The stark assessment of is “the global economy appears to be heading towards recession.”
Hopes for a swift rebound in the European economy have been snuffed out. War and factors like China’s use of aggressive lockdowns are causing disruption. “The global economic slowdown is intensifying,” said Wagner. “Rising interest rates, the post-pandemic normalisation of government spending, high energy costs and general price increases are starting to weigh on growth.”
…a further deterioration in the public finances of eurozone countries can hardly be avoided.
He noted that net energy-importing regions, such as the eurozone and Japan, appear to be particularly vulnerable to the threat of Russia restricting energy supplies: “Germany is in a particularly difficult situation because of its excessive dependence on Russian gas imports.” It’s likely to have an impact here, as Germany is Luxembourg’s largest market in many sectors.
He’s also concerned about problems as states either bail out energy companies or distribute aid to consumers. Either way, “a further deterioration in the public finances of eurozone countries can hardly be avoided.”