-setting meeting in September, “leaving a further hike on the table,” report AFP.&nbsp;

(With inputs from agencies)&nbsp; 
 
 
&nbsp;

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The economic growth in the eurozone rebounded in the second quarter, according to the data released by the European Union’s (EU) agency, on Monday (July 31). The report has since led to a rise in European shares with the German blue-chip index or DAX hitting a record high.

The economic growth in the eurozone rebounded in the second quarter, according to the data released by the European Union’s (EU) agency, on Monday (July 31). The report has since led to a rise in European shares with the German blue-chip index or DAX hitting a record high. Inflation in eurozone eases The EU’s Eurostat data agency said that the growth in the 20 countries that use the euro referred to as the ‘eurozone’ reached 0.3 per cent over the second quarter, April-June period, after recording zero growth in the first three months of the year. This comes after a long period of stagnation in the eurozone economy as inflation continues to fall from last year’s peak. According to the data, the inflation rate also declined from 5.5 per cent to 5.3 per cent in July. Earlier this year, the European Commission (EC) winter forecasts also noted that the eurozone will narrowly avoid the technical recession which was expected last year in November as the growth since was 0.1 per cent quarter-on-quarter. ALSO READ | European Commission raises eurozone growth forecast for 2023 as inflation eases However, concerns about the inflation in the eurozone – which continues to be stubbornly high – remained. This is also in addition to fears about the slow growth and stagnated Gross Domestic Product (GDP) reported between April and June in the biggest European economy, Germany. Meanwhile, the French and Spanish economies grew more than expected. “This won’t be welcome news in Frankfurt, and will help the hawk’s cause,” said Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics. He added, “Coupled with scary-looking Q2 wage data, we still think that the ECB hawks will successfully push for one final hike in September before the data turn decisively against them. This is a close call.” In the Eurozone, Belgium had the lowest inflation rate, at 1.6 per cent in July, according to the Eurostat data. However, the food and drink costs continue to rise sharply, at 10.8 per cent when compared with 11.6 per cent in June. ALSO READ | Eurozone's inflation tumbles, fuels rate cut debate in European Central Bank European stocks rise after report After the data by the EU agency was released, European shares rose, including the German DAX as it inched up 0.1 per cent and hit a record high for the second consecutive session, according to Reuters. The rise was attributed to drugs and pesticide maker Bayer. Additionally, pan-European STOXX 600 and Italy's FTSE MIB index also witnessed a rise on Monday. ECB interest rate hikes The European Central Bank (ECB), which has also sought to calm the soaring inflation – following in the footsteps of the US Federal Reserve and Bank of England has aggressively raised interest rates – announced its ninth consecutive hike, last week. While there has been a recent drop in inflation, the figures remain far higher than the ECB’s two-per cent target. After the latest hike, the interest rate stood at 3.75 per cent highest since 2000-01. ALSO READ | ECB hikes interest rate by 0.25 percentage points as inflation spooks Eurozone While ECB president Christine Lagarde last week indicated that the aggressive interest rate hikes could be paused, analysts suggest another hike is still a possibility which might further constrain economic growth. Bert Colijn, senior eurozone economist at ING, a global financial institution, said that the recent eurozone GDP reading would not be “a dovish argument” at the next ECB rate-setting meeting in September, “leaving a further hike on the table,” report AFP. (With inputs from agencies) WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

Eurozone economy returns to growth after inflation eases in July; Germany’s DAX hits new record

The eurozone entered a technical recession in the first three months of 2023 as soaring energy prices and rising interest rates drove inflation higher. The eurozone is made up of 20 member countries of the European Union (EU) that have adopted the euro (€) as their primary currency and sole legal tender.

Euro zone enters recession after Germany, Ireland growth revision

Kristalina Georgieva, the Managing Director of the International Monetary Fund (IMF), has expressed confidence that her home country Bulgaria will ultimately join the Euro zone, despite political obstacles that have hindered the nation's bid for the past three years.&nbsp;

Speaking at a joint IMF and Croatian central bank conference in Dubrovnik, Georgieva emphasized that Bulgaria's entry into the Euro zone is a matter of "when, not if".&nbsp;

Bulgaria, alongside Croatia, entered the Euro-area's waiting room, called ERM-2, in 2020. While Croatia successfully adopted the Euro in January, Bulgaria, a former Soviet satellite state in Eastern Europe, had to abandon its initial goal of joining the Euro zone by 2024 due to political turmoil.&nbsp;

Georgieva pointed out that Croatia's more stable political environment, exemplified by the re-election of prime minister Andrej Plenkovic in the 2020 general election, played a significant role in the country's successful transition. She stressed the need for political will and societal unity during challenging times, underscoring that such conditions can lead to favorable outcomes.&nbsp;

“The contrast between Croatia and Bulgaria shows that where there’s political will, and where society is united, even in the hardest times, a good outcome can be achieved,” Bloomberg quoted Georgieva as saying.

Georgieva also acknowledged the significance of Bulgaria's currency board, which has ensured stability in the country, and reassured that no one desires to see it disappear. The Sofia-born economist said Bulgaria's currency board “has anchored the stability in the country. Nobody wants to see the currency board go away.”

Kristalina Georgieva, the Managing Director of the International Monetary Fund (IMF), has expressed confidence that her home country Bulgaria will ultimately join the Euro zone, despite political obstacles that have hindered the nation's bid for the past three years.

Kristalina Georgieva, the Managing Director of the International Monetary Fund (IMF), has expressed confidence that her home country Bulgaria will ultimately join the Euro zone, despite political obstacles that have hindered the nation's bid for the past three years. Speaking at a joint IMF and Croatian central bank conference in Dubrovnik, Georgieva emphasized that Bulgaria's entry into the Euro zone is a matter of "when, not if". Bulgaria, alongside Croatia, entered the Euro-area's waiting room, called ERM-2, in 2020. While Croatia successfully adopted the Euro in January, Bulgaria, a former Soviet satellite state in Eastern Europe, had to abandon its initial goal of joining the Euro zone by 2024 due to political turmoil. Georgieva pointed out that Croatia's more stable political environment, exemplified by the re-election of prime minister Andrej Plenkovic in the 2020 general election, played a significant role in the country's successful transition. She stressed the need for political will and societal unity during challenging times, underscoring that such conditions can lead to favorable outcomes. “The contrast between Croatia and Bulgaria shows that where there’s political will, and where society is united, even in the hardest times, a good outcome can be achieved,” Bloomberg quoted Georgieva as saying. Georgieva also acknowledged the significance of Bulgaria's currency board, which has ensured stability in the country, and reassured that no one desires to see it disappear. The Sofia-born economist said Bulgaria's currency board “has anchored the stability in the country. Nobody wants to see the currency board go away.”

Bulgaria's entry into Euro zone: IMF chief optimistic despite political deadlock

Inflation in the Eurozone has decelerated to its slowest pace since Russia's invasion of Ukraine.&nbsp;The initial estimate from the European Union's statistics agency cited by CNN reveals that consumer prices in the euro area rose by 6.1 percent last month compared to the previous year, marking a significant drop from April's 7 percent surge.&nbsp;

Germany, France, Italy, and Spain, the major economies within the Eurozone, have all witnessed a sharp decline in inflation.&nbsp;

The easing of inflationary pressures can be attributed to various factors.&nbsp;Food prices moderated for the&nbsp;second consecutive month in May. Energy prices, however, declined during the same period. Moreover, core inflation, which excludes food and energy, hit a four-month low of 5.3 percent. These developments indicate a gradual cooling down of the previously heated price trends.

The downward trend in inflation&nbsp;has also ignited discussions about the need for the European Central Bank (ECB) to reconsider its course of action. But ECB President Christine Lagarde was quoted by CNN as saying that there is still work to be done before interest rates can be considered sufficiently restrictive.

Mixed Signals and Economic Indicators

While May's inflation data encourages some policymakers to advocate for an end to the ECB's tightening cycle, others remain cautious due to persistent services inflation and the tight labour market.&nbsp;

The Eurozone's unemployment rate dipped to 6.5 percent in April, demonstrating a robust economy. However, separate data revealed that lending by banks in the Eurozone stagnated in April, with loans to households barely showing any growth. These mixed signals make it challenging for the ECB to determine the most appropriate monetary policy approach.

If the gradual easing of core inflation continues, analysts cited by CNN predict that the ECB will settle for two more interest rate hikes, eventually reaching a peak deposit rate of 3.75 percent.&nbsp;

This will depend on various factors, including economic indicators, lending patterns, and the evolution of inflationary pressures.&nbsp;However, economists caution that the stagnant lending in the Eurozone provides further evidence that the ECB's tightening policy is effective, giving proponents of a rate hike halt a stronger argument.

Inflation in the Eurozone has decelerated to its slowest pace since Russia's invasion of Ukraine. The initial estimate from the European Union's statistics agency cited by CNN reveals that consumer prices in the euro area rose by 6.

