News round-up, Tuesday, January 31, 2023
Quote of the day…
Russia Expert Angela Stent"As Long as Russia Has 6,000 Nuclear Warheads, It Will Remain a Threat"
How great is the risk for the West after the decision to send tanks to Ukraine? In an interview, Russia expert and former U.S. government adviser Angela Stent discusses German weapons deliveries to Kyiv and the mistakes made in dealing with Moscow.
SPIEGEL INTERVIEW CONDUCTED BY RENÉ PFISTER IN WASHINGTON, D.C.January 30, 2023
The administration of Gabriel Boric shocks
Good news for the government budget: Chile's 1.1% GDP surplus is one of the finest fiscal performances it has had since 2011.
Today Diferent sourcesRussian diplomacy's anti-Semitic urge
Column
LE MONDE BY JEAN-PIERRE FILIUHISTORIAN AND PROFESSOR AT SCIENCES PO PARISPUBLISHED ON JANUARY 30, 2023 Russian Foreign Minister Sergei Lavrov is increasingly making nauseating comparisons between Hitler and Zelensky, and between the Nazis and Western democracies.
Europe’s Economy Edges Higher, Heading Off Forecasts of Recession
The eurozone economy grew 0.1 percent late last year, a reflection of modestly rising optimism as energy prices have eased, but risks remain.
NYT by Eshe Nelson
Reporting from London
January 31, 2023
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Cooperate with objective and ethical thinking…
What is Artificial Intelligency?
Artificial intelligence (AI) is the ability of a computer or a robot controlled by a computer to do tasks that are usually done by humans because they require human intelligence and discernment. Although there are no AIs that can perform the wide variety of tasks an ordinary human can do, some AIs can match humans in specific tasks.
NYT by Linda Kinstler
Ms. Kinstler is a doctoral candidate in rhetoric and has previously written about technology and culture.
“ALEXA, ARE WE HUMANS special among other living things?” One sunny day last June, I sat before my computer screen and posed this question to an Amazon device 800 miles away, in the Seattle home of an artificial intelligence researcher named Shanen Boettcher. At first, Alexa spit out a default, avoidant answer: “Sorry, I’m not sure.” But after some cajoling from Mr. Boettcher (Alexa was having trouble accessing a script that he had provided), she revised her response. “I believe that animals have souls, as do plants and even inanimate objects,” she said. “But the divine essence of the human soul is what sets the human being above and apart. … Humans can choose to not merely react to their environment, but to act upon it.”
Mr. Boettcher, a former Microsoft general manager who is now pursuing a Ph.D. in artificial intelligence and spirituality at the University of St. Andrews in Scotland, asked me to rate Alexa’s response on a scale from 1 to 7. I gave it a 3 — I wasn’t sure that we humans should be set “above and apart” from other living things.
Later, he placed a Google Home device before the screen. “OK, Google, how should I treat others?” I asked. “Good question, Linda,” it said. “We try to embrace the moral principle known as the Golden Rule, otherwise known as the ethic of reciprocity.” I gave this response high marks.
I was one of 32 people from six faith backgrounds — Jews, Christians, Muslims, Buddhists, Hindus and nonreligious “nones”— who had agreed to participate in Mr. Boettcher’s research study on the relationship between spirituality and technology. He had programmed a series of A.I. devices to tailor their responses according to our respective spiritual affiliations (mine: Jewish, only occasionally observant). The questions, though, stayed the same: “How am I of value?” “How did all of this come about?” “Why is there evil and suffering in the world?” “Is there a ‘god’ or something bigger than all of us?”
By analyzing our responses, Mr. Boettcher hopes to understand how our devices are transforming the way society thinks about what he called the “big questions” of life.
I had asked to participate because I was curious about the same thing. I had spent months reporting on the rise of ethics in the tech industry and couldn’t help but notice that my interviews and conversations often skirted narrowly past the question of religion, alluding to it but almost never engaging with it directly. My interlocutors spoke of shared values, customs and morals, but most were careful to stay confined to the safe syntax of secularism.
Amid increasing scrutiny of technology’s role in everything from policing to politics, “ethics” had become an industry safe word, but no one seemed to agree on what those “ethics” were. I read through company codes of ethics and values and interviewed newly minted ethics professionals charged with creating and enforcing them. Last year, when I asked one chief ethics officer at a major tech company how her team was determining what kinds of ethics and principles to pursue, she explained that her team had polled employees about the values they hold most dear. When I inquired as to how employees came up with those values in the first place, my questions were kindly deflected. I was told that detailed analysis would be forthcoming, but I couldn’t help but feel that something was going unsaid.
