EUR News
LAST UPDATE: June 30, 2025
Spain’s economy minister wants EU to issue joint debt to boost euro as reserve currency
Spain’s economy minister called for the EU to issue joint debt to bolster the euro’s role as a reserve currency and finance strategic priorities like defense and energy transition.
Insight
This proposal reflects growing momentum toward fiscal integration in the EU, challenging dollar dominance and enhancing economic resilience.
Deal that reduced US tariffs on UK cars and aircraft parts comes into effect
A new U.S.–UK trade deal has taken effect, reducing tariffs on British car imports to 10% (from 27.5%) under a 100,000-vehicle quota and eliminating tariffs on aircraft parts.
Insight
This deal marks a key milestone in post‑Brexit trade relations, providing relief to UK manufacturing and aviation sectors—even as steel and aluminum tariffs remain unresolved.
UK economy grew at fastest pace in a year in Q1 before expected slowdown
The UK economy expanded by 0.7% in the first quarter of 2025—the fastest pace in a year—driven by strong homebuying and manufacturing ahead of tax and tariff deadlines. However, April data showed a 0.3% GDP decline, signaling a likely slowdown in Q2.
Insight
The rebound in Q1 reflects front-loaded demand rather than sustained strength. April’s contraction highlights fragile momentum, supporting expectations that the Bank of England may soon cut rates further to support growth.
UK Welfare Overhaul Back on Track After Concessions, Minister Says
The UK government revived its welfare overhaul plans after making key concessions to appease internal party critics. Changes to disability payments will only apply to new claimants, preserving benefits for current recipients, according to Health Secretary Wes Streeting.
Insight
The government’s adjustment avoids a damaging rebellion and ensures legislative progress, but it exposes political fragility and limits future cost savings—raising the prospect of tax increases or budget reallocations.
Swedish Retail Sales Drop Pressures Riksbank to Cut Again
Swedish retail sales plunged 4.8% month-on-month in May—the biggest drop since April 1994—intensifying calls for further rate cuts from the Riksbank after its mid-June easing move (bloomberg.com).
Insight
The sharp retail decline highlights cooling domestic demand and reinforces the case for additional monetary easing to stimulate growth and prevent deflation.
Czech budget gap to rise next year on defence, finance minister says
Finance Minister Zbyněk Stanjura forecast the budget deficit will widen to 280 billion crowns (~$13.3 bn) next year (from 241 billion), citing increased defence spending, nuclear projects, and ending the energy windfall tax .
Insight
The anticipated wider deficit reflects Prague’s balancing act between NATO commitments and investment priorities, highlighting rising fiscal stress.
Czech Central Bank Chief Pledges ‘Strict’ Policy, Low Inflation
CB Governor Aleš Michl emphasized a cautious approach, pledging to maintain strict monetary policy until inflation is firmly contained—despite some pressure to ease .
Insight
Michl’s stance signals readiness to keep rates high to ensure price stability, prioritizing inflation control over growth concerns.
Turkey Set to Skip Minimum‑Wage Hike in Boost for Investors
Turkey’s government will forgo its planned mid‑year increase to the minimum wage, despite inflation around 35%, aiming to cool inflation and send a signal of fiscal discipline to investors (x.com).
Insight
By postponing the wage hike, Ankara hopes to ease inflation pressures and bolster investor confidence. However, this risks further squeezing real incomes and fueling public discontent amid soaring living costs.
Turkish Opposition Faces Trial in Case That’s Got Market on Edge
A Turkish court has delayed its June 30 hearing to September 8 in a case targeting the opposition CHP leader, a decision that briefly eased market pressure while signaling ongoing political conflict .
Insight
The postponement provides short‑term stability but highlights persistent judicial risks for democratic opposition, potentially undermining investor confidence ahead of major elections.
US holidaymakers descend on Europe as overtourism fears mount
Over 7.7 million Americans visited Europe between January and May 2025—a 6% YoY increase—leading to overtourism concerns in hotspots like Barcelona and Venice, straining housing, prices, and local quality of life .
Insight
The surge in U.S. tourists amid Middle Eastern instability underscores Europe’s tourism boom—but intensifies local backlash over overcrowding and affordability. Long-term solutions may include targeted taxation and sustainable tourism management.
