State of the Union: sunshine in Ankara, darkness in Tbilisi

euronews (in English)

This edition of State of the Union focuses on the continuing diplomatic détente between Turkey and Greece and the escalating domestic upheaval in Georgia.

Transcript

00:00Hello and welcome to State of the Union, I'm Stefan Grobe in Brussels.

00:10Just a year ago, a summit meeting of the leaders of Turkey and Greece would have created sensational

00:15news.

00:16But when President Recep Tayyip Erdogan hosted Prime Minister Kiryakos Mitsotakis in Ankara

00:22this week, it was almost a routine talk between neighbors.

00:27For over a year now, the world has been witnessing a five-month-old friendship initiative that

00:31was designed to put an end to decades of mutual animosity.

00:36Instead, the two NATO members are focused on trade, tourism, energy, and repairing cultural

00:42ties.

00:43Erdogan visited Athens in December, and the two countries have since maintained close

00:48high-level contacts, apparently with success.

00:53In the critical area of immigration, the cooperation between our two countries, and especially between

00:59the police and the port, is failing.

01:02In the face of illegal flows and in the face of reckless traffickers who take advantage

01:10of the pain of desperate people, this cooperation must continue and intensify.

01:18There are still areas where both sides have agreed to disagree, but it's good to see one

01:23old trouble spot in Europe sort of fading, while another trouble spot just around the

01:28corner was heating up big time this week.

01:31I'm talking about Georgia, where thousands of protesters rallied near the parliament

01:36building in Tbilisi, again, just hours after lawmakers gave the final approval to the controversial

01:42foreign influence law.

01:44A piece of legislation that could have been drafted in Moscow.

01:48They passed the law despite EU warnings that it would undermine Georgia's path to EU membership.

01:55The official reaction in Brussels was muted, revealing a sense of disappointment.

02:01I had a phone call a few days ago with the prime minister.

02:03I told him that I'm disappointed, and I sincerely hope that in Georgia they will find the way

02:09to stick to the rule of law principles, to democratic principles, and also to meet the

02:16expectations of the population.

02:18Maybe the government of Georgia should focus on real issues like the economy and not on

02:23unpopular stupid laws.

02:26This week, the European Bank for Reconstruction and Development released its latest economic

02:30outlook.

02:32The numbers for Georgia, which is part of the area where the EBRD operates, were rather

02:37sobering.

02:38In general, the forecast also contained some encouraging news.

02:43Joining me now is Beata Javorcik, chief economist of the European Bank for Reconstruction and

02:48Development.

02:49Welcome to the program.

02:50Always good to see you.

02:51Thank you for having me.

02:53So, your latest report is appropriately called Taming Inflation.

02:58And when I look at the numbers, inflation in the EBRD regions came down from a peak

03:03in October 22 of 17.5 percent to an average of 6.5 percent last March.

03:11Explain that number for us.

03:13What is behind such a huge drop?

03:16What has helped bring the inflation down were, to a large extent, the developments in

03:22international markets.

03:23We have seen a sharp drop in the prices of natural gas in Europe, decline in prices of

03:31agricultural commodities, and oil prices have remained moderate.

03:37But, of course, inflation in our regions of operations still remains above the level saw

03:46before the pandemic, as is the case in advanced economies.

03:50So, do you feel a sigh of relief regardless now?

03:54Or are there still important inflation risks remaining?

03:57Not all central bankers can consider their job done.

04:00If you look at cumulative inflation, that is, inflation since February 2022 up till

04:08now, it has exceeded 30 percent in several countries, notably in Egypt, in Turkey, in

04:17Hungary, and Kazakhstan, Moldova, and Ukraine.

04:20So that means that in the absence of wage increases, people in those countries would

04:26have lost a third of their purchasing power.

04:29Let's talk about the growth outlook in the EBRD's EU regions.

04:34Do you see positive signs going forward?

04:38This year is going to be much better than last year for the Eastern European EU member

04:45states. In particular, Poland and Croatia stand out with the expected growth of 3 percent.

04:52Hungary will do as well, too.

04:54We see real wages increasing.

04:58We see fiscal policy helping out.

05:01And the EU funding, the new generation EU, also stimulating economic activity.

05:08Well, I can't release you without a word on Ukraine.

05:12How is their economy doing in the third year of the war?

05:16The heavy bombings in the last two months mean that the ability of Ukraine to generate

05:26electricity has been severely diminished.

05:30Electricity production is at 40 percent of what it used to be before the bombings.

05:37And this capacity cannot be easily repaired.

05:42All right.

05:43Beata Jaworczyk, chief economist of the EBRD.

05:46Thanks for coming on the show today.

05:48Thank you for having me, Stefan.

05:50Looking for something fun to do over the weekend?

05:53How about this?

05:55Jumping from a helicopter at 3000 feet high, diving down to 35 meters above the River Thames

06:03and then soaring through London's Tower Bridge, only to rise up again to 80 meters,

06:09the height required to open the parachute before landing safely.

06:13A complex James Bond-like maneuver known among insiders as a flare.

06:18Well, two professional skydivers from Austria did it this week

06:23and described the experience as a dream come true.

06:27And this coming from veteran skydivers with more than 22,000 jumps under their belt.

06:33From takeoff to landing, the London wingsuit flight covered more than a kilometer

06:38and reached a top speed of almost 250 kilometers per hour.

06:43And it lasted 45 seconds.

06:46That might not be enough fun for an entire weekend, but it's a start.

06:51Just don't look down.

06:54That's it for this edition.

06:55I'm Stefan Grobe and thank you for watching.

06:57Have an excellent week.

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