Eurozone News
LAST UPDATE: July 15, 2025
EU clash with Italy over UniCredit heats up after warning letter
The European Commission warned Italy that conditions set for UniCredit’s acquisition of Banco BPM (via golden-power rules) may breach EU law; Italy’s decree (including Russia exit mandate) faces scrutiny and possible infringement action.
Insight
The dispute exemplifies tension between national strategic-asset protection and EU internal market rules, complicating bank consolidation and regulatory oversight.
German Commercial Property at Risk of Further Slump, Report Says
German commercial real estate faces further price declines, driven by structural shifts (e.g., remote work, e-commerce), adding stress to banks and investors.
Insight
Structural change is deepening sector distress, with potential knock-on effects on financial stability and corporate real estate exposures.
Spain’s Central Bank Picks Fed Official as New Chief Economist
The Bank of Spain has appointed United States Federal Reserve official David López-Salido as its new chief economist.
Insight
Hiring a U.S. Fed insider signals a potential shift toward more market-aligned analytic approaches and international monetary expertise in Spain.
IMF: Estonia’s budget policy for 2025 well-balanced
The IMF concluded Estonia’s 2025 budget strikes a good balance between spending and deficit control, though it cautioned on future imbalances and recommended structural reforms and macroprudential vigilance.
Insight
The favorable evaluation confirms fiscal discipline, but flags potential risks ahead from increased defense/EU spending and structural vulnerabilities requiring attention.
Greek government seeks parliamentary probe into EU farm fraud, opposition decries cover-up
Greece’s government proposed a parliamentary investigation into EU farm subsidy fraud (2016–23); EU prosecutors allege political involvement.
Insight
The move appears as a political self-preservation tactic amidst serious allegations that implicate state officials, risking public trust and international credibility.
Tariff threat complicates ECB’s July decision but won’t derail pause to rate cuts, sources say
Donald Trump’s threatened 30% tariffs on EU imports are forcing the ECB to revisit economic projections, but policymakers plan to maintain a pause on rate cuts at its July 23–24 meeting; potential rate moves likely deferred to September.
Insight
Trade-policy uncertainty is complicating central bank planning, illustrating the transmission of geopolitical risk to monetary policy decisions, though immediate action is avoided.
Italy’s Chianti wine makers eye South America, Asia amid Trump tariff threat
Chianti producers are proactively shifting toward markets in South America (Brazil, Argentina, Uruguay, Paraguay) and Asia (China, Japan, Vietnam, Taiwan, India) to mitigate risks from potential 30% U.S. tariffs.
Insight
Exporters are strategically diversifying market exposure to reduce U.S. dependency and cushion against trade policy shocks.
France: le FMI juge “adéquat” l’ajustement budgétaire envisagé
The IMF endorses France’s plan to reduce its structural deficit through a 1.1% of GDP adjustment in 2026 followed by ~0.9% annually. This trajectory would help France exit its excessive deficit procedure by end-2029, assuming implementation.
Insight
The IMF’s approval underscores the adequacy of France’s fiscal roadmap, though success depends on political will and effective execution amid potential social resistance.
