The European Union Is Again Close To A Meltdown

The Ukraine conflict is taking a toll on the Euro-zone and it could result in finally pushing it over the edge

• When you couple soaring energy prices with stagnate growth and a growing trade balance with China you have the recipe for disaster
• Inflation accelerated to a record high in May
• Excluding food and energy prices, inflation rose to 4.4% year-on-year from 3.9%.
• This puts pressure on the European Central Bank to increase rates further

The Euro-zone has already endured a lot of problems what it does not need is another refugee crisis this time caused by food insecurity across North Africa or the emergence of an energy-scarce winter as 2022 comes to a close.

• The EU abandoned all structural reforms in 2014 when the ECB started its quantitative easing program (QE) and expanded the balance sheet to record levels.

The EU-China comprehensive investment agreement clearly signifies a significant shift in EU policy towards Asia

• Brussels is leading the EU into an ambush, Europe cannot hold its own against China
• Imports from China to the EU surged by more than a fifth last year to 472 billion euros ($522 billion) compared to 2020
• This widened the bloc's trade deficit with China to 249 billion euros
• China exploits its trading partners by exporting goods at slightly below cost in order to draw manufacturing jobs from other countries
• The ramifications flowing from Italy's deal with China may, in the end, prove to be a deal with the devil

 

https://brucewilds.blogspot.com/2022/06/the-european-union-is-again-close-to.html