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hello and welcome to State of the Union I’m Stefan grober in Brussels for weeks now Europe is anxiously looking at its number one economic Powerhouse Germany to be more precise at the country’s alien car manufacturers some of Germany’s industrial pillars a serious car crisis in the federal republic triggered by a quasi collapse of the electrical vehicle Market Market could have severe consequences elsewhere in the EU threats of historic job Cuts plant closures at Volkswagen and plunging earnings at mercedesbenz and BMW prompted emergency talks at Berlin’s economy Ministry this week but given strained Federal finances and fights with China over tariffs the government’s toolboxes rather empty nonetheless the economy Minister expressed his willingness to help but excluded quick fixes Germany’s in the uncomfortable position today to be forced to reorient its entire manufacturing sector that depended on cheap Russian energy I can already hear Ukraine’s president’s zi shouting I told you so zinski was at the United Nations this week to drum up support for what he called his victory plan he also reacted to Police from the European far left and far right to negotiates with Russia we know some in the world want to talk to Putin we know it to meet to talk to speak but what could they possibly hear from him that he’s upset because we are exercising our right to defend our people or that he wants to keep the war and Terror going just so no one thinks he was wrong how the Ukrainian economy keep suffering from the war was detailed this week by the latest Outlook from the European bank for reconstruction and development the ebrd covers not only Ukraine but large parts of Eastern Europe and Central Asia the bank’s findings are an important Bell weather for the global economy joining me now is Bata yorik the chief Economist of the ebrd welcome to the program thank you so your latest Regional economic prospects report is called along the adjustment path that sounds like a friendly way of saying it’s disappointing what are the economies you invest in need to adjust to well the situation in Europe remains quite challenging we continue to have very high prices of energy particularly the price of natural gas is five times as high as in the US the demand for exports particularly from Germany is muted given the difficult situation of the German economy and finally the costs of borrowing continue to be high there is this extra risk premium this extra uh interest rate countries in the regions had to pay when the war in Ukraine started and this risk premium continues to be there on the upside are a decline in inflation and an increase in real wages what exactly happened well by historical standards we have seen a very fast disinflation process though of course the adjustment is not done yet inflation remains above the preo level but on the positive side we have managed to avoid hard lending so this fight with inflation has come without very big unpleasant effects in terms of unemployment as the inflation episode started we saw a big decline in real wages but then real wages started catching up um that was visible in the last few month in the last year they are not yet back to the preo trend but they have certainly caught up in a significant way I guess there’s still some remaining inflationary pressures um what are they inflation Still Remains high in some countries such as turkey or Egypt still in high double digits and depreciation of domestic currencies which has made Imports more expensive has contributed um to further inflation um one country that is still in the spotlight is of course Ukraine how are they coping with the ongoing War economically well despite the war early this year so in the first quarter Ukrainian economy managed to grow very fast the ble Black Sea Corridor allowed Ukraine to export grain as well as metals and ores uh but then this heavy bombing and destruction of electricity infrastructure happened um and that made the situation very difficult there are rolling blackouts um there are shortages of electricity the country is importing electricity from Europe but it comes at a higher cost and that’s weighing down on the economy all right B York Chief Economist of the European bank for reconstruction and development thank you for your insights today thank you Stefan before we finish let’s go to Portugal a country severely hit by Massive wildfires recently such a cast catastrophe leads many people to pray for God’s protection at the Fatima Shrine in central Portugal an estimated crowd of 180,000 motor bikers gathered for the traditional pilgrimage of the blessings of helmets a parade carried the statue of Our Lady of Fatima to The Basilica of the Holy Trinity followed by mass where the helmets were blessed the annual pilgrimage is organized by various motorcycle groups groups from around Europe they come to the famous pilgrimage sites to ask for the Lord’s protection for their trips as a church official explained according to National statistics 124 people died in almost 9,000 motorcycle accidents in Portugal last year if God can help bring these numbers down let’s give it a try that’s it for this Edition I’m Stefan grober thank you for watching have an excellent week