Inflation in the Eurozone has decelerated to its slowest pace since Russia's invasion of Ukraine. The initial estimate from the European Union's statistics agency cited by CNN reveals that consumer prices in the euro area rose by 6.1 percent last month compared to the previous year, marking a significant drop from April's 7 percent surge. Germany, France, Italy, and Spain, the major economies within the Eurozone, have all witnessed a sharp decline in inflation. The easing of inflationary pressures can be attributed to various factors. Food prices moderated for the second consecutive month in May. Energy prices, however, declined during the same period. Moreover, core inflation, which excludes food and energy, hit a four-month low of 5.3 percent. These developments indicate a gradual cooling down of the previously heated price trends. The downward trend in inflation has also ignited discussions about the need for the European Central Bank (ECB) to reconsider its course of action. But ECB President Christine Lagarde was quoted by CNN as saying that there is still work to be done before interest rates can be considered sufficiently restrictive. Mixed Signals and Economic Indicators While May's inflation data encourages some policymakers to advocate for an end to the ECB's tightening cycle, others remain cautious due to persistent services inflation and the tight labour market. The Eurozone's unemployment rate dipped to 6.5 percent in April, demonstrating a robust economy. However, separate data revealed that lending by banks in the Eurozone stagnated in April, with loans to households barely showing any growth. These mixed signals make it challenging for the ECB to determine the most appropriate monetary policy approach. If the gradual easing of core inflation continues, analysts cited by CNN predict that the ECB will settle for two more interest rate hikes, eventually reaching a peak deposit rate of 3.75 percent. This will depend on various factors, including economic indicators, lending patterns, and the evolution of inflationary pressures. However, economists caution that the stagnant lending in the Eurozone provides further evidence that the ECB's tightening policy is effective, giving proponents of a rate hike halt a stronger argument.

Eurozone's inflation tumbles, fuels rate cut debate in European Central Bank

In a recent interview, former United States treasury secretary Larry Summers said that Brexit will be remembered as a “historic economic error” which could have not only damaged the United Kingdom’s economy but helped increase the country’s inflation. Meanwhile, inflation in the Eurozone has fallen to 6.1 per cent in May 2023 down from 7.0 per cent, in April.&nbsp;

<h2>What did Summers say about the UK economy?</h2>

Speaking to BBC Radio 4’s Today Programme, Summers on Thursday said, “Brexit will be remembered as a historic economic error that reduced the competitiveness of the UK economy, put downward pressure on the pound and upward pressure on prices, limited import goods and limited in some ways the supply of labour. All of which contributed to higher inflation.”

One of the most prominent economists who served as the US treasury secretary, Summers also spoke about how the UK economic policy has been “substantially flawed for some years,” speaking particularly about its exit from the European Union (EU) and how it has driven costs higher in Britain.&nbsp;

Summers also went on to criticise officials at the Bank of England for Britain’s high inflation and said that the country’s problems have been “reinforced by very ill-judged monetary policies”.&nbsp;

This comes as the UK has been witnessing a cost-of-living crisis and soaring inflation. Last week, the country’s Office for National Statistics reported that inflation remains stubbornly high at 8.7 per cent in April, but&nbsp;it is down from 10.1 per cent in March.&nbsp;

Earlier this month, a report by the London School of Economics (LSE) said that British households have paid billions to make up for the extra cost of trade barriers on food imports from the EU. Notably, the UK also has the highest rate of inflation among the Group of Seven (G7) nations.&nbsp;

<h2>Eurozone inflation falls to 6.1 per cent&nbsp;</h2>

Meanwhile, inflation in the 20 countries which use the euro and are referred to as the ‘eurozone’ fell to 6.1 per cent in May 2023, down from 7.0 per cent the month prior, reported EU’s Eurostat agency. This drop also takes the countries’ annual inflation closer to the European Central Bank’s target of two per cent.&nbsp;

The decrease in inflation has been attributed to a drop in energy prices, while food and alcohol were the main components driving inflation, rising 12.5 per cent in May which was one per cent lower than the month before. Last year, the Eurozone was struggling with high inflation at 10.6 per cent due to the effects of the Russian invasion of Ukraine and supply chain issues post-Covid.&nbsp;

(With inputs from agencies)&nbsp; 
 
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In a recent interview, former United States treasury secretary Larry Summers said that Brexit will be remembered as a “historic economic error” which could have not only damaged the United Kingdom’s economy but helped increase the country’s inflation.

In a recent interview, former United States treasury secretary Larry Summers said that Brexit will be remembered as a “historic economic error” which could have not only damaged the United Kingdom’s economy but helped increase the country’s inflation. Meanwhile, inflation in the Eurozone has fallen to 6.1 per cent in May 2023 down from 7.0 per cent, in April. What did Summers say about the UK economy? Speaking to BBC Radio 4’s Today Programme, Summers on Thursday said, “Brexit will be remembered as a historic economic error that reduced the competitiveness of the UK economy, put downward pressure on the pound and upward pressure on prices, limited import goods and limited in some ways the supply of labour. All of which contributed to higher inflation.” One of the most prominent economists who served as the US treasury secretary, Summers also spoke about how the UK economic policy has been “substantially flawed for some years,” speaking particularly about its exit from the European Union (EU) and how it has driven costs higher in Britain. Summers also went on to criticise officials at the Bank of England for Britain’s high inflation and said that the country’s problems have been “reinforced by very ill-judged monetary policies”. This comes as the UK has been witnessing a cost-of-living crisis and soaring inflation. Last week, the country’s Office for National Statistics reported that inflation remains stubbornly high at 8.7 per cent in April, but it is down from 10.1 per cent in March. Earlier this month, a report by the London School of Economics (LSE) said that British households have paid billions to make up for the extra cost of trade barriers on food imports from the EU. Notably, the UK also has the highest rate of inflation among the Group of Seven (G7) nations. Eurozone inflation falls to 6.1 per cent Meanwhile, inflation in the 20 countries which use the euro and are referred to as the ‘eurozone’ fell to 6.1 per cent in May 2023, down from 7.0 per cent the month prior, reported EU’s Eurostat agency. This drop also takes the countries’ annual inflation closer to the European Central Bank’s target of two per cent. The decrease in inflation has been attributed to a drop in energy prices, while food and alcohol were the main components driving inflation, rising 12.5 per cent in May which was one per cent lower than the month before. Last year, the Eurozone was struggling with high inflation at 10.6 per cent due to the effects of the Russian invasion of Ukraine and supply chain issues post-Covid. (With inputs from agencies) WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

‘Historic economic error’: Former US treasury secretary Larry Summers about Brexit; Eurozone inflation falls

The European Commission (EC), on Monday (February 13), raised its growth forecast for the eurozone this year and also expects inflation to be lower than previously estimated at the end of 2022. The expected GDP for the eurozone was raised by 0.9 per cent which was up from the previously predicted 0.3 per cent. Additionally, the eurozone might also dodge recession this year after high levels of gas storage helped ease the energy crisis and labour markets continue to hold up, said the EC.&nbsp;

The EU’s executive arm released the new winter forecasts which show that the 20 countries which use the euro referred to as the ‘eurozone’ will narrowly avoid the technical recession which was expected last year in November as the growth since was 0.1 per cent quarter-on-quarter. Furthermore, the wider European Union is expected to grow by 0.8 per cent from the previously predicted 0.3 per cent, said the EC.&nbsp;

“Almost one year after Russia launched its war of aggression against Ukraine, the EU economy is on a better footing than expected in autumn”, said the commission, on Monday. They added, “Inflation appears to have peaked and favourable developments in energy markets foreshadow further forceful declines.”

ALSO READ |&nbsp;<a href="https://www.wionews.com/business-economy/eurozone-inflation-hits-record-as-gas-crunch-looms-493665">Eurozone inflation hits record, as gas crunch looms</a>

This also comes as the wholesale gas prices have fallen “below pre-war levels” which has been attributed to the above-seasonal average levels of gas storage. The commission also said that the “forecast crucially hinges on the purely technical assumption that Russia's aggression of Ukraine will not escalate”.&nbsp;

Furthermore, the EU executive arm in Brussels while announcing the forecast said, “Both areas are now set to narrowly avoid the technical recession that was anticipated for the turn of the year. The forecast also slightly lowers the projections for inflation for both 2023 and 2024.” Notably, the growth forecast for 2024 remains unchanged with 1.5 per cent for the eurozone and 1.6 per cent for the EU.&nbsp;

The estimates also show that all EU states are expected to witness growth this year except Sweden which might contract by 0.8 per cent as the country is also facing a recession along with Denmark. Whereas, Germany the region’s biggest economy and Austria have also witnessed two consecutive quarters of contraction making them the only two eurozone countries which are facing this phenomenon. &nbsp; 
 
ALSO READ |&nbsp;<a href="https://www.wionews.com/world/global-economy-faces-tough-time-in-2023-says-imf-head-548634">Third of global economy to face recession in 2023, warns IMF head</a>

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Growth forecast for 2023 (%): 
 
