Economy of the European Union

Main article: European Union

GDP

Main article: EU GDP

Financial system

Non-financial debt

Non-financial debt consists of credit instruments issued by government agencies, households and businesses that are not included in the financial sector.

National debt

2022: The national debt of the YeS-27 countries grew to 13.2 trillion euros or 85% of GDP

The public debt of the YeS-27 countries increased to 13.2 trillion euros (85.1% of GDP) for Q3 2022 compared to 13.1 trillion (86.4% of GDP) a quarter earlier and 12.8 trillion in Q3 2021 (89.7% of GDP).

Over the year, the increase in debt is only 418 billion euros, which is comparable to the accumulated budget deficit (395 billion euros) for 12 months.

Almost all debt is concentrated in the Eurozone countries (12.2 trillion), as well as the growth of borrowing for the year - 400 billion euros, but in the Eurozone the debt burden is slightly higher than the YeS-27 countries (93%), but decreases in relation to Q3 2021 (97.3%).

In all large countries without exception, the debt burden has decreased. There are three reasons:

• A low comparison base for 2021, when GDP did not regain its potential after a strangled economy with protracted lockdowns that lasted until mid-2021, unlike the United States, which almost all measures were removed at the beginning of Q3 2020.

• Factor of inflation and nominal GDP growth. This ratio estimates nominal GDP and debt, so inflation affects and if it is possible to contain debt growth, as Europe did, then in conditions of inflation debt is "burned."

• A fairly low budget deficit, which, despite the actualization of anti-crisis measures of energy compensation, amounted to only 3.3% of GDP, compared with 7% in the crisis of 2009 and almost 12% in the crisis of 2020.

Formally, the debt situation is under control, but in the context of the debt crisis (the inability to be effectively and successfully placed), the issue of the stability of the debt structure with rising rates and a clear deficit in private sector demand arises on the agenda.

Europe is extremely fragmented, where resources are concentrated by the largest and most successful, like France and Germany. Accordingly, one way or another, you will have to redeem the debts of the weak links of the chain, which are becoming more and more.

The buyer of last resort is known - this is the ECB, because in the context of geopolitical events, the energy crisis and the battle for capital between the United States and Europe, it will be very difficult to attract foreign investors, and domestic private demand may not be enough, the Spydell Finance channel noted in February 2023.

2018: National debt of countries per capita

Budget

Main article: Budget of the European Union

ECB and banks

• European Central Bank (ECB)
• European Investment Bank (EIB)
• Banks of Europe

Currencies

Euro

Main article: Euro (currency)

Cryptocurrencies

Main article: Cryptocurrencies in the European Union

Inflation

Main article: EU inflation

Key rate

Crediting

2023: Average household debt: 52% of GDP

2022: Record collapse in mortgage demand after key rate rises

In January 2023, in the Eurozone, the demand for housing loans record collapsed and prices begin to decline.

Insurance

Ernst & Young, July 2, 2012: The persistence of traditionally low interest rates negatively affects participants in the European life insurance sector, who are forced to seek opportunities to narrow the gap between investment income and the minimum level of guaranteed profitability embedded in existing insurance products.

Andy Baldwin, head of Ernst & Young's financial services practice for the EMEIA region (Europe, Middle East, India and Africa), notes: "Insurers are experiencing significant difficulties in securing payments for insurance products sold in pre-crisis times. The dividends that insurers expect to receive for products with a guaranteed level of profitability do not correspond to the level of investment income that insurers now have at their disposal and which they will have in the foreseeable future. The situation is also complicated by current and future capital adequacy requirements, which will entail the introduction of Solvency II. Insurers will have to look for ways to reduce the deficit in the current portfolio, and convince customers to purchase products with lower and less stable levels of guaranteed returns and that's then, when the issues of maintaining capital and ensuring a reliable level of profitability are most acute on the agenda of any client. To narrow the existing gap, insurance companies are trying to optimize the structure of their assets. Paradoxically, the most profitable assets are state loan bonds of individual states, but it is in such assets that regulators strongly advise against investing. "

Asset Management

Ernst & Young, July 2, 2012: According to the forecast, in 2012 the volume of assets under management will increase by only 1.4%. In 2011, the value of assets managed by participants in the eurozone asset management sector decreased by more than 7% compared to 2010, with investments in funds specializing in asset management reduced by 12% and direct investment by 16% (the latter was caused by a reduction in the private equity market by 8% and investors' refusal to share in assets).

