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"Keep cool and go on: keep calm and carry on"!

A rather mild recession expected in Europe in 2023 due to the war and the energy crisis.

1. Stable balance sheets, pent-up demand in some areas and fiscal support will help limit the damage.

2. The energy gap remains a concern in Europe because, despite the record construction of the liquid gas terminal, for example, the substitution of Russian gas imports remains difficult. And also because some regional princes, for example, hinder the expansion of wind energy and prefer to drum for nuclear power, which only contributes minimally to the supply and is very uncertain in the case of France (there has been no technical inspection of the systems for years due to the phase-out).

3. Geopolitics is also a concern: in the USA, even under Biden, a protectionist policy prevails and is becoming more insecure due to the Congress majority. Brazil shows that Stephan Bannon and Co. are up to mischief not only in Europe but also in South America. China's change in its COVID strategy could be disruptive at first, but is likely to have a calming effect on supply chains later this year unless new, dangerous variants are spread. And some emerging markets will have to contend with economic and political risks.

4. Central banks, determined to fight inflation, but created not from excess demand/overheating, but also from supply and supply constraints, taking action that is reassuring. 

Prices and wages:
Prices appear to have peaked in October 2022, giving workers less reason to argue for higher wage increases. Overall wage growth already appears to be declining. This would break a price-wage spiral. The European Central Bank will continue to tighten monetary policy and thus at least have an effect on the demand side, which should further reduce inflationary pressure.