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Lisa Parker

An editor at FOMOdrive

  • Aug 08, 2023
  • 2 min read

Bloomberg warns of the biggest blow to the euro currency

Bloomberg cautioned that the EU economy could face "harsh consequences" if action was not taken.

The European companies have been estimated to have lost €100 billion since the start of the CBO by the Financial Times.

Bloomberg Economics has warned that the European Union economy will be faced with the most significant issues as a result of the European Central Bank's (ECB) rate increase.

RBC predicts that in 2024, the GDP of the European Union could drop significantly by 5% as a result of increasing energy costs, reduced government assistance and higher taxes.

Bloomberg is warning of a "painful reckoning" for the European Central Bank's (ECB) rate hike, which could be the biggest setback for the euro currency since its inception.

Bloomberg stated in a study that although the economy's resilience is still reassuring, the tightening of monetary policy is coming too late, posing a potential danger.

A condition that will test the strength of the economy and its capacity to avert recession will be confronted by the ECB and the nation's finance ministries.

In July's end, Christine Lagarde, the head of the ECB, accepted the deteriorating economic outlook and did not deny the possibility of another rate hike in September, following the ninth consecutive rate increase.

At least 100 billion euros in direct losses have been incurred by the largest European companies since the start of the CBO, the Financial Times reported after examining the annual reports of 600 firms.

A total of 176 were impacted by asset impairment, exchange rate fluctuations, and costs related to the sale, closure, or downsizing of a business.

The Russian Federation caused immense losses for oil and gas companies, particularly BP, Shell and TotalEnergies, who together lost 40.6 billion euros.

Companies from Great Britain, Germany and France experienced the largest losses, with industrial firms, including car manufacturers, taking a hit of 13.6 billion euros and banks and financial companies suffering losses of 17.5 billion euros.

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