Despite some revival of the situation in the first quarter of 2012, when growth in the asset management sector approached 6%, in the second quarter the situation changed again for the worse, in all likelihood, due to the escalation of the sovereign debt crisis in the eurozone, which led to a decrease in quotations in the securities markets and another round of growth in the yield of sovereign bonds of peripheral countries. In Europe the current macroeconomic situation, participants in the asset management sector do not have to rely on the fact that in 2012 they will be able to compensate for losses incurred in 2011.

"Due to continued market alertness, investors in the short term are likely to invest in funds with a diversified asset structure guaranteeing absolute rates of return. At the same time, given the tightening of requirements for funding pension plans, it can be assumed that in the next 20-30 years more than half of the savings will be sent to pension funds. Thus, it is quite possible that pension funds will account for half of all funds of individuals in management, "said Marie Diron, economic consultant in preparing the Ernst and Young economic forecast for the financial services sector of the eurozone countries

.

Financial Technology

Main article: Financial technology (fintech) in Europe

Energy and power

Hydrogen Power

Main article: Hydrogen power

Oil and gas production

Main article: Oil and gas production in Europe

Import of gas, coal, oil and petroleum products

Main article: Import of gas, coal, oil and petroleum products in Europe

Electricity imports

• Black Sea Energy - a project of an underwater cable along the bottom of the Black Sea for the transmission of electricity from Azerbaijan.

2023

The rise of Chinese solar panel installations and the decline in their production in the EU

The release of solar panels in Europe is in the deepest crisis in the past decade, as fierce competition from China undermines local production in the sector, making the continent's hopes for greater energy independence even more unrealizable.

Chinese imports reduce prices and allow a record increase in the number of installations.

The fallout includes the possible closure of a factory in Germany.

Europe's petrochemical industry on 'deathbed' over Russia conflict

The last time European petrochemical plants processed so little of their favorite raw materials was when the Swedish group ABBA was the most popular on the continent, and the "Fall of Saigon" marked the end of the war in. Vietnam It was 1975 and the region was still licking its wounds after the first oil crisis. After almost half a century, the industry is dying.

Producers of the region import components for plastic production from abroad, since energy prices after refusing to supply from Russia make domestic production too expensive.

Electricity generation shrank to 1997 levels

By November 2023, electricity generation in the EU is literally 1% of the minimum COVID-19 crisis in 2020 and somewhere at the level of 1997.

Average delay in construction of NPP power units - 4 years

Sharp decline in energy demand due to the shutdown of heavy industry

The drop in demand for electricity in Europe will not end, the IEA reported in July 2023. Demand for it seems to fall to the lowest level in more than 20 years, as the reduction in industrial production becomes constant.

High energy prices have brought heavy industry to a standstill across the continent, leading to a significant decline in demand in the first half of 2023. The agency also warned of an increase in load on power systems due to the need to cool buildings during a period of sharp rise in summer temperatures.

"The competitiveness of the European energy-intensive industry is at risk due to the high cost of energy," the IEA report said. "There is no easy way forward."

European authorities in 1.5 years allocated €792 billion to fight energy crisis after refusing fuel from Russia

In mid-February 2023, it became known that since September 2021, the European Union authorities have collectively allocated about €792 billion to help households and local companies in connection with the energy crisis.

According to the estimates of the Brussels research organization Bruegel, the EU countries spent €681 billion to combat the energy crisis, while Great Britain they allocated €103 billion, Norway and €8.1 billion from September 2021. The total amount of spending on the fight against the energy crisis reached €792 billion, while in November 2022 this figure, according to Bruegel, was €706 billion. The increase came as the Eurozone continued to grapple with the effects of halting most gas supplies to Russia Europe in the winter.

Germany topped the spending table, allocating almost €270 billion - an amount exceeding all other countries. Great Britain, Italy France and were the next largest expenses, although each of them spent less than €150 billion. Most EU countries spent only a small part of this amount. At the same time GDP , Slovakia is in first place in terms of the percentage of allocated funds, which turned out to be ready to spend 9.3% on protecting the population and firms from high electricity prices. Germany, on the other hand, allocated an amount equivalent to 7.5% of GDP for these needs.

Per capita, Luxembourg, Denmark and Germany spent the most.