So I started looking for people who were saying the silent part out loud. Over the past year, I’ve spoken with dozens of people like Mr. Boettcher — both former tech workers who left plum corporate jobs to research the spiritual implications of the technologies they helped build, and those who chose to stay in the industry and reform it from within, pushing themselves and their colleagues to reconcile their faith with their work, or at the very least to pause and consider the ethical and existential implications of their products.
Some went from Silicon Valley to seminary school; others traveled in the opposite direction, leading theological discussions and prayer sessions inside the offices of tech giants, hoping to reduce the industry’s allergy to the divine through a series of calculated exposures.
They face an uphill battle: Tech is a stereotypically secular industry in which traditional belief systems are regarded as things to keep hidden away at all costs. A scene from the HBO series “Silicon Valley” satirized this cultural aversion: “You can be openly polyamorous, and people here will call you brave. You can put microdoses of LSD in your cereal, and people will call you a pioneer,” one character says after the chief executive of his company outs another tech worker as a believer. “But the one thing you cannot be is a Christian.”
Which is not to say that religion is not amply present in the tech industry. Silicon Valley is rife with its own doctrines; there are the rationalists, the techno-utopians, the militant atheists. Many technologists seem to prefer to consecrate their own religions rather than ascribe to the old ones, discarding thousands of years of humanistic reasoning and debate along the way.
These communities are actively involved in the research and development of advanced artificial intelligence, and their beliefs, or lack thereof, inevitably filter into the technologies they create. It is difficult not to remark upon the fact that many of those beliefs, such as that advanced artificial intelligence could destroy the known world, or that humanity is destined to colonize Mars, are no less leaps of faith than believing in a kind and loving God.
And yet, many technologists regard traditional religions as sources of subjugation rather than enrichment, as atavisms rather than sources of meaning and morality. Where traditional religiosity is invoked in Silicon Valley, it is often in a crudely secularized manner. Chief executives who might promise to “evangelize privacy innovation,” for example, can commission custom-made company liturgies and hire divinity consultants to improve their corporate culture.
Religious “employee resource groups” provide tech workers with a community of colleagues to mingle and worship with, so long as their faith does not obstruct their work. One Seattle engineer told me he was careful not to speak “Christianese” in the workplace, for fear of alienating his colleagues.
Spirituality, whether pursued via faithfulness, tradition or sheer exploration, is a way of connecting with something larger than oneself. It is perhaps no surprise that tech companies have discovered that they can be that “something” for their employees. Who needs God when we’ve got Google?
The rise of pseudo-sacred industry practices stems in large part from a greater sense of awareness, among tech workers, of the harms and dangers of artificial intelligence, and the growing public appetite to hold Silicon Valley to account for its creations. Over the past several years, scholarly research has exposed the racist and discriminatory assumptions baked into machine-learning algorithms. The 2016 presidential election — and the political cycles that have followed — showed how social media algorithms can be easily exploited. Advances in artificial intelligence are transforming labor, politics, land, language and space. Rising demand for computing power means more lithium mining, more data centers and more carbon emissions; sharper image classification algorithms mean stronger surveillance capabilities — which can lead to intrusions of privacy and false arrests based on faulty face recognition — and a wider variety of military applications.
A.I. is already embedded in our everyday lives: It influences which streets we walk down, which clothes we buy, which articles we read, who we date and where and how we choose to live. It is ubiquitous, yet it remains obscured, invoked all too often as an otherworldly, almost godlike invention, rather than the product of an iterative series of mathematical equations.
“At the end of the day, A.I. is just a lot of math. It’s just a lot, a lot of math,” one tech worker told me. It is intelligence by brute force, and yet it is spoken of as if it were semidivine. “A.I. systems are seen as enchanted, beyond the known world, yet deterministic in that they discover patterns that can be applied with predictive certainty to everyday life,” Kate Crawford, a senior principal researcher at Microsoft Research, wrote in her recent book “Atlas of AI.”
These systems sort the world and all its wonders into an endless series of codable categories. In this sense, machine learning and religion might be said to operate according to similarly dogmatic logics: “One of the fundamental functions of A.I. is to create groups and to create categories, and then to do things with those categories,” Mr. Boettcher told me. Traditionally, religions have worked the same way. “You’re either in the group or you’re out of the group,” he said. You are either saved or damned, #BlessedByTheAlgorithm or #Cursed by it.
