my father, who unfortunately can't be here today because he passed away was a big supporter of santos, and was friends with pillow, with pepper catania zito, lima. he was great friends with the mall and i decided along with my daughter and my mom to come here to represent my father. because if he was alive, he would definitely be here. paying his homage to pillow the funeral possession took 4 hours to wind through santos. and to get here to the towns vertical cemetery, just under a kilometer away fillet, have wanted to be placed on the 9th floor because 9 is the number that his dad don been you're also fuller had on the back of his shirt. but his family actually changed that when he died and decided to put him on the 1st floor instead because they wanted him to be more accessible to the find some people that wanted to come and visit him. this it seems would be the new shrine popella in a country that still reveals him. john hohmann out is eda santos

ah player again, i'm fully batty boy. with the headlines on al jazeera south korea is increasing its airport checks for covered 19. that's after a chinese national, who tested positive on arrival, went missing while awaiting to enter a quarantine facility. the philippines authorities have asked hundreds of police officers to resign in a so called crime down on corruption. the interior minister requested that all generals and colonels submit their resignation saying he wanted to cut ties to legal drugs, more than a dozen officers have been arrested or dismissed in the past year for involvement in the drunk street. in while the philippines president is on the 2nd day of his visit to china for a non marcos junior has met members of the funding committee of the national people's congress is also due to meet the chinese leadership. paying this wednesday . hundreds of trucks are blocking highways in bolivia with dr. as protesting

against the rest of the gulf. now santa cruz police detained louis camacho last week after he was accused of trying to overthrow. then president, evil morales seen 20. 19 the road blockades have threatened deliveries of grain and food around the country. russia is blaming the use of mobile phones for one of the worst attacks on the stroke since the war and ukraine began. the defense ministry says 89 soldiers were killed in a new years. they attack on temporary barracks. in my case, it says the authorities be on authorized to use of mobile phones, allowed ukrainian forces to pinpoint the soldiers. location. voting will resume on wednesday for a new speaker in the us house of representatives. members have 3 vote. republican needed kevin mccarthy could not secure enough banners from his own party. cctv footage has emerged showing to israeli settlers defacing tombs at a protestant cemetery and occupy these. she was them. on sunday,

the attackers were seen toppling headstones and smashing the graves in the mount zion area. the cemetery has been attacked by settlers several times. the last incident was in 2014 medical workers in the u. k. is national health services say they are under huge pressure describing it as intolerable. and us an unsustainable the royal college of emergency medicine says delays in care could account for up to 500 deaths each week. and those are the headlines on al jazeera. we'll have more news for you after inside, sorry. ah . croatia celebrated the new year by adopting the euro is joining us

a time when the i m f is wanting of a recession. so what's the head for the european economy and the euro zones? newest member, this is inside story. ah hello the and welcome to the program. i'm laura kyle. croatia has finally adopted the euro some 10 years after joining the european union. it's another step in the rapid transformation of a state once part of tito's communist yugoslavia. the celebrations might have brought some brief distraction for the you away from the troubles affecting the arizona and for a well facing de economic uncertainty. gracious government to express pride in its adoption of the new currency. but reaction on the streets of the capital zagreb was

mixed. i thought that 60, this is the future thinks might get better overnight, like we used to think, but this is the future, especially because of tourism and people coming here from the rest of europe was a negative. no sir. i think people shouldn't get hung up on the negative. one is to keep thinking positive thought we joined the xing in area. i'm very happy about that because soccer ball slowly turn into a real metropolitan city for local was her math reports to graduate. missing that what you're bethany definitely as things are getting more expensive fall over the world, it will also happen here too. we can't escape this unfortunately almost. or we'll get to our guests in just a moment. but 1st, let's bring you a closer look at what the euro zone is. it's a currency union created in 1999, but physical coins, adams notes, only entered circulation. 3 years later, the euro replaced national currencies, but not all e u members belong to it. the euro is own, began with 11 member states,

