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EU Adopts 2018 Budget

President Antonio Tajani signs the 2018 budget into law. [European Parliament]
President Antonio Tajani signs the 2018 budget into law. [European Parliament]
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EU Adopts 2018 Budget

President Antonio Tajani signs the 2018 budget into law. [European Parliament]
President Antonio Tajani signs the 2018 budget into law. [European Parliament]

The European Union on Thursday adopted its 2018 budget, amounting to €160.1 billion ($189.7 billion) in commitments - an increase of 0.2 percent compared to 2017.

The EU said total payments amount to €144.7 billion ($171.5 billion), rising 14.1 percent from last year.

"Payments increase significantly because the implementation of the 2014-2020 programs is expected to reach full speed in 2018," the EU said.

Märt Kivine, deputy finance minister of Estonia and chief Council negotiator for the 2018 EU budget, said that the Parliament and the Council shared the same two main priorities for the financial year 2018: to tackle migration and security, and to boost innovation, growth and employment in Europe.

“I am convinced that we have achieved a good and balanced result, allowing the Union to act and to react to the various needs”, Kivine said.

The biggest portion of the budget -- €11.2 billion ($13.4 billion) -- will be allocated to the EU's research and innovation programs; this is an increase of 8.4 percent compared to 2017.

The bloc, meanwhile, said Turkey's pre-accession funds have been cut by €105 million ($124.4 million).

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Russia's Central Bank Holds Off on Interest Rate Hike

People skate at an ice rink installed at the Red Square decorated for the New Year and Christmas festivities, with the St. Basil's Cathedral, left, and the Kremlin, right, in the background in Moscow, Russia, Friday, Dec. 20, 2024. (AP Photo/Alexander Zemlianichenko)
People skate at an ice rink installed at the Red Square decorated for the New Year and Christmas festivities, with the St. Basil's Cathedral, left, and the Kremlin, right, in the background in Moscow, Russia, Friday, Dec. 20, 2024. (AP Photo/Alexander Zemlianichenko)
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Russia's Central Bank Holds Off on Interest Rate Hike

People skate at an ice rink installed at the Red Square decorated for the New Year and Christmas festivities, with the St. Basil's Cathedral, left, and the Kremlin, right, in the background in Moscow, Russia, Friday, Dec. 20, 2024. (AP Photo/Alexander Zemlianichenko)
People skate at an ice rink installed at the Red Square decorated for the New Year and Christmas festivities, with the St. Basil's Cathedral, left, and the Kremlin, right, in the background in Moscow, Russia, Friday, Dec. 20, 2024. (AP Photo/Alexander Zemlianichenko)

Russia's central bank has left its benchmark interest rate at 21%, holding off on further increases as it struggles to snuff out inflation fueled by the government's spending on the war against Ukraine.
The decision comes amid criticism from influential business figures, including tycoons close to the Kremlin, that high rates are putting the brakes on business activity and the economy.
According to The Associated Press, the central bank said in a statement that credit conditions had tightened “more than envisaged” by the October rate hike that brought the benchmark to its current record level.
The bank said it would assess the need for any future increases at its next meeting and that inflation was expected to fall to an annual 4% next year from its current 9.5%
Factories are running three shifts making everything from vehicles to clothing for the military, while a labor shortage is driving up wages and fat enlistment bonuses are putting more rubles in people's bank accounts to spend. All that is driving up prices.
On top of that, the weakening Russian ruble raises the prices of imported goods like cars and consumer electronics from China, which has become Russia's biggest trade partner since Western sanctions disrupted economic relations with Europe and the US.
High rates can dampen inflation but also make it more expensive for businesses to get the credit they need to operate and invest.
Critics of the central bank rates and its Governor Elvira Nabiullina have included Sergei Chemezov, the head of state-controlled defense and technology conglomerate Rostec, and steel magnate Alexei Mordashov.
Russian President Vladimir Putin opened his annual news conference on Thursday by saying the economy is on track to grow by nearly 4% this year and that while inflation is “an alarming sign," wages have risen at the same rate and that "on the whole, this situation is stable and secure.”
He acknowledged there had been criticism of the central bank, saying that “some experts believe that the Central Bank could have been more effective and could have started using certain instruments earlier.”
Nabiullina said in November that while the economy is growing, “the rise in prices for the vast majority of goods and services shows that demand is outrunning the expansion of economic capacity and the economy’s potential.”
Russia's military spending is enabled by oil exports, which have shifted from Europe to new customers in India and China who aren't observing sanctions such as a $60 per barrel price cap on Russian oil sales.