Recent events with the rapid rise in COVID-19 cases in China, the escalation of the war in Ukraine despite the Christmas holidays, and the persistence of the energy crisis and inflation have set the stage for a global recession until at least the new year. 2023, without clear signs of immediate recovery.

Separate quarterly changes in the trend of growth and employment in both the Eurozone and the US do not change the prospects and threats of a recession, which could reduce both international trade and individual GDP growth in most countries of the world.

It should be emphasized that during the pandemic, as well as more recently with the development of the conflict in Ukraine, globalization and interdependence of economies and markets have shifted to a decentralized logic that relies more on regional alliances that may not have connections between themselves and less in a single global development model. and international trade.

Supply chain disruptions have been significant over the past two years, and while demand has recovered from the initial shock from supply cuts, problems with the flow of goods and commodities remain in almost all major markets around the world.

In addition, a change in the direction of monetary policy, both from the ECB and the Fed, has become more or less predictable, as markets are fairly quick to factor into the financial sector both liquidity injections and rate hikes aimed at curbing inflation.

Based on the foregoing, the exogenous conditions of the economic crisis that exist today and are associated with a pandemic and health threats, military conflicts mainly against the backdrop of Ukraine, as well as climate change, which makes its presence more and more tangible with extreme weather events and natural disasters also caused changing the endogenous variables of the core of today’s capitalist system. In practice, this means that even if the exogenous factors of the crisis disappear in the medium term, it is very likely that the current global system will not be able to recover unless there is a comprehensive restructuring based more on sustainable, sustainable and environmentally sound development and less on an endless process of increase. production that is ultimately not absorbed and creates a liquidity problem for a large percentage of businesses and the need for government intervention and rescue again, through the Keynesian fiscal approach.

In conclusion, with the threat of a recession visible to us, but with significant variations depending on the regional market, a general agreement between the member states of the main markets is required so that, on the one hand, the production process is based on clearly agreed and sustainable development criteria for customers, enterprises , shareholders and society, and, on the one hand, control and regulation mechanisms that protect healthy competition and the import-export process, in order to ensure the sufficiency of goods and services in all markets of the planet, work effectively.

* Mr. Meletis Redumis – Banking Economist.