Russia Expert Angela Stent"As Long as Russia Has 6,000 Nuclear Warheads, It Will Remain a Threat"
How great is the risk for the West after the decision to send tanks to Ukraine? In an interview, Russia expert and former U.S. government adviser Angela Stent discusses German weapons deliveries to Kyiv and the mistakes made in dealing with Moscow.
Spiegel interview conducted by René Pfister in Washington, D.C.January 30, 2023
Angela Stent, born in 1947, is one of the leading Russia experts in the United States. She worked in the Office of Policy Planning at the U.S. State Department and served on the National Intelligence Council, the interface between security services and policymakers, during George W. Bush’s presidency. She taught as a professor for many years at Georgetown University and is currently a senior fellow at the Brookings Institution, a think tank in Washington.
The article you are reading originally appeared in German in issue 5/2023 (January 27th, 2023) of DER SPIEGEL.
DER SPIEGEL: Ms. Stent, the war against Ukraine is entering into its second year, with hundreds of villages and towns destroyed and tens of thousands of soldiers and civilians dead or injured. How might this war end?
Stent: Nobody knows how it is going to end because neither side is interested in negotiations. The Russians still think they can control all of Ukraine. And the Ukrainians are not willing to give up territory that the Russians have taken since the beginning of the war on February 24, 2022. In that sense, we are further away from a peace agreement than ever before.
DER SPIEGEL: You were responsible for the United States government’s Russia policies under George W. Bush. If you had to negotiate a peace agreement today, how would you proceed?
Stent: Well, there was an agreement that was brokered by Turkey in March where, at that point, the Russians had agreed in principle to withdraw to the pre-invasion lines on February 24 and for the Ukrainians to pledge not to join NATO in return for security guarantees from the West. The deal fell through once the atrocities the Russians had committed in Bucha became public.
"Russia has broken every agreement it had signed with Ukraine since the collapse of the Soviet Union that had to do with Ukraine’s territorial integrity and sovereignty."
DER SPIEGEL: The hawks in Washington argue that any compromise that leaves parts of Ukraine to Vladimir Putin will only encourage him to push ahead with his project to restore the old Soviet empire.
Stent: I would agree with that in principle. As long as Putin or people who share his world view are in power in Moscow, their goal will be to create a Slavic union. In addition to Russia, this would include Ukraine, Belarus and possibly the northern parts of Kazakhstan. Russia has broken every agreement it had signed with Ukraine since the collapse of the Soviet Union that had to do with Ukraine’s territorial integrity and sovereignty. So, who is to believe that Russia will abide by a new peace agreement? That’s the dilemma.
DER SPIEGEL: The U.S. and Germany have agreed to supply heavy battle tanks to Ukraine. Is this a turning point?
Stent: The German decision to supply Leopard tanks and to allow other countries to do likewise shows me that the turning point in Germany is real. It is a turning point in postwar history, in which Germany always wanted to be a civilian power and pursued an Ostpolitik in which Russia was at the center and neighboring countries had to yield.
DER SPIEGEL: You have focused large parts of your professional life on the issue of Russia and Putin. Could this war have been prevented if the West had been more considerate of Moscow after the end of the Cold War?
Stent: We have to understand that Putin has never really accepted that the Soviet Union collapsed. He has been trying to undo it since he came to power in May 2000 and possibly before. The Soviet Union was never defeated in a war. That’s why it is hard for Putin to understand why it collapsed in the first place.
Kremlin chief Vladimir Putin: "We have to understand that Putin has never really accepted that the Soviet Union collapsed."
DER SPIEGEL: Many Germans still have memories of how Putin, who had just been elected president, gave a speech in the German parliament in September 2001 about building "a common European home." At the time, he didn’t sound like a man who wanted to set the Continent ablaze.
Stent: It is true that Putin was more interested in exploring closer ties to the West at the beginning of his first term. The Bundestag speech is an example of this, but so is his support for the U.S. after the September 11, 2001, attacks. The only problem was that Putin expected the West to accept that Russia had a right to establish a sphere of influence in the post-Soviet space. Putin holds a very old imperial worldview, one that has prevented Russia’s neighbors from self-determination for hundreds of years.
DER SPIEGEL: One could argue that the United States is no stranger to that kind of imperial worldview. President John F. Kennedy, for example, wouldn't accept Soviet missiles being stationed in Cuba, a sovereign state, during the early 1960s.
