has europe left its future in the hands of too many other countries? we'll look at how the e u is trying to lower its reliance on foreign imports. this is data we're business on robots in berlin. welcome to the program. it followed immense pressure. the european central bank decision to hike interest rates by 50 basis points has been welcomed in many parts of the euro zone, but not all the higher than expected rates. rise announced by christine le guard on thursday brought the c v policy closer in line with the u. s. federal reserve and strengthened euro against the dollar. the key aim is to bring down record inflation in your resume. however, the rise has been met with concern in parts of europe with higher levels of debt among them. italy, where news came on the same day as its prime minister, mario druggie announced his resignation. well, let's discuss this further with kramer. his chief economist at comerica bank enjoys

us for frankfort. good. have you on the program? good. that you can hear us. well, this rate's rise is always going to have a different impact on some of the 19 members of yours and that is on others, isn't it? well, on the other end you have to say yes, you should be delivered yesterday a 50 basis points rated by the deposit rate of the c b. it's still at 0 percent. therefore, monetary policy is still very, very expansionary. therefore, i think it's far too early to say that this may be a problem for, for any country, this should not be a problem for any country, an interest rate of 0 percent. but does it set a precedent that could see further rates rises? in fact, the c, v, it's just that that could be what's coming. they may be appropriate, i think is the way that it, it put it in is that not something that could be concerned for the countries that have got higher levels of debt and that they might actually be impacted more than, for example, countries in the north of the region where when you think of italy,

for example, italy has a debt to g. d p ratio of 150 percent. this is really 3 times what the mastery treaty allows. and in so far, italy should, should prepare it, serve, of course to, to sustain this dead lever to carry this dead level. even if the interest rate is no longer 0 percent but, but, but a bit higher. that means norma. and therefore of course, i think it's a problem that prime minister draggy who started some reforms, at least their prime minister drug was forced by to this political system to recite series of, to the countries themselves to kind of mitigate the, the impacts of this. but the c b did announce a measure to try and help countries you know, to deal with the uneven impacts. what are they named at the name of the transmission protection instrument and we know exactly how that's going to work and,

and how it aims to sort of fix that problem. a way to translate was what t p i, it really means this is a new bond by program of the e. c. b in favor of individual countries with high debt whose government bonds may suffer from future interest rate hikes. this is back on. however, as far as, as a program is, is concerned, they are no her objective criteria to this. and even the, the reform conditions attached to the program are very, very weak. and therefore, i think that there we can say how the e c, b will use this program in the future. very entrance paragraph to say ok, you kramer, chief economist at comments bang, some criticism of the c b there. thanks a lot for joining us. yeah, thank you. now let's take

a look at some of the other global business stories that are making the news. the german government will acquire 30 percent stake in beleaguered utility unit according to the company effectively, the german government is offering the country's largest in puerto russian gas, a multi 1000000000 euro bailout. berlin is struggling to secure alternatives to russian gas in port summit. soaring prices, talks on a un led plan to secure a car door for ukrainian grain all going well according to turkey. and gra, hosted officials from russia, ukraine, and the un to discuss getting ukrainian weeks out amid the war. turkeys as a general agreement has been reached and the world can expect good news on how much we will soon be able to leave crane. now germany and other countries rely heavily on imports of raw materials for use in key technology such as batteries, robotics and renewable energy is often on one single supply. a country like china.

europe is extremely dependent on overseas trade for elements like cobalt, lithium, graphite, titanium and rare elements. in fact, china supplies 98 percent of the rad, which are required in wind and solar energy equipment and battery production. only one percent of the raw materials needed to make batteries comes from the e. u. the pandemic and the war and ukraine have made the blocks self insufficient. if you like all to clear brussels now wants to use the raw materials act, an initiative to reduce its reliance on just a few countries and make supply chains more resilient. in the face of crises that could be done by encouraging more mining and recycling of resources within the you . whatever. i spoke to sandra flock from germany, s e fo, institute for economic research. and i asked her how you are, if it becomes so reliant on raw materials from unreliable partners?

