Europe’s economy looks set to avoid the severe shock that the region feared amid the energy crisis resulting from Russia’s invasion of Ukraine. But the region’s medium-term problems look harder to fix, and leave Europe facing a struggle to retain its industrial core, the Wall Street Journal reported. Russia’s war on Ukraine and its economic fallout has shaken Europe’s export-oriented business model. Skyrocketing energy prices threaten industries at the heart of the continent’s manufacturing system, such as chemicals and metal production.

Brexit has left the UK economy is 5.5% smaller than it would have been and added to the squeeze on public services that’s behind strikes cripling the railways and National Health Service, a prominent research group concluded, Bloomberg News reported. The Center for Economic Reform said that slower growth is also weighing on the Treasury’s revenue and that the tax increases announced in the autumn fiscal statement wouldn’t be necessary if the UK were still in the European Union’s common market.

President Vladimir Putin said on Wednesday that Russia could achieve the goals of what he calls Moscow's "special military operation" in Ukraine without damaging the economy by militarising it, Reuters reported. Speaking at an end-of-year conference of Russia's top military brass, Putin said Russia would improve its military forces steadily and calmly without undermining the quality of social services for the Russian people. Read more.

The World Bank on Tuesday said it had approved an additional financing package totaling $610 million to address urgent relief and recovery needs in Ukraine as the war with Russia continues, Reuters reported. The package includes an additional $500 million loan from the World Bank's International Bank for Reconstruction and Development (IBRD) that is supported by a guarantee from Britain, and a new project to restore and improve access to health care and address war-related needs for health services, the global lender said.

Europe’s move to cap natural gas prices threatens to curb supply to the region and intensify its energy crisis, Bloomberg News reported. European nations this week reached a deal to put a ceiling on gas prices, ending months of political wrangling over whether to intervene in its energy sector. But while the mechanism may help prevent extreme price swings, it may leave the region vulnerable to insufficient supplies and stronger competition from Asia.

Thurrock council has become the latest local authority to formally declare effective bankruptcy, as it grapples with a £500m deficit caused by a series of disastrous investments in risky commercial projects, the Guardian reported. The Conservative-run council in Essex admitted three weeks ago that it faces big cuts and job losses after revealing it had lost £275m on investments it made in solar energy and other businesses, and has set aside a further £130m this year to pay back investment debts.

The rouble slumped to its weakest point in more than seven months against the dollar on Monday and was on course for its biggest single-day drop since July amid fears that sanctions on Russian oil will hit the country's export revenue, Reuters reported. Monday's drop came as Russian President Vladimir Putin visited Belarus, fanning fears in Kyiv that he intends to pressure his ex-Soviet ally to join a fresh ground offensive that would open a new front against Ukraine. The currency also lost 3.8% to trade at 71.71 against the euro , also a more than seven-month low.

Shareholders in Uniper on Monday approved a state bailout that has so far cost the German government more than 50 billion euros ($53 billion), paving a way for a de facto nationalisation of the struggling gas giant, Reuters reported. Chief Executive Klaus-Dieter Maubach earlier told a virtual extraordinary meeting that the disarray caused by the loss of gas supplies from Russia could leave shareholders with nothing if they did not accept the German proposal.

Europe has been hit hard by the fallout from the war in Ukraine, putting its companies on the front line of what has become a war of economic attrition between the West and Russia that is playing out alongside the real war in Ukraine, the Wall Street Journal reported. The U.K. is suffering more than other big countries in Europe, economists say. Inflation is running in the double digits, higher than all of its Group of Seven industrialized peers with the exception of Italy; gross domestic product shrank 0.2% in the third quarter year-over-year, setting the U.K.

The key prosecution witness in Germany's biggest post-war fraud trial admitted guilt on Monday in a scam that led to Wirecard's collapse but said the company was a "swindle" from the start, with former chief executive Markus Braun at its core, Reuters reported. Wirecard's downfall two years ago shook the German business establishment, putting politicians who had backed it under intense scrutiny, along with regulators that took years to investigate allegations against the payments company.