Renewed clamp down to return to profitability, but with all thiefs continuously changing their tactics. It could be a long while before that will happen. How many degrees al jazeera in nigeria is all producing, delta ah. Type a picture of the headlines here now does era the lead of al qaeda . Im and also a hurry has been killed in a c. I drones strike and afghanistan in a televised address announcing the strike President Joe Biden said Us Intelligence officials, tract, so hurry to a home in downtown cobble where he was hiding with his family. From heidis, he coordinated al qaedas branches and are all around the world, including setting priorities. Were providing operational guidance and call for inspired attacks against us targets. He made videos including the recent weeks calling for his followers to attack the United States and our allies. Now, justice has been delivered and this terrorist leader is no more. Will this video purportedly shows the aftermath of the strike in kabul, which kills a hurry on the weekend. The Afghan Interior Ministry denied reports on social media about address strike. The taliban who control afghanistan have condemned the u. S. Action as a violation of afghan sovereignty. Media outlets him taiwan are reporting that us house beacon nancy pelosi will visit the island there. Theres no confirmation from her office. Shes on a tour of asia and isnt malaysias capital column pool. China has warned the u. S. Of serious consequences if policies visit to taiwan goes ahead. Beijing considered the island a part of china. Driver protests had been held in iraqs capital bagdad, thousands of protest as back in the shia cleric, nevada account inside parliament. They stormed the building on saturday and are refusing to leave until as an overhaul of iraqs political system and Arrival Group known as the Coordination Framework is held, counter protest against what it calls. 8 suspicious coo was a heavy security presence to keep both sides apart. They had a barons Atomic Agency says his country has the ability to produce a nuclear bomb, but doesnt plan to im at islam. His remarks came hours before the us announced fresh sanctions and entities involved in iraqs oil and petrochemical trade. Well, that was with the headlines. The news continues here now to 0. After counting the cost statement, then selection buffer we understand the differences, celebrities, of cultures across the world. So no matter how you take it out 0, were bringing the news and Current Affairs that matter to you count his arrow. Ah, hello, im adrian said again. This is counting the cost on al jazeera. You look at the world of business and economics this week, joining the fight against inflation. Europe raises Interest Rates for the 1st time in more than a decade, but will the measure work and whats at risk. Also this week, as Interest Rates rise for the highly indebted countries like italy could get into more trouble, will the European Central bank come to its rescue . And european nations agree to reduce the amount of natural gas they use, but will that help them stay warm . This winter, if russia stops all deliveries ah, europe is struggling to put out the fires, hurting its economy on several fronts, spots its the rising cost of heating homes and feeding families. Thats worrying many europeans, probably the most. Annual inflation of the European Union reached almost 9 percent in june. The last on it was that high, the euro, which a shed by 19 of the box countries didnt exist. The European Central bank has raised Interest Rates for the 1st time in more than a decade to try to rain in price increases. The cost of borrowing was increased by a launch and that expected half percentage point that takes the easy bs key Interest Rate to 0, ending the blanks. A cheer experiment with negative Interest Rates. June inflation was more than the bank had predicted. The euro fell to parity with the dollar for the 1st time in 20 years last week, or the banks president christie law. God explained the easy bees decision to hike rates legato also gave few signals about what comes next. Economic activity is slowing. Russias and justified aggression towards ukraine is an ongoing drug on growth. The impact of high inflation on purchasing power. Continuous supply constraints and higher uncertainty are having a dampening effect on the economy. Firms continued to face higher costs and disruptions in their supply chains. Although they are tentative signs that some of the supply bottlenecks are easing taken together. These factors are significantly clouding the outlook for the 2nd half of 2022. And beyond. Will the bank also introduced a new policy tool to shield some of the blocks most indebted nations from excessive borrowing costs, the transmission protection, instrument, or t p. I is intended to stop disorderly moves in Government Bond markets and prevent euro spreads from widening the gap between italian, a german benchmark yields a closely watched gauge of financial stress, grew to as much as 2. 38 percentage points. Now the tool allows the bank to buy the bonds of countries experiencing an unwarranted deterioration in financing conditions. And by doing so on prices go up and theyre yield down. And that in theory caps interest costs. But it wouldnt offer protection if the easy be determined that the higher borrowing costs resulted from poor government decisions. Or to discuss all of that. Joining us from london, melanie to bono a senior europe economist, pansy and macroeconomics and independent Economic Research firm. Good tele with us up melanie. So the c bs move makes sense. Its well behind its peers though. Is it too little, too late . Easy be raised. Great. I 50 basis points last week taking a ski deposit rate from minus point 5 to 0. This was more than most of us had expected and its probably not enough. Know, so we look or an extra 75. 