🇮🇪 4.9 
🇲🇹 3.1 
🇷🇴 2.5 
🇱🇺 1.7 
🇨🇾 1.6 
🇸🇰 1.5 
🇪🇸 1.4 
🇧🇬 1.4 
🇬🇷 1.2 
🇭🇷 1.2 
🇸🇮 1.0 
🇵🇹 1.0 
🇳🇱 0.9 
🇧🇪 0.8 
🇮🇹 0.8 
🇪🇺 0.8 
🇫🇷 0.6 
🇭🇺 0.6 
🇦🇹 0.5 
🇵🇱 0.4 
🇱🇹 0.3 
🇩🇪 0.2 
🇫🇮 0.2 
🇨🇿 0.1 
🇪🇪 0.1 
🇱🇻 0.1 
🇩🇰 0.1 
🇸🇪 -0.8 
 
Winter <a href="https://twitter.com/hashtag/ECForecast?src=hash&amp;ref_src=twsrc%5Etfw">#ECForecast</a> ↓
— European Commission 🇪🇺 (@EU_Commission) <a href="https://twitter.com/EU_Commission/status/1625058425716588548?ref_src=twsrc%5Etfw">February 13, 2023</a></blockquote>
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However, the commission has also said there is high uncertainty surrounding the forecast but the risks to growth are now broadly balanced. This could be due to a rise in domestic demand and if the “recent declines in wholesale gas prices pass through to consumer prices more strongly and consumption proves more resilient”, said the EC.&nbsp;

It added, “Nonetheless, a potential reversal of that fall cannot be ruled out in the context of continued geopolitical tensions”. Additionally, the Economy Commissioner Paolo Gentiloni also cautioned that “better than expected doesn’t mean good,” and said Europe continues to face a difficult period of slow growth and only a gradual easing in inflation.

ALSO READ |&nbsp;<a href="https://www.wionews.com/business-economy/explained-imf-lifts-2023-global-growth-forecast-in-world-economic-outlook-updated-report-557556">Explained: IMF lifts 2023 global growth forecast in World Economic Outlook updated report</a>

Additionally, households and businesses in Europe continue to face high power bills, as core inflation with the exception of energy and unprocessed food is still affecting consumers’ purchasing power, said the commission.&nbsp;

This could signal further raises in interest rates by the European Central Bank, addressing which the commissioner said, “There are of course consequences of the tightening of monetary policy, but…there is the very positive aspect of this tightening, which is the contribution to reducing inflation, so overall I think this is balanced”.&nbsp;

(With inputs from agencies)&nbsp; 
 
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The European Commission (EC), on Monday (February 13), raised its growth forecast for the eurozone this year and also expects inflation to be lower than previously estimated at the end of 2022.

The European Commission (EC), on Monday (February 13), raised its growth forecast for the eurozone this year and also expects inflation to be lower than previously estimated at the end of 2022. The expected GDP for the eurozone was raised by 0.9 per cent which was up from the previously predicted 0.3 per cent. Additionally, the eurozone might also dodge recession this year after high levels of gas storage helped ease the energy crisis and labour markets continue to hold up, said the EC. The EU’s executive arm released the new winter forecasts which show that the 20 countries which use the euro referred to as the ‘eurozone’ will narrowly avoid the technical recession which was expected last year in November as the growth since was 0.1 per cent quarter-on-quarter. Furthermore, the wider European Union is expected to grow by 0.8 per cent from the previously predicted 0.3 per cent, said the EC. “Almost one year after Russia launched its war of aggression against Ukraine, the EU economy is on a better footing than expected in autumn”, said the commission, on Monday. They added, “Inflation appears to have peaked and favourable developments in energy markets foreshadow further forceful declines.” ALSO READ | Eurozone inflation hits record, as gas crunch looms This also comes as the wholesale gas prices have fallen “below pre-war levels” which has been attributed to the above-seasonal average levels of gas storage. The commission also said that the “forecast crucially hinges on the purely technical assumption that Russia's aggression of Ukraine will not escalate”. Furthermore, the EU executive arm in Brussels while announcing the forecast said, “Both areas are now set to narrowly avoid the technical recession that was anticipated for the turn of the year. The forecast also slightly lowers the projections for inflation for both 2023 and 2024.” Notably, the growth forecast for 2024 remains unchanged with 1.5 per cent for the eurozone and 1.6 per cent for the EU. The estimates also show that all EU states are expected to witness growth this year except Sweden which might contract by 0.8 per cent as the country is also facing a recession along with Denmark. Whereas, Germany the region’s biggest economy and Austria have also witnessed two consecutive quarters of contraction making them the only two eurozone countries which are facing this phenomenon. ALSO READ | Third of global economy to face recession in 2023, warns IMF head Growth forecast for 2023 (%): 🇮🇪 4.9 🇲🇹 3.1 🇷🇴 2.5 🇱🇺 1.7 🇨🇾 1.6 🇸🇰 1.5 🇪🇸 1.4 🇧🇬 1.4 🇬🇷 1.2 🇭🇷 1.2 🇸🇮 1.0 🇵🇹 1.0 🇳🇱 0.9 🇧🇪 0.8 🇮🇹 0.8 🇪🇺 0.8 🇫🇷 0.6 🇭🇺 0.6 🇦🇹 0.5 🇵🇱 0.4 🇱🇹 0.3 🇩🇪 0.2 🇫🇮 0.2 🇨🇿 0.1 🇪🇪 0.1 🇱🇻 0.1 🇩🇰 0.1 🇸🇪 -0.8 Winter #ECForecast ↓ — European Commission 🇪🇺 (@EU_Commission) February 13, 2023 × However, the commission has also said there is high uncertainty surrounding the forecast but the risks to growth are now broadly balanced. This could be due to a rise in domestic demand and if the “recent declines in wholesale gas prices pass through to consumer prices more strongly and consumption proves more resilient”, said the EC. It added, “Nonetheless, a potential reversal of that fall cannot be ruled out in the context of continued geopolitical tensions”. Additionally, the Economy Commissioner Paolo Gentiloni also cautioned that “better than expected doesn’t mean good,” and said Europe continues to face a difficult period of slow growth and only a gradual easing in inflation. ALSO READ | Explained: IMF lifts 2023 global growth forecast in World Economic Outlook updated report Additionally, households and businesses in Europe continue to face high power bills, as core inflation with the exception of energy and unprocessed food is still affecting consumers’ purchasing power, said the commission. This could signal further raises in interest rates by the European Central Bank, addressing which the commissioner said, “There are of course consequences of the tightening of monetary policy, but…there is the very positive aspect of this tightening, which is the contribution to reducing inflation, so overall I think this is balanced”. (With inputs from agencies) WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

European Commission raises eurozone growth forecast for 2023 as inflation eases

The European economy’s manufacturing sector registered a strong performance for the first time in six months, raising expectations that Europe will be able to weather the possible recession this year.

Europe’s S&amp;P Global Flash Eurozone purchasing managers’ index (PMI) rose to 50.2 in January from 49.3 in December.

PMI is an economic indicator derived from the monthly survey of private sector companies. It aims in providing information regarding the current and future conditions of a business to the decision-makers, analysts and investors of the company. A figure above 50 indicates growth.

According to the data, lower inflation, improved supply chains and the recent reopening of China’s Covid-scarred economy, greatly benefitted the European economy.

Among the European economies, Germany registered a robust performance with the composite PMI rising from 49.0 in December to 49.7 in January.

France, on the other hand, fell for a third consecutive month after a sharper drop in services activity.

While the rest of the eurozone, which is made up of 20 countries after Croatia joined in January, returned to growth.

“The survey undoubtedly brings welcome good news to suggest that any downturn is likely to be far less severe than previously feared and that a recession may well be avoided altogether,” said Chris Williamson, S&amp;P’s chief business economist, reports AFP news agency.

He added that the survey suggested “a nadir was reached back in October, since when fears over the energy market in particular have been alleviated by falling prices, helped by the warmer than usual weather and generous government assistance”.

Despite positive PMI, inflation remains to be high at 9.2 per cent, however, it fell fallen for two months in a row, driven by slowdown in the rate of energy price rises.

S&amp;P’s Williamson said however the increase in inflation for goods and services would “add encouragement to the hawks to push for further monetary policy tightening”.

(With inputs from agencies)

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The European economy’s manufacturing sector registered a strong performance for the first time in six months, raising expectations that Europe will be able to weather the possible recession this year.

