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'We have become poorer' Eurozone hammered by energy crisis as trade deficit soars to €10BN

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From November to December, the EU’s trade deficit, the difference between exports and imports, widened to €10billion (£838million). Figures from the European Commission pointed the blame at a surge in energy costs, as the bloc continues to rely on Russian gas.

Data from Eurostat said the EU’s value of imported goods jumped 41.8 percent from December 2020 to December 2021.

Year-on-year, the value of imports rose from €146.8billion (£123.1billion) in 2020 to €208.2billion (£174.5billion) in 2021.

Meanwhile, the bloc’s value of “extra-EU exports of goods in December 2021” was estimated to be €198.2billion (£166.2billion), for a rise of 12.5 percent from 2021.

As a result, Eurostat said the EU has recorded a €10billion (£838million) trade deficit in 2021, compared to a trade surplus in 2020 of €29.3billion (£24.5billion).

The Eurozone also saw the value of imports rise to 37 percent year-on-year in December 2021.

Imports to the euro area as of the end of 2021 were valued at €223.3billion (£187.2billion), with the rise mainly driven by an “increase in energy imports”.

However, export were valued at €218.7billion (£183.4billion), increasing by 14.1 percent compared to December 2020.

Eurostat also held the “highest increase for both import and export flow was recorded in the energy sector”, where the bloc record as 62.4 percent increase in extra-EU exports and 72.1 percent increase in extra-EU imports.

Throughout 2021, EU data says the bloc had a trade deficit of €276.7billion (£232billion) in just the energy sector.

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It comes as the European Central Bank (ECB) warned of a potential €84bn (£70.4billion) blow to the region’s economy if its gas supplies are severed by a Russian invasion of Ukraine.

Russia sends an estimated 230 million cubic metres of gas to Europe every day, with around a third travelling west via Ukraine.

The ECB warned a 10 percent plunge to the eurozone’s gas supply would reduce economic output by 0.7 percent, equal to a €84billion (£70.4billion) hit, based on 2019 GDP figures.

Vanessa Gunnella at the ECB said: “The euro area is heavily dependent on imports of both petroleum-based energy products and natural gas.

“Higher gas – and electricity – prices reduce households’ real disposable income and purchasing power… and thus private consumption.”

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Due to supply chain issues and spiralling energy costs, the ECB has raised its inflation expectations for 2022.

The Brussels-based institution said inflation will hit 3.5 percent in 2021, from a November forecast of 2.2 percent.

In a statement, the European Commission said inflationary pressures are likely to come down in 2023.

The commission estimated that annual inflation in the euro area will rise from 2.6 percent in 2021 to 3.5 percent in 2022, before then falling to 1.7 percent in 2023.

Meanwhile, inflation in the UK has hit a 30-year high of 5.5 percent according to the Office of National Statistics.

Consumer prices rose by 5.5 percent in the 12 months to January 2022, the highest since March 1992 when it stood at 7.1 percent.

The ONS said clothing and footwear, housing and household services, which includes energy bills, and furniture and household goods pushed inflation higher.

The Bank of England warned this month that consumer price inflation could peak at about 7.25 percent. by April due to the energy crisis.

It also comes as leading German economists have said “we have become poorer as a country” as the energy crisis causes havoc to Berlin.

Monika Schnitzer, Government economics adviser and Professor at the LMU Munich, told German outlet FOCUS Online: “The increased energy prices are currently mainly due to the increased prices for gas and oil imports.

“Since we have no influence on these prices and cannot do without imports in the short term, this means that we as a country have become poorer overall.

“For this reason, a one-time payment should be used in the short term to help those who are particularly in need.”

Michael Hüther, Director of the Cologne Institute for Economic Research also said: “In the short term, the expansion of renewable energies will not remedy the high prices. In the long term, however, this is where the key to lower energy prices lies.

“Against the background of the ecological transformation, planning and approval procedures in particular must be accelerated.

“The abolition of the EEG surcharge is long overdue and has been decided by the governing coalition.”

Additional reporting by Monika Pallenberg



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'Have to kick the pedal to the metal' Ex-Ukrainian leader slams Macron tank aide hesitancy

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Ex-Prime Minister Arseniy Yatsenyuk sat down on LBC Radio to discuss NATO leaders. NATO has been allying themselves with Ukraine, sending help and weaponry and taking fleeing Ukrainian refugees. NATO members held a conference on the Russian invasion earlier this week to discuss more ways to help Ukraine.

Mr Yatsenyuk pushed for Macron to send over military tanks as promised, slamming him for dragging his feet, and claiming that the war in Ukraine affects the security of every European country.

Mr Yatsenyuk said: “That’s what Putin is closely watching, as for now, Putin didn’t expect this kind of unity and consolidated and concerted actions against the Russian federation.

“But you know, the time is running and we don’t have enough time to wait until some EU member states decide to supply more weapons to Ukraine.

“Or to impose tougher and stronger sanctions on the Russian Federation, so the EU has to be decisive and they have to speed up the process of new sanctions.

“And the shipment and delivery of weapons to Ukraine, because it’s not just about Ukraina and they realise it clearly, this is about the free world.

“And this is about the security of every single nation in the European Union, so the French have to kick the pedal to the metal.”

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Ukrainian President Volodymyr Zelensky explained this week that he expected “serious steps” from Western-allied countries.

Mr Zelensky repeated the calls for a no-fly zone over Ukraine to be imposed by NATO forces and complained that the Western allies had not yet provided Ukraine with sufficient planes, up to date modern anti-missile systems, tanks or anti-ship weapons.