The power spending update comes as countries debate EU proposals to further loosen state aid rules for green technology projects as Europe seeks to compete with subsidies in the US and China. The Bruegel document notes that European governments have directed most of the aid to non-targeted measures to reduce retail energy prices, such as reducing VAT on gasoline or limiting retail electricity prices.^[1]

2022

Wind and solar together produced more electricity than gas in Europe for the first time

In 2022, wind and solar together produced more electricity in Europe for the first time than coal and even gas.

Sharp decline in gas consumption in industry and households due to the rise in its price

Total gas consumption for all YeS-27 countries in the first eleven months of 2022 decreased by 11% compared to the level of 2019-2021.

The leaders in the decline in gas demand are Finland (minus 53% in January-November) and the Baltic countries (Latvia, Lithuania and Estonia), which reduced consumption by 27-30%, and by November reached a demand compression of half of the average level 2019-2021.

In November 2022, gas consumption decreased by 23% from the November average in 2019-2021, which is the strongest reduction in demand in modern history according to Bruegel.

In November, the Netherlands reduced gas consumption by 33% by 2019-2021, in France minus 25%, in Germany minus 23%, in Spain minus 22%, in Italy minus 20%, and in Poland minus 10%.

In principle, countries are exceeding the agreed EU plan for a 15% forced reduction.

It is curious that in the priority between industry and the electric power industry, the latter is of higher importance. The leading countries Europe (,, and Germany France) Italy in Spain industry reduced gas consumption by 20-32%, where Germany reduced demand the most, and in the electric power industry the drop in gas consumption averaged 12%.

It is rather not EU policy measures that work here, but the economy, the Spydell Finance channel noted. Gas prices have risen so much that the profitability of production becomes negative, so it is not administrative coercive measures that work, but exclusively market ones.

If gas bills have risen 4-6 times relative to 2021, everything will happen naturally, even directives do not need to be introduced. The most vulnerable industries: petrochemistry, chemistry, metallurgy, production of building materials, fertilizer production, and so on.

Rise in electricity prices due to pressure on Russia

European households pay more for electricity and natural gas than ever, even as governments spend billions to protect consumers from the energy crisis.

Retail natural gas prices in October 2022 are twice the level of October 2021. Household electricity costs soared 67% to 36 euro cents per kilowatt-hour.

On a monthly basis, the average specific tariff for electricity in October increased by 3.4%, and for gas - by 2.5%. The biggest monthly gain was recorded in Dublin, where electricity rates rose 44%, while the average price of gas in Rome soared 97%.

from

Structure of power generation: NPP, gas, wind

Growth in debt of energy and utilities companies exceeded 1.7 trillion euros due to rising prices for gas and oil

The combined debt of European energy and utilities companies exceeded the 1.7 trillion euro mark, as enterprises must take loans to cover the costs associated with rising gas and oil prices.

According to Bloomberg, in the first six months of 2022, energy companies in the region attracted 45 billion euros of bonds and 72 billion euros of loans.

2021

Largest energy crisis in EU history

The European Union is racing in all pairs to the strongest energy crisis in its history, which promises the European economy a further acceleration of inflation and a full-fledged industrial recession.

Electricity prices in France and Germany have updated historical records following gas quotes, which on December 21, 2021 for the first time in history climbed above $2000 per thousand cubic meters. Having soared 22% per day and 89% since the beginning of December, January gas futures closed trading on the ICE exchange at $2,100 after Gazprom stopped pumping through the Yamal-Europe pipeline, leaving Germany alone with the upcoming cold and record low reserves in UGS.

However, the cost of electricity is growing faster than gas. In Germany, the cost of a megawatt-hour soared 30% in a day and 114% since the beginning of the month, to a record 428 euros. Factories and factories are not able to afford electricity. Thus, in Germany in November, the growth rate of producer prices reached 19.1% year-on-year and became a record since 1951.

The gas market does not expect a significant decrease in prices even in the summer: gas futures for May and June cost more than $1000 per thousand cubic meters.

Shutdown of several power companies due to the rise in gas prices

Due to rising energy prices, British and German companies are experiencing problems. The shutdown in September 2021 was announced by Avro Energy and Green Supplier. Avro served about 580,000 UK customers, Green about 250,000 customers. At the same time, the total number of households in the UK affected by the wave of bankruptcies of energy companies approached 1.5 million. As Green Supplier explained, "current market conditions are unprecedented":

"Record wholesale energy prices are driving energy costs above the cap. This means that Green, like all other energy suppliers, sells energy to consumers at a loss. "

Deutsche Energiepool, a German company specializing in the supply of gas for industrial enterprises, has terminated contracts with its customers due to a significant increase in prices in the market. This is stated in a statement issued on Friday by the company. "Energy prices in Germany, as in almost all of Europe, are rising. Over the past few months, purchase prices for natural gas and electricity in the market have tripled, and prices for short-term purchases have increased by about five times, "the message says.