00 basis points of hikes. It been now and the end of the year, taking that deposit rate to point 75 percent or i but higher rates, its fair to go to push the euro block into recession. How far and how fast you think the e c b should be moving rates right now . Well at this point and the year is only economists heading into recession, whether it is he be, was hiking or its or not. After the panic, when it seemed like suppliers she is where abating are the warren and ukraine broke out. So and as a result, the brush and gas supplies have dwindled and we got heading into europe. And this is affecting industry, especially in the likes of germany. And italy, which are highly reliant on those gas supplies. So we forestall and iraq on recession either with or without further, sep, with inflation across the eurozone. Melody is running a, been, as was your bottles quickly as it is across the us. Why is it so much harder for the e . C. B to get inflation on the control, but it is for the 3rd. I wouldnt necessarily say its harder both are struggling at the moment because inflation is high in both places. And, but at this point, a lot of what is driving the inflation rate, higher is energy, and that is something that easy, big cannot control. So Interest Rate hikes will eventually damp and inflation because they all convinced that will lead to lower demand for certain goods. Convincing firms to stop by raising prices, but in the meantime, its energy thats driving inflation and that will continue, especially if, as we saw this week with the surgeon gas prices, again, the energy rate will remain higher than otherwise would have been the case 0 go up on the early games that it made after the e. C. P is decision on our rates. As to what extent boat could a depreciating euro actually be better for the euro zone economy. Depreciating euro helps exporters. So when the euro depreciates against us dollar, european goods are relatively more, its more cheaper for a head given price. So that means the exporters benefit because their goods are more competitive on the global market, or to what would it take for the euro to make up a but to make gauged to become stronger . Well, at this point b, so we expect the euro to depreciate a bit further because of the friendship. So thats because the u. S. Federal reserve bank will hide, i more than e c b over the coming months. But we do see this turning. So in september where r u. S. Economists us of ation to make a turn and the fed to start hiking by less than its done in recent months. That is, when we will see the dollar lose out compared to the euro, will pressure on the euro zone economy get worse if russia carries through its threat to cut off suppliers or severely reduce gas supplies to europe. We expect that russia will close the caps fully a 4 year end, and probably before europe manages to phillips gas levels or gas applies to the intended rates, there is by 9 to protect come, 80 percent, sorry, come november. And that will be hard. It will hurt, especially like i previously mentioned countries like germany and italy, which are highly exposed, especially in gas and, but its not something that europe cant adapt to. So a lot of European Countries have already ramped up cold production. And it seems also that Nuclear Production may come back on the line in germany or discussion so far has been pretty pessimistic melody. Is there anything positive to say right now about the euros own economy, tourism is expanding at breakneck speed. It, of course, took a large hit during the pandemic and now its on a tear. So if tourism wasnt rebounding, it to the extent that it was now, we probably see a much deeper recession in the years own in the coming to corners than we currently expect. Literally, there are concerns about how higher borrowing costs are gonna affect indebted nations. Thats something i want to talk to you about a little more in just a moment. Stay with us. Well, italy is among blows countries. It has the 2nd highest burden of the euros own, and raising Interest Rates too quickly could high comp italys debt and make it harder for it to pay. It comes to the country, faces political uncertainty. After the resignation of Prime Minister mario drunky will get more into the details on how the t p i works, which we told you about in a few moments. But 1st, lets hear how some italians, a coping. Can i sell for 4 year olds . What i was selling a to before, you know what they tell me here to close. So all of these price increases are paid for by us. The small Medium Business owners going on, im anxious if you try to not turn on the air conditioning take the car less, but the still anxiety because you have to think twice about doing things that were normal before. So we simply need to pay more attention than we have up here. Its impossible to get ahead this way between tax bills and everything else. Its impossible to get ahead. I worked in the morning until late more than 10 hours and for water to pay the bill. So lets get back to melanie about a senior year if economists to pansy and micro economics. So melanie concerned growing over a return to the years im christ just broke out in 2010. What, what are the chances that get Services Cost will