EUR News
LAST UPDATE: June 17, 2025
EU dismisses reports that it is ready to accept flat 10% U.S. tariff
The European Commission officially denied claims that it is considering accepting a blanket 10% tariff on EU goods in U.S.–EU negotiations. It emphasized that discussions are ongoing and the bloc continues to oppose “unjustified and illegal” U.S. tariffs.
Insight
The Commission’s denial underscores the EU’s firm stance in trade talks, maintaining pressure on the U.S. to scale back punitive tariffs. It also highlights the challenge of balancing domestic political pressures with wider diplomatic strategy.
EU must keep ‘nerves of steel’ in talks with U.S. on tariffs, Costa says
European Council President Costa stated that the EU must remain steadfast during current tariff discussions with the U.S., noting that Brussels has already offered zero tariffs and seeks “constructive dialogue” to avoid a trade war.
Insight
Costa’s comments highlight the EU’s commitment to diplomacy over escalation. By positioning restraint and readiness to negotiate, the bloc seeks to preserve market access while avoiding retaliatory measures.
EU too slow in staving off Donald Trump’s tariff war, says Jean‑Claude Juncker
Former European Commission President Jean‑Claude Juncker criticized current EU leadership for not directly engaging with President Trump on tariffs. He emphasized that Ursula von der Leyen’s team relied too heavily on Trade Commissioner Šefčovič and delayed high‑level diplomacy—unlike Juncker’s hands‑on approach in 2018. With threats of 50% tariffs looming if no deal is reached by July 9, Juncker advocates for firm and strategic engagement.
Insight
Juncker’s critique underscores a potential misjudgment in EU trade strategy: delegating negotiations may have sent the wrong signal. He suggests stronger, more targeted engagement (e.g., targeting Republican‑led states) could pressure Washington more effectively. The warning serves as a reminder that past tactics require adaptation, and passive diplomacy risks being outpaced by aggressive tariff threats.
EU’s Sefčovič to Meet US’s Greer at G‑7 to Talk Trade, Tariffs
EU Trade Commissioner Maroš Sefčovič is scheduled to meet U.S. Trade Representative Jamieson Greer on the margins of the G‑7 summit in Canada to discuss ongoing tariff negotiations. The aim is to resolve remaining disputes and prevent the U.S. from increasing steel, aluminum, or broader tariffs beyond the current 10% blanket, which may escalate after July 9.
Insight
The meeting highlights the EU’s commitment to direct, diplomatic engagement to defuse trade tensions. It reflects an understanding that high-stakes personal negotiations can slow or avert escalatory tariffs. Moreover, it suggests that von der Leyen’s EU is recalibrating toward more proactive negotiation—a strategy Juncker also advocated last year.
Norway parliament approves new power subsidy scheme for households
Reuters
Norway’s parliament passed a law allowing households to opt into a fixed-price electricity scheme—“Norway Price”—set at 0.40 NOK/kWh (≈$0.041), excluding fees. The program runs from Oct 1, 2025, to Dec 12, 2026 (extendable to 2029), covering up to 5 000 kWh/month per household. It aims to shield consumers from the post‑2022 energy crisis volatility.
Insight
This marks a proactive move by the government ahead of September elections to stabilize household energy costs. While potentially easing public pressure, critics worry the program may disincentivize conservation and unfairly benefit certain consumers at taxpayers’ expense.
Poland’s central bank mulls rate cuts starting as soon as May
Polish central bank policymakers, including Gabriela Maslowska and Ludwik Kotecki, signaled that a first interest rate cut of 25 bps in May could happen if inflation data remains favorable. The main rate has been at 5.75% since October 2023.
Insight
This dovish shift reflects easing inflation pressure, and it aligns Poland with other European economies. Starting cuts in May could boost credit growth but puts pressure on inflation expectations and fiscal balance.
Moldova’s GDP down by 1.2% in first quarter
Moldova’s economy contracted by 1.2% year-over-year in Q1 2025—the third consecutive quarterly decline. This follows a 1.3% drop in Q4 2024, reflecting persistent economic weakness.
Insight
Continuous GDP contraction highlights ongoing vulnerability from regional disruption, weak private consumption, and external trade headwinds. Reviving growth likely requires structural reforms and external support.
US–UK trade deal to be completed ‘very soon,’ says Starmer
UK Prime Minister Keir Starmer announced on June 16 at the G7 Summit that the US–UK trade deal—which includes 10% tariff on up to 100,000 UK cars annually and preferential terms for aerospace—will be finalized imminently.
Insight
The deal signals a rapid alignment between Starmer’s UK and Trump’s administration. While symbolically strengthening the “Special Relationship,” key sectors like steel and aluminum still lack resolution.
UK commits £8 bn to flood defences
The UK government pledged £8 billion (≈ $11 bn) over the next decade to upgrade flood defences, including building barriers and restoring wetlands. The plan, partly funded by an infrastructure spending review, will invest £4.2 bn in the next three years.
Insight
This historic investment paradigm reflects growing climate change urgency. It aims to protect homes, businesses, and infrastructure, potentially saving £8 in damage for every £1 spent. Political leadership is seeking to reassure voters ahead of environmental pressures.
Polish Central Banker Maslowska Mulls Next Rate Cut in September
Central Bank board member Gabriela Maslowska has indicated that further rate cuts may be delayed until July or September, instead of earlier in May. She and colleagues are adopting a more cautious approach due to risks to disinflation, high wage growth, energy price volatility, and fiscal expansion (reuters.com).
Insight
Maslowska’s position reflects a shift toward prudence in Poland’s monetary policy. Though the central bank signaled potential easing, it remains mindful of domestic political uncertainties and inflation risks—suggesting that rate cuts this year may total 100–125 bps, but will be gradual rather than abrupt.
