Politics

The SPD won the German parliamentary elections, receiving 25.7% of the vote. The conservative CDU/CSU union came in second with 24.1% of the vote, a record low after 16 years of Chancellor Angela Merkel's governments. Possible coalitions will now be sought.

The Court of Justice of the European Union fined Poland half a million euros a day for failing to stop mining at the Turów brown coal mine near the Czech-German border. Warsaw is to pay the financial penalty until it obeys the court's spring order and work at the mine ends. The CEO of PGE, which owns the mine, said he disagreed with the court's decision on the fine and expected mining to continue at the site.

The European Commission wants to speed up the digitisation of society and at the same time strengthen cybersecurity. It intends to achieve this by massively investing in digitisation, better adapting people to technological change, attracting IT professionals to the EU and deepening cooperation with the private sector, all while setting reasonable rules.

Economy

In the second quarter of 2021, seasonally adjusted GDP increased by 2.1% in the EU compared with the previous quarter. In the first quarter of 2021, GDP had declined by 0.1% in the EU. Compared with the same quarter of the previous year, seasonally adjusted GDP increased by 13.8% in the EU in the second quarter of 2021, after -1.2% in the previous quarter. Ireland (+6.3%) recorded the sharpest increase of GDP compared to the previous quarter, followed by Portugal (+4.9%) and Latvia (+4.4%). Declines were observed in Malta (-0.5%) and Croatia (-0.2%).

The EU unemployment rate was 6.8% in August 2021, down from 6.9% in July 2021 and from 7.7% in August 2020. Eurostat estimates that 14.469 million men and women in the EU were unemployed in August 2021. Compared with July 2021, the number of persons unemployed decreased by 224 000 in the EU and by 261 000 in the euro area. The lowest unemployment rate in August was in Czechia (2,9 %) followed by Malta and the Netherlands (both 3,2 %), the highest was in Spain (14 %) and Greece (13,2 %).

EU annual inflation was 3.2% in August 2021, up from 2.5% in July. A year earlier, the rate was 0.4%. The lowest annual rates were registered in Malta (0.4%) and Greece (1.2%). The highest annual rates were recorded in Estonia, Lithuania and Poland (all 5.0%). Compared with July, annual inflation remained stable in one Member State and rose in twenty-six.

In the second quarter of 2021, hourly labour costs slightly rose by 0.6% in the EU, compared with the same quarter of the previous year. In the first quarter of 2021, hourly labour costs increased by 1.6% respectively. The two main components of labour costs are wages & salaries and non-wage costs. In the EU, the costs of hourly wages & salaries increased by 0.2% and the non-wage component by 2.0% in the second quarter of 2021. In the I. quarter of 2021, the annual change in wages & salaries was +2.4%, for the non-wage component -1.0%.

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This document is intended as an additional information source, aimed towards our customers. It is based on the best resources available to the authors at press time. The information and data sources utilised are deemed reliable, however, Erste Bank Sparkassen (CR) and affiliates do not take any responsibility for accuracy nor completeness of the information contained herein. This document is neither an offer nor an invitation to buy or sell any securities.

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