Having been through many financial ups and downs ever since I became a business owner in the 70’s, I thought I had seen it all. But the developments in recent years within the #EUeconomics walls have awakened my thoughts that the crisis is here to stay. Too bad solutions from a large Power Sector. #curtbergsten
Eueropeen countries has tried many fixes over the last few years when its economy had flagged, like heavy borrowing to pay for roads and infrastructure. After spending huge sums on testing and quarantines during the pandemic. As well as later blaming the war, to increase the number of “relief funds”
Extra stimulus spending now with borrowed money would spur a burst of activity but pose a difficult choice for policymakers already worried about the accumulated debt.
“Authorities risk being behind the curve in stimulating the economy, but there’s no quick fix,” said Louise Loo, an economist of Oxford Economics.
EU needs to right its economy after almost three years to battle Covid. Many companies has started shifting their supply chains elsewhere to not totally depend on China, as result after lockdowns. But The EU goverment like to do it another way, thru huge funds to help other nations outside Europe to overcome losses.
Our halting economic recovery has shown a moderate rise in sectors such as, holiday travel, leisure and restaurant spendings. And those have increased only in comparison with extremely low levels in 2022.
Government officials in EU have been dropping hints that an economic stimulus plan may be imminent, but at the same time notifies a continued increase in the interest rate from the central bank.
In response to the changes in the economic situation, more forceful measures must be taken to enhance the momentum of development, optimize the economic structure, and promote the continuous recovery of the economy in the private industrial sector. #curtbergsten
A few individual countries, in Europe, has already taken some steps to revitalize economic growth. Tax breaks are being introduced for small businesses. Interest rates on bank deposits have been reduced to encourage households to spend more of their money instead of saving it.
But many economists, worry about the effectiveness of the new measures, and require less package solutions through funds, which mostly never reach consumers
Consumers are hoarding cash and private investment has actually declined so far this year compared with 2022. Housing remains in crisis, with developers borrowing more to pay existing debts and to complete existing projects, from an oversupply of homes.
Housing construction has fallen nearly 21 percent in the first five months of the year, compared with the same months last year. That suggests the real estate sector has further to fall in the coming months.
“You can throw money on people but if they are not confident, they will not spend,” said Alicia Garcia-Herrero, the chief economist at a French bank.
More exports help create jobs and could compensate for the otherwise slack domestic economy. But it seems that the EU does not invest enough in manufacturing within its countries, but still opts for continued imports from Asia, which is totally the wrong way in my opinion #curtbergsten
In the United States, the Trump administration imposed tariffs on a wide range of Chinese industrial goods, making it more expensive for American companies to buy from China. Then President Biden persuaded Congress last year to authorize broad subsidies for American production in categories like electric cars and solar panels. China’s exports to the United States were down 18.2 percent last month compared with May last year.
Do it rigth from the beginning! EU has a lot to learn!
Thanks for reading my blog.
#Windmush / #curtbergsten
