Eurozone News
LAST UPDATE: September 25, 2025
Households should keep emergency cash at home, ECB study suggests
A study by the European Central Bank (ECB) suggests that households should keep emergency cash at home as a contingency measure. The study examined four crisis episodes in the euro area and found that cash’s “offline functionality” and “tangibility” made it a crucial instrument during times of stress. The findings underscore the importance of cash as a backup payment method.
Insight
The ECB’s recommendation for households to keep emergency cash is a striking and counterintuitive message in an increasingly cashless world. It signals that even in an advanced digital economy, central banks recognize the fundamental importance of physical currency for financial stability and crisis preparedness.
French Unions Plan More Strikes Saying No Clarity on Budget Plan
French unions are planning more strikes and protests, stating that there is no clarity on the government’s budget plan and that they fear more austerity measures. The unions’ concerns are centered on potential cuts in social spending and the impact of these policies on workers’ purchasing power. The strikes signal ongoing domestic unrest over the government’s economic agenda.
Insight
The planned strikes and protests highlight the significant domestic political resistance to the French government’s fiscal policies. The unions’ demand for clarity on the budget plan indicates a lack of public trust and a fear that the government will prioritize fiscal consolidation over social welfare, potentially leading to further civil unrest.
Germany Eyes Cutting €4b From Industries’ Power Costs
The German government is considering a plan to cut €4 billion from its industry’s power costs. The proposal includes a subsidy to finance transmission grid costs and a permanent reduction of electricity taxes for over 600,000 companies. The move is aimed at providing energy-intensive industries with planning security and encouraging a shift to climate-friendly production.
Insight
Germany’s plan to lower electricity costs for its industries is a direct response to global competition and rising energy prices. This strategic intervention highlights the government’s commitment to protecting its key industrial sectors and ensuring their competitiveness, even as it pursues ambitious climate goals.
German finance minister urges EU to ‘Buy European’, embrace joint defense projects
German Finance Minister Lars Klingbeil has called for a “Buy European” policy for key technologies and a single market for defense. The six-point plan aims to reboot the European Union’s economy and ensure it can deal with a less transatlantic-minded US and ongoing conflicts. He also pressed for new trade deals with partners like India and the Mercosur bloc.
Insight
This push for “Buy European” and a unified defense market signals a new, more assertive German leadership within the EU. It reflects a growing concern about the EU’s economic and security vulnerabilities and a desire to reduce dependence on external powers, particularly the US, in a changing global landscape.
Italian government has not discussed freezing retirement age, PM says
Italy’s Prime Minister Giorgia Meloni stated that her government has not discussed plans to freeze the retirement age at 67. The statement was a response to a media report that the government was considering the measure as part of its 2026 budget. A similar proposal in France recently sparked widespread strikes and protests.
Insight
The Prime Minister’s denial suggests the political sensitivity of pension reform in Italy. The public clarification aims to pre-emptively address any public backlash, demonstrating the government’s caution in handling an issue that has led to significant social unrest in other European countries.