run . And so because the c, b is hiking Interest Rates, Government Bond yields were rise in italy. And especially because now the c, b has ended, its program and no longer hovering all the news that the Italian Government and issuing. So any markets or just been tor buying that, that are much more price sensitive and will require higher premium to buy the debt. In turn, the government is still issuing you debt because it is having to spend a lot more on trying to appease what trying to offset the rising cost of living. And because now of course has to invest in the green transition and it has and more of the defense because of the risk doorstep. So its spending a lot more, its having to issue new debt. And therefore, debt servicing costs will rise and the debt burden arise. Do we think its going to lead to a new crisis . No, we dont think so. The debt is more manageable now, and we think that the relationship between Government Bond yields and none of that is much more benign than it was in 2012 plus if we were heading in that direction, the e. C, b would be much more willing to come to the rescue for now compared to the intrinsic just of 2012. All right, so do you think that the p p i will work if indeed it is even used you think is going to be yours and is it just me or have the details been left deliberately vague . Its not just you only yesterday, so easy be president christine le guard said that they will not tell us everything about the t p. I am, we do have some information and thats basically that the t p i is like a form of asset purchase program. But of course, not exactly like you ease, so its in simple terms. A promise, find it easy be that it will buy a certain Government Bonds if it thinks that bond yields are rising much more quickly. And the fundamentals with imply, there is a number of conditions on there such as fisco, sustainability and, and it really just depends how strictly and easy reinforces those conditions. Whether or not it will be helpful for countries like italy or not. Its very easy to see is on the governing council members, you know, warning putting up headline signals that they dont want to support some crunches because of past the sustainability were is, and so who knows if it will help and who knows if it new. Okay, christina, god declined to say whether italy is actually on the list given the political crisis, could, could italy even meet t p ice conditions, im guessing, from what you were saying earlier that it possibly could. And what does all of this mean for investors . So at this point, and italy probably does meet the conditions yet, but of course were heading for snap elections. So as we do head for snap collections, we expect italian bond yields to rise, and thats based on political uncertainty. And thats one of the things of the t p i. Condition set out if the bon yards are rising and spreads are widening because of political yourself include effective political uncertainty, then it wouldnt warrant the use of t b. I. So well have to wait and see whether or not on this point, what happens in the coming months. Well leave these if you to step in. So whats next . Were to lose on the earth. Melanie asked to draw his exit, why is it in such a mess . And is it at risk to think of even crashing out of the euros home . We do not see a risk that italy will crash as a deer, as own. And none of the Political Parties are offering that law perm, theyve learned from the mistakes of before. And they would like to stay in the euro even the most are right wing parties and, and so we do not see a risk of that. As it happens. My a drug didnt resign and we are heading for snap collections. Does that change the outlook for italy . We dont think so. So for us are further fiscal support was an upside risk to our forecast. The staff election amused at further fiscal support this year is highly unlikely. And thats not because of willpower, but its more because of logistics. The snap election is being held on the 25th of september Coalition Politics mean the in italy t. It will take time for a governing coalition to form, let alone that new government agreeing on new f escalade. So because fiscal support was an upside for forecast before, now its no longer there and we still expect the italian jaime to enter recession by q 4. This year, our forecast county point to growth of 2. 7 percent for this year, the whole which is lower than what the government has recently forecast. Really good to talk to melanie many, thanks to the for being wilson counting the course course. Thank you. Werent any ah, no, it was seen as an act of solidarity in the face of what you country say is energy blackmail by russia locks watered down plan to cut gas consumption by 15 percent comes as moscow announced another count to supply, sending prices up once again Russian Energy from gas prom says that its reduced gas flows into germany to allow walk on a turbine on the lord stream one pipeline. But you leaders say that move is politically motivated, all zeros, barbara and go per reports. The Energy Crisis slimming over europe dominated the meeting of e ministers in brussels, cutting gas consumption ahead of winter, the best and only way to reduce eas, reliance and Russian Energy fortified. B. A sam correspond stay 15 percent cut in our usual gas. When sumption did be in the beginning of august and the end of march, thats why we have pointed to this percentage as the target on Member States should stay forward. Russia is set to further reduce supplies to the north stream pipelines. Blaming