Is the dream of increasing well-being in Europe disappearing?

2024-11-21 16:30:00, Kosova & Bota CNA

In an increasingly harsh international environment, the risks for the eurozone financial system are increasing, he warns

European Central Bank. According to one of its reports, the European Central Bank is very concerned about the financial stability of the eurozone at a time of weak economic growth there and increasing conflicts in world trade. In the six-monthly report of developments in the eurozone of the European Central Bank, it is found that economic growth in the eurozone is quite fragile, at the same time that geopolitical uncertainties are having a negative impact.

Increasing tensions in world trade

But that's not the only concern about the ECB's warning. "In addition to geopolitical and political risks, tensions in world trade are also increasing, which increases the risk of extreme events," declared the Vice President of the European Central Bank, Luis de Guindos, on Wednesday (20.11), according to the Reuters agency. According to de Guindo, this darkens the perspective of financial stability in the eurozone.

Is the dream of increasing well-being in Europe disappearing?

Economic experts in Europe have anxiously turned their eyes towards the USA, where the winner of the presidential elections, Donald Trump, is expected to come to power for the second time. The warnings made by Trump in the election campaign for the imposition of customs, resulting in the aggravation of trade conflicts, would hit the Eurozone hard. Indeed, according to the assessment of the European Central Bank, the financial markets have so far been resistant, but recently the turbulence in the stock markets has increased. Likewise, the budget problems of some countries and the stagnation of economic growth add to the worries of the financial markets about the ability of the countries to pay off their debts. Enterprises continue to be burdened by high credit costs and lack of perspective for economic growth. Difficulties may increase for small and medium-sized enterprises and households if the economy continues to weaken.

Business real estate markets in crisis

But for the European Central Bank, real estate markets are also a worrying factor. While residential real estate prices have stabilized, the real estate market of firms and companies is still struggling due to "home-office", working from home. The losses of this market, according to the ECB, may increase in the future./ DW