The EU announced the depletion of reserves due to assistance to Ukraine and energy

An EU spokesman told the agency that EU member states will need to support the bloc's 2021-2027 budget once it is revised. BLOOMBERG notes,

The European Union will have to ask member states to make new contributions to the bloc's budget due to the energy and financial crisis, as well as the consequences of the conflict in Ukraine, writes Bloomberg.

“We need to replenish the EU budget in some sense, because many of the reserves over the past year have been used up,” European Commission Vice President Valdis Dombrovskis told the agency.

Bloomberg recalls that the bloc has agreed on a seven-year budget of €1.8 trillion in 2020, including an "unprecedented" recovery fund from the covid-19 pandemic . However, the conflict in Ukraine, the energy crisis and the need to support European companies to counter US climate law have put a strain on the EU budget, the agency said.

Member states will need to support the EU's long-term 2021-2027 budget with additional contributions as part of a review due to be completed next summer, an EU official told Bloomberg.

Macron announced the EU's response to the US anti-inflation law Politics

In 2022, the EU countries are facing the highest inflation in decades. This is due both to record hot weather and to the conflict in Ukraine, due to which new sanctions were imposed on Moscow . RUSSIA , in response, banned the EU countries from buying energy resources for foreign currency, which is why many European companies refused to make further purchases.

The ECB expects that European central banks may face a high loss ratio due to increased inflation in the near future. At the same time, the German and French Central Banks are confident that inflation will return to the target 2% by the end of 2024 or 2025.

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Annual inflation in the Eurozone in July 2022 rose to a record 8.9%, at the same time the ECB raised its base rate for the first time in 11 years. In October, inflation in the EU was already 10.6%, but in November it dropped to 10.1%, and in December to 9.2%.

The IMF has also previously warned that many countries, including the EU and the US, could face recession in 2023. This was also stated by experts from the Center for Economic and Business Research (CEBR). “It is likely that the global economy will face a recession next year as a result of higher interest rates in response to higher inflation,” Kay Daniel Neufeld, DIRECTOR and HEAD of forecasting at CEBR, told Bloomberg.

In 2022, the global economy experienced an inflationary shock on a scale not seen since the early 1970s, the authors of the CEBR forecast say. Supply chain disruptions caused by the COVID-19 epidemic and changing consumer demand patterns in 2021 led to problems, to which 2022 added an increase in energy prices due to sanctions against Russia. The effects of this shock are felt all over the world, but especially the rise in energy prices has affected the European economies.