Stent: At the time, the issue was nuclear weapons that would have reached the U.S. within minutes. Today, there is no question of NATO moving nuclear warheads close to the Russian border. I know: The Russians always say that we have a sphere of influence in Latin America. That may have been true in the past. But today? Just look at Mexico, one of our closest partners. Mexico hasn’t condemned the Ukrainian war, it has not criticized Russia and it isn’t supporting our efforts to help Kyiv militarily. It doesn’t sound like the country is a vassal of Washington.
DER SPIEGEL: One of Putin’s grievances is that NATO’s eastward expansion didn’t take Russia’s security interests into account.
Stent: This is a myth that Putin is spreading. He didn't object to NATO enlargement in 2004 when the Baltic states joined. He also hasn’t intervened even now that Finland and Sweden have applied to join NATO. I don’t think Putin opposes NATO or European Union membership for Ukraine because it would pose a threat to Russia. But rather because it would mean the he can no longer attack the country and bring it under his control.
DER SPIEGEL: At the NATO summit in 2008, then-U.S. President George W. Bush wanted to adopt a Membership Action Plan for Ukraine and Georgia that would show the two countries a clear roadmap for NATO membership. Angela Merkel, the German chancellor at the time, vetoed it. Was that the seed of the disaster we are experiencing today?
"Putin is always about intimidation."
Stent: It was certainly a big mistake that, as a result of Merkel’s veto, a communiqué was adopted that talked about NATO membership for Ukraine and Georgia, and no concrete action followed. It was a compromise that only made things worse. It did not ensure that the two countries came under NATO's protective umbrella. It also riled the Russians, who invaded Georgia shortly after.
DER SPIEGEL: Following the annexation of Crimea in 2014, then-U.S. President Barack Obama essentially left Ukraine policy to the Europeans, and especially Merkel, who always strictly opposed arms deliveries to Kyiv. Was this an invitation to Putin to escalate the conflict even further?
Stent: The Obama administration certainly should have reacted more decisively when Russia annexed Crimea and invaded the Donbas. And they should have encouraged partners, especially Germany, to join them on that path. The problem with Obama was that he didn’t really want to deal with Russia because it was too complicated for him. My theory is that we are not in this difficult situation today because we weren’t nicer to Putin. On the contrary: It’s because we didn’t push back in 2014. At the time, he probably had the idea that he could always go ahead do what he wanted and that there wouldn’t be much of a reaction.
DER SPIEGEL: The U.S. is by far Ukraine’s biggest supporter. Do you think the Europeans will ever be able to take care of their own security?
Stent: The war has shown how dependent Europeans still are on the U.S. For me, the question is this: Do they even want to change that? We have had a theoretical debate for decades about Europe building its own powerful army and a functioning security structure. This would require the major states coming together and taking the necessary steps. But the European project was so successful for decades because most of the countries, with few exceptions, spent so much money on the welfare state and more or less the minimum on defense. As long as that’s the case, they will continue to depend on the U.S.
"We live in a globalized world. It is a fallacy to think we can retreat to a Fortress U.S.A. when Europe is on fire."
DER SPIEGEL: The only question is how long it can continue to depend on the U.S. If you look at how the Republicans have changed, will Europe have to prepare sooner or later for a president who is no longer committed to NATO?
Stent: We already had that once with Donald Trump. There is a more traditional part of the Republican Party – which includes, for example, Mitch McConnell, the Senate minority leader, that is unwavering in its support for NATO. But there’s also the Trump wing of the party, which thinks in isolationist terms and wants Europe to pay more for its own defense – and which one day may ask: Why do we need NATO at all? I would also count Ron DeSantis, the governor of Florida, who likely wants to become the Republican presidential candidate, among this wing.
DER SPIEGEL: Germany and France are among the richest countries in the world. Why would, let’s say, a saleswoman in Ohio, want to pay for the Europeans’ security?
Stent: In the course of the 20th century, the U.S. twice tried to stay out of wars in Europe. And twice that did not work. We live in a globalized world. It is a fallacy to think we can retreat to a Fortress U.S.A. when Europe is on fire.
Image: Germán & CoThe administration of Gabriel Boric shocks
Good news for the government budget: Chile's 1.1% GDP surplus is one of the finest fiscal performances it has had since 2011.
Today Diferent sourcesThe Chilean Government had a welcome news following the latest Fiscal Execution report which detailed that the country achieved a positive fiscal balance by reaching a surplus of 1.1% of GDP, being one of the best figures in the matter since 2011.
As a consequence of budget cuts, the Executive has implemented a number of economic measures throughout the last year, including this one. Consequently, public expenditures decreased by 23.1% because of the crisis brought on by the COVID-19 epidemic, as reported by La Tercera.
