Eurozone News
LAST UPDATE: June 24, 2025
ECB could still cut rates despite oil market volatility, top policymaker says
ECB official Villeroy de Galhau signaled that despite recent pause, rate cuts remain likely within six months if inflation continues to fall, even as oil and euro trends are monitored.
Insight
This hints at a dovish stance, balancing inflation risks against slowing growth; markets should watch incoming data on energy prices and euro impact on inflation.
German cabinet passes 2025 draft budget and framework for 2026
The German cabinet approved a 2025 budget and 2026 framework, with investments of €115.7 bn and €123.6 bn respectively, defense spending rising to 3.5% of GDP by 2029, funded by significant borrowing.
Insight
Germany is doubling down on fiscal stimulus through infrastructure and defense investment, enabled by debt-brake reform, but rising debt interest highlights risks ahead in balancing growth and debt sustainability.
French prime minister to meet with pension negotiators after talks fail
After months of discussions between trade unions and employers over the 2023 pension reform stalled late Monday, Prime Minister François Bayrou has summoned both sides for a meeting to break the deadlock. The reform, which raises retirement age from 62 to 64, saw unions seeking concessions for physically demanding jobs and maternity leave, while employers resisted financially burdensome changes (reuters.com, srnnews.com).
Insight
The breakdown of these “last‑chance” negotiations puts Bayrou’s minority government in a precarious position. With far-left parties threatening a no-confidence vote and Socialists divided, failure to reach an accord could trigger a political crisis and undermine efforts to restore fiscal stability through pension reform.
