EU not seeking ‘systematic confrontation’ as rival China grows
Al JazeeraMAY 2022
The Spin
Narrative A
With better-than-expected results, the steep fall in inflation will be a big boost for the European Central Bank. A recession has not materialized, but expect more rate hikes and a tight labor market as Europe tries to get inflation to where it should be.
Narrative B
While there is an evident divergence in the success of reducing inflation between the Eurozone and the UK — and the ECB now holds more options than expected when it comes to interest rates — European financial stability is still weak. The situation is still extremely fragile and sensitive to surprises, and too much confidence may lead to a macroeconomic correction in the financial markets soon.