Monthly Report No. 12/2022

Chart of the Month EU-CEE at the forefront of electric vehicle production and export by Doris Hanzl-Weiss Opinion Corner Into the Maelstrom - The EU in the Zeitenwende by Hubert Gabrisch Multiple crises have hit the European Union since 2008, and a new global order is evolving. The EU needs to adjust its 1990s-era treaties in the direction of more democracy and sovereignty. There is a European momentum to reform; yet the political leadership that would enable the opportunity to be seized is lacking. Russian energy dependence and European inflation by Esther Linton-Kubelka and Roman Stöllinger Despite a common monetary policy and closely synchronised business cycles in the euro area, the increase in inflation since the outbreak of war in Ukraine has varied considerably across member states. As the increase in inflation across the EU is positively associated with energy dependence on Russia, the overreliance on Russian gas and oil supplies may turn out to be rather costly both economically and politically. More evidence-based policy advice is warranted (rather than following groups with a vested interest). Rising public debt does not drive up short-term interest rates by Leon Podkaminer Econometric models for the European countries, the US and Japan suggest that increasing public debt may have been of only minor importance in determining short-term real interest rates. Moreover, the effect appears to be negative almost everywhere rising public debt has tended to reduce short-term interest rates, if only fairly marginally in most cases. The lingering opinion that fiscal deficits can drive up interest rates is not confirmed by the data. Monthly and quarterly statistics for Central, East and Southeast Europe