In an attempt to boost the faltering economy of the Eurozone, the European Central Bank on Thursday cut the benchmark interest rate by 25 basis points. Inflation, which has been a key threat for years, is now falling below the target level for the first time, while trade tensions and announcements of US tariffs further complicate the economic recovery.
European Central Bank (ECB) announced a reduction in the interest rate by 25 basis points and at the same time lowered its own inflationary forecasts, due to the stronger euro and lower energy costs, are reported by world agencies.
The decision drops the interest rate on deposit facilities to 2 percent, significantly lower than the peak of 4 percent in mid-2023.
"The decision to lower the rate on deposit facilities - which is the main instrument of the ECB Council for directing monetary policy - is based on an updated assessment of the inflationary outlook, the dynamics of core inflation and the effectiveness of the transmission of monetary policy," the ECB said in a statement.
Eurozone inflation fell below the ECB's target of two percent in May, coming in at a lower-than-expected 1,9 percent, according to preliminary data released earlier this week.
Weak economic growth in the Eurozone
However, economic growth remains weak, despite the easing of monetary policy. The latest estimate shows that the eurozone in the first quarter of 2025 recorded a growth of only 0,3 percent.
The central bank's decision comes at a time of great uncertainty for the eurozone economy, as companies and decision makers face rising geopolitical tensions.
A particular cause for concern is US President Donald Trump's tariff policy, which is expected to have a negative impact on economic growth. Some sectoral tariffs could hit Europe particularly hard, as they hit key industries like steel and car manufacturing.
The impact of tariffs on inflation is uncertain and, according to officials, will depend on whether and how the European Union responds. Retaliatory EU measures are currently on hold, but EU leaders have said they are ready to implement them if necessary. The question remains how plans to increase defense spending across Europe will affect the economy.
The state currently has no money for the second installment of subsidies per hectare, announced the Minister of Agriculture in the technical mandate, Dragan Glamočić. Farmers were waiting for the promised help before the autumn sowing, while agro-economic analysts warn that the government's technical mandate does not release the state from its obligations.
The leakage of half a million liters of oil near Sisak stopped the transport of Janaf, on which the supply of the Refinery in Pancevo depends. NIS has requested access to state reserves, and experts warn that a longer interruption could stop production at the Refinery
The import of fossil fuels has cost Serbia more than 57 billion dollars in the past two decades, with a high price for the environment and the health of citizens. The energy transition is expensive, but its delay seems to be even more expensive
Due to damage to the pipeline on the Adriatic pipeline, crude oil transport to Serbia has been suspended, and the Pancevo Refinery is adjusting the volume of processing. NIS also requested diesel from operational reserves
Citizens could face new price increases in the coming months, partly due to the consequences of last year's administrative restriction of prices and trade margins.
At the moment when the institutions of the Republic are destroyed, when Vučić's octopus is still alive, when people are disgusted by the injustice and the stench left behind by the Essenes regime, we have, as Machiavelli said, only civic virtue as the fuel with which we can return to the beginning
The four independent members of REM are an example of perseverance and civic responsibility. Rodoljub Šabić even, upon leaving the premises of REM, after the sentencing of the Informer, experienced that the Essenes insulted him, hit him with their hands and feet. But that too will soon be over
Vučić pardoned the batterers and Dijana Hrkalović. The election winners should abolish the sultan's power that allows one man to run afoul of the entire judicial system
Interview: Branko Stamenković, public prosecutor of the Supreme Public Prosecutor's Office
A black picture and the breakdown of the rule of law subscribeThe archive of the weekly Vreme includes all our digital editions, since the very beginning of our work. All issues can be downloaded in PDF format, by purchasing the digital edition, or you can read all available texts from the selected issue.
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