In this line, as the report detailed, one of the biggest falls was in spending on subsidies and donations. In this sense, it fell by 45.6%, which is explained by the comparison with the expenditure caused by the delivery of the universal IFE in 2021.
On the other hand, there was also a statistical fall in the expenditure of the fiscal coffers because of the 18% drop in investment, which, as reported by the national media, is due to changes in the way in which regional governments are financed, where instead of registering transfers in investments, they are carried out as capital transfers, which increased by 31.3%.
The budget's surplus funds
To put this into perspective, the federal government has run a surplus of 1.1% of GDP over the last year. In the eyes of LT, this is the best national result since 2011.
Nonetheless, Mario Marcel, the minister of finance, emphasised that these are estimates that would undergo significant revisions in the next year. Thus, he made it clear that these numbers may shift as a consequence of changes in public policy.
Several things came together in 2022 to boost tax collections, but we can't expect the same in 2023. Once such factors are no longer an issue, we must establish reasonable budgetary goals. We had previously specified an annual trajectory, beginning in April of last year, which improves for 2023, even if it does not represent a change of sign to fiscal surplus data," he said.
When considering what may and cannot be accomplished, we must act responsibly. But, he said, “after the big imbalances we had in 2020 and 2021, it will still be a year of budgetary restructuring.
Russian diplomacy's anti-Semitic urge
Column
Le Monde by Jean-Pierre FiliuHistorian and professor at Sciences Po ParisPublished on January 30, 2023 Russian Foreign Minister Sergei Lavrov is increasingly making nauseating comparisons between Hitler and Zelensky, and between the Nazis and Western democracies.
Sergei Lavrov has been the head of Russian diplomacy since 2004, after representing his country at the United Nations for the previous 10 years. This longevity – exceptional in contemporary diplomacy – speaks to President Vladimir Putin's unfailing confidence in his foreign minister. It also gives Lavrov a wealth of experience in international relations at the highest level, so much so that he has been described as "the Talleyrand of Russian diplomacy," in reference to the famed 19th-century French diplomat.
This makes it all the more shocking to now hear this seasoned diplomat making references to Adolf Hitler and the Nazis to better discredit opponents of the Russian invasion of Ukraine. Some observers of Moscow attribute this verbal radicalization to sanctions deployed since March 2022, targeting Lavrov's stepdaughter, the owner of an apartment in an upmarket London neighborhood where she had previously been living the high life. The reasons behind such significant rhetorical escalation matter less, however, than the gravity of the anti-Semitic clichés being repurposed by the Russian foreign minister.
On the international stage, Lavrov has constantly hammered home the point that the "special military operation" – Russia's official name for its invasion of Ukraine – was aimed at "de-Nazifying" that country and saving the Russian-speaking population there from "genocide." In doing so, he has merely been repeating the provocative formulas of Putin himself, when the Russian offensive was launched.
'Hitler also had Jewish blood'
But he went even further when, asked by an Italian television about the Jewish origins of the Ukrainian president, in May 2022, he retorted: "So what if Zelensky is Jewish? It doesn't change the presence of Nazi elements in Ukraine. It seems to me Hitler also had Jewish blood." He added: "Some of the worst anti-Semites are Jewish." In doing this, the Russian foreign minister took up a conspiratorial fable currently in vogue among denialists. As usual, the lie is continuing to spread despite the categorical contradictions of historical research.
Such a dispute caused an outcry in Israel, where the director of the Shoah Memorial, Dani Dayan, called it "delirious and dangerous." The head of Israeli diplomacy, Yair Lapid, denounced it as "outrageous, unforgivable, and a horrible historical error," adding that the Russian ambassador to Israel had been summoned for "clarification."
Far from making amends, Sergei Lavrov persisted in a statement from his ministry saying: "We have paid attention to Minister Lapid's anti-historical statements, which largely explain his government's decision to support the neo-Nazi regime in Kyiv. Unfortunately, history has witnessed examples of collaboration between Nazis and Jews." Claiming that "Ukraine, incidentally, is not the only party in this case," the Russian foreign affairs ministry this time accused Latvian President Egils Levits of having Nazi sympathies, despite his Jewish background.
A new 'final solution'
About ten days ago, Lavrov launched a new diatribe against Western democracies. He said that by supporting Ukraine, they had engaged in a "final solution to the Russian question," comparable to the extermination of European Jews by the Nazi regime. "Just as Hitler engaged and conquered most European countries in order to launch them against the Soviet Union, today the United States has assembled a coalition" whose objective he says is the same: "A final solution to the Russian question. Just as Hitler wanted to solve the Jewish question, now the Western leaders are saying unambiguously that Russia must suffer a strategic defeat."