has now grown to 20 with croatia, adopting the currency. the european central bank, the e. c. b is responsible for monetary policy, but it is limited in its flexibility to consider individual country needs. assets. responsibility is the euro zone as a whole. and now the i, m f is wanting, half of the european union's economies are at risk of a recession. ah, let's bring in our guests now and in rome, leonor poly head of analysis at the center for european policy network in berlin, been iris founder and as to and chief of be any intel in use. and in london, vicky price chief economic adviser at the center for economics and business research by warm welcome to all of you elanora. let's start with you because it doesn't feel like a very good time for croatia to be joining the euro zone. but how much is its

economy against be affected by this switch to the euro? certainly is not the best finding, abrasions, the creation will benefit from entering the you're, i'm the, you're paying for money that you are out. was a run your credit shot. to me it's very much louder. remember, i'm reading the i think not much which would change on the negative side on the country where, you know, allow more trade and more choices coming to question twin somehow make you make the country life easier. because already technology partners are part of the european union, and i'm not, i'm not saying that it will let much impact. because anyway, even before entering the euro ration was reduced from how linked to european economic trends in terms of the special would be bad anyway. and do you think this is a good time for the years, which doesn't appear to be struggling to have a coin?

country like croatia join us. i think from crisis point of view, is this a good time to join just simply by getting the year they will benefit greatly for economically. and so much is said the now the, the e c. b is in charge of my 3 policy that it gives access to, to the country to more they couldn't see that they couldn't even come in would be available to the banks. they're buying more government bonds with it, which gives the government more money spends. you can expect the real estate boom and so much as some of the sex or the good guys, the real estate sector. but given the europe as a whole is in a horrible economic position by trucks in the area and having access to those funds for more liquidity. and that's exactly what you need in order to stimulate the economy in order to promote growth at a time, a slow down. so i actually think it's probably net net a big benefit for gracious joint now. ok, but the key,

where does that money for correlation come from? who is providing it within the euro zone? was the 1st thing to bear in mind is that so the you and the european commission have been quite active in ensuring that there is sufficient support. still the countries have gone through the cold coven period. now the energy crisis with special funds, which have been raised and put aside for all the countries in europe, and the ones that are benefiting mostly at present have tended to be the southern european countries and possibly now the eastern european countries, if you like, getting a share of this, so next generation you fund of the real support that is needed because of course, we now also have the issues relating to russia and the war in ukraine and therefore cutting off of gas and other supplies. so there is a lot of cooperation going across, and that was of course, happening anyway. as far as the wider e. u is concerned. no for croatia itself course or the money that ben was referring

to is what the europeans of the bank is been doing in relation to quantitative easing all these years. in other words, sort of buying bonds in the secondary market of those countries and ensuring there's enough liquidity in the system to keep them going if you like. and that is special money. be that put aside again. even though the finish, the overall package of quantitative easing just recently, those extra money put aside for those countries that find themselves in difficulty . so there will be for a while at any rate support going to if question is it a countries like russia, but also of course, countries like italy and spain and greece, which may need that in the short term too. because of course, we are entering a recession, a number of countries, i'm going to need extra boost boost as a result of this because the capital markets may decide that their debt levels are a bit too high for them to be doing it with us. some support from the c b the ever gave just let afford by 2 questions by saying that we are entering

a recessive the years in is entering recession. one of my questions was, is it going to happen because need to talk 1st about inflation? don't we? then that it's soaring across much of the world, just bring it back to the basics for us in the euro zone, why is inflation the buzzword at the moment? and how is the e c. b, how is the central bank intending to address it? this that's a complicated question. i mean, there's a lot that goes into it. and the obvious factors that be contributing to inflation already from before the war in ukraine with buyers is the food prices have been inflated. that supply chains have been disrupted by the panoramic, which is main things, more expensive, basic things like food and fuel. and then the war in russia is only exacerbate that by sending all the commodity prices are even higher, and they were already high before that. at the end of the pandemic. and the become