At the same time, it is indicated that earlier the spot price for gas was 4.80 euros per 1 MWh. As of September 20, as noted in the message, it reached 75.04 euros per MWh. At the same time, the company believes that prices for natural gas will continue to rise, since European gas storage facilities are practically empty.

In addition, as emphasized in Deutsche Energiepool, the company's own purchase prices have risen by about three times. Among other things, there are restrictions on the volume of purchases. "This is a condition that we can no longer meet commercially because of economic unreasonableness. Therefore, we were forced to terminate many of the contracts we concluded, "the statement states.

2020: Average energy consumption per capita

and

2018: Petrol price

Minerals

2022: Memorandum on the supply of REE from Kazakhstan

At the end of 2022, EU representatives signed a memorandum of strategic partnership with Kazakhstan to provide raw materials. The partnership is aimed at supplying rare earth elements, raw materials for the production of batteries and "green" hydrogen to the EU.

Kazakh officials, commenting on the conclusion of the memorandum, said that at present there is an opportunity to supply 16 out of 30 critical elements. At the same time, it was noted that in the future, supplies will be able to partially cover the needs of the EU for all 30 critical REEs.

But there's one legal subtlety: It's about a memorandum, not an intergovernmental agreement or a legally binding treaty. That is, deliveries can be carried out, but the mechanism of compensation and payment to Kazakh enterprises is not clearly spelled out. The text states that the EU countries will help in the modernization of enterprises in Kazakhstan.

Often in such cases, the colony countries buy the necessary equipment, patents for temporary use, consulting services, exploration services, audit services and many other services from the EU. All this is issued in the form of a loan secured by future deliveries. This scheme of work allows you to pump out resources for almost free for decades.

2021: Partnership with Ukraine on REE, noble gases and hydrogen

In 2021, the EU and Ukraine began a strategic partnership on raw materials. His goal was and remains in integrating the supply of raw materials from Ukraine into the chains of high-tech EU products. In Ukraine, it was planned to use Soviet enterprises to produce the necessary REE and noble gases, which will then be used to produce chips and electronics already in the EU.

Similarly, it is planned to use the energy potential of Ukraine for the production of hydrogen. The production itself can be placed in Ukraine, using for this, for example, a nuclear power plant, and the EU countries will already be the consumer of environmentally friendly fuel. Classical colonial addiction.

2020: Critical reliance on rare earth imports

In the EU, the situation with the provision of rare earths is much more complicated than in the United States. The list of critical raw materials for IPC and industry in the latest edition of 2020 contains 30 elements. Of these, 19 are predominantly imported from China. This is, for example, 93% magnesium and 86% rare earth metals.

In the EU, only 1% of critical elements are produced. From China, 40% of the total volume of rare earth elements (REE) used in the EU is supplied. Other major suppliers are South Africa, Russia and Brazil.

Most of the REE included in the list of critical important elements of the EU are mined in Russia. Including 85% of vanadium supplies. Vanadium alloys are used in nuclear reactors. Vanadium oxide is used as a pigment for ceramics and glass, as a catalyst and in the production of superconducting magnets.

According to the European Commission, only for batteries by 2030 will require five times more cobalt and 18 times more lithium than now. Huge volumes of metals are necessary for the production of batteries, windmills, electric vehicles, etc. The batteries use nickel, lithium, cobalt, vanadium and manganese.

As a systematic solution to this problem, it is planned to adopt the Law on Critical Raw Materials in the EU.

The main objectives are:

• Defining a set of "strategically critical raw materials"
• Early Warning System
• Access to funding
• Improved waste and cycle structure to advance recycling.

A small example: a 3 mW wind generator requires 335 tons of steel, 4.7 tons of copper, 1,200 tons of concrete, 3 tons of aluminum, 2 tons of rare earths, as well as zinc. For almost all positions, the EU is dependent on imports, including from Russia.

