Europe in brief: ECB warns of technical recession risk in the eurozone, EU Commission calls on Council of the EU to accept Bulgaria, Romania and Croatia into the Schengen area, EU to provide 1 billion euros for climate adaption in Africa

by dpa, BTA, AFP | 18.Nov 2022 | Europe in brief

More EU news is available on the wire services of the respective news agency.

Amid high energy prices, rising inflation and low economic growth, risks to financial stability in the euro area have increased, warns the European Central Bank. What also happened: The European Commission calls for Schengen area membership for Romania, Bulgaria as well as Croatia and announces a 1-billion-euro program to help fund climate change adaptation and resilience in Africa.

Ein vorbeifahrendes Schiff zieht kurz nach Sonnenuntergang seine Lichtspuren über den Main, während im Hintergrund die Lichter der Frankfurter Bankenskyline und der Europäischen Zentralbank (EZB) leuchten. Der Euroraum steht vor der ersten Zinserhöhung seit elf Jahren. (zu dpa "Inflation treibt EZB zum Handeln: Erste Zinserhöhung seit 2011")
The European Central Bank (ECB) in Frankfurt. (Photo: Boris Roessler/dpa)
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ECB warns of financial stability risks in euro area

Frankfurt/Main (dpa) – The European Central Bank (ECB) sees growing risks for financial stability in the euro area. “In our estimation, risks to financial stability have increased and a technical recession in the euro area has become more likely,” said ECB Vice President Luis de Guindos at the presentation of the central bank’s financial stability review in Frankfurt on Wednesday. If the economy shrinks year-on-year for two consecutive quarters, economists speak of a “technical recession”.

“I think that the main risk for financial stability and growth now is a very high inflation level,” de Guindos said. “At present, our main contribution to financial stability is the establishment of price stability.” According to the ECB, this would be ensured at mid-term inflation levels of two percent in the euro area. Inflation has been a long way off that target for months: In the euro area, consumer prices increased by 10.7 percent year on year in October. In Europe’s largest economy, Germany, the inflation rate rose to 10.4 percent in October.

Since July, the ECB has been trying to get a grip on extremely high inflation rates with sharp interest rate hikes. The key interest rate in the euro area, which had been frozen at a record low of zero percent for years, now stands at 2.0 percent. The ongoing war in Ukraine continues to represent a significant inflation risk and threat to growth, the ECB noted. Overall, however, the central bank, which directly supervises the largest banks in the eurozone, considers the banking system in the currency area consisting of 19 countries to be “well positioned to withstand many risks.” (November 16)

EU Commission: Bulgaria and Romania have met the required conditions and should become full members of the Schengen area

Brussels/Sofia (BTA) – The European Commission (EC) calls upon the EU Council to take the necessary steps to grant Bulgaria, Romania and Croatia full membership in the Schengen area without further delay. In a communication adopted on November 16, the Commission took stock of the three member states’ strong record of achievements in the application of the Schengen rules.

“Until now, we have not had such categorical support from the European institutions for Bulgaria’s accession to Schengen,” said Bulgarian Acting Minister of Justice Krum Zarkov. Minister of Foreign Affairs Nikolay Milkov said Bulgaria was trying to secure the Netherlands’ support to achieve the required unanimity in the EU Council vote on 8 December.

On Thursday, the Bulgarian National Assembly adopted a declaration expressing its full support for the efforts of the Bulgarian government to convince the EU Council to vote in favor of Bulgaria’s Schengen membership by the end of 2022. MPs urge parliaments of EU member states to support Bulgaria’s accession to the Schengen area and thus uphold the principles of equality and non-discrimination. The Bulgarian Parliament calls on the Council of the EU to adopt a decision for the full implementation of the provisions of Schengen law in relation to Bulgaria, thereby guaranteeing the abolition of checks at all land, air and sea borders of the country with other member states by the beginning of 2023. (November 17)

Climate Change: EU pledges over 1 billion euros for adaptation in Africa

On August 8, 2022, a herd of sheep walk over cracked earth at al-Massira dam in Ouled Essi Masseoud village, some 140 kilometres south from Morocco’s economic capital Casablanca, amidst the country’s worst drought in at least four decades. (Photo by FADEL SENNA/AFP)

Sharm el-Sheikh (AFP) – The European Union and some individual member states will provide a total of more than 1 billion euros to help Africa adapt to climate change, European Commission Vice President Frans Timmermans announced on Wednesday.

“Together, the European Union and four member states – France, Germany, the Netherlands and Denmark – will provide more than 1 billion euros to support adaptation in Africa,”

Frans Timmermans announced at COP27 in Egypt.

This initiative was intended to mobilize new and existing adaptation programs, said the Commission in a statement, without specifying what proportion would have to be new. Some of this money would be directed to mitigate the losses and damages already suffered by the continent, Timmermans said. (November 16)

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