another factor playing into this is the globalization that's been going on. and again, the war in ukraine is just making that was by spreading the world into the west and the globe. and all of these things have led to much higher and much more persistent inflation than anyone was expecting. and so for some of my be traveling this or any central bank, it's extremely difficult. i mean, the been put through some record high rate hikes in order to try and bring it under control. but that's the question, the jack reaction you high makes being inflation down, but those right highest, normally they're designed to deal with inflation caused by monetary products. it's too much cash chasing to few goods. and that's not the problem here is like russia comes up or in gas prices, it's also the commodities have gone very high. and these are things of monetary policy do not affect. and so inflation is got high and it's going to stay high. so some of my b, b are in a bind, i mean, the only thing you can do is high rates and try and psychologically to the

expectations price established itself is inflation, right? so as i say, it says multiple moving costs and less and it's a very nasty problem. and everybody suffering from it is it isn't it, especially in this brings us back to that perhaps what some might say is the problem of the you're right. you're right in the fact that it's run by a central bank a c b that has to control vastly different economies of across a huge region facing many different challenges. leonora. analysts say that it's lee is likely to be the weakest link here, but it's the most at risk from the e. c. b, raising interest rates. can you give us a bit of an explanation as to why and what the impacts of fed to be? yeah, let me start by saying that you're right. as far as when she's concerned to be withdrawn . but then, you know, when it comes to the european economic policy, you know, the, the innovation is incomplete. it's a caution. every time you know,

even when you're in, you know, you have to hours intervene somehow effect of the odyssey it using because it doesn't match the piano army, but he will never see an average countryside is known as an effect. on the other hand, he takes month where you're young countries and maybe to find, you know, compromise or a deal that's no, get back to train. or now you know, when we are discussing how to face, you know, your information reduction. but it takes, you know, a lot of time, more than other government to you know, to make a decision. when it comes to me. silly is randy. you know, that we took the sense of how a national that they high we have been, you know, how they were by no interest rates in the last years. but of course now it's time for me to rise interest rate. but the fact as well as the right side would be,

you know, i'm even across, you know, you to be on economy. and the fact is that he's still one of the biggest economy within the union. the you cannot allow the money to pay, you know, because it's not in the for because it's a big economy within the u. okay. who might win as a raise interest rate be i was an interesting question. i mean, honestly, whoever's been sort of speculating in, in bond markets, you know, some people have done rather well out of the volatility that we have seen in recent months. so that's one. but otherwise, obviously, if you have a sense of any sort and, and you're able to get any reasonable return on those assets, then, then maybe you know, your savings. in other words, you know, might do slightly better. but in general, it's not good news is not good news for anyone who wants to borrow, knocking useful households. of course,

that depend quite lot on their credit cards or any other loans that have it's not good for businesses which have to pay more. and really the focus needs to be quite considerably on the yields in the bond market, which determined also long term interest rates. those have gone up significantly, mainly because of the support from the european. so the bank has now gone from the market. the same thing in the us, the same thing in the u. k. for example. and the long term rates that people have to pay to invest if they want to borrow money and invest, those have gone out quite significantly which suggest also that we are going to be entering a period when business investment is reduced. so it means that growth is going to be affected, not just in the short term, but also in the longer term. and that's why the, the, the european commission and alongside the big countries is trying to ensure that that investment continues with support from funding. perhaps with some lower

interest rates, the weights raised in a combined way across europe for all this projects that europe absolutely needs such as, you know, doing a lot more on climate change, a lot more on innovation and a lot more and getting itself perhaps more resilience to the types of crisis we're fed by some shane, you know, as centers of excellence for semiconductors and electronics, for example, electric vehicles, batteries and all that, which is going to be required for the future of the world economy. when we look ahead at all the challenges that are out there, the inflation ben is being inexorably linked to the energy crisis, isn't it? hasn't been as bad as was expected or has a milder autumn and other factors have been brought into it. mitigated that crisis somewhat at the moment. yes, immediately them in the gas price is now full and dramatically just the last few weeks. and that's a function of both extremely warm weather. i'm sitting here in berlin and it's like