Business

• Start-ups in Europe

2023: Company bankruptcies hit highest since 2015

According to the results of the second quarter of 2023, the number of bankrupt companies in the European Union reached 106 - this is the maximum figure since the start of data collection in 2015. Such figures are contained in a study by the European Union Statistics Office (Eurostat), the results of which were released in mid-August 2023.

The report says that compared to the first quarter of 2023, the number of bankruptcies of enterprises in the EU in the second quarter of this year rose by 8.4%. Thus, the number of bankrupt companies is growing for the sixth quarter in a row. The situation is explained by several reasons, including macroeconomic challenges and high inflation.

If we consider the EU market by type of activity, then in all sectors of the economy there was an increase in the number of bankruptcies in the second quarter of 2023 compared to the previous quarter. The most affected are the hotel business and the catering sector, where the number of bankruptcies in quarterly terms increased by about 24%. In the field of transport and warehouse services, the number of bankrupt enterprises rose by about 15% compared to the previous quarter, while the education, health and social activities sector recorded an increase of 10%.

The study also says that the level of bankruptcy of companies in the EU in the second quarter of 2023 increased in almost all sectors compared to the fourth quarter of 2019 - before the start of the COVID-19 pandemic. The only exceptions were industry and construction, where the number of bankrupt enterprises decreased by 11.5% and 2.7%, respectively. The largest increase in the number of bankruptcies compared to the last quarter of 2019 was recorded in the field of hotel business and catering - plus 82.5%.^[2]

2022: Record number of bankruptcies due to failed policy of pressure on Russia

In Europe, in the 4th quarter of 2022, the number of company bankruptcies increased sharply, which is a direct consequence of a significant drop in business margins in the context of the energy and inflation crisis.

European businesses are holding back employment and, amid personnel shortages, are raising salaries at a faster pace than productivity is growing, but shifting costs to themselves, reducing profitability.

The growth of intermediate costs (energy, logistics, intermediate goods) and the growth of wages extremely negatively affects the stability of European business and many do not withstand the stress test.

The number of bankruptcy applications among EU enterprises increased significantly in the fourth quarter of 2022 (+ 27% compared to the previous quarter + 23% compared to pre-pandemic 2019) and reached the highest level since the start of data collection in 2015.

Eurostat collected these statistics on a voluntary basis from 2015 to Q4 2020 and mandatory from Q1 2021, so the data are not fully representative, but at least make it possible to understand the trends regarding 2021, the Spydell Finance channel noted.

There is definitely a blow to business, although not in the place where one would expect. It was assumed that the industry would take the brunt, but so far this is not the case.

Transport and storage (+ 73% qoq, + 85% compared to 2019), accommodation and nutrition services (+ 39% qoq and + 97% by 2019), as well as education, health care and social activities (+ 30% and + 40%, respectively) were activities with the largest increase in the number of bankruptcies in 4 qoq 2022.

At the same time, bankruptcies in industry (production + processing) practically did not change in Q4 2022 compared to Q3 2022 and decreased by 18% compared to 2019. The same applies to construction (+ 6% and minus 10%, respectively).

Wholesale and retail trade (+ 21 %/+ 11%), finance, scientific and business services (+ 20 %/+ 30%), IT and communications (+ 20 %/minus 5%).

These statistics are not weighted by the size of the companies, but make it possible to understand the potential risks and direction.

2021: Corporate deposits hit record €3.2 trillion

By August 2021, eurozone companies have the largest cash reserves on record.

Deposits of non-financial companies in the eurozone at the end of July reached a record level of 3.2 trillion euros (3.8 trillion) dollars , according to the ECB. This is about 600 billion euros more than the amount held by creditors at the beginning of the pandemic COVID-19 in 2020.

R&D

2022

2021: EU increases research spending by 45% over 10 years

In 2021, the European Union spent approximately €331 billion on research and development (R&D). This is 6.9% more compared to the previous year, while the growth compared to 2011 was about 45%. Such data are provided in a study by the EU Statistical Service (Eurostat), the results of which were released on October 4, 2023.

It is noted that R&D costs in 2021 decreased to 2.27% of GDP compared to 2.3% a year earlier. This can be explained by the recovery in GDP in 2021 after a significant drop in 2020, provoked by the COVID-19 pandemic. Compared to 2019, the share of R&D in relation to GDP rose by 0.05%, and compared to 10 previous years - by 0.26%.

