In the EU, the annual inflation was 2.6% in April 2024
Politics
At the end of May, the European Parliament hosted a debate featuring the leading candidates for the presidency of the European Commission: Walter Baier (Austria), Sandro Gozi (Italy), Ursula von der Leyen (Germany), Terry Reintke (Germany), and Nicolas Schmit (Luxembourg). The topics of the debate were the economy and jobs, defence and security, climate and environment, democracy and leadership, migration and borders, and innovation and technology.
Parliamentary elections will take place in the United Kingdom on July 4, 2024. Earlier, it was anticipated that elections would take place no earlier than the fall. It is expected that the early elections, to be held in the summer, will be won by the Labour Party, which would thereby return to power after fourteen years in opposition.
The EU will use the proceeds of frozen Russian assets to buy munitions for Ukraine and for its reconstruction. The decision was made by representatives of the member states.
The European Investment Bank will finance defence projects. Also, the EU’s development bank can now make loans without limitation to finance the production of so-called “dual use goods,” that is, products and technology that can be used for both civilian and military purposes. The bank is also launching a new lending program for start-ups and small and medium enterprises in those sectors.
New regulations for regulation of methane have come into effect in the EU. The new regulations impose an obligation on companies active in the fossil fuel industry to measure, report, and certify their emissions of methane and take steps to reduce them. The greatest impact will be on extractive industries, which must limit unnecessary flaring of natural gas and its venting (i.e., releasing it into the atmosphere).
New market reforms will ensure supplies of clean energy. Extensive reform of the European markets for gas and electricity will provide consumers throughout the EU with more stable prices of energy and less dependence on prices of fossil fuels. The EU is also supporting the development of the markets for hydrogen and other carbon-free gases.
Economy
In the first quarter of 2024, seasonally adjusted GDP increased by 0.3% in the EU, compared with the previous quarter. In the fourth quarter of 2023, GDP had remained stable in the EU.
In the EU, the annual inflation was 2.6% in April 2024, stable compared to March 2024. A year earlier, the rate was 8.1%. The lowest annual rates were registered in Lithuania (0.4%) and Denmark (0.5%). The highest annual rates were recorded in Romania (6.2%) and Belgium (4.9%). Compared with March 2024, annual inflation fell in 15 Member States, remained stable in 4 and rose in 8.
The EU unemployment rate was 6.0% in April 2024, stable compared to March 2024 and to April 2023.
In 2023, the actual weekly working hours for people aged 20-64 in their main job, in the EU, averaged 36.1 hours. A closer look at EU countries reveals notable differences. The longest working weeks were recorded in Greece (39.8 hours), Romania (39.5) and Poland (39.3). By contrast, the Netherlands had the shortest working week (32.2 hours), followed by Austria (33.6) and Germany (34.0).
Sectors
A prototype of a modern production line for manufacture of the most advanced computer chips is to be introduced in the EU. The Belgian research organization IMEC, which is the world’s foremost centres for development of advanced microchips, has obtained financing in the sum of 2.5 billion euros for the project. The production line will be able to produce chips using a more modern process than the current industry leader, the Taiwanese company TMSC, is capable of.
In 2023, the EU exported €1.03 billion worth of bicycles (both electric and non-electric), marking a 10% decrease compared with 2022. The value of imports stood at €1.98 billion, a 21% decline compared with 2022. EU exported 293 thousand electric bicycles (-21% compared with 2022) and imported 867 thousand electric bicycles (-27%). At the same time, the EU exported 852 thousand non-electric bicycles (-17% compared with 2022) and imported 3.5 million (-34%).
The United Kingdom and Slovakia are both planning new nuclear power plants. The British government has opened negotiations with foreign energy companies
for a power plant in northern Wales on the island of Anglesey. The government of Slovakia is also planning to construct a new nuclear reactor with a capacity of 1,200 megawatts at the state-owned Jaslovské Bohunice nuclear power plant.
The Chinese automobile producer BYD will introduce its Seagull electric cars to Europe, selling them for less than 20,000 euros. The firm sells the car for less than 10,000 euros in China.
The capacity of transport from Asia to Europe might be reduced by as much as a fifth because of difficulties in the Red Sea. Disruptions to container shipping in the Red sea are not abating, according to the Danish carrier Maersk. Moreover, the company’s fuel costs on the affected routes between Asia and Europe are now 40% higher.
Author
Erste Bank Research Team
Erste Bank
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