BRUSSELS (AP) 鈥� A day after to join the European Union, the bloc's leaders turned their attention Friday to the severe economic turbulence looming over the coming months as the full impact of sinks in and the threat of recession rises.
The EU's 27 leaders gathered in Brussels to grapple with , , dwindling business and consumer confidence, and growing budget pressures.
The leaders also will have to contend with higher borrowing costs as the European Central Bank prepares to to counter runaway price increases. ECB President Christine Lagarde, who plans to raise rates next month and again in September, joined the EU summit to discuss the darkening economic outlook.
鈥淲e are in a difficult situation,鈥� Swedish Prime Minister Magdalena Andersson said on her way into the summit. 鈥淚t鈥檚 very important that we have this discussion.鈥�
The EU has spent the previous decade battling a series of crises, ranging from Greece鈥檚 financial woes and transatlantic trade disruptions under former U.S. President Donald Trump to Britain鈥檚 departure from the bloc and the .
The EU's executive arm, the European Commission, on Friday announced plans to issue 50 billion euros ($52.7 billion) of EU bonds to aid member countries between July and December as part of its flagship economic recovery program.
With no end in sight to the war in Ukraine and the EU committed to stepping up sanctions against Russia as punishment, the bloc must battle economic threats on multiple fronts.
Energy poses a major challenge for the EU, which for years has to help power cars, factories, heating systems and electricity plants.
Under pressure to keep pace with American and British penalties against Russia, the EU since April has expanded what were already unprecedented sanctions by targeting Russian fuels. A will start in August and an will be phased in over the coming eight months.
Meanwhile, , which the EU didn鈥檛 include in its own sanctions for fear of seriously harming the European economy. Before the war, the bloc got about 40% of its gas from Russia.
鈥淚t鈥檚 very likely that Russia will use gas and energy as a blackmail toward European Union countries,鈥� Finnish Prime Minister Sanna Marin said. 鈥淩ussia will use it as a tool, as a weapon against us, so we have to help each other.鈥�
Moscow has , including heavy importers Germany and Italy, and .
Germany on Thursday triggered the for gas supplies, saying the country faces a 鈥渃risis.鈥� Weaknesses in Germany, Europe鈥檚 largest economy, risk having a broad spillover effect and making the EU鈥檚 latest economic growth forecasts look too rosy.
鈥淭he impact will be enormous for Germany but also for all the other European countries,鈥� Belgian Premier Alexander De Croo said.
In May, the European Commission said the 2.7% this year and 2.3% in 2023 after 5.4% growth in 2021. Other forecasts have already downgraded growth prospects. As this year began, the bloc was still facing effects 鈥� including higher budget deficits 鈥� from the pandemic, which caused the economy to shrink 5.9% in 2020.
The to protect the 19 countries that share the euro currency from market turmoil as it tackles record inflation of 8.1%. A selloff in the bonds of some euro nations was a central feature of the debt crisis a decade ago.
鈥淭he next few months will be very difficult,鈥� said European Parliament President Roberta Metsola, who attended the first day of the summit Thursday.
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Mike Corder and Samuel Petrequin in Brussels contributed to this story
The Associated Press