Among the EU countries, the highest R&D intensity in 2021 was recorded in Belgium (3.43% of GDP), Sweden (3.4%), Austria (3.26%) and Germany (3.13%), that is, in all these countries spending exceeded 3% of GDP. At the same time, six EU countries recorded R&D costs below 1% of their GDP in 2021: these are Romania (0.47%), Malta (0.65%), Latvia (0.74%), Bulgaria (0.77%), Cyprus (0.83%) and Slovakia (0.92%).

The study says that seven EU countries registered a decrease in R&D intensity from 2011 to 2021: Finland (minus 0.63%), Estonia (minus 0.55%), Ireland (minus 0.44%), Luxembourg (minus 0.38%), Slovenia (minus 0.29%), Denmark (minus 0.18%) and Malta (minus 0.01%).

In 2021, the business sector accounted for 65.95% of the total R&D costs in the European Union, which is equivalent to €218.32 billion. This is followed by the higher education segment (21.76%; €72.03 billion), the state industry (11.64%; €38.55 billion) and the private non-profit sector (0.65%; €2.14 billion). R&D is said to be the main driver of innovation in many areas.^[3]

Foreign trade

Main article: EU Foreign Trade

Sectors of the economy

Industrial production

2022

Industrial production in the EU is growing, despite the strongest energy crisis in 50 years

Which industries suffered the most damage in a year?

As of December 2022, the chemical industry took on the whole blow - a fall of almost 15% per year (the strongest crisis in 30 years), the Spydell Finance channel noted. But the chemicals industry includes six major segments.

• The production of basic chemicals, fertilizers and nitrogen compounds, plastics and synthetic rubber in primary forms is the main blow here with a collapse of 26%, which is comparable to the 2009 crisis in terms of the sharpness of the reduction. The current level of the index is on track to break through the lowest in the last 30 years. This segment predominantly includes lower end products such as industrial gases (methane, propane, butane), fertilizers, sulfuric acid, hydrochloric acid and dozens of other chemicals, untreated plastic and rubber, i.e. the most basic materials.

• The production of pesticides and other agrochemical products has not changed in a year, however, production over the past 12 months has updated the historical maximum. This is a broader category that includes all types of agricultural fertilizers of a higher level of redistribution than nitrogen, phosphate or potash fertilizers from the first group.

• The production of paints, varnishes and similar coatings, printing ink and mastics - there is a decrease of 6% y/y, but the annual production corresponds to 2016-2019. Nothing critical, the energy crisis did not directly affect this segment.

• The production of soap and detergents, cleaning and polishing products, cosmetics and perfumes - an increase of 2.6% YoY and an update of the historical maximum of annual production. This is the most capacious, capitalized and marginal group.

• The production of other chemical products is reduced by 1.5%, and the annual production of 3-4% of its maximum is no impact of the energy crisis.

• The production of artificial fibers is reduced by 2% and stagnates in annual production. The trend of production compression over the past 20 years, there are no obvious distortions from 2021.

Thus, there is damage, but localized in the narrow segment of low-margin production of lower redistributions, the Spydell Finance channel noted.

The metallurgical industry is down 6.4%, iron ore production is down 12.6%, oil and gas production is down 7.6%. Production of other non-metallic mineral products - minus 4.4%. However, oil and gas services - plus 15%!

The production of paper and paper products is reduced by 6.8% y/y, a serious drop of 5% in the production of wood and wood products, with the exception of furniture, problems in the production of rubber and rubber products - a drop of 3.7%. Textiles and clothes are bad.

If everything falls, why growth? Production has shifted strongly into a knowledge-intensive and capital-intensive segment. The pharma industry is growing at a fantastic rate of 33% (the same has never happened), the production of computers and related electronics is growing by 18%.

The production of vehicles, trailers and semi-trailers is a sharp increase of 12%. Other transport equipment - plus 8.3%, electrical equipment - plus 9.6%, mechanical engineering for commercial and industrial purposes - plus 5.8%.

The defense order significantly supports the European and American economies.

As a result, the economy of high redistributions is growing as never before, and low-margin production is declining.

According to preliminary calculations, the affected segments occupy about 15% in the structure of European production. Yes, they are reduced by 20-30%, but since their share is relatively low, and the industry is shifted towards knowledge-intensive, the resulting effect is limited than in the mono-economy.

At the same time, unprecedented amounts of state assistance cannot be written off.