Mr Zelensky added: “At these three summits we will see who is our friend, who is our partner and who sold us out and betrayed us.”

President Zelensky also expressed that he was grateful for the support Ukraine was continuing to receive from individual NATO member countries from around the world.

Mr Zelensky added: “But NATO has yet to show what the alliance can do to save people,” he said. “It feels like we’re in the grey zone between the West and Russia, but we’re protecting all our and your shared values.

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Mr Johnson added: “We’ve got to tighten the economic vice around Putin, sanctioning more people today, as we are, sanctioning the Wagner Group, looking at what we can do to stop Putin using his gold reserves, and also doing more to help the Ukrainians defend themselves.”

Foreign Secretary Liz Truss has been playing an active role in trying to de-escalate the war with Russia by imposing tight sanctions on Russia to try and stop Putin’s warpath of destruction.

Ms Truss has warned that infighting between NATO countries at the moment could be highly detrimental for progress in ending the war.

Mr Truss said: “Russia’s targeting of critical national infrastructure is calculated and dangerous.

“It shows Putin is prepared to risk lives to sow division and confusion among allies.”



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Brexit news: What happens when Article 16 is triggered?

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After Britain’s exit from the European Union (EU) was confirmed, the two parties have been attempting to renegotiate terms for a special Brexit deal relating to Northern Ireland. Coined the Northern Ireland protocol it’s been a point of contention that’s led to threats from each side of triggering a mechanism called Article 16. But what is it?

What is Article 16?

The UK and EU agreed to the creation of the Northern Ireland protocol, in October 2019.

By allowing goods to flow freely between the Republic of Ireland and Northern Ireland the deal removed the threat of a hard border.

But the arrangement has also resulted in what’s been labelled as an ‘Irish Sea border’.

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Goods that now arrive into Northern Ireland from the rest of the UK are subjected to more stringent checks and controls.

In the scenario that either the UK or EU feel that the protocol is leading to significant issues or hampering their capacity to trade, then they have the option of activating Article 16.

The component sets out the process for taking unilateral “safeguard” measures, which in reality would amount to suspending parts of the deal.

Specifically, Article 16 says safeguard measures can be taken if the protocol is leading to serious “economic, societal or environmental difficulties” that are liable to persist.

He said: “Triggering Article 16 now would severely disrupt the unity of the UK and EU response to the war in Ukraine.

“It is thus perhaps not surprising that key US figures chose this week to restate that any uncertainty around the stability of the Good Friday Agreement would hinder a future UK-US trade deal.”

In recent months talks between Foreign Secretary Liz Truss and her EU counterpart Maros Sefcovic have stalled, leading to calls from Brexiteers for the UK to act.

However, Professor Menon cautioned that triggering Article 16 won’t “rid” Britain of the protocol.

He added: “I think the British Government if it triggers Article 16 will do something relatively small and contained.

“And then there’s not a massive bust-up. You don’t end up getting rid of the protocol. You end up with months if not years of negotiations, mediation and arbitration.

“So, it’s a way of doing something but it’s not a way of solving anything. In a sense you’re still stuck with the protocol and you’re still negotiating about the future of the protocol.”

In essence, were Article 16 to be triggered it wouldn’t have a huge impact on the ground.

Many of the checks on goods flowing from Britain to Northern Ireland have already been unilaterally suspended.

Triggering the mechanism itself would only start a formal dispute process that requires both sides to go into talks to resolve.



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NATO slammed as former US Army chief exposes ‘two big issues’ in united Russia response

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US Army vice chief of staff general Jack Keane, sat down on LBC radio to talk about the NATO conference which took place earlier this week. Mr Keane discussed the possibility that Putin could deploy chemical biological weapons on the battlefield. Russian President Vladimir Putin has already used the highly condemned thermobaric weapons since the war started just over a month ago.

The US Army chief acknowledged there had been no public policy declaration on the consequences Putin would face if he was to take such a barbaric action.

Mr Keane said: “Listen I was very disappointed by the NATO summit.

“I totally applaud the fact that they’re going to increase by 40k troops in Eastern Europe.

“And they’re increasing sanctions and it seems like a sense of unity.

“But on two big issues, it’s got to be disappointing, there’s no NATO public policy declaration.

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Mr Keane added: “At the end of that summit to deal with this particular issue, chemical biological weapons and nuclear weapons which the Russians have been waving in front of our face now for almost 30 days.

“What we need is… Think policy statement, not something that’s left to a reporter to ask a question on.

“And then you get a statement that you just repeated, which leads to more confirmation than anything else.

“A much better statement, using my words… I don’t want to put words into other people’s mouths.

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“But with me, the use of any form of WMB would be unacceptable.

“We will not let it stand, it will result in decisive consequential actions and all options are on the table.

“Words to that effect, in a public policy statement, and we didn’t get it and it’s really unfortunate.

“And what it does it leaves in the minds of Putin and his  leaders just what would the reaction be, ambiguous like that and I think it’s very unfortunate.”

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Fear of the Russian military deploying chemical biological weapons has been heightened.

Ukrainian outlet InformNapalm has warned that: “Our conclusions may sound premature or too apocalyptic, but after the missile attacks and bombing of civilian infrastructure in Ukraine, which the Russian army resorted to, we believe that it is necessary to make these data public and try to thwart any such intentions of Russia.”

And NATO Secretary-General Jens Stoltenberg said in Brussels on Thursday: “We’ve tried to be very clear about the gravity of the use of any such chemical weapons.

“These are agents that should never be employed and certainly not on the battlefield, as we are concerned Russia might.”



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