The European economy’s manufacturing sector registered a strong performance for the first time in six months, raising expectations that Europe will be able to weather the possible recession this year. Europe’s S&P Global Flash Eurozone purchasing managers’ index (PMI) rose to 50.2 in January from 49.3 in December. PMI is an economic indicator derived from the monthly survey of private sector companies. It aims in providing information regarding the current and future conditions of a business to the decision-makers, analysts and investors of the company. A figure above 50 indicates growth. According to the data, lower inflation, improved supply chains and the recent reopening of China’s Covid-scarred economy, greatly benefitted the European economy. Among the European economies, Germany registered a robust performance with the composite PMI rising from 49.0 in December to 49.7 in January. France, on the other hand, fell for a third consecutive month after a sharper drop in services activity. While the rest of the eurozone, which is made up of 20 countries after Croatia joined in January, returned to growth. “The survey undoubtedly brings welcome good news to suggest that any downturn is likely to be far less severe than previously feared and that a recession may well be avoided altogether,” said Chris Williamson, S&P’s chief business economist, reports AFP news agency. He added that the survey suggested “a nadir was reached back in October, since when fears over the energy market in particular have been alleviated by falling prices, helped by the warmer than usual weather and generous government assistance”. Despite positive PMI, inflation remains to be high at 9.2 per cent, however, it fell fallen for two months in a row, driven by slowdown in the rate of energy price rises. S&P’s Williamson said however the increase in inflation for goods and services would “add encouragement to the hawks to push for further monetary policy tightening”. (With inputs from agencies) WATCH WION LIVE HERE:

Europe’s manufacturing performance rises for first time in six months

The annual inflation rate of the eurozone fell for the second time in a row to 9.2 per cent in the month of December, dropping into single digits for the first time since September, stated the EU statistics agency on Friday.&nbsp;As a result of the slowdown in the increase in the rate of energy prices, the inflation rate declined from 10.1 per cent to 9.2 per cent in a month.&nbsp;

A record 10.6 per cent was touched by consumer prices in October, which is five times higher than the target of the European Central Bank.&nbsp;

ALSO READ |&nbsp;<a href="https://www.wionews.com/business-economy/eurozone-inflation-hits-record-as-gas-crunch-looms-493665">Eurozone inflation hits record, as gas crunch looms</a>

The analysts had stated that the inflation rate was likely to drop again in the single currency area but the decline was larger than the figures predicted by FactSet and Bloomberg, which had estimated 9.7 per cent and 9.5 per cent, respectively.

In December, energy costs increased by 25.7 per cent compared to 34.9 per cent in November. The costs of drink and food also increased.&nbsp;

Last month, ECB chief Christine Lagarde promised to control sky-high inflation and the eurozone was warned to be prepared for more increases in rate in 2023, despite already inflated consumer prices.&nbsp;

"We are raising interest rates and we will raise them further, at a steady pace, until they are at a level which ensures a timely return of inflation to our two-percent medium-term target," said Lagarde, in a holiday message extended on December 23.

WATCH | EU Chief congratulates Croatia on joining Schengen, Eurozone

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The lowest inflation rate of 5.6 per cent was recorded in Spain in December among the 20 nations that use the euro currency, including&nbsp;Croatia which joined this month, said Eurostat.&nbsp;

This week, the decline in inflation was reported by Germany and France in December, increasing hopes that Europe may have lived through the phase of peak inflation.

(With inputs from agencies) 
&nbsp;

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The annual inflation rate of the eurozone fell for the second time in a row to 9.2 per cent in the month of December, dropping into single digits for the first time since September, stated the EU statistics agency on Friday.

The annual inflation rate of the eurozone fell for the second time in a row to 9.2 per cent in the month of December, dropping into single digits for the first time since September, stated the EU statistics agency on Friday. As a result of the slowdown in the increase in the rate of energy prices, the inflation rate declined from 10.1 per cent to 9.2 per cent in a month. A record 10.6 per cent was touched by consumer prices in October, which is five times higher than the target of the European Central Bank. ALSO READ | Eurozone inflation hits record, as gas crunch looms The analysts had stated that the inflation rate was likely to drop again in the single currency area but the decline was larger than the figures predicted by FactSet and Bloomberg, which had estimated 9.7 per cent and 9.5 per cent, respectively. In December, energy costs increased by 25.7 per cent compared to 34.9 per cent in November. The costs of drink and food also increased. Last month, ECB chief Christine Lagarde promised to control sky-high inflation and the eurozone was warned to be prepared for more increases in rate in 2023, despite already inflated consumer prices. "We are raising interest rates and we will raise them further, at a steady pace, until they are at a level which ensures a timely return of inflation to our two-percent medium-term target," said Lagarde, in a holiday message extended on December 23. WATCH | EU Chief congratulates Croatia on joining Schengen, Eurozone The lowest inflation rate of 5.6 per cent was recorded in Spain in December among the 20 nations that use the euro currency, including Croatia which joined this month, said Eurostat. This week, the decline in inflation was reported by Germany and France in December, increasing hopes that Europe may have lived through the phase of peak inflation. (With inputs from agencies)

Eurozone inflation rate falls for second month in a row, down to single digits

As the new year got underway, Croatia adopted euro and entered Europe's passport-free Schengen zone. With this, the country has&nbsp;taken two milestone steps since joining the European Union (EU) nearly 10 years ago.&nbsp;At midnight (2300 GMT Saturday) the Balkan nation bid farewell to its kuna currency and became&nbsp;the 20th member of the eurozone.

Croatia is also&nbsp;the 27th nation in the passport-free Schengen Zone. It is the world's largest such zone which allows free movement of people across borders of its member countries.

Expert opinions suggest that Croatia's adoption of the euro will help to shield its economy at a time economies across the world are witnessing soaring inflation after Russia's invasion of Ukraine.

However, AFP reported that the feelings among Croatians are mixed. While they welcome the end of border controls, some worry about the euro switch, with right-wing opposition group saying it only benefits large countries such as Germany and France.

"We will cry for our kuna, prices will soar," said Drazen Golemac, a 63-year-old pensioner from Zagreb as quoted by AFP.

His wife, Sandra, disagreed, saying the "euro is more valuable".

"Nothing changes on January 1, all is calculated in euros for two decades anyway," said clerk Neven Banic.

Officials have defended the decisions to join the eurozone and Schengen, with Prime Minister Andrej Plenkovic saying Wednesday that they were "two strategic goals of a deeper EU integration".

Croatia is a former Yugoslav republic of 3.9 million people. The country fought a war of independence in the 90s. Croatia joined the European Union in 2013.&nbsp;

The euro is already largely present in Croatia.

(With inputs from agencies)

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As the new year got underway, Croatia adopted euro and entered Europe's passport-free Schengen zone. With this, the country has taken two milestone steps since joining the European Union (EU) nearly 10 years ago.

As the new year got underway, Croatia adopted euro and entered Europe's passport-free Schengen zone. With this, the country has taken two milestone steps since joining the European Union (EU) nearly 10 years ago. At midnight (2300 GMT Saturday) the Balkan nation bid farewell to its kuna currency and became the 20th member of the eurozone. Croatia is also the 27th nation in the passport-free Schengen Zone. It is the world's largest such zone which allows free movement of people across borders of its member countries. Expert opinions suggest that Croatia's adoption of the euro will help to shield its economy at a time economies across the world are witnessing soaring inflation after Russia's invasion of Ukraine. However, AFP reported that the feelings among Croatians are mixed. While they welcome the end of border controls, some worry about the euro switch, with right-wing opposition group saying it only benefits large countries such as Germany and France. "We will cry for our kuna, prices will soar," said Drazen Golemac, a 63-year-old pensioner from Zagreb as quoted by AFP. His wife, Sandra, disagreed, saying the "euro is more valuable". "Nothing changes on January 1, all is calculated in euros for two decades anyway," said clerk Neven Banic. Officials have defended the decisions to join the eurozone and Schengen, with Prime Minister Andrej Plenkovic saying Wednesday that they were "two strategic goals of a deeper EU integration". Croatia is a former Yugoslav republic of 3.9 million people. The country fought a war of independence in the 90s. Croatia joined the European Union in 2013. The euro is already largely present in Croatia. (With inputs from agencies) You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here. WATCH WION LIVE HERE ×

Croatia adopts euro as currency, joins eurozone, passport-free Europe club

Unemployment levels hit a record low&nbsp;in the&nbsp;eurozone, at 6.5 percent in October, the EU's Eurostat statistics office said on Thursday. The figure, which was the lowest since Eurostat began tracking unemployment rates in April 1998, showed that the 19 EU nations&nbsp;that use the currency, Euro had recovered economically from the Covid pandemic. Compared to the 7.3 per cent recorded a year ago, the seasonally adjusted unemployment&nbsp;rate was significantly lower.

In October, 12.95 million or six per cent of the working-age population in the 27-nation European Union, were reported to be unemployed, with 10.87 million of them living in the eurozone itself.&nbsp;

While all The Organization for Economic Cooperation and Development (OECD) economies, with the exception of Britain, a former member of the EU, have recovered to their pre-pandemic size, the recovery is being slowed down by global headwinds. The European Commission predicts that the eurozone will enter a recession in the next weeks.

Also read |&nbsp;<a href="https://www.wionews.com/world/macau-casinos-to-face-their-worst-year-ever-due-to-covid-restrictions-539092">Macau casinos to face their worst year ever due to Covid restrictions</a>

Despite declining in the most recent report on Wednesday, inflation is still running high at 10 per cent, which is more than the ECB's goal rate of two&nbsp;per cent. This is partly due to rising energy prices sparked by the consequences of Russia's war in Ukraine.

WATCH |&nbsp;India's GDP growth shrinks to 6.3%; The Agriculture sector grows 4.6%

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According to a Purchasing Managers' Index (PMI) survey released by S&amp;P Global, business activity has been dropping for five months in a row, however the rate of decline moderated in November. As per Eurostat, young people had the highest unemployment rates in the EU and its eurozone, at 15.1 per cent and 15.0 percent, respectively.&nbsp; Germany, which has the largest economy in the eurozone, had an unemployment rate of 3.0 percent, down from 3.3 percent in October 2021. It decreased from 7.6 percent a year earlier to 7.1 percent in France, the second-largest economy.

