The Week in Review: UK Trade, Russia Inflation, U.S. Recovery

A sluggish economic recovery in Europe is adding pressure to talks between Greek and German policymakers, while to the west and east of the continent signs of economic recovery are mounting.

A sluggish economic recovery in Europe is adding pressure to talks between Greek and German policymakers, while to the west and east of the continent signs of economic recovery are mounting.

In Europe, Greek and German policymakers continue a back-and-forth discussion of how exactly Greece can avoid defaulting on its payments to the IMF, which were due last week, and to Eurozone creditors, which are set to overwhelm the Greek coffers later this month. The talks have led to a number of high-pressure press releases, in which both sides reaffirmed their refusal to compromise while also insisting that, somehow, a deal to help Greece avoid leaving the euro will be made.

“The willingness is there to cooperate with the three institutions, it’s now a matter of acting on that,” said German Chancellor Angela Merkel to reporters on Thursday, adding that there is “absolute unity” between European banks and ountries.”Greece will continue to work emphatically and resolutely with the three institutions in the coming days to clear up all open questions as far as possible,” she said.

Alexis Tsipras, the Greek Prime Minister, met with European Commission President Jean-Claude Juncker to smooth tensions after Tsipras insisted deals given to Greece were, as Juncker put it, “a leave-or-take offer,” which the Greeks found to be unacceptable. Juncker later insisted that was untrue.

To combat instability from ongoing discussions about Greece, and how Europe can handle its debt loads, the European Central Bank began a Quantitative Easing monetary policy designed to inject liquidity and raise aggregate demand. The policy, modeled after the Federal Reserve’s programs from 2012 and 2013, are set to inject over a trillion euros into the economy.

Those payments have not helped stimulate demand for British products, and have hurt UK exports. The Office for National Statistics reported this week that exports have flattened in April, a fall from a small rise in exports in March, despite growing exports to the United States.

The U.S. has also shown signs of improvement despite a tightening monetary policy from the Federal Reserve, as the Department of Labor reported growing quits, more job openings, and strong unemployment claims data. Some analysts are also expected first quarter GDP estimates for the U.S. to be revised upwards.

To the east of the EU, Russia has grown confident that its currency and economy are beginning to stabilize. The Bank of Russia announced earlier this week that the high inflation that the country has suffered is set to slow, as the bank has inflation “under control.” The bank predicts peak inflation rates are already in the past, and the Bank can now lower target interest rates to stimulate the economy and bring the country out of recession.

Some analysts believe Russia will still need to wait, and may only exit recession in 2016, as lower oil prices and sanctions take their toll on the country.