a technical fault at one of their stations, something e and ministers disappeared. E leaders say theres no technical reason for the latest reduction of the Short National jane. As of today, there is no solution to the ongoing equipment issues at the port here they are compressed, the station we have, there is no solution whatsoever yet. Seems as saying nothing because theyre trying to find solutions. But there are milan, come out as the western Russia Exchange economic blows in response to russias warden ukraine. European leaders say moscow is not a trustworthy part. Now, the wind is coming ah, and we dont know how cold it will be. But what we know for sure that would be in the will continue to play his her dog, the games her in the misusing and like, mailing her by ha ha, ga supplies. Ukraines president for lottie mal zalinski says that europe is a ready at war with russia, and gas is a new front line, or is he and his bride . All this is done by russia on purpose to make it as difficult as possible for europeans to prepare for winter. And this is an open guess war that russia is waging against the united europe. This is precisely how it should be perceived and they dont care what will happen to the people or how they will suffer from hunger g to the blockade, the ports, or from winter cold and poverty, or from occupation. These are just different forms of terror. Yet on the south up, nearly half of all the gas europe needs comes from russia. The supply is now down to her relative trickle. Come winter, if youre a pin, countries dont have enough supplies toward up and time. Russians will almost certainly mean a struggle to heat homes and power cities. Barbara anger per hour to sara, voluntary agreement may become mandatory if suppliers reach crisis levels. However, some countries not connected to the used Gas Pipelines such as island, malta, and cyprus would be exempt. States like baltic nations that are heavily reliant on gas for electricity can also avoid the reductions, and its the same for any country. The fills its gas storage tanks to the required 80 percent level, as well as Critical Industries and supply chains that use gas as a feedstock. Now, an e u official said that hungary was the only member state that opposed the gas reduction agreement. Lets discuss all of this further with Michael Bradshaw, professor of Global Energy at warrick business school. He joins us now from coventry in the u. K. Michael godaddy with us once again. What do you make of this deal . How are businesses, factories, households going to be affected . And as you suggested, its a compromise. I mean, a bargain has been struck. Theres lots of exemptions and we must wait and see what happens if we get to a physical shortage of supply. If you look at the kind of measures that propose, i think for, for households, it really means that they are hoping on what we might call behavioral change. That people will take measures to reduce their gas consumption in the winter. I mean, these things are not necessarily hard to do turning down thermostats in improving the efficiency of your house in terms of installation of windows, not eating rooms you dont need. And so for the industry is much harder, particularly the, the Energy Intensive industries is already a degree of demand destruction as a consequence of high price. But most countries probably have in place a, c, a system that will, will actually say to Key Industries you need to reduce or, or stop operating to save gas. So that gas can be used to generate electricity and heat households. Its being described as a show of resolve a show of solidarity among you nations. But are they really united in the energy war with russia . Well, obviously what president could hopes to do with dr. Discord and disunity among european Member States the fact that theyve reached the agreement is a positive. But as you report, as a suggested, it comes with various caveats. Exemptions. The other other concern among Member States is what more might Call Commission creek. That actually the European Commission is over stepping its mandate here because that responsibility for Energy Security and energy mix is actually something that lies with national government, not European Union. I think it will become it. We really will be tested if we get to this emergency situation where they try to make it mandatory until then its a voluntary agreement and we must wait to say, i given the long list of exemptions, could european nations still fill the gaps left . If russia does turn off the taps completely, especially if, if europe faces an exceptionally cold winter, i think the short answer is no to simply not enough gas available in global markets. Because most of the, the other gas will have to come with liquefied natural gas. And its not just whether or not theres a, theres a mild winter in europe. Weve been relatively lucky in europe that the chinese demand has been depressed as a consequence of cove. It, if we have a hard winter in the northern hemisphere, that effects asian l. N. G demand will be in competition with asia to try and secure the available, flexible, and n g. The simply not enough Flexible Energy to cover the gap. So where does all of this leave . The use plans to ultimately win itself off . Russian gas. While its going to take time, theres no question about that at the back to back story here is that the global gas mark is exceedingly tight. And European Union is, is wanting to put it away from pipeline gas to rely on, on, on seaborne liquefied natural gas. And the