Brussels: Ireland and France are the backbone of the European Union amid fears that it will move into economic recession. Even as the ECB raises interest rates, the shadow of an economic recession spreads across the EU. Meanwhile, Ireland and France are leading the way in terms of economic growth. It is believed that by retaining the excellence of these two countries, the EU’s status can be improved.
The ECB raised interest rates to curb inflation. Even though the price increase is slow, it remains high. According to the IMF report, the European continent’s economy contracted in the first three months of this year. The report stated that Germany’s growth will slow to 0.3 percent in 2023.
Eurostat reported last month that the EU’s inflation rate was 5.5%. In this context, the ECB decided to raise interest rates ahead of the EU’s stated target of 2% inflation. Even as these measures are implemented, most EU countries are experiencing an economic recession.
However, prices in Ireland have fallen. In recent months, Irish prices have fallen below the EU average. Ireland has experienced 3.3 percent economic growth. France’s GDP growth has been equally impressive. The French economy expanded by 0.5 percent between April and June. This growth rate was in line with the 0.1 percent predicted by economists. Together, these two factors eased the impact of the recession on the EU as a whole.
Economists frequently assert that high inflation is the cure for high inflation. People cut back on their spending when prices are too high. As a result, experts predict that goods will be unable to be purchased and prices will fall. However, this is not the case in the EU. In the EU, retail prices are relatively stable. In this context, a section also raises concerns that the EU’s measures to raise interest rates will have results.
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