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Brussels (Belga) – Eurozone inflation declined faster than expected in the autumn of 2023 and will probably continue its downward trend in 2024. By the end of 2025, inflation should only just exceed the European Central Bank’s (ECB) 2 percent target. This is what the European Commission wrote in its latest economic forecast published on Thursday.
Eurozone inflation stood at 5.4 percent in 2023 and is likely to fall to 2.7 percent in 2024. By the end of next year, average price increases in euro countries should amount to 2.2 percent. In Belgium, inflation was 2.3 percent last year. This year, the Commission expects 3.5 percent, with 2.3 percent projected for next year.
Only Austria is forecast to record higher price increases this year (4.0 percent). Slovakia (3.5 percent) is projected to be at Belgium’s level. According to the Commission, the fact that inflation is likely to rise again only in Belgium has to do with the expiry of various government interventions to dampen the effect of rising energy prices. Next year, Belgium is expected to fall back towards the eurozone average, resulting in a corresponding drop in the eurozone ranking. That, in turn, will probably be the result of a slow rise in energy prices.
Inflation in the euro area declined more steeply than expected last year due to the sharp reduction in energy prices. This year, the downward trend will probably be held back by the expiry of the member states’ support measures in the context of the energy crisis and disruptions to trade flows.
Economic growth in the euro area is projected to remain weak in the first half of 2024, before stabilising from the second half of the year until the end of 2025. Eurozone growth should amount to 0.8 percent this year and 1.5 percent next year; with a forecast growth of 1.4 percent in 2024 and 1.5 percent in 2025 for Belgium.
While last autumn the Commission assumed that the eurozone economy would grow by 0.6 percent in 2023, it has now adjusted this to 0.5 per cent. The forecast for this year is also being adjusted: the Commission no longer expects growth of 1.2 percent, but 0.8 percent. In 2025, the eurozone economy is expected to grow by 1.5 per cent.
The Belgian economy grew by 1.5 percent in 2023 and should remain stable at 1.4 percent and 1.5 per cent respectively in 2024 and 2025. This year, the country’s growth rate should be in the middle range, but next year only a handful of other eurozone countries are likely to record lower growth. With Germany (1.2 percent), Italy (1.2 percent) and France (1.3 percent), these do include Europe’s largest economies.
Looking back at 2023, European Commissioner for Economy Paolo Gentiloni said that the European economy has had a particularly challenging year. The Italian does point out that geopolitical tensions, an unstable environment with increasingly unpredictable weather phenomena and a number of important elections, such as in the US, make the forecast for 2024 uncertain. (15 February)
EU support for project to strengthen border management in Bosnia and Herzegovina
Sarajevo (FENA) – The European Union has announced support for a project worth 6.4 million euros to strengthen border and migration management in Bosnia and Herzegovina.
The importance of supporting the project is significant due to the increase in the number of migrant arrivals in BiH in the last few years and the need for improvements in management techniques, which burdened the country’s ability to effectively deal with mixed migration flows and border management.
Since 2017, the number of migrants passing through BiH has increased 1.6-fold, with continued rises in 2022 and 2023. This highlights the urgent need for improved management strategies to address the challenges facing BiH. Although efforts have been made since 2018 to improve the country’s border and migration management capacity, challenges remain due to limited technical capacity and cooperation between different agencies and organisations.
To address these issues, this EU-funded project will focus on improving integrated border management in line with human rights standards. The project will also be aligned with the EU Action Plan for the Western Balkans and relevant strategies in BiH. Its general objective is to improve integrated border management and strengthen its capacities for the effective implementation of migration policies in accordance with EU standards.
The EU is already providing support to BiH’s Ministry of Security and responsible agencies through the joint programme “Individual measure to strengthen response capacity to manage migration flows in BiH”. To date, this support has included procurement of specialised equipment, training of civil servants and operational support. The new project will be implemented by the International Organization for Migration (IOM) in close cooperation with the Ministry of Security of Bosnia and Herzegovina. (14 February)
Switzerland: Parliamentarians give the green light to the resumption of negotiations with the EU
Zurich (AFP) – On Tuesday, two parliamentary committees gave the green light to the Swiss government to resume negotiations with the European Union, while voicing numerous criticisms of the thorny draft agreement aimed at regulating relations with the Alpine country’s biggest trading partner.
Relations between Switzerland and the EU are governed by numerous bilateral agreements, but in 2021 Bern had slammed the door on negotiations for a comprehensive agreement.
Following a resumption of talks in mid-2022, the Federal Council (government) published a joint document with the EU last December, setting out a basis for negotiations that was already very detailed in a number of areas, ranging from questions of freedom of movement to electricity and integration into major European research programmes.
Many employers’ organisations had urged Bern to resume negotiations, given that the EU is Switzerland’s biggest trading partner. But the new draft still meets with resistance from the radical right and the unions. (13 February)
This is a compilation of the European coverage of enr news agencies. It is published on Fridays. The content is an editorial selection based on news by the respective agency.