Eurozone News
LAST UPDATE: July 2, 2025
ECB Is in No Rush to Lower Interest Rates Further, Centeno Says
ECB Governing Council member Mario Centeno said the bank is not eager to cut borrowing costs further, despite inflation hitting the 2% target, and that rate decisions should await clearer data.
Insight
Centeno’s caution reflects concerns over global uncertainty and persistent inflation risks. Markets expecting additional cuts may need to temper expectations until growth and inflation dynamics stabilize.
Joint European defence borrowing could bolster euro’s global role, ECB’s Rehn says
ECB policymaker Olli Rehn advocated for pooled European defence borrowing—via a defence development bank—to create liquid euro-denominated safe assets that can reinforce the euro’s global standing while financing defence.
Insight
Rehn’s proposal aligns strategic defence priorities with financial integration, offering eurozone asset diversification and greater global credibility. It could propel EU institutional reform but faces political resistance.
ECB should consider mildly supportive stance as on low growth, inflation, Wunsch says
Belgian central bank Governor Pierre Wunsch recommended the ECB maintain a mildly supportive monetary stance due to weak growth, strong euro, low energy prices, and inflation risks undershooting the 2% target.
Insight
Wunsch underlines growing concerns that neutral rates may no longer be sufficient. A modestly accommodative tone could help meet inflation targets without triggering overheating, balancing resilience in fragile recovery.
Eurozone’s Jobless Rate Creeps Higher as Business Uncertainty Abounds
Eurozone unemployment rose to 6.3% in May, up from 6.2% in April, partly driven by uncertainty over U.S. tariffs, geopolitical tensions, and rising oil prices, according to Eurostat (marketscreener.com).
Insight
While the jobless rate remains near historic lows, the uptick signals fragility in labor markets. Amid global economic headwinds, businesses are holding off hiring—raising concerns that sustained uncertainty could threaten employment gains. Continued vigilance is needed.
Italy could lose 20 bln euros in exports, 118,000 jobs with US tariffs, industry head says
Confindustria President warned that a 10% US tariff on EU goods could cost Italy €20 bn in exports and 118,000 jobs next year, particularly impacting machinery, transport equipment, and leather exports .
Insight
The warning underscores Italy’s vulnerability to US tariff threats. With the July 9 deadline looming, both Italy and the EU face pressure to secure concessions or risk economic fallout.
Spain’s June jobless figure at lowest in 17 years
Registered unemployment dropped to 2.41 million in June—the lowest since May 2008—with a net gain of 40,399 formal jobs, helped by seasonal boosts .
Insight
The data reflects a robust summer labor market driven by tourism, indicating resilience in Spain’s employment landscape as seasonal hiring continues.
