Eurozone News
LAST UPDATE: July 30, 2025
Eurozone Economy Shows Signs of Resilience Even as Tariffs Bite
Eurozone GDP grew by 0.1% in Q2 2025, decelerating from Q1 but avoiding contraction despite trade tensions.
Insight
Growth shows moderate resilience, supported by France and Spain, even as Germany and Italy lag; tariff-related uncertainty remains a drag on sentiment.
Dutch economic growth slowed in Q2 on lower consumer spending
Dutch GDP rose just 0.1% in Q2 2025 as consumer spending declined 0.4%, notably on clothing and dining; exports rose but imports expanded faster.
Insight
The slowdown underscores domestic demand weakness, and suggests consumer caution amid rising uncertainty and global trade friction.
Portugal’s economy bounces back with 0.6% quarterly growth
Portugal rebounded with 0.6% GDP growth in Q2, recovering from a prior quarter contraction, driven by robust private consumption and export gains.
Insight
Portugal’s recovery outpaces many eurozone peers, reflecting improving demand dynamics despite revised lower full‑year forecasts due to trade pressures.
Euro zone wage growth slowing as expected, ECB data shows
ECB wage-tracker indicates negotiated wage growth is slowing—from 4.6% in 2024 to 3.2% in 2025 and projected around 1.7% by early 2026.
Insight
Slower wage growth should ease inflation pressures and supports expectations for a cautious ECB policy path, including potential rate cuts.
France’s Lombard Says US Trade Deal Gives Businesses Visibility
France’s Finance Minister Eric Lombard hailed the U.S.–EU trade deal for improving tariff certainty, which helps business planning.
Insight
Transparency from the deal could boost corporate investment and confidence across sectors, although critics warn of concessions.
Chinese trade diversion from US would cut euro zone inflation, ECB blog says
The ECB blog warned that redirected Chinese exports to Europe—if U.S.–China talks fail—could lower eurozone inflation by up to 0.15 percentage point in 2026.
Insight
While unlikely, such diversion could reinforce disinflationary trends, potentially prompting pre-emptive ECB easing.
German cabinet approves 2026 budget
The German cabinet approved the 2026 draft budget featuring record investment of €126.7 billion and borrowing of €174.3 billion, signaling a major fiscal expansion.
Insight
This marks a historic shift away from fiscal conservatism toward stimulus-driven policy aimed at reinvigorating growth, infrastructure, and defense spending.
Germany prepares huge orders for jets, armored vehicles, sources say
Germany plans major defense procurements including ~20 Eurofighter jets, up to 3,000 armored vehicles, and thousands of infantry vehicles to bolster its military.
Insight
The initiative supports NATO commitments and reflects Germany’s strategic pivot toward increased defense autonomy and military readiness.
