2023's EU forex trends on deficit, inflation, and car sales

Politics

The EU and New Zealand have signed a free trade agreement. The pact includes the free movement of a wide range of products, from pork to chocolate to wine, which are important exports for many European countries. The agreement is therefore the first such EU treaty to introduce sanctions for violations of environmental or labour standards.

The EU is ready to invest EUR 45 billion in Latin America in dozens of projects connected with the transition to a climate-responsible and digital economy. This was stated by the President of the European Commission, Ursula von der Leyen, before the start of a meeting of the leaders of EU and Latin American countries.

The EU is preparing an ambitious EU AI act. The regulation, which has already passed the European Parliament (but still needs to be approved by EU member states), was created before the current wave of artificial intelligence chat (generative AI). It tries to choose technology-neutral definitions and instead of general obligations, it relies on a risk-based approach – it classifies some systems as unacceptably risky, otherwise it leaves AI more or less to the market environment. According to critics of the proposal, the problem arises with the high risk category.

The EU plans to set up an EU system that will allow passengers to search for connections across the EU, paying once and in one place. However, individual states will have to supply the data to it. The Czech Republic will thus have to prepare and program a single place – the so-called National Access Point – where information will be available to travellers.

Economy

In the first quarter of 2023, the seasonally adjusted general government deficit to GDP ratio stood at 3.0% in the EU, due to decreas in total expenditure as well as increas in nominal GDP.

At the end of the first quarter of 2023, the general government gross debt to GDP ratio in the EU decreased from 83.8% to 83.7%. The slight decrease in government debt to GDP ratio is due to an increase in GDP outweighing the increase in government debt in absolute terms. Compared with the first quarter of 2022, the government debt to GDP ratio also decreased in the EU (from 87.4% to 83.7%).

EU annual inflation was 6.4% in June 2023, down from 7.1% in May. A year earlier, the rate was 9.6%. The lowest annual rates were registered in Luxembourg (1.0%), Belgium and Spain (both 1.6%). The highest annual rates were recorded in Hungary (19.9%), Slovakia (11.3%) and Czechia (11.2%). Compared with May, annual inflation fell in twenty-five Member States, remained stable in one and rose in one.

Download The Full EU News Monthly