our financial market correspondent all of us in frankfurt only so the three percent of g.d.p. deficit limits is part of the e.u. stability and growth pact what does it mean when a heavyweight micron s breaks that rule. well it means that it s setting a bad example for others and already the telly in government has noted as much that now france would be in that corner as well and of course it makes it all the more difficult for the e.u. commission or the other finance ministers and heads of governments and states to reel in italy and france and their big heavyweights and they both of course have their issues why they re doing this in france everybody knows you already said it it s the political situation in the country the village on the yellow vests basically hindering mccraw in performing the reforms that many in the markets
there are more protests planned today then of course it could mean more pressure on prime minister viktor orban how has the government reacted to these protests is there any indication that it may be willing to compromise. well for the moment there is no indication de are willing to compromise however there are still behind the scenes told i think going on what to do next because if this release will go along and if indeed many people will keep going to the streets then of course you will see more pressure on the prime minister so far they have said this people are mercenaries so for george soros to reach entropy is to for instance finance the central european university and order rights groups of course the demonstrators are denying that and day say we are united in our fight and i was struggle for freedom today well talking about unity there it appears to be a rather broad alliance of different groups out there on the streets of budapest
won a silver medal for germany at the olympic games and john chiang. already that is so long ago already i know if we ve already forgotten what they ve even won or you ve got a you re here with business now on a story about italy striking a deal with the e.u. over its controversial budget well i don t know yet if they can strike a deal but they re certainly trying to sue me which which is abuse of it is government has agreed on the basis of a new budget aimed as avoiding disciplinary action from the european union now this move comes after the country s original spending plans were found to be in breach of e.u. fiscal rules italy s leaders want to increase welfare payments cut taxes and reduce the retirement age but the usus those plans will raise the country s deficit beyond acceptable levels the details of the revised budget i m not yet know. while meanwhile the turkish economy is slowing and that in the midst of a domestic currency crisis the turkish lira tumbled as much as forty se
percent domestic demand also fell by three point five percent the crisis doesn t seem to be over yet the government now wants to ensure that the turks feel as little of a crisis as possible before the important regional elections in march it could support the economy with subsidies but that would probably only postpone the crisis in turkey. of a more i m joined by dorian joining jones who joins us in istanbul durrant imports you just heard the reports will than twenty percent of domestic demand fell by three point five percent how is all of that reflected on the streets of cities. well the main pain is being felt in turkey is food prices have been soaring since the collapse in the currency official inflation is running for food at over twenty seven percent but it s much higher for key staples like potatoes onions which many turks depend on they ve those prices of have doubled in even some cases tripled now
the government has been blaming host sailors for holding and even been raiding warehouse warehouses but that still has done little to this surge in food prices and also being felt by a wave upon wave of double digit increases for electricity and natural gas another double digit rise is expected this month and this is hit consumer demand one striking figure the demand for consumer durables has full twenty four percent in the last quarter and there is further pain expected in the coming months winter is expected to be very difficult. how hopeful dorian i check are citizens that the economy will rebound and who should be able to achieve that. well i mean turkey is no stranger to economic crisis but normally the u.d.c. very sharp rebounds a v. but the lot of expectation that the magnitude of the shock of this major currency shock could lead to a much longer recession and that is the key challenge facing turkey central bank