Eurozone News
LAST UPDATE: July 10, 2025
Climate shocks could cost eurozone 5% of GDP, economists warn
NGFS and ECB warn extreme weather events could reduce eurozone GDP by nearly 5% over five years.
Insight
Places climate risk at the forefront of macroeconomic stability, underscoring urgent adaptation and mitigation policies.
ECB warns of risks beyond tariffs: from security to capital flows
ECB economist Philip Lane flagged non-tariff barriers, economic-security policies, and volatile capital flows as emerging risks.
Insight
Signals a broadened threat landscape, showing Basel oversight must now incorporate geopolitical and digital security concerns.
ECB Should Neither Plan Nor Rule Out Further Cuts, Nagel Says
Bundesbank President Joachim Nagel advised that the ECB should maintain full optionality on interest rates, avoiding being tied to future cuts or pauses due to persistent economic uncertainty.
Insight
This reflects caution: rather than committing prematurely, the ECB aims to retain flexibility amid unpredictable growth and inflation outlooks.
ECB’s de Guindos hopes euro exchange rate will stabilise
ECB Vice‑President Luis de Guindos expressed hope that the euro’s exchange rate would stabilize and noted that current levels shouldn’t hinder economic growth.
Insight
The ECB is monitoring currency strength: while not immediately concerning, excessive appreciation (above ~$1.20) could be problematic.
Bank of France estimates Q2 French economic growth of around 0.1%
The Bank of France estimates Q2 GDP growth at ~0.1%, supported by industrial and services activity, though dampened by tariff uncertainty and hot weather.
Insight
Slow but positive growth suggests resilience, although cross‑sectoral pressures highlight the fragility of France’s recovery.
Merz urges France to stick to deal on joint fighter jet project
Chancellor Friedrich Merz urged France to uphold prior agreements on the FCAS fighter jet project amid reports France wants increased workshare.
Insight
This plea underscores sensitive industrial cooperation: unresolved disputes could delay Europe’s next-gen defense ambitions.
Germany’s Merz sees decisions on debt brake reform by spring 2026
Chancellor Merz expects to finalize decisions on reforming Germany’s constitutional debt brake by spring 2026.
Insight
Indicates ongoing fiscal policy evolution: reforms aim to balance discipline with flexibility needed for economic stimuli and security.
New German chancellor set for first China visit later this year, source says
Chancellor Merz plans his first official China visit in late 2025, likely with a business delegation, to reinforce economic ties.
Insight
The trip signals Germany’s strategic balancing: engaging China on trade while calibrating ties amid U.S. tensions.
Spain’s Sanchez offers new measures to root out corruption to placate allies
PM Sánchez unveiled 15 anti-graft measures—blocking corrupt firms from public contracts, boosting transparency, expanding whistleblower protections—to stabilize his government.
Insight
The reforms aim to restore trust and shore up coalition support, highlighting the political cost of corruption allegations.
French police raid offices of Marine Le Pen’s far‑right Rassemblement National
French financial police conducted a raid at RN headquarters investigating alleged illegal campaign financing, seizing records from multiple election cycles.
Insight
This marks a significant legal escalation against the far‑right, potentially undermining the party before upcoming elections.