(With inputs from agencies)

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Unemployment levels hit a record low in the eurozone, at 6.5 percent in October, the EU's Eurostat statistics office said on Thursday. The figure, which was the lowest since Eurostat began tracking unemployment rates in April 1998, showed that the 19 EU nations that use the currency, Euro had recovered economically from the Covid pandemic.

Unemployment levels hit a record low in the eurozone, at 6.5 percent in October, the EU's Eurostat statistics office said on Thursday. The figure, which was the lowest since Eurostat began tracking unemployment rates in April 1998, showed that the 19 EU nations that use the currency, Euro had recovered economically from the Covid pandemic. Compared to the 7.3 per cent recorded a year ago, the seasonally adjusted unemployment rate was significantly lower. In October, 12.95 million or six per cent of the working-age population in the 27-nation European Union, were reported to be unemployed, with 10.87 million of them living in the eurozone itself. While all The Organization for Economic Cooperation and Development (OECD) economies, with the exception of Britain, a former member of the EU, have recovered to their pre-pandemic size, the recovery is being slowed down by global headwinds. The European Commission predicts that the eurozone will enter a recession in the next weeks. Also read | Macau casinos to face their worst year ever due to Covid restrictions Despite declining in the most recent report on Wednesday, inflation is still running high at 10 per cent, which is more than the ECB's goal rate of two per cent. This is partly due to rising energy prices sparked by the consequences of Russia's war in Ukraine. WATCH | India's GDP growth shrinks to 6.3%; The Agriculture sector grows 4.6% According to a Purchasing Managers' Index (PMI) survey released by S&P Global, business activity has been dropping for five months in a row, however the rate of decline moderated in November. As per Eurostat, young people had the highest unemployment rates in the EU and its eurozone, at 15.1 per cent and 15.0 percent, respectively. Germany, which has the largest economy in the eurozone, had an unemployment rate of 3.0 percent, down from 3.3 percent in October 2021. It decreased from 7.6 percent a year earlier to 7.1 percent in France, the second-largest economy. (With inputs from agencies) WATCH WION LIVE HERE:

Eurozone unemployment drops to all-time low; post-pandemic recovery slowed by global headwinds

The inflation in the Euro zone has dropped to 10 per cent for the first time since November and in the process, it has also exceeded the expectations of most experts. The 19 countries which recognise Euro as their currency grew by just 10 per cent after a 10.6 per cent rise in October.

Also read |&nbsp;<a href="https://www.wionews.com/world/china-removed-from-uk-nuclear-project-a-day-after-sunaks-golden-era-over-statement-538678">China booted from UK nuclear project after Sunak's 'golden era over' statement</a>

Most experts said that the inflation is expected to be somewhere around 10.4 per cent but the fall in inflation has given rise to hope among the economies that the prices can stabilise before the new year.

The inflation was directly related to the energy and food crisis created by the Covid-19 pandemic and the ongoing Russia-Ukraine conflict. While the assurance of price caps on oil and energy has somewhat resulted in the slowdown, the food price inflation continues to be a major concern.

Also read |&nbsp;<a href="https://www.wionews.com/world/europes-import-of-russian-lng-jumps-42-amid-russia-ukraine-war-report-538720">Europe's import of Russian LNG jumps 42% amid Russia-Ukraine war: Report</a>

The other issue with both food and energy prices is the extreme volatility experienced in the global market. While the European Central Bank has already raised interest rates on multiple occasions, more such measures are expected in the near future to keep the inflation rate steady.

This was the first time that the inflation rate came down to 10 per cent in well over a year and it has become a headache for governments. Without food and fuel costs, the inflation has actually gone up slightly from 6.4 per cent to 6.6 per cent – a trend that contradicted with most predictions.

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The inflation in the Euro zone has dropped to 10 per cent for the first time since November and in the process, it has also exceeded the expectations of most experts.

The inflation in the Euro zone has dropped to 10 per cent for the first time since November and in the process, it has also exceeded the expectations of most experts. The 19 countries which recognise Euro as their currency grew by just 10 per cent after a 10.6 per cent rise in October. Also read | China booted from UK nuclear project after Sunak's 'golden era over' statement Most experts said that the inflation is expected to be somewhere around 10.4 per cent but the fall in inflation has given rise to hope among the economies that the prices can stabilise before the new year. The inflation was directly related to the energy and food crisis created by the Covid-19 pandemic and the ongoing Russia-Ukraine conflict. While the assurance of price caps on oil and energy has somewhat resulted in the slowdown, the food price inflation continues to be a major concern. Also read | Europe's import of Russian LNG jumps 42% amid Russia-Ukraine war: Report The other issue with both food and energy prices is the extreme volatility experienced in the global market. While the European Central Bank has already raised interest rates on multiple occasions, more such measures are expected in the near future to keep the inflation rate steady. This was the first time that the inflation rate came down to 10 per cent in well over a year and it has become a headache for governments. Without food and fuel costs, the inflation has actually gone up slightly from 6.4 per cent to 6.6 per cent – a trend that contradicted with most predictions.

Eurozone inflation slows to 10 per cent in November but rate rises expected

The European Union's statistics agency said on Monday (October 31) that inflation in Eurozone was at record 10.7 per cent in October. Just a month before, the same figure was at 9.9 per cent. A huge increase of 41.9 per cent has caused the inflation to jump, said Eurostat. The European Central Bank has already warned last week that a recession is looming. It had announced a jumbo interest rate hike in order to attempt to curb inflation.

Russia's war on Ukraine has also made matters worse. Russia is one of the major gas supplier to Europe. In the wake of Ukraine war, Russia has drastically cut gas supplies to Europe as a result of which the continent is facing energy crisis. There are fears of power shortages just as winter approaches.

Watch | US Midterms 2022: Inflation tops voter concern, residents struggle to pay bills

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The third quarter figure was marginally better than expected after economic powerhouse Germany bettered forecasts with 0.3 percent growth.&nbsp;

Among other key economies, France and Spain were at 0.2 percent and Italy on Monday announced growth of 0.5 percent.&nbsp;

Eurostat said that overall Eurozone increased by 2.1 per cent as compared to same quarter last year.

Also Read | <a href="https://www.wionews.com/world/eu-thinking-of-more-sanctions-against-iran-over-excessive-crackdown-says-scholz-529994">EU thinking of more sanctions against Iran over 'excessive' crackdown, says Scholz</a>

But despite the mildly better-than-expected news, analysts warned that a recession appeared to be on its way regardless.

"It is a matter of how deep the recession will be and not if there will be one," Oxford Economics said in an analyst note. &nbsp;

"Therefore, while Q3 was more resilient than expected a recession over the winter in eurozone is imminent."

(With inputs from agencies)

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The European Union's statistics agency said on Monday (October 31) that inflation in Eurozone was at record 10.7 per cent in October. Just a month before, the same figure was at 9.

The European Union's statistics agency said on Monday (October 31) that inflation in Eurozone was at record 10.7 per cent in October. Just a month before, the same figure was at 9.9 per cent. A huge increase of 41.9 per cent has caused the inflation to jump, said Eurostat. The European Central Bank has already warned last week that a recession is looming. It had announced a jumbo interest rate hike in order to attempt to curb inflation. Russia's war on Ukraine has also made matters worse. Russia is one of the major gas supplier to Europe. In the wake of Ukraine war, Russia has drastically cut gas supplies to Europe as a result of which the continent is facing energy crisis. There are fears of power shortages just as winter approaches. Watch | US Midterms 2022: Inflation tops voter concern, residents struggle to pay bills × The third quarter figure was marginally better than expected after economic powerhouse Germany bettered forecasts with 0.3 percent growth. Among other key economies, France and Spain were at 0.2 percent and Italy on Monday announced growth of 0.5 percent. Eurostat said that overall Eurozone increased by 2.1 per cent as compared to same quarter last year. Also Read | EU thinking of more sanctions against Iran over 'excessive' crackdown, says Scholz But despite the mildly better-than-expected news, analysts warned that a recession appeared to be on its way regardless. "It is a matter of how deep the recession will be and not if there will be one," Oxford Economics said in an analyst note. "Therefore, while Q3 was more resilient than expected a recession over the winter in eurozone is imminent." (With inputs from agencies) You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here. WATCH WION LIVE HERE ×

Eurozone inflation hits a new record high, says Eurostat

The Eurozone's biggest economy, Germany, could be heading for an imminent recession. According to SMP Global Market Intelligence, there are growing signs of an impending recession.

UK: Eurozone downturn deepens, Germany heads for recession

European Union is grappling with an economic conundrum. According to a Eurostat report released on Wednesday, inflation hit an average of 10.9 per cent across the 27-nation bloc in September, up&nbsp;0.8 per cent from the record set in August.&nbsp;

The report by the EU's statistics office added that the annual rate of inflation in the Eurozone was 9.9 per cent in September, compared to 9.1 per cent in August.&nbsp;

<a href="https://www.wionews.com/business-economy/global-economy-live-updates-october-19-asian-shares-were-mostly-higher-but-hong-kong-stocks-drop-at-open-526612">Read more:&nbsp;Global Economy LIVE updates (October 19): EU inflation rose to 10.9% in September</a>

Notably, last month, 19 eurozone countries reported double-digit overall inflation. Meanwhile, former EU member, Britain's inflation rose to a 40-year high in September, rising above 10 per cent on soaring food prices, official data released on Wednesday revealed.&nbsp;

The September rate matched the level in July and is the highest in 40 years as a result also of sky-high energy bills.

