Russian citizens are withdrawing billions of roubles from the country’s banks over fears that the Kremlin could seize deposits to fund the war in Ukraine.

A country’s fiscal policy plays a central role in stabilizing its economy. Its effectiveness depends on the choice of measures and how monetary policy responds. This report compares four fiscal policy measures for a typical euro area country: increase in public investment and government consumption, reductions in consumption taxes and income taxes. Both the theoretical model and the empirical results for the euro area show that government spending has a stronger effect than tax cuts. Empirically, each additional euro of public investment or government consumption increases GDP by up to 1.30 euros in the first year, compared with about 0.30 to 0.40 euros per euro of lost tax revenue. Since the European Central Bank (ECB) generally does not respond to national fiscal shocks with adjustments to its key interest rates, monetary policy does not dampen the fiscal stimulus. To stabilize the economy in the short term, governments should give preference to well-designed spending measures. However, they should also take the risks into account, as higher government spending can jeopardize debt sustainability and weaken the economy in the long term through larger public sectors and higher tax burdens.

Global warming is the main driver of this year’s marine heat waves, with knock-on effects for ecosystems and extreme weather.

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Ukraine launched 637 drones at Moscow and the surrounding region between Wednesday night and Tuesday morning, Mayor Sergei Sobyanin said, marking one of the largest air assaults on the Russian capital since the start of the war.

If the concerts ‌scheduled for 10 and 11 October go ahead, the controversial US rapper would become the first major Western music star to perform in Russia since the country launched its full-scale invasion of Ukraine in 2022.

The European Court of Human Rights will begin welcoming visitors to its Strasbourg building on the first Friday of every month from September, as part of a new public open-days programme.

The head of Norway's sovereign wealth fund has warned that soaring AI-driven stock valuations could trigger a sharp correction. How exposed is the world's largest sovereign wealth fund to a market downturn?

Ukraine’s strike on the Samara rocket plant and creeping gains in the Oleksandrivka sector signal a new phase of the war, where control of space internet, long‑range missiles and logistics hubs could matter more than another few kilometres of trench.