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As concerns over the European Union's economic recession grow, the European Central Bank (ECB) is
deepening its concerns ahead of the key interest rate decision on the 21st. A typical 0.25 percentage point hike
would be to keep the existing promise with the market to gradually raise the benchmark interest rate, but it could
be evaluated as insufficient to curb inflation, which has risen to an all-time high. However, if the "big step" of

raising the 0.5 percentage point is taken, the economy of the Eurozone (19 countries using the euro) which is
already suffering from an economic slowdown due to energy shortages could become more troubled. According
to a recent survey conducted by Bloomberg News on the 17th (local time), 45 percent of the respondents said
the Eurozone will fall into a recession within the next year, up 15 percentage points from 30 percent a month

ago. As the economic recovery gradually decreases after the COVID-19 pandemic and the reality of an energy
crisis in winter comes to the skin, the prospect of an economic recession is deepening. In addition, even if Europe
experiences an economic recession, inflation will not ease, unlike the United States, Bloomberg pointed out.
This is because inflation is different. While the U.S. has caused demand-driven inflation due to huge stimulus

measures poured out by the government during the pandemic, Europe has a strong characteristic of cost-raising
inflation due to a surge in natural gas prices following the Russia-Ukraine war. Therefore, even if the economy
enters a downward phase due to the ECB's key interest rate hike, it is unlikely that prices will be steady as long
as energy prices remain high. A senior economist at Deutsche Bank said, "Even if a minor recession hits later

this year, inflationary pressure is expected to continue until next year." In addition, Bloomberg introduced several
factors that will determine the base rate at the ECB monetary policy meeting on the 21st. First, inflation in the
Eurozone. ECB President Christine Lagarde has said she will "judge based on data," which continues to rise. In
June, consumer price growth reached an all-time high of 8.6 percent. In addition, the executive committee, the

EU administration, recently revised its economic outlook, raising its inflation forecast for this year and next year
to 7.6 percent and 4.0 percent. This indicates that prices will continue to rise by two times the ECB target (2%)
until next year. As prices are rising above expectations, the monetary policy meeting may decide to raise rates by