"I understand that families across the country are struggling with rising prices and higher energy bills," Britain's new finance minister Jeremy Hunt said in a separate statement.

<a href="https://www.wionews.com/world/uk-inflation-accelerates-to-40-year-high-amid-rising-food-prices-526733">Read more:&nbsp;UK inflation accelerates to 40-year high amid rising food prices</a>

The situation in the continent has been exacerbated by the eight-month-long Russia-Ukraine war. Moscow has stopped the supply of natural gas through its Nord Stream pipeline and the immediate effect has been the jacked-up fuel prices.

With the winter season fast approaching and utility bills soaring, inflation has gone up manifolds. Most of the countries across Europe do not have energy reserves that can last them the entire season.&nbsp;

Thus, inflation is expected to rapidly climb in the coming weeks. The banks have been increasing interest rates to arrest the slide but so far, it has had little to no influence on the ground.&nbsp;

The EU leaders on Tuesday convened and proposed a $39.2 billion package to aid small and medium-sized firms battling the energy crisis. However, it ought to be an entirely different conversation if the proposal receives the nod of all 27 countries.&nbsp;

(With inputs from agencies) 
 
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European Union is grappling with an economic conundrum. According to a Eurostat report released on Wednesday, inflation hit an average of 10.9 per cent across the 27-nation bloc in September, up 0.

European Union is grappling with an economic conundrum. According to a Eurostat report released on Wednesday, inflation hit an average of 10.9 per cent across the 27-nation bloc in September, up 0.8 per cent from the record set in August. The report by the EU's statistics office added that the annual rate of inflation in the Eurozone was 9.9 per cent in September, compared to 9.1 per cent in August. Read more: Global Economy LIVE updates (October 19): EU inflation rose to 10.9% in September Notably, last month, 19 eurozone countries reported double-digit overall inflation. Meanwhile, former EU member, Britain's inflation rose to a 40-year high in September, rising above 10 per cent on soaring food prices, official data released on Wednesday revealed. The September rate matched the level in July and is the highest in 40 years as a result also of sky-high energy bills. "I understand that families across the country are struggling with rising prices and higher energy bills," Britain's new finance minister Jeremy Hunt said in a separate statement. Read more: UK inflation accelerates to 40-year high amid rising food prices The situation in the continent has been exacerbated by the eight-month-long Russia-Ukraine war. Moscow has stopped the supply of natural gas through its Nord Stream pipeline and the immediate effect has been the jacked-up fuel prices. With the winter season fast approaching and utility bills soaring, inflation has gone up manifolds. Most of the countries across Europe do not have energy reserves that can last them the entire season. Thus, inflation is expected to rapidly climb in the coming weeks. The banks have been increasing interest rates to arrest the slide but so far, it has had little to no influence on the ground. The EU leaders on Tuesday convened and proposed a $39.2 billion package to aid small and medium-sized firms battling the energy crisis. However, it ought to be an entirely different conversation if the proposal receives the nod of all 27 countries. (With inputs from agencies) WATCH WION LIVE HERE:

European Union's inflation average hits 10.9% in September

Driven by soaring fuel prices caused by Russia's war in Ukraine, the yearly inflation rate in the Eurozone is up from 8.9 percent in July and is at its highest since records began.

Eurozone inflation hits a peak of of 9.1% in August

As per a flash estimate from Eurostat, the European Union's statistical agency, annual inflation in the euro area is predicted to reach 8.9 per cent in July 2022, up from 8.6 per cent in June. The euro zone's manufacturing activity shrank last month, with factories being forced to stockpile unsold items as a result of weak demand, according to data released on Monday. This has raised concerns that the region could enter a recession.&nbsp;Despite weaker overall sentiment due to concerns about an economic slowdown, European stocks had their highest monthly gain on Friday (July 29) since November 2020 thanks to solid earnings from corporate Europe.

Also read |&nbsp;WION Dispatch: Eurozone inflation at record high; consumer prices jump 8.9% in July

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As inflation, the crisis in Ukraine, and the pandemic took their toll, retailers in Germany, the powerhouse of the European economy, saw the sharpest decline in their year-over-year sales in nearly three decades at the end of the first half of 2022, according to data.

Also read |&nbsp;<a href="https://www.wionews.com/world/russia-halts-gas-supply-to-latvia-following-deadly-prison-attack-502043" hreflang="en">Russia halts gas supply to Latvia following deadly prison attack</a>

In China too home sales of the top 100 developers fell in July, a sign that the growing mortgage boycott issue plaguing the nation has further undermined consumer confidence.

Despite government efforts to promote purchases, the demand remained flat amid an economic slowdown. According to preliminary data provided by China Real Estate Information Corp., combined contract sales decreased 39.7 per cent from a year earlier to 523.1 billion yuan ($78 billion).

Also read |&nbsp;<a href="https://www.wionews.com/world/despite-gas-crisis-and-inflation-surge-eurozone-economy-grows-faster-than-expected-501880" hreflang="en">Despite gas crisis, inflation surge, Eurozone economy grows faster than expected</a>

Hong Kong too is battling the effects of inflation. According to fresh official data released on Monday, Hong Kong has once again entered a technical recession as a result of the city's prolonged commitment to stringent coronavirus regulations, rising interest rates, and weakening international trade.

The city's GDP again declined in the second quarter of 2022, although by a smaller margin of 1.4 per cent, according to preliminary estimates issued by the Census and Statistics Department. This follows a year-over-year fall of 3.9 per cent in the first quarter of 2022.

(With inputs from agencies)

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As per a flash estimate from Eurostat, the European Union's statistical agency, annual inflation in the euro area is predicted to reach 8.9 per cent in July 2022, up from 8.

As per a flash estimate from Eurostat, the European Union's statistical agency, annual inflation in the euro area is predicted to reach 8.9 per cent in July 2022, up from 8.6 per cent in June. The euro zone's manufacturing activity shrank last month, with factories being forced to stockpile unsold items as a result of weak demand, according to data released on Monday. This has raised concerns that the region could enter a recession. Despite weaker overall sentiment due to concerns about an economic slowdown, European stocks had their highest monthly gain on Friday (July 29) since November 2020 thanks to solid earnings from corporate Europe. Also read | WION Dispatch: Eurozone inflation at record high; consumer prices jump 8.9% in July As inflation, the crisis in Ukraine, and the pandemic took their toll, retailers in Germany, the powerhouse of the European economy, saw the sharpest decline in their year-over-year sales in nearly three decades at the end of the first half of 2022, according to data. Also read | Russia halts gas supply to Latvia following deadly prison attack In China too home sales of the top 100 developers fell in July, a sign that the growing mortgage boycott issue plaguing the nation has further undermined consumer confidence. Despite government efforts to promote purchases, the demand remained flat amid an economic slowdown. According to preliminary data provided by China Real Estate Information Corp., combined contract sales decreased 39.7 per cent from a year earlier to 523.1 billion yuan ($78 billion). Also read | Despite gas crisis, inflation surge, Eurozone economy grows faster than expected Hong Kong too is battling the effects of inflation. According to fresh official data released on Monday, Hong Kong has once again entered a technical recession as a result of the city's prolonged commitment to stringent coronavirus regulations, rising interest rates, and weakening international trade. The city's GDP again declined in the second quarter of 2022, although by a smaller margin of 1.4 per cent, according to preliminary estimates issued by the Census and Statistics Department. This follows a year-over-year fall of 3.9 per cent in the first quarter of 2022. (With inputs from agencies) Watch WION LIVE HERE: You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

Recession fears haunt Eurozone; China witnesses slump in house sales; Hong Kong enters technical recession

Eurozone inflation rose to another record high in July and its peak could still be months away, keeping pressure on the European Central Bank to opt for another big interest rate increase in September.

WION Dispatch: Eurozone inflation at record high; consumer prices jump 8.9% in July

The European Central Bank (ECB) on Thursday (July 21) went for an aggressive benchmark deposit rate hike. This is a first since 2011 and has brought an end to the era of negative interest rates in the eurozone. The half point hike is bigger than expected. It has come amid soaring inflation and looming energy crisis in the wake of conflict in Ukraine.

The ECB said its new "assessment of inflation risks" justified taking "a larger first step on its policy rate normalisation path than signalled at its previous meeting" in June when policymakers shared their intent to raise rates by a more modest 25 basis points or a quarter of a percentage point.

In June, inflation in the eurozone hit 8.6 per cent. This was the highest ever level and it was well above ECB's target of two per cent.

The ECB also unveiled the first details of a new crisis tool to fight bond market stress in parts of the eurozone.

The instrument is a response to recent increases in the borrowing costs for governments in more highly indebted, usually southern eurozone members, such as Italy.

Dubbed the "Transmission Protection Instrument (TPI)", the targeted bond-buying scheme "can be activated to counter unwarranted, disorderly market dynamics that pose a serious threat to the transmission of monetary policy across the euro area," the ECB said in a statement.