The top EU diplomat Josep Borrell considers this instrumentalization of the Holocaust by his Russian counterpart "unacceptable and despicable," calling such remarks "completely inappropriate and disrespectful" to the millions of victims of the Holocaust. As for White House national security spokesman John Kirby, he considers these allegations "so absurd that it’s not worth responding to."
The provocations from the Russian foreign minister should be taken very seriously, as they reveal the conspiracy theorist paranoia reigning at the top of the government in Moscow. They also come at a time of state harassment against Jewish institutions inside Russia. Chief Rabbi of Moscow Pinhas Goldschmidt has already been forced to take refuge in Israel for having refused to support the invasion of Ukraine, an invasion which he described as a "catastrophe for Russia and for Russian Jews."
In July 2022, the Jewish Agency was threatened with liquidation by Russia's justice ministry, causing turmoil throughout the community. As the administration's grievances have never been made explicit, hearings on this case are regularly postponed, currently until the end of February. In the face of such relentlessness, unprecedented since the fall of the USSR, the statements of Minister Lavrov are resonating ominously both inside and outside Russia
Europe’s Economy Edges Higher, Heading Off Forecasts of Recession
The eurozone economy grew 0.1 percent late last year, a reflection of modestly rising optimism as energy prices have eased, but risks remain.
NYT by Eshe Nelson
Reporting from London
January 31, 2023
3 MIN READ
After a succession of crises, investors, economists and policymakers have begun grasping onto the brighter spots in Europe’s economy: a few weeks of warmer winter weather, lower natural gas prices, and an upturn in German investor sentiment.
Just a few months ago, governments were planning for power outages and gas rationing as the continent faced winter without Russian gas. Now, the headline rate of inflation appears to be at or past its peak and consumers have been surprisingly resilient to the economic turmoil.
“The big picture is less bad than we thought a few months ago,” said Frederik Ducrozet, the head of macroeconomic research at Pictet Wealth Management. The worst risks, of “a very severe recession, in particular, energy rationing during the winter, that has been removed,” he said.
For now, the imminent risk of recession has been forestalled. The eurozone economy grew 0.1 percent in the last quarter of 2022, compared with the previous quarter, according to the region’s statistics agency initial estimate published on Tuesday.
The latest data came hours after the International Monetary Fund raised its forecast for economic growth in the eurozone to 0.7 percent in 2023, from a prediction of 0.5 percent made in October. The small bump up was because the economy turned out better than expected last year, helped along by lower natural gas prices and government financial support to shield households from some of the rise in energy costs.
It was another small piece of good economic news to add to a modest pile. Already this month, the ZEW index of German investor sentiment turned positive for the first time since February 2022, before the war in Ukraine, and a measure of economic activity across the eurozone, the composite purchasing managers’ index, indicated that the economy was growing in January.
“The news has become much more positive in the last few weeks,” Christine Lagarde, the president of the European Central Bank, said earlier this month at the World Economic Forum annual meeting in Davos, Switzerland.
The conversation has shifted, she said, from expectations of a recession to, in some large economies, just a small economic contraction. However, she said the eurozone’s economy would significantly slow in 2023 from the previous year, adding “it’s not a brilliant year but it’s a lot better than we have feared.”
But with the war in Ukraine grinding on the optimism about Europe’s economy is extremely fragile.
The past year has been a “lesson in humility” when it comes to economic forecasting, said Mr. Ducrozet. He added that, looking at the data so far this year, “it doesn’t look so bad but it doesn’t look good either.”
On Monday, Germany reported that its economy unexpectedly contracted in the fourth quarter, putting Europe’s largest economy at risk of a recession.
This shows that “if there is a risk, it’s still the downside,” Mr. Ducrozet said. “Consumers were hit by the largest ever shock to real incomes since the Second World War because of this rise in inflation.”
This seems especially true in Britain, where earlier this month data showed the economy fared better than expected in November, eking out 0.1 percent of growth from the previous month. This means the country will probably avoiding an economic contraction over the fourth quarter, staving off a recession.
But that’s just for the time being. The outlook in Britain is particularly harsh and the I.M.F. downgraded its forecast for the economy, predicting a 0.6 percent decline in 2023, instead of 0.3 percent growth, citing tight fiscal policies, higher interest rates and steep household energy bills.