spring outside. and at the same time, the, the tanks and the energy that's coming in the natural gas in order to replenish those thanks. not russian guests coming at. that meant the storage levels are very high. and specifically gas prices, which is very important for the energy market in europe have been brought down because you have plenty of gas in the tanks and the weather is very mild. so demand is down. but the way the energy crisis is work is that we're at the point now where we're heading towards the end of the heat season with lots of gas because the weather is being miles. the fear is if you touch the analyst, that the energy crisis will start up again in the summer or late summer as thanks needs to be refilled. and that last, you know, russia and 185000000 cubic maces in 2021 and only a 12022. and it can be expected to send more than 50 in the sit this year.

and so the prices are likely to spike again, so the energy crisis is not, hasn't gone away, but because it's so intimately tied to the weather. it's incredibly seasonal. so yes, it has been missing. but that's not necessarily the end that far from it. you can expect, i mean price is the same last year in the summer when i'm 24 and given the reduction, the huge having a brushing gas on its way to europe this year. you can expect maybe the same thing to happen again. i mean, even worse. ok. so germany, for example, been reporting inflation for december being lower than was expected. that's not reason for hope yet. no, it's, it's helpful and the low price is now and the less helpful what that does will reduce the pressure in the next season in the next cycle, which will start in march at the end of the season. so yeah, it's definitely good news, but you have to, if you look across the board, i mean, everybody is reporting double digit inflation or close to which is incredibly

painful. i mean, normally that's considered a crisis and we're sort of getting in it now. we're in extremely difficult economic position. and as we mentioned before, people like the see, they don't really have tools to solve it. i mean this, this is economic shop and it's been shock out. the shock with the pandemic and now the war and what is the prices and looking for the crises, going to continue because this crisis with russia has hit commodity markets and then that's rippled out across the entire world. and where the world bank was predictable, percent growth now is predicting sort of flash maybe a global recession. i mean, we're not gonna have to place it. and you know, it does the c, b not have the tools to address this because it is governed by strict rules, according to the master treaty. for example, it's not allowed to buy government debt. and yet we've seen that it does by

government debt, and it does help countries in the so called south of the euro, there in time and time again. so kind of not the more flexible in its approach, differing the approach to the bigger country to the smaller countries. i think used to be trying to avoid bath in the sense that it had been one of the last to raise interest rate. and now, you know, in the fact that it will be raising interest rates are for next year. the fact is that used to be look at me or be an economy in this one. so, you know, can just concentrate on countries. on the other hand, you're buying bonds from national and countries. so these are the way the problem is that, that different anesha across, you know, national governments within the u. like you have, you know, the not just which are very much on of policy. and on the other you have which are left by germany. and then the other hand, you have problems which has be moving for

a more like soft approach supporting more like your appealing direction is like additional energy found proposed by fast or, or so having and williams approach to words, you know, these regulations, which is not a pacific by germany, time 5 to germany, and also like when it comes to us problems because those are the 2 that have been leading, you know, european policies, you know, from that point, you know, enjoying on an external. i think at the moment you have kind of internal boxes between, you know, the prize and germany i need support at which point to vision. on the other hand, i think, you know, the european bank will continue with the interest rates rising interest rate. and i think, you know, the cost of $94.00, special talbot hundreds would be critical. but, you know, at the same time as i was saying, you cannot allow, you know, countryside,