The rate hike has lifted ECB's deposit facility from negative to zero.

The rate on its main refinancing operations climbs to 0.50 percent and on its marginal lending facility to 0.75 percent.

With prices taking off, the euro weak against the dollar and other central banks racing ahead with bigger hikes, the ECB was under pressure to think about making a bigger move at the meeting on Thursday.

Future rate hikes "will be appropriate", the ECB said, as it looks to catch up with the US Federal Reserve and the Bank of England which both&nbsp; 
started raising rates earlier and more aggressively.

(With inputs from agencies)

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The European Central Bank (ECB) on Thursday (July 21) went for an aggressive benchmark deposit rate hike. This is a first since 2011 and has brought an end to the era of negative interest rates in the eurozone.

The European Central Bank (ECB) on Thursday (July 21) went for an aggressive benchmark deposit rate hike. This is a first since 2011 and has brought an end to the era of negative interest rates in the eurozone. The half point hike is bigger than expected. It has come amid soaring inflation and looming energy crisis in the wake of conflict in Ukraine. The ECB said its new "assessment of inflation risks" justified taking "a larger first step on its policy rate normalisation path than signalled at its previous meeting" in June when policymakers shared their intent to raise rates by a more modest 25 basis points or a quarter of a percentage point. In June, inflation in the eurozone hit 8.6 per cent. This was the highest ever level and it was well above ECB's target of two per cent. The ECB also unveiled the first details of a new crisis tool to fight bond market stress in parts of the eurozone. The instrument is a response to recent increases in the borrowing costs for governments in more highly indebted, usually southern eurozone members, such as Italy. Dubbed the "Transmission Protection Instrument (TPI)", the targeted bond-buying scheme "can be activated to counter unwarranted, disorderly market dynamics that pose a serious threat to the transmission of monetary policy across the euro area," the ECB said in a statement. The rate hike has lifted ECB's deposit facility from negative to zero. The rate on its main refinancing operations climbs to 0.50 percent and on its marginal lending facility to 0.75 percent. With prices taking off, the euro weak against the dollar and other central banks racing ahead with bigger hikes, the ECB was under pressure to think about making a bigger move at the meeting on Thursday. Future rate hikes "will be appropriate", the ECB said, as it looks to catch up with the US Federal Reserve and the Bank of England which both started raising rates earlier and more aggressively. (With inputs from agencies) You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here. WATCH WION LIVE HERE ×

ECB goes for aggressive rate hike for first time since 2011

Croatia formally became the 20th member of the euro common currency as European Union finance ministers on Tuesday approved the country's request. The approval will come into being at the start of 2023. The European Council, the grouping of 27 EU governments, adopted three legal acts required to allow Croatia - an EU member since 2013 - to introduce the euro on January 1. One of those acts set the conversion rate for entry at one euro to 7.53450 Croatian kuna, with Croatia now having a few months to prepare the practicalities for the currency switch, as reported by Reuters.

European Commission Vice-President Valdis Dombrovskis said the use of the European currency would bring economic benefits to Croatia - the first country to join the euro since Lithuania in 2015. "It will help stabilize interest rates, making it easier and cheaper for people and companies to borrow and it brings a positive impact on growth thanks to the full integration into EU single market," he said.

To adopt the euro, Croatia had to fulfil criteria of price and exchange rate stability, sound public finances and moderate long-term interest rates, all measured against EU benchmarks. "I know that it's a wonderful club to be a member of but it requires commitment, dedication, and continued respect of the rules," European Central Bank President Christine Lagarde said at a signing ceremony, reports Reuters.

Also Read:<a href="https://www.wionews.com/photos/in-pics-no-more-sushi-for-japan-fatty-katsuo-fish-may-foreshadow-climate-change-heres-how-496614">&nbsp;In pics: No more sushi for Japan? Fatty 'katsuo' fish may foreshadow climate change, here's how</a>

Matthias Kullas of the Centre for European Policy (CEP) points out that Croatia's debt level of just under 80 per cent of gross domestic product (GDP) is below the average of the euro countries, which climbed to a good 95 per cent in the wake of the Covid crisis. But the Stability Pact actually sets the maximum limit at 60 per cent. Among the eight EU members that have not yet joined the monetary union, Croatia has the highest debt, as reported by Daily Express.

The European Commission examined Croatia's economic convergence with the rest of the eurozone, including balance of payments trends and the integration of its labour and financial markets, and verified that Croatian legislation is compatible with EU laws governing the European Central Bank. Croatia, in southeastern Europe, has been an independent country since 1991 when it left then-federal Yugoslavia. Neighbouring Slovenia, also an ex-Yugoslav republic and now EU member, adopted the euro in 2007.

(with inputs from agencies)

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Croatia formally became the 20th member of the euro common currency as European Union finance ministers on Tuesday approved the country's request. The approval will come into being at the start of 2023.

Croatia formally became the 20th member of the euro common currency as European Union finance ministers on Tuesday approved the country's request. The approval will come into being at the start of 2023. The European Council, the grouping of 27 EU governments, adopted three legal acts required to allow Croatia - an EU member since 2013 - to introduce the euro on January 1. One of those acts set the conversion rate for entry at one euro to 7.53450 Croatian kuna, with Croatia now having a few months to prepare the practicalities for the currency switch, as reported by Reuters. European Commission Vice-President Valdis Dombrovskis said the use of the European currency would bring economic benefits to Croatia - the first country to join the euro since Lithuania in 2015. "It will help stabilize interest rates, making it easier and cheaper for people and companies to borrow and it brings a positive impact on growth thanks to the full integration into EU single market," he said. To adopt the euro, Croatia had to fulfil criteria of price and exchange rate stability, sound public finances and moderate long-term interest rates, all measured against EU benchmarks. "I know that it's a wonderful club to be a member of but it requires commitment, dedication, and continued respect of the rules," European Central Bank President Christine Lagarde said at a signing ceremony, reports Reuters. Also Read: In pics: No more sushi for Japan? Fatty 'katsuo' fish may foreshadow climate change, here's how Matthias Kullas of the Centre for European Policy (CEP) points out that Croatia's debt level of just under 80 per cent of gross domestic product (GDP) is below the average of the euro countries, which climbed to a good 95 per cent in the wake of the Covid crisis. But the Stability Pact actually sets the maximum limit at 60 per cent. Among the eight EU members that have not yet joined the monetary union, Croatia has the highest debt, as reported by Daily Express. The European Commission examined Croatia's economic convergence with the rest of the eurozone, including balance of payments trends and the integration of its labour and financial markets, and verified that Croatian legislation is compatible with EU laws governing the European Central Bank. Croatia, in southeastern Europe, has been an independent country since 1991 when it left then-federal Yugoslavia. Neighbouring Slovenia, also an ex-Yugoslav republic and now EU member, adopted the euro in 2007. (with inputs from agencies) WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

Why is croatia's joining of Eurozone a matter of concern for other EU countries?

The euro struck parity with the dollar for the first time in nearly 20 years on Tuesday as a cut in Russian gas supplies to Europe heightened fears of a recession in the eurozone. Molly Gambhir tells you more.

WION Fineprint | Eurozone recession fears mount as Euro strikes dollar parity

Eurozone inflation accelerated to another record high in June, official data showed on Friday, as Russia's war in Ukraine drives up energy prices and hammers the European economy.

The EU's Eurostat data agency said the increase in consumer prices in the 19 countries that use the euro reached 8.6 percent in June, leaping from the previous record of 8.1 percent a month earlier.

Consumer prices in the eurozone have hit records since November, buffeted by sky-high energy prices, which jumped by 41.9 percent over one year, caused by the fallout of Russia's invasion of its neighbour Ukraine.

But analysts also pointed to the rise in food prices, which accelerated by 8.9 percent, showing that the inflation problem was spreading through the economy.

"Historically, we have never had such a high figure for the contribution of food. It will have a big impact," said Philippe Waechter of Ostrum Asset Management.

The European Central Bank has said it will do whatever it takes to bring inflation back to its target level, with political pressure high to bring energy and food prices into check.

"With eurozone inflation now becoming more broad-based in nature, the outlook for the Eurozone for the rest of 2022 continues to look bleak," warned Pushpin Singh, Economist at the Centre for Economics and Business Research.

"This comes amid a mounting possibility of a severe gas crisis in Europe, with Russia using gas exports as a means to counter sanctions," he added.

Rate hike

As the conflict rages on, Russia has shown an increased willingness to cut off gas supplies to Europe, a danger that has raised the prospect of energy rationing in the eurozone to get through next winter.

Some analysts took solace in the core inflation data, which excludes energy and food prices and came in at 3.7 percent, a tiny drop from the previous month.

But this would not be enough to change the course decided at the ECB's last meeting, when policymakers agreed to the bank's first interest rate hike in more than a decade.

The quarter-point raise, set to take place at its next meeting on July 21, will raise rates from their historic lows.

"We will go as far as necessary to ensure that inflation stabilises at our two percent target over the medium term," ECB head Christine Lagarde said on Tuesday.

