The global financial markets have been gripped by fear as the escalating COVID-19 pandemic threatens to send the world economy into a deep recession. The eurozone has not been spared, and investors have become increasingly concerned about the stability of its banking sector. Despite the recent plunge in bank shares, EU leaders have been quick to assure the public that the eurozone’s banking system is stable and that their financial institutions are well equipped to handle any potential shocks. In this article, we will take a closer look at the current state of the eurozone banking sector and explore whether these reassurances from EU leaders hold any weight.
The European banking sector faces concerns over a potential crisis, leading to a plunge in bank shares. However, EU leaders insist that the banking sector is stable and seek to dampen fears of a recession. The European Central Bank (ECB) warns about the potential trigger of the next financial crisis by shadow banking. The EU summit states that the banking sector is not in turmoil, and the situation is under control.
Despite the dramatic plunge in shares, EU leaders remain steadfast in their reassurance that the eurozone banking sector is stable. While this may seem a difficult pill to swallow for some investors, it is important to remember that the European Union has made significant changes to regulations and oversight in recent years to prevent the type of financial crisis that impacted the world in 2008. Whether or not these efforts have been entirely successful remains up for debate, but one thing is certain: Europe is taking the risks and concerns surrounding the banking sector seriously. As we move forward, it will be important to keep a careful eye on banking institutions throughout the eurozone and ensure that they remain transparent and accountable. Only by doing so can we hope to achieve a truly stable financial system for all.
Eurozone
Amid Turmoil in Banking Sector, ECB Deems Interest Rate Hike ‘Highly Probable’
The European Central Bank (ECB) is reportedly gearing up to increase interest rates in the near future, despite significant turbulence in the banking sector. Recent months have seen several major banks struggling with financial difficulties, with some even facing collapse, prompting concerns about the stability of the financial system. As a result, the ECB’s potential interest rate increase is expected to be a crucial move aimed at preventing further damage to the European economy. In this article, we will explore the reasons behind the ECB’s decision to raise interest rates and examine the potential impact of this move on banks, businesses, and individuals.
Here are several articles discussing the possibility of an interest rate increase from the European Central Bank (ECB), as well as some doubts raised by Credit Suisse. The Irish Times argues for clarity on the ECB’s strategy regarding interest rates. Commerzbank warns that a rate increase could have a negative effect on the euro. For more details, see the linked articles.
In conclusion, the decision by the ECB to increase interest rates amid major banking turbulence may not be surprising but the impact on the financial markets, businesses and consumers cannot be underestimated. While some may argue that the move is necessary to curb inflation, others may argue that it could potentially destabilize the already fragile economy. Regardless of where one stands, it’s important to stay informed and be prepared for any possible changes in the near future. As always, we’ll be keeping a close eye on the developments and provide you with the latest updates.
Inflation data for the 20-country eurozone is expected to be announced tomorrow, Thursday, and economists expect inflation to slow to 8.3% from 8.6%, while core inflation, which has been of interest to European Central officials recently and excludes volatile energy and food costs, is likely to remain at a record level. It is 5.3%.
When does the monetary tightening cycle end?
Germany’s central bank chief, Joachim Nagel, told reporters in Frankfurt earlier on Wednesday that underlying price pressures remain very high, and that inflation is likely to decline only gradually to a rate of between 6% and 7% in Germany in 2023.
Morgan Stanley: The eurozone economy can withstand more rate hikes
Nagel added in a speech: “One thing is clear.. The rate hike in March will not be the last.. It may also be necessary to take more important interest rate steps after that.”
While Nagel declined to predict when the tightening cycle might end, his French counterpart François Villeroi de Gallau said in Paris that it was “desirable” for the ECB to reach peak rates by September 2023.
Angular: Europe’s warm winter “like summer”, salvation for the energy crisis | Reuters
LONDON/BRUSSELS (Reuters) – Europe continued to record record temperatures through the end of the year and into the new year. Environmental activists have called for more urgent action to tackle climate change, a relief for governments grappling with soaring natural gas prices.
From Switzerland to Poland to Hungary, temperatures have hit record highs in recent days, with Hungary’s capital Budapest hitting an all-time high of 18.9 degrees Celsius on New Year’s Day. In France, the temperature on December 30-31 last year was the highest since the beginning of statistics, and the temperature in the southwest reached nearly 25 degrees Celsius on New Year’s Day. This area is usually filled with ski resorts, but due to lack of snow, the area is becoming deserted.
The German Meteorological Agency said it hasn’t had a hotter New Year’s Eve since 1881, when records began being kept.
Czech television reported that some trees in private gardens are already starting to blossom. The Swiss Meteorological Agency has issued a pollen alert for people with allergies after the hazelnut flowers bloom.