It should also be understood that the degradation of basic sectors of the economy may have a delayed effect, i.e. the production of medium and high redistributions is highly likely to have a negative impact in 2023 due to problems with primary production.

The localization of the energy crisis does not cancel the structural problems of the European economy: the debt crisis, which will fully manifest itself in 2023, demography, degradation of the labor force, a decrease in the pace of technological progress, limited transfer within income clusters of the population, deglobalization, trade wars and protectionism, political deformation and a lot of other problems.

The closure of fertilizer, gas chemistry and metallurgy enterprises due to attempts to put pressure on Russia and rising energy prices

In 2022, Europeans had to reduce gas consumption by 40-50 billion cubic meters. m of gas due to the closure of enterprises for the production of fertilizers, gas chemistry, metallurgy and "this is just the beginning," said at the end of December 2022, Deputy Prime Minister of the Russian Government Alexander Novak.

Dependence on China for procurement of raw materials

European Commission head Ursula von der Leyen, September 2022: "Of the 30 most important raw materials, 10 come mainly from China. The PRC essentially controls the global manufacturing industry. Nearly 90% of rare earths and 60% of lithium are processed in China. We should not fall into the same trap and addiction as with oil and gas. "

Reduction and shutdown of steel plants production due to rise in electricity prices after pressure on Russia

Since August 2022, European steel plants have been stopping production due to rising electricity prices amid sanctions imposed on Russia over the conflict in Ukraine.

2019

Tourism

Telecom

• Telecommunications market in EU countries
• Internet access (EU market)
• Online Advertising (European Market)
• Smartphones (European market)
• Wearable Electronics (European Market)

Internet

• Internet regulation in EU countries

Information Technology

• Europe's IT Market
• Western Europe IT Market
• Blockchain (European market)
• Major Oracle and SAP partners in Europe

Construction

2022: Construction volumes remain stable

Real estate

2023: Commercial property transactions collapse by 58%

In the second quarter of 2023, the volume of commercial real estate transactions in Europe fell by 58% to the lowest level since 2010.

The office segment suffered the most - the fall was 68%, while in the hotel segment the fall was 36%. In all major markets, there was a significant decrease in the volume of transactions.

MEDIA

• Media in Europe

Agriculture

2023: France leads by output with 18% EU share

France is the largest producer of agricultural products in the EU, accounting for about 100 billion euros a year, or about 18% of total production in 2023.

2022: High level of state support for agriculture

Labour market

Unemployment

2023: Record low unemployment in the Eurozone - 6.4%

The eurozone unemployment rate hit a record low in November 2023, despite fears that the 20-nation bloc fell into recession in the second half of 2023.

The unemployment rate fell to 6.4% from 6.5% in October, Eurostat said on Tuesday, the equivalent of nearly 11 million people out of work in a region of more than 300 million.

2022: Unemployment at historic low

2012

In June 2012, unemployment in 17 eurozone countries was 11.2 percent, a record for the entire observation period (Eurostat)^[4] reached^[4].

According to Bloomberg, in May, statistical departments recorded an unemployment rate of 11.1 percent. The number of unemployed in the region increased by 123 thousand to 17.8 million people.

Spain is the leader in this indicator among the countries participating in the monetary union. The lowest unemployment rates are observed in Austria (4.5%) and the Netherlands (5.1%).

The number of unemployed in Spain amounted to 5.7 million, which is 24.6 percent of the total working population of the country.

Unemployment in Italy in June rose to 10.8%, a record since 1999. The share of the working population was 56.9%, and the share of economically inactive citizens was 36.1%. The largest number of unemployed people are young people aged 15 to 24 - 34.3 percent of people in this age group do not work.

In Germany, the figure was 6.8%, unchanged from last month. The number of unemployed in the country amounted to 2.89 million people.

The International Labor Organization (ILO) believes that the number of jobs is declining due to government policies to reduce budget spending, which negatively affects economic growth. According to ILO forecasts, if the authorities do not take measures to stimulate the economy, the number of unemployed in the eurozone in the next 4 years could grow to 22 million people.

• Ernst & Young, June 2012: The widening gap in eurozone economies continues to widen the disparity in labour markets. The share of unemployed reached nearly 25% in Spain, 22% in Greece and 15% in Portugal, with unemployment rising between 3% and 4% in each of these markets over the past six months. This further weakens domestic demand and reduces investment, as well as limits the ability of these governments to implement plans to reduce the budget deficit. At the same time, unemployment remains below 6% in Germany, Austria and the Netherlands.