market there is going to be tight, probably the next 2 or 3 years, at least. And therefore, this is not going to be an easy thing to do and its going to come at a very high cost. So driving down demand is, is a critical element and truck, but trying to find alternative supplies is going to take time. Other options for nations in warmer climes, southern parts of europe to share a Spare Capacity with, with nations in the north. There are problems here with the gas pipeline network. Main. One of the reasons of spain is, is, is exempt. Actually, although spain has a lot of l n, g import capacity, the pipeline links between spain and france around the developed and therefore, the gas that spain might have an offer to Northern Europe cannot actually make it into european markets. In a previous gas dispute between russia, ukraine did result in European Union investing in greater connections within this gas market. But its not that straightforward to move the gas. Its equally not that straightforward to move the gastro neurology terminals because the pipeline systems based on moving lots of gas from russia. And what is all of this mean for, for householders, like, like, you and me, a bill is going to stay high. Now for the foreseeable future, is this cost of living crunch due to the rising cost in heating cost is going to continue. Unfortunately, think it is. I think we have to break ourselves for further increases in price this morning. I actually just received my gas bill and i cant believe its so high, it must be a mistake, im saying to myself. So i think were going to see further increases and greater pressure on governments to portray the tech consumers. And thats not going to go away unless rather gloomy note her professor. Well leave it. Betty, thanks did for be with us. Thats Michael Bradshaw there in coventry a u. N broke a deal clearing the way for the export of millions of tons of ukrainian grain is expected to help ease food prices. And the global states will shortage. But getting harvest from the farm to the table has become a dangerous job in ukraine. Since the russian invasion began Al Jazeera John henry reports now from the village of cries, nay. In a wheat field, north of keep a de mining experts sweeps for the weapons of war. The mind detector finds remnants of a cluster bomb. It slow going, but these workers need to clear a path before forming combines can reap the wheat from a war time harvest. They are among a 1000 de mining experts across ukraine, racing to avert a global food shortage of the last say, hi me. We have found a fragment of class emission and a grin aid from an r p g 7, which is unexpected. When the war began, this farm was attacked by russian aircraft artillery and cluster bombs. Workers had to replace tractors, trucks in barns before they could bring in the harvest. Youll never isnt idea of 3 of. You can see their burn and destroyed by shell in artillery and john strike. William. She as good as farmers scrambled together, wheat, corn, and sunflower oil, russia and ukraine have reached a tenuous agreement to allow 20000000 tons of trapped, ukrainian grain to leave from black c ports through so called safe channels. But with all the dangers of transporting the crop of 2022 in a war zone for now, this farm is storing wheat in these containers. Weight is the symbol of ukraine, that yellow and blue flag represents a field of wheat beneath a sky of blue. And free crane, the problem is getting this wheat out of the ports. But for farms like this, the problem is overcoming all of the obstacles to get it harvested in the 1st place. The harvest of war has been tough on farms across ukraine. Russia has left its signature on these cluster bombs. Know what might be in your market ogle, but as hes got him here, we can see the mark of rational forces. Since the beginning qua her work, our employees font these on our field season. This year she threw up ala nurse, the machinery of war, rushes, the machines on the far end is summer winds to close, the race to bring in this years crop grows more urgent every day. John henderson, al jazeera krazny ukraine, and thats all show thought this week. Dont forget if you want to get in touch with us, but anything that youve seen, you can tweet me. Im at a finnegan on twitter. Please use the hash tag, ha, ctc. When you do or you can drop us a line counting the cost of al jazeera dot net is our e mail address. There is, of course, more few online at al jazeera dot com slash ctc. That takes you straight to our page and there youll find individual reports, links, an entire episodes for you to catch up. But thats it for this edition of counting the cost. Im Adrian Finnegan from the whole team here and so hop. Thanks for being with us. The news on al jazeera is next week is the ocean. This witness lane is witness differences. What is change . Witness . Happiness. Witness . Not witness. Sunlight. Witness de la. Witness. Last witness. Charity witness. We can witness clarity, witness, family and witness. Friends. Witness the beginning. Witness. The end witness life witness when al jazeera, the latest news, as it breaks, the country will work on monday, one a controversial constitutional referendum, which is widely expected to both present slaves. Portrait with detail coverage because the fertilizer has more than doubled the caesar thats largely due to the war in ukraine. From around the world, all these cows are infected with foot and mouth disease. They are dairy cattle but their milk production has dropped by more than 70 percent. Ah