EUR News
LAST UPDATE: July 12, 2025
Merz to make first official visit to London on July 17
German Chancellor Friedrich Merz will visit London on July 17—his first official trip since taking office in May. He will meet PM Keir Starmer and sign a friendship/security cooperation treaty.
Insight
The visit and treaty signal a revitalization of Anglo-German ties post-Brexit, focusing on strategic alignment on foreign and security policy.
UK says EU backs migrant returns deal despite pushback from southern members
FT
The UK and France have struck a one-year bilateral “one in, one out” pilot migration deal allowing the UK to return migrants arriving via small boats to France in exchange for France accepting an equivalent number of migrants with valid claims. While the UK claims EU backing, Mediterranean countries (Italy, Spain, Malta, Cyprus, Greece) have pushed back, and the European Commission has yet to formally approve the deal.
Insight
The deal marks a post-Brexit shift in UK-EU cooperation on migration, but exposes deep divisions within the EU over burden-sharing and asylum responsibilities, highlighting structural flaws in the bloc’s migration pact.
Rachel Reeves looks at reforms aimed at curbing fiscal volatility
UK Chancellor Rachel Reeves is reviewing reforms to reduce fiscal policy volatility, aiming to avoid mid-year budget adjustments. She is considering IMF recommendations to limit fiscal policy changes to once a year and to assess compliance with fiscal rules annually instead of biannually. This follows a spring correction triggered by a £4bn overshoot after the Autumn Budget. The Treasury seeks to preserve two core fiscal rules despite exploring those changes.
Insight
Aligning with IMF advice, these reforms aim to stabilize policymaking and reduce market uncertainty. However, balancing flexibility with fiscal discipline will be politically sensitive, and investor reaction will be critical.
Merz to make first official visit to London on July 17
German Chancellor Friedrich Merz will travel to London on 17 July for his first official visit since taking office in May. He will be received by UK Prime Minister Keir Starmer, and the two leaders are expected to sign a “friendship treaty” covering foreign and security cooperation, as well as initiatives to promote economic growth and people‑to‑people contacts.
Insight
The visit and proposed treaty underscore a strategic deepening of Anglo‑German ties post‑Brexit, particularly in defence and security, reflecting shared concern over Russia and a mutual intent to reinforce European stability.
Unite union moves to suspend Rayner and re-examine ties with Labour
Unite, Labour’s largest union, voted to suspend Deputy Prime Minister Angela Rayner’s membership over her stance during the Birmingham bin strike and is re-examining its relationship with the Labour Party. Rayner reportedly resigned from the union months ago.
Insight
The move highlights deteriorating relations between Labour leadership and its traditional union base, which could impact funding, morale, and internal cohesion.
Turkey’s Central Bank Signals Caution With Focus on Deposits
Governor Fatih Karahan said the central bank is monitoring deposit trends among savers, suggesting a cautious approach to cutting interest rates.
Insight
Emphasizing deposit behavior shows the bank’s careful stance amid inflation decline, reflecting risk management in adjusting monetary policy despite easing conditions.
