EUR News
LAST UPDATE: June 12, 2025
IMF, Serbia reach staff-level agreement on 36-month deal
Reuters
The IMF and Serbia agreed on the first review of a 36‑month Policy Coordination Instrument (PCI), with Serbia committing to maintain a fiscal deficit at 3% of GDP. The arrangement supports economic reforms and continued access to external financing.
Insight
The staff-level accord underlines Serbia’s disciplined fiscal path and economic vulnerability to political protests and global fragmentation. Growth forecasts (3% in 2025 and 4% in 2026) depend on reforms and require IMF Executive Board approval.
EU lending arm triples defence loan plan to 3 billion euros
The European Investment Bank (EIB) expanded its defence-sector funding initiative from €1 billion to €3 billion, beginning with a €500 million loan to Deutsche Bank, which will on-lend to SMEs in the EU military supply chain.
Insight
This signals Europe’s strategic pivot toward bolstering defence autonomy by funding smaller defence suppliers amid U.S. pressure and tensions with Russia. It reflects integration of EIB into the “Readiness 2030” defence plan.
Tariffs could be the spur Europe’s single market needs
An IMF‑backed analysis suggests that internal barriers within the EU act like a 44% tariff on goods and 110% on services. Removing these could help offset external U.S. tariffs by unlocking intra-EU trade.
Insight
The idea reframes trade policy: internal harmonization—streamlining services and goods mobility—might boost growth more effectively than retaliatory tariffs. It offers strategic insight ahead of U.S.–EU trade talks.
EU countries consider softening methane emissions law on gas imports
EU member states, including Romania and Slovakia, are exploring ways to simplify methane monitoring/reporting requirements for gas imports—especially U.S. LNG—arguing the current rules may hinder supply.
Insight
Striking a balance between environmental goals and energy security, this adjustment could ease U.S.–EU trade negotiations and boost LNG access, but invites criticism from environmental groups.
UK’s Reeves sets out spending plans to meet ‘working people’s priorities’
Chancellor Reeves announced a multi-year spending review focusing on health, defence, infrastructure, and housing, backed by the largest tax hike in a generation and more flexible borrowing rules.
Insight
The plan supports Labour’s “securonomics” agenda—investing in public services to stimulate growth. Yet cuts in aid and asylum are controversial, and critics warn that future tax hikes may follow if growth falters.
‘Her challenge is the voters’: can Rachel Reeves’ spending review rebuild her reputation?
Chancellor Rachel Reeves launched a major spending review featuring £113 bn in capital investment, targeted at infrastructure, defense, the NHS, housing, and AI. Amid criticisms over spending priorities and credibility, the review aims to restore public confidence and distinguish Labour from austerity politics .
Insight
The review marks a pivotal test for Reeves and Labour: while ambitious and reformist, its success hinges on delivering visible benefits before the next election and convincing voters of fiscal responsibility without immediate tax hikes.
Romania’s Budget Fix Key For Investor Trust, Central Banker Says
Romania’s central bank governor emphasized that resolving the budget deficit is essential to restore investor confidence, advocating for fiscal discipline, spending controls, and sustainable debt strategy amidst political volatility.
Insight
The governor’s emphasis on fiscal consolidation highlights how critical credible budget management is for maintaining foreign capital inflows and stabilizing bond yields in politically uncertain environments.
Possible defects at French reactor lift European power prices
The nuclear safety regulator ASNR has raised concerns about potential stress corrosion in EDF’s Civaux 2 reactor. Markets reacted sharply, with French forward power contracts jumping to a four-month high as output uncertainties rose .
Insight
Although inspections are ongoing and no corrosion confirmed, this highlights Europe’s reliance on nuclear electricity and its vulnerability to unplanned outages—adding pressure on energy security and prices.
Polish government wins confidence vote after presidential election blow
PM Tusk’s pro-EU coalition retained parliamentary support after winning a confidence vote (243–210), despite the nationalist presidential win. Achievements cited include defense spending increases and judicial reform efforts .
Insight
The vote stabilizes Tusk’s government, but with a nationalist president ahead, ongoing institutional clashes—especially over judiciary and migration—will define governance dynamics.
Poland may introduce partial controls on German border in summer, PM says
PM Tusk indicated that partial border controls with Germany could be implemented if migrant numbers spike this summer, citing security and organized-return procedures under EU rules .
Insight
Tusk balances liberal EU integration with domestic security concerns; border policy may be used to placate nationalist critics ahead of the presidential handover.
