- EU Commission Prepared the 2022 Budget Draft
- US Senate Approves Bill for Competition with China
- Fastest Increase in PPI in 13 years in China
EU Commission Prepared the 2022 Budget Draft
The EU Commission has announced its proposal for the draft budget for 2022. According to the draft, the EU’s 2022 budget will be 167.8 billion euros.
The recovery program prepared against the economic effects of the new type of coronavirus epidemic will make an additional contribution of 143.5 billion euros to the said budget.
The EU Commission will distribute this resource as a grant to the member states.
The extra money is to help finance the 27-nation bloc’s recovery from the coronavirus pandemic and the transformation of its economy into one that does not eventually emit CO2 and that is more digitalized.
“Today, we are putting forward unprecedented levels of financial support to reinforce Europe´s recovery from the health and economic crises,” EU Budget Commissioner Johannes Hahn said.
“We will invest in Europe’s resilience and its modernization via the green and digital transition. Getting Europe back on track, speeding up its recovery, and making it fit for the future are our main priorities,” he said.
The EU budget will contribute to significant investments in economic recovery and job creation. The budget will prioritize projects that are in line with environmental targets and will assist digital transformation.
The announced draft budget will enter into force after the completion of the negotiations between the European Council and the European Parliament (EP) and the necessary approvals.
US Senate Approves Bill for Competition with China
The U.S. Senate voted 68-32 on Tuesday to approve a sweeping package of legislation intended to boost the country’s ability to compete with Chinese technology.
The fact that the bill, which has been waiting in the US Senate for weeks, is passed with the contributions of Republican senators, is considered an important indicator that Democrats and Republicans can come together to compete with China.
The draft, which was prepared in order for the USA to gain superiority in its competition with China in the technological field, allocates 190 billion dollars for technological infrastructure and R&D investments, and envisages a budget of 54 billion dollars for the production of semiconductors.
While it is emphasized that 2 billion dollars of the 54 billion dollars budget is reserved for the production of chips used in automobiles and which have had serious problems in their production for a while, it is stated that the said technological package will pave the way for new investments in many areas.
Biden, on the other hand, in his written statement regarding the passing of the bill, whose next stop is the House of Representatives, stated that this is a very important package and he is looking forward to signing it.
Senate Majority Leader Chuck Schumer, a co-sponsor of the measure, warned of the dire consequences of not funding research to keep up with China.
“If we do nothing, our days as the dominant superpower may be ending. We don’t mean to let those days end on our watch. We don’t mean to see America become a middling nation in this century,” Schumer said.
Biden praised the bill: “We are in a competition to win the 21st century, and the starting gun has gone off … We cannot risk falling behind.”
Fastest Increase in PPI in 13 years in China
China’s National Bureau of Statistics released May consumer and producer price index data.
According to the data announced, producer prices increased by 9% in May compared to the same month of the previous year; its biggest year-on-year increase since September 2008 and higher than economists’ forecasts.
The index has been rising sharply in recent months — gaining 6.8% in April — driven by an international rally in commodities markets as well as a low base effect after being in negative territory for most of last year.
While consumer price increases remain low in China, the country’s soaring producer prices are set to increase costs for businesses and exporters at a time of mounting concerns over higher inflation in the US and around the world.
“Rising costs everywhere, in particular in China, will be adding to global inflationary pressures,” said Dariusz Kowalczyk, an economist at Crédit Agricole.
“I think we are going to live with higher inflation globally, and what’s happening in China will contribute to that”.
Consumer prices in China rose 1.3% in May, the most since September, but fell 0.2% month on month, the NBS said. Pork prices, which have risen sharply in recent years on widespread culling because of African swine fever, dropped 24% year on year.