• Unemployment in April 2012 in the eurozone updated the record to 11 percent (Eurostat data).

April unemployment in Italy also turned out to be a record: according to preliminary data, it amounted to 10.2 percent. As the AGI agency clarifies, the indicator has reached a record since 2004. Compared to March, unemployment increased by 0.1 percent, on an annualized basis, the figure increased by 2.2 percent.

On May 31, 2012, the upper house of the Italian parliament approved the reform of the labor market, according to which the dismissal process will be simplified. Thus, the authorities hope to stimulate employers to hire more new employees, primarily young people. In addition, the government of Prime Minister Mario Monti plans to introduce a missing system for paying unemployment benefits.

• Statistical departments have been keeping records of unemployment in the eurozone since 1995.

Incomes and expenses of the population

The richest people in Europe

Main article: The richest people in Europe

2022: Real income crash as inflation soars due to sanctions against Russia

2021: The EU counted 24 million very poor residents

In mid-September 2021, data appeared that 24 million workers throughout the European Union EU () live below the poverty line on the minimum wage. This was reported in the European Confederation of Trade Unions (ETUC; represents 45 million members of 90 trade unions from 38 countries Europe and 10 European trade union federations). More. here

2020: Denmark, Netherlands and Sweden lead in citizen welfare

At the end of 2020, Danish families are the richest in the European Union, having the largest reserves of cash and pension savings.

According to the Central Copenhagen dollars Bank, collected in, Danes have about 1.3 million kronor (US 208,000) of financial assets per capita, more than twice the EU average. It's after debt deduction.

That puts Denmark on top, with the Netherlands, Sweden, Luxembourg and Belgium rounding out the top five.

2012

Ernst & Young, June 2012: The deterioration of the labor market, low wage growth and uncertainty about the future of the single currency negatively affect consumer confidence. With the exception of Germany, whose population, according to recent studies, is muted optimism, consumer confidence in eurozone countries has continued to decline in recent months.

Therefore, according to the economic forecast for the eurozone countries in 2012, real consumer spending will increase by about 0.9% in Germany and only by 0.2% in France, while in most other countries of the euro zone they will remain at the same level or decrease.

Taking into account the dissipating concerns about the structure of the eurozone in 2013, further growth of consumer spending in the strongest countries is predicted at the level of 1%. However, household spending in peripheral countries in 2013 is likely to continue to decline and resume growth only in 2014.

Retail

2023: Europe's retail sales slump intensifies

The decline in retail sales in Europe is intensifying amid high inflation, a slowdown in income growth, rising loan rates and the integral stagnation of the economy.

In August 2023, compared to December 2019, retail sales growth was only 1.5% for the Eurozone countries and 2.6% for the YeS-27 countries. The result in almost four years is very mediocre, but how to see it.

On the one hand, we can say that without visible consequences, the following were overcome: the COVID-19 2020-2021 crisis, the 2022 energy crisis, the inflation crisis 2022-2023 and the 2023-2024 debt crisis is reaching full capacity. A series of continuous crises swept Europe and the blow is more significant among developed countries than in the United States or Japan.

On the other hand, the lack of growth over 4 years, given the full potential of subsidies and monetary experiments, which resulted in debt accumulation and structural degradation.

2022: Retail volume declines due to standoff with Russia

The demand of the population in Europe against the background of the conflict in Ukraine began to fail. Exactly, as in the United States, dwindling savings and credit activity support demand, but the supply of resources is limited against the background of a record failure of income in real terms over 40 years. In terms of income in Europe, the situation is much worse than in the United States.

Retail sales in the Eurozone are only 2.2% higher than in January 2020 (the last month without restrictions related to COVID-19). Relative to 2021, retail sales in October decline by 2.7%, and throughout Europe minus 2.4%.

There is an accelerated decrease in consumption of food and drinks by 3.9% YoY against the background of record inflation in this segment, which emphasizes the blow to the least affluent class of the population in Europe.

2018: Map of the largest retailers by country

Consumption

Car market

• Automobile market of the European Union

Tea

2018: Per capita tea consumption per kg per year

Milk

2018: Milk consumption in litres per year per person

Meat

2019: Pork is the most consumed type of meat

Beer

2019: Beer consumption in litres per year per person

Alcohol market

Minimum age to purchase alcoholic beverages

Notes