EUR News
LAST UPDATE: May 28, 2025
EU ‘fully committed’ to reaching US trade deal: commissioner
The EU expresses strong commitment to finalizing a trade agreement with the US, following tariff postponements.
Insight
The EU’s dedication to a trade deal with the US demonstrates the importance of transatlantic economic relations. It also reflects efforts to mitigate trade tensions and foster cooperation amidst global economic uncertainties.
EU to Focus on Critical Sectors in Bid to Avoid Trump’s Tariffs
The European Union is accelerating trade talks with the US, focusing on critical sectors like steel, autos, and semiconductors to prevent a 50% tariff hike threatened by President Trump.
Insight
The EU’s strategy to concentrate on key industries reflects an urgent attempt to shield its economy from significant trade disruptions. By targeting sectors most vulnerable to US tariffs, the EU aims to negotiate exemptions or compromises. This approach underscores the bloc’s reliance on diplomatic channels to mitigate protectionist measures and maintain economic stability.
ECB’s Lagarde criticizes Trump’s ‘terrible language’ on EU
ECB President Christine Lagarde condemned President Trump’s remarks that the EU was formed to “screw” the US, calling his language “terrible” and historically inaccurate.
Insight
Lagarde’s rebuke highlights the growing tensions between the EU and the US under Trump’s administration. Her defense of the EU’s origins serves to counteract narratives that could undermine transatlantic relations. This incident may further strain diplomatic ties and complicate ongoing trade negotiations, emphasizing the need for careful communication between global leaders.
EU plans sweeping stress test of non-banks
EU regulators are preparing the first comprehensive stress test for non-bank financial institutions, including hedge funds and insurers, to assess systemic risks.
Insight
The initiative reflects concerns about the growing influence of non-bank entities in the financial system and their potential to trigger crises. By evaluating these institutions’ resilience, the EU aims to identify vulnerabilities and implement safeguards. This proactive measure indicates a shift towards more inclusive financial oversight, recognizing the interconnectedness of various financial actors.
Europe’s defence companies scramble for workers as business booms
European defense firms face labor shortages amid increased demand due to heightened military spending, driven by geopolitical tensions and calls for defense autonomy.
Insight
The surge in defense budgets has outpaced the industry’s capacity to supply skilled labor, leading companies to raise wages and seek talent from other sectors. This labor crunch could hinder the timely fulfillment of defense contracts, affecting national security objectives. The situation underscores the need for strategic workforce development to support the defense sector’s growth.
UK turns to shorter-term borrowing as fiscal pressure mounts
The UK government is shifting towards issuing shorter-term debt to manage rising borrowing costs and declining demand for long-term bonds.
Insight
This move aims to reduce immediate interest expenses but increases exposure to refinancing risks and market volatility. The strategy reflects the government’s attempt to navigate fiscal constraints while maintaining investor confidence. However, reliance on short-term borrowing may pose challenges if interest rates rise or market conditions deteriorate, necessitating careful fiscal planning.
UK food inflation hits one-year high, industry data shows
UK food inflation rose to a one-year high in May 2025, with annual food prices increasing by 2.8%, up from 2.6% in April, primarily due to rising fresh food costs, notably wholesale beef prices.
Insight
The increase in food inflation reflects ongoing pressures from rising input costs and operational expenses for retailers. Despite overall grocery inflation remaining slightly negative, the persistent rise in fresh food prices indicates challenges in the supply chain and cost management. This trend may impact consumer spending and necessitate strategic pricing and sourcing decisions by retailers.
Swiss Exports to US Plummet in First Month of Trump Tariffs
Swiss exports to the US plummeted in April 2025, showing the fallout from President Donald Trump’s tariff policy.
Insight
The sharp decline in Swiss exports to the US underscores the immediate impact of protectionist trade policies on international trade flows. Swiss industries, particularly those reliant on US markets, may need to diversify their export destinations and adapt to changing trade dynamics. The situation highlights the vulnerability of small, open economies to unilateral trade measures by major partners.
Polish rate cuts possible at the end of the Q3, central banker Duda says
Polish central banker Duda indicated that interest rate cuts are possible at the end of the third quarter of 2025, contingent on economic conditions.
Insight
The potential for rate cuts suggests that the Polish central bank is monitoring economic indicators closely and is prepared to adjust monetary policy to support growth. This approach reflects a balance between controlling inflation and stimulating the economy, acknowledging the uncertainties in the global economic environment.