The temperature at Bilbao Airport in Spain’s Basque Country is 25.1 degrees Celsius. Around the nearby museum, people have been seen sunbathing and strolling along the Nervion River.
Eusebio Forgueira, 81, who lives in Bilbao, is surprised: “It always rains a lot and it’s very cold here. It’s January. (But now) it feels like summer.”
French traveler Joana Ost said: “It’s great weather for a bike ride, but we know the earth is on fire, so enjoy yourself while you’re at it.” I feel scared,” she said.
Scientists have yet to finish analyzing how climate change is specifically affecting the recent warm winter. But the fact that January was so warm fits perfectly with the long-term warming trend of human-induced climate change.
“European winters are getting warmer every year due to rising global temperatures,” said Freja Bamburgh, climate scientist at the European Union’s meteorological information agency Copernicus Climate Change Service (C3S).
Dr Friederike Ott, a climate scientist at Imperial College London, also said: ‘The record temperatures across Europe in the New Year are more likely to have been caused by human-induced climate change.’
Robert Botard, director of the Pierre-Simon Laplace Institute in France, said that although the temperature increase peaked between December 30 and January 2, the hot weather itself has been going on for two weeks and is not over yet. . He said it was a relatively long lasting meteorological phenomenon.
France’s meteorological agency attributed the unusually high temperatures to a wave of warm air flowing into Europe from subtropical regions.
Ski resorts across the country have been directly affected, with almost no customers due to canceled bookings. Ski resorts in northern Spain, such as Asturias, León and Cantabria, are closed from the holiday season due to lack of snow.
The Jahorina Mountains near Sarajevo, the capital of Bosnia and the site of the 1984 Winter Olympics, should have been the busiest season for skiers, but there was no snow on the ground and no one was on the lifts. Only one couple was having dinner in a restaurant of the pension.
A ski jumping event scheduled for January 7-8 in Zakopane, southern Poland, has been cancelled.
“What we are seeing is exactly what climate scientists warned about 10, 20 years ago and it can no longer be prevented,” said Carsten Smid, climate expert at environmental group Greenpeace Germany, calling for urgent action to halt further dramatic warming.
On the other hand, from the point of view of European countries, which have struggled to find alternative sources of energy and keep energy prices in check after Russia cut its energy supply, this unusually warm winter served as a “savior god” to overcome the immediate crisis.
The energy crisis has led European nations to call for a faster shift from fossil fuels to clean energy, but the short-term challenge is finding enough natural gas from Russia to offset the collapse in supply.
But recently, rising temperatures have reduced the demand for heating gas in many countries, leading to lower prices for natural gas. The Dutch TTF contract for natural gas trading fell to 70.25 euros per megawatt-hour (MWh) on Monday morning, the lowest since shortly before Russia’s invasion of Ukraine in February last year.
The head of Italy’s energy agency said he expects energy regulation rates to drop this month if a warm winter continues to push gas prices lower.
(Reporters Matthias Williams and Kate Abnett)
BGN 89.819 million will be spent BNB next year for the minting of 780 million euro coins in connection with the preparation for the introduction of the euro legal tender in our country. This is reflected in the central bank’s draft budget for next year, published on its website.
Bulgaria has set itself the goal of introducing the euro January 1, 2024 Then he will have the right to produce his own euro coins, on which a characteristic symbol of our country will be depicted. What it will be, will be determined after a competition.
Because of the euro, the cost of producing new ones coins in 2023 they were increased by 402.4% and that’s a total of BGN 108.636 million, of which BGN 7.005 million will go to commemorative coins. To cover the need for Bulgarian exchange currencies, 115 million pieces will be produced.
Estimated costs for new banknotes next year it will be 8.092 million levs, a decrease of 21.2% compared to 2022. The money will be used to print 50 million banknotes with a denomination of 50 levs. In determining the costs, according to the BNB, the agreed prices for the delivery of paper banknotes and their printing were used.
Central Bank official: Interest rates must be driven to ‘tight zone’
With the central bank now signaling a higher final interest rate than many market participants expected, “reaching consensus” on next steps “certainly wouldn’t be easier,” Schnabel said.
The German official said the European Central Bank had downplayed the importance of continued inflation previously and “didn’t initially take signs of rising inflation seriously enough” because it went from a stage where inflation very low was the main risk and uncertainty associated with the pandemic cast a shadow on monetary policy decisions.
“There was concern that premature monetary policy measures could unnecessarily push the economy into another recession,” he added.
Schnabel said “many people” underestimated the price hike as COVID-19 measures wore off, thinking supply chain disruptions would be resolved more quickly. But the situation took much longer than expected.”
Eurozone inflation hits all-time high as recession fears mount