Eurozone News
LAST UPDATE: June 12, 2025
French central bank trims growth outlook on trade tensions
The Bank of France lowered its 2025 growth forecast to 0.6 %, down from 0.7 %, largely because uncertainty tied to U.S. tariff threats is dampening export demand. Longer-term growth is projected at 1.0 % in 2026 and 1.2 % in 2027 .
Insight
The downgrade reflects how external trade tension, not only actual tariffs, can depress economic momentum. It underscores France’s need to strengthen domestic demand and diversify export channels.
ECB to Speed Up Reviews of Share Buyback Plans by European Banks
The ECB plans to accelerate its approval process for European banks’ share buyback proposals by leveraging a risk-based framework, digital tools, and standardized templates to reduce bureaucratic delays.
Insight
This marks a regulatory shift from crisis-era restrictions to enabling banks to return excess capital to shareholders—signaling confidence in bank resilience—though balancing speed with prudential oversight is key.
Dollar keeps losing market share but euro slow to benefit: ECB study
An ECB study found that the US dollar’s share of global foreign exchange reserves dropped by ~2 percentage points in 2024 to around 58%, while the euro remained steady below 20%; other currencies like the yen and gold gained. The report attributed the euro’s weakness to structural issues in EU capital markets.
Insight
The findings suggest that fragmentation in EU financial markets and a lack of geopolitical weight are limiting the euro’s ascent, even as central banks seek diversification—highlighting the need for deeper integration and stronger euro-denominated assets.
Italy Can Achieve or Even Beat GDP Goal for 2025, Giorgetti Says
Economy Minister Giancarlo Giorgetti stated that Italy is on track to meet or even exceed its 2025 GDP growth target of +0.6%, citing structural reforms and supportive budget legislation.
Insight
The upbeat outlook reflects confidence in reform momentum and fiscal discipline, reinforcing policy credibility. However, Italy remains exposed to external headwinds such as global demand and energy price fluctuations.
Climate change could cost Italy over 5% of GDP in 2050, budget watchdog says
Italy’s budget watchdog warned that, without strong climate action, the annual economic cost of extreme weather events could rise from 0.2% of GDP in 2024 to 5.1% by 2050. Achieving global carbon neutrality could lower this impact to 0.9%.
Insight
By framing climate change as a major fiscal risk, the watchdog underscores the importance of embedding climate resilience into public budgeting, illustrating how environmental trends can affect long-term economic planning.
Irish banks can absorb ‘bottoming out’ commercial real estate price falls, regulator says
Ireland’s central bank said its domestic banks could withstand a sharp enough drop in commercial real estate valuations, using stress tests and saying non-bank vulnerabilities warrant attention. (tradingview.com, reuters.com)
Insight
This confirmation of resilience boosts confidence in Ireland’s banking stability. However, caution remains warranted for potential risks in less-regulated lending sectors and possible future stress as CRE prices shift.
Portugal leads marine protection with new designated area
Portugal announced a new marine protected area around the Gorringe Ridge, raising its ocean protection to 27%, a strong contribution to global conservation goals, announced during UN Oceans forum in Nice.
Insight
By increasing marine protection, Portugal is positioning itself as a leader in environmental conservation and reinforcing its commitment during critical UN talks, setting an example for maritime biodiversity.