or ottoman the 3 countries were said before that to be and these will have major impact on your ability. so vicky, how do you stop them from failing? well, you keep supporting them, i'm afraid that's all you can do. and the truth is that the europeans of the bank and the u as a whole, have been very flexible over the last last few years. so during covert and beyond that they have basically given up on some of the rules or the suspend to some of the rules, the had the european stability and growth pact has been abandoned for the time being. in other words, needing to keep the very strict debt and deficit percentages. that's all gone for the time being that you've been. so the bank has been buying circle junk bonds from those governments. so he's been buying a lot of great bonds which where jumped for a while, but there seem to have improved a little bit recently, but it keeps on buying those or has kept buying those through the entire

quantitative easing period. so a lot of flexibility there, there is no doubt in my mind that this flexibility needs to continue. that if we were to revert back to any tightening of the rules again, there is a review. now the stability and the growth is stability. pact with ability and growth back what we'll replace it will be very important and we're talking earlier about creation and what implication gratiot will be in creation having and inflation of over 13 percent right. now. other countries a bit less, but the baltic states over 20 percent of the problem with the europeans of the bank is that a single interest rate doesn't really work across. in any case, when you have countries, as you mentioned, germany senior reduction in their inflation rate. and you've got a information that tells you that in some countries, inflation is 3 times as high as it is in france or germany. so really difficult, therefore continued support. i'm afraid is what is going to be needed when do you think that leads us on to the question of whether the easy be with the or is that

it needs a more permanent to speed monetary policy to support the different nations in the way that their own economies needed that's a very good question. and the thing with the whole e u project is that it works extremely well when things calm and prosperous and steady, then it works very well. but even within that, there's always been this sort of distortions. i mean, the size of germany and the power of its economy is in the same, you know, regulatory environment under the c, b, as the vulcans. and so the interest, the monetary policy rate is supposed to fit both of them and for germany, but that means in fact, is that the euro is much cheaper than it would be if the business bank was regulated, setting the monetary policy for itself. and consequently, it has this incredible export because it is very cheap and talking about introducing a to speed. i mean, this is acknowledgment,

i think of the crisis the moment and the, the plan in europe i think is just a way for the price go away. and then go back to it. i mean, at the moment there's, there's a federated europe. this is a monetary unity, but then even, that's not universal within the u. and so it ends up being a fudge. and we've been talking about monetary policy and you change race both boost growth by cutting rates or have growth by increasing rates. but the way the use gets around that is simply by giving captions money. the amount of money that's being spent on supports at the moment is phenomenal. i think the collected the spend some 700000000000 euros in terms of. ready support and relief for the high energy cost moment. and so you know, you don't have to cut rates in order to promote growth by creating more money within the financial system. you can just give it to the countries in cash. and all of these programs, which is what's been going on at the moment, that seems to be the plan. i'm in germany,

learners is 1st aid program. a study been in the 2nd one, the same. and then the 3rd $1.00 to $100.00 in. so they just hitting with money to wait for the crisis. i mean that's the issue is how long is this going to go on? and i think up until recently the view is being that it will last until the when. so maybe the spring, but i think now the listener, readjusting and talking about a long war in ukraine, which will continue to disrupt the energy markets, commodity markets for at least another year and not possibly even well. so i think you're right that we got to revisit the, the economic policies. because at the moment the policies are by relief from these crises. ok, cash and not a big structural change. it's like you're talking about 2 just not big structural changes. they can do. you rate the survival of the euro? yes, i think there's enough commitment is been demonstrated actually during the crisis

is survived. it is 10 minutes and doing quite well. in fact, one of the fastest growing countries and in europe right now. so yes, i think it will survive by the need to be we thought some of those rules have been too strict and need to be so. all right, well that will leave our discussion today. thank you very much. all i guess for joining us. eleanor polly been ours and vicky price and thank you to for watching. you can see the program again, any time by visiting a web site that's out there a dot com and for discussion to get to our facebook page that facebook dot com forward slash ha inside story. you know, they're doing the conversation on twitter. ok, let's add a j inside story. from me laura kyle: i'm the whole team here. it's bye for now. ah

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