yes, i am. in principle over all firms have offshore to a great part off low value added steps of the production process we choosing. pres, poa very good strategy if this is combined with a diversification of suppliers. ah, but what we see is that for many intermediate goods and materials, they use reliant on fuel producers, which implies a higher dependency as well. that. so yeah, this realization seems to becoming a, a, a bit too late, isn't it? wow. i wouldn't say too late because in the next 2 years we were, we are going to see an increasing demand for a several raw material. so we have showing in our study, ah, critical raw materials that to germany and the you need for the production of key technologies such as electric motors and wind turbines and to if the demand for these products increase. also the demand for all materials increase. ah, and so,

so there is a is to you are high need to act. ah, yes indeed sir, in this direction. so i think then it's, yeah, oh then you should now expand trade relations with partners that are key producers and key export or is all far off my intermediate to woodson and raw materials to increase the resilience of supply chains in the future. because one of the problems is that manufacturers and indeed consumers in europe have got used to having to pay less or gay or being needed. and we're not not having to pay so much money because of the, the cheaper or materials that come from elsewhere. if they are mind and your presumably they will be more expensive. so is that going to be okay with us? yeah, so what we observe already in there in the daytime service that we have for conduct at funny since with firms is that firms are really to change their sourcing strategy. i'll find sourcing of intermediate inputs, including raw materials,

even if these is associated with higher production prices and these in our, as a way to increase the resilience of supply chains. so for instance, we have asked firms about their furniture plans in terms of sourcing strategy and in particular, firms there were severely hit by material shortages. these firms are planning to increase their diversification of their supply chains and increase the stock highly . but of course, these means then are higher costs and then also higher prices to find out consumers . yes it is. there's always a knock on effect for these things. isn't that liz? under aflac from an effect institute. i thank you so much joining us until we think of her the condition that the european union is not just reliance on the rest of the world for raw materials. the finished products themselves are also coming often from other countries. and countries within e is future relationship is far from secure. so often that country, as china,

ah love him or hate him. masks are an example of a product of the european union, no longer produces, at least until the corona virus came along. since the pandemic europeans have started wondering if they outsource to many key industries. solar energy is another one of those key industries, especially now is the block is trying to shift away from russian fossil fuels. but the german companies that used to lead the european solar market have long since gone bankrupt to the end of federal subsidies a decade ago. the market will take care of itself. after all, they said, well, it did. and now the you is dependent upon china. the motto is, the cheaper, the better lenses. i think 5, if i don't think we need to ask ourselves if that was the right path ever, ever long a yahoo for many years it was well arreola had said the trade off was in our favor . have easy, yap implies may achieve solar panels. but

a lot of people could afford the nautilus and con, we also had she power from russia to an egg. developable slant become for many years our economic growth by including for many consumers in germany, was a net positive and was have alpha and arch lunch. deposit eva, and figure it to sentiment. economist good on voice agrees with, with a caveat. does in the 1st hours is not to mission. aguilar does it well, it's of course annoying that we don't have any producers in the sector anymore. duffy, and that's because china is distorting the market with its subsidies and state aid, not just in better thoughts out and china's roles. a trade partner is problematic for other reasons as well. components for chinese solar panels are producing jang province where many wiggers live. the government suspects the muslim minority of supporting terrorism over a 1000000 of them are currently believe to be enforced labor camps. chinese cotton is often also produced with force labor before it's shipped abroad.

the european parliament recently voted to been all products produced with force labor in the u. digitalization and artificial intelligence are also a weak spot for the u. china is leading the way for other asian countries there and is already moved well ahead of germany, just like he was high tech companies did decades ago. it's not just a question of having the right investors. the e needs more experts as well. ah, the hm. oh, the yeah, i think we haven't been attracting the right talents for years now. politics, especially when you look at our immigration policies, as i said, the americans did that. that's. i'm the only candidate my stanford in california aren't just so good because there are so many good americans. national is a good fuss. but because they also attract the best from the entire world, people are still key for many key industries.

and just a reminder, the top business story we're following for you this hour e. c, b decision to raise interest rates is being met with concern in some parts of yours . i'm countries with high levels of debt such as italy of pricing for knock on effects. that's all from us with

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