The ECB is being pressured by some to go faster in halting inflation and choose a path more akin to the United States where the Federal Reserve has warned it may trigger a recession to cool prices.

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Eurozone inflation accelerated to another record high in June, official data showed on Friday, as Russia's war in Ukraine drives up energy prices and hammers the European economy.

Eurozone inflation accelerated to another record high in June, official data showed on Friday, as Russia's war in Ukraine drives up energy prices and hammers the European economy. The EU's Eurostat data agency said the increase in consumer prices in the 19 countries that use the euro reached 8.6 percent in June, leaping from the previous record of 8.1 percent a month earlier. Consumer prices in the eurozone have hit records since November, buffeted by sky-high energy prices, which jumped by 41.9 percent over one year, caused by the fallout of Russia's invasion of its neighbour Ukraine. But analysts also pointed to the rise in food prices, which accelerated by 8.9 percent, showing that the inflation problem was spreading through the economy. "Historically, we have never had such a high figure for the contribution of food. It will have a big impact," said Philippe Waechter of Ostrum Asset Management. The European Central Bank has said it will do whatever it takes to bring inflation back to its target level, with political pressure high to bring energy and food prices into check. "With eurozone inflation now becoming more broad-based in nature, the outlook for the Eurozone for the rest of 2022 continues to look bleak," warned Pushpin Singh, Economist at the Centre for Economics and Business Research. "This comes amid a mounting possibility of a severe gas crisis in Europe, with Russia using gas exports as a means to counter sanctions," he added. Rate hike As the conflict rages on, Russia has shown an increased willingness to cut off gas supplies to Europe, a danger that has raised the prospect of energy rationing in the eurozone to get through next winter. Some analysts took solace in the core inflation data, which excludes energy and food prices and came in at 3.7 percent, a tiny drop from the previous month. But this would not be enough to change the course decided at the ECB's last meeting, when policymakers agreed to the bank's first interest rate hike in more than a decade. The quarter-point raise, set to take place at its next meeting on July 21, will raise rates from their historic lows. "We will go as far as necessary to ensure that inflation stabilises at our two percent target over the medium term," ECB head Christine Lagarde said on Tuesday. The ECB is being pressured by some to go faster in halting inflation and choose a path more akin to the United States where the Federal Reserve has warned it may trigger a recession to cool prices. You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here. WATCH WION LIVE HERE ×

Eurozone inflation hits record, as gas crunch looms

Eurozone economic growth deteriorated sharply to a 16-month low in June, according to preliminary PMI data by S&amp;P Global, an American publicly traded corporation, &nbsp;reflecting a fall in demand growth.&nbsp;

Manufacturing output contracted for the first time in two years and the expansion in service sector activity came down considerably, easing most notably for consumer-facing services.

The survey by S&amp;P Global revealed that companies also scaled back their business expectations for output over the coming year to the lowest since October 2020.&nbsp;

“Economic growth is showing signs of faltering as the tailwind of pent-up demand from the pandemic is already fading, having been offset by the cost-of-living shock and slumping business and consumer confidence,” S&amp;P Global economist Chris Williamson said in a statement, as reported by Bloomberg.

Both the stagnation of demand and worsening outlook were widely blamed on the rising cost of living, tighter financial conditions and concerns over energy and supply chains linked to the Ukraine war and ongoing pandemic disruptions.

Also Read:&nbsp;<a href="https://www.wionews.com/world/mass-graves-being-prepared-for-earthquake-victims-in-afghanistan-491083">Mass graves being prepared for earthquake victims in Afghanistan</a>

The survey of purchasing managers continued to show elevated price pressures, including a “worrying increase in costs growth in the service sector.” The cooling of demand, however, pointed to a calming of goods prices, “bringing a tentative hint of a peaking of inflation in the near future,” Williamson said.

The euro retreated against the dollar on Thursday as economic data pointed to increased prospects of a recession in Europe. Global stock markets wobbled after another battering this week, while oil prices slid further.

Government bond yields also fell in another indication that investors are more worried about the prospect of a recession, removing some of the financial stings on governments from rising interest rates.

(with inputs from agencies) 
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Eurozone economic growth deteriorated sharply to a 16-month low in June, according to preliminary PMI data by S&P Global, an American publicly traded corporation, reflecting a fall in demand growth.

Eurozone economic growth deteriorated sharply to a 16-month low in June, according to preliminary PMI data by S&P Global, an American publicly traded corporation, reflecting a fall in demand growth. Manufacturing output contracted for the first time in two years and the expansion in service sector activity came down considerably, easing most notably for consumer-facing services. The survey by S&P Global revealed that companies also scaled back their business expectations for output over the coming year to the lowest since October 2020. “Economic growth is showing signs of faltering as the tailwind of pent-up demand from the pandemic is already fading, having been offset by the cost-of-living shock and slumping business and consumer confidence,” S&P Global economist Chris Williamson said in a statement, as reported by Bloomberg. Both the stagnation of demand and worsening outlook were widely blamed on the rising cost of living, tighter financial conditions and concerns over energy and supply chains linked to the Ukraine war and ongoing pandemic disruptions. Also Read: Mass graves being prepared for earthquake victims in Afghanistan The survey of purchasing managers continued to show elevated price pressures, including a “worrying increase in costs growth in the service sector.” The cooling of demand, however, pointed to a calming of goods prices, “bringing a tentative hint of a peaking of inflation in the near future,” Williamson said. The euro retreated against the dollar on Thursday as economic data pointed to increased prospects of a recession in Europe. Global stock markets wobbled after another battering this week, while oil prices slid further. Government bond yields also fell in another indication that investors are more worried about the prospect of a recession, removing some of the financial stings on governments from rising interest rates. (with inputs from agencies) WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

Eurozone economy at a 16-month low in June due to Ukraine war and pandemic disruptions: Report

The European Central Bank (ECB) on Monday (June 20) said that the arrival of Ukrainian refugees into the European Union could gradually solve labour shortage issues. ECB noted that some of those fleeing the war are likely looking to settle permanently.&nbsp;

Russia announced the invasion of Ukraine this year on February 24, with Moscow calling it special military operations. The Russia-Ukraine war led to the displacement of people on a very large scale.&nbsp;

According to the United Nations refugee agency (UNHCR), a total of 8.3 million refugees could have left Ukraine by the end of the year. More than 7.5 million have fled Ukraine and millions more have been displaced inside the country. Those who entered the neighbouring countries, hope to find durable employment opportunities in the 27-nation EU.&nbsp;

The situation is expected to benefit both, as the euro zone has been struggling with increasing labour shortages and on the other hand, those who entered Europe, are looking for work. The ECB said that the influx of refugees could "slightly ease" labour market tightness.&nbsp;

The ECB said in an Economic Bulletin article: "Under all of the assumptions detailed thus far, back-of-an-envelope calculations point to a median increase of between 0.2% and 0.8% in the euro area labour force in the medium term."&nbsp;

"This corresponds to an increase of between 0.3 and 1.3 million in the size of the euro area labour force as a result of the Ukrainian refugee crisis," it added.&nbsp;

The ECB further added that getting people to work may prove difficult due to administrative barriers. "Barriers to the labour market and other frictions remain significant impediments to refugees, making it difficult for them to integrate into host countries’ labour markets, especially in the short term," it said.&nbsp;

(With inputs from agencies)&nbsp;

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The European Central Bank (ECB) on Monday (June 20) said that the arrival of Ukrainian refugees into the European Union could gradually solve labour shortage issues.

The European Central Bank (ECB) on Monday (June 20) said that the arrival of Ukrainian refugees into the European Union could gradually solve labour shortage issues. ECB noted that some of those fleeing the war are likely looking to settle permanently. Russia announced the invasion of Ukraine this year on February 24, with Moscow calling it special military operations. The Russia-Ukraine war led to the displacement of people on a very large scale. According to the United Nations refugee agency (UNHCR), a total of 8.3 million refugees could have left Ukraine by the end of the year. More than 7.5 million have fled Ukraine and millions more have been displaced inside the country. Those who entered the neighbouring countries, hope to find durable employment opportunities in the 27-nation EU. The situation is expected to benefit both, as the euro zone has been struggling with increasing labour shortages and on the other hand, those who entered Europe, are looking for work. The ECB said that the influx of refugees could "slightly ease" labour market tightness. The ECB said in an Economic Bulletin article: "Under all of the assumptions detailed thus far, back-of-an-envelope calculations point to a median increase of between 0.2% and 0.8% in the euro area labour force in the medium term." "This corresponds to an increase of between 0.3 and 1.3 million in the size of the euro area labour force as a result of the Ukrainian refugee crisis," it added. The ECB further added that getting people to work may prove difficult due to administrative barriers. "Barriers to the labour market and other frictions remain significant impediments to refugees, making it difficult for them to integrate into host countries’ labour markets, especially in the short term," it said. (With inputs from agencies) WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

Ukrainian refugees in eurozone could join workforce, ease labour shortage: ECB

Inflation in the 19 countries of the eurozone soared to 8.1% in May from 7.4% in April. Rising prices have been exacerbated over recent months by the war in Ukraine, particularly food and energy costs.

Eurozone inflation hits record 8.1% amid rising food and energy costs

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