Europe is struggling to find the money

The EU’ EU EU GDP EU EU s27 members have spent freely since early 2020 to support their economies and citizens through a global pandemic, a war on their doorstep and an energy-price surge. Back in 2020 richer northern members reluctantly signed up to a debt-funded recovery fund worth €806bn ($880bn, some 5% of in 2022) that mostly benefits the south and east of the union. But high interest rates have bent these plans out of shape. At a summit on December 14th and 15th all countries bar one reached an agreement on how to top up the budget to pay for more financial support for Ukraine (a pot of €50bn over the next four years), as well as higher interest rates on debt and extra support for countries facing a surge in the arrival of refugees. The compromise was less generous than the European Commission, the bloc’s executive arm, had hoped for, but it was enough to win almost everyone’s agreement.