Eurozone News
LAST UPDATE: June 10, 2025
Bank of Spain lowers 2025 economic growth forecast to 2.4% amid trade tensions
On June 9, the Bank of Spain downgraded its 2025 GDP growth projection from 2.7% to 2.4%, citing trade tensions among the US, China, and Europe, while still forecasting above-Eurozone averages.
Insight
The downgrade reflects increased vulnerability to global tariff pressures, signaling that external disruptions are weighing on Spain’s trade-dependent economy. Despite this, Spain’s growth remains robust relative to the euro area. The central bank is preparing for possible monetary easing, and its tighter inflation outlook suggests limited cost pressures ahead.
Latvia needs to mobilize additional revenue and accelerate structural fiscal reforms – IMF
An IMF staff report following the 2025 Article IV mission recommended that Latvia generate additional revenue and fast‑track structural reforms—especially to pensions and financial sector oversight.
Insight
The IMF emphasizes the urgency of strengthening Latvia’s revenue base and pension resilience amid demographic pressures. Reforming financial safeguards in the real-estate sector reflects concerns about systemic risk. Accelerating second- and third-pillar pensions shows a shift to long-term sustainability. Without decisive action, Latvia risks fiscal imbalance and heightened exposure to economic shocks.
France’s Le Pen hosts Europe allies in show of far‑right unity
AFP (via various outlets)
Marine Le Pen gathered several European far-right leaders, including Viktor Orban, Matteo Salvini, and Santiago Abascal, for a rally in Montargis, France. They united around anti-immigration and EU-skeptic messaging, signaling a coordinated push ahead of France’s 2027 elections.
Insight
By convening key nationalist figures, Le Pen sought to demonstrate a cohesive cross-border movement capable of reshaping the EU agenda from within, not breaking with it. This strategy reflects her party’s “detoxification” effort to shift from fringe to mainstream, leveraging allies to amplify influence and present a unified front in the build-up to future national campaigns.
Low turnout thwarts Italian referendums, deals blow to opposition
Italy’s two-day referendum—covering citizenship, labor rights, and workplace protections—failed due to turnout below the 50% threshold, with only about 23% of voters participating. The government-backed boycott led to the invalidation of all five proposals.
Insight
The referendum’s failure underscores the enduring dominance of Giorgia Meloni’s right-wing coalition, which successfully mobilized abstention. Despite broad popular support (65–80% among those who voted), the opposition’s inability to reach the quorum reflects weak mobilization and fragmented messaging. Moving forward, the effort will likely shift toward voter turnout strategies rather than referendum campaigning, while the government gains a symbolic victory reinforcing its political standing.
