The European Union is looking into delaying repayments on billions in debt it took on during the pandemic, as countries search for more money to spend now on defense and advanced technologies, Bloomberg News reported. The European Commission, the EU executive’s arm, is preparing an analysis of the possibility, according to people familiar with the matter who spoke on the condition of anonymity. Several countries, including France, have already urged the EU to push back the payments, which are set to begin in 2028, arguing that tightening budgets and urgent spending needs should take priority.
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The European Union proposed measures such as optimizing jet fuel distribution and cutting energy taxes to navigate the Iran war-driven crisis that it said could reverberate for years, Bloomberg News reported. “AccelerateEU” — announced by the European Commission on Wednesday — gives member states the tools to curb energy prices and address potential fuel shortages, without undermining the bloc’s climate ambitions or triggering damaging competition between nations. A longer-term objective is to electrify the economy to get rid of dependencies and avert future fossil fuel shocks.
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European Union exports to the United States dropped by more than a quarter for a second consecutive month in February, but may be exaggerating the impact of President Donald Trump's tariffs, given they follow a year-ago period when front-loading began, Reuters reported. Exports from the 27-nation European Union to the United States fell by 26.4% in February, EU statistics agency Eurostat said on Friday, following a 27.8% drop in January, and contributing to a 60% reduction in the EU's trade surplus.
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The European Union will urge members to cut their dependence on Middle Eastern jet fuel and look into increasing imports from the U.S., in new guidelines expected next week, an official source told Reuters, as the Iran war disrupts global supply. The plans, previously unreported and still being finalised, will put a greater focus on self-sufficiency and resilience via Sustainable Aviation Fuel (SAF) or synthetic fuels. European airlines have warned of potential jet fuel shortages within weeks as a result of the Iran war, which could disrupt the summer travel season.
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Economic prospects for the eurozone have dimmed, with the IMF lowering its GDP growth forecast to 1.1% for the current year, EuroNews.com reported. This downgrade from the earlier 1.4% estimate comes as a direct consequence of the war in Iran, which has sent shockwaves through international markets. According to the IMF’s World Economic Outlook, released on Tuesday, the disruption to energy markets through the blockade of the Strait of Hormuz and infrastructure damage in the Middle East has effectively stalled the recovery of the world's major economies.
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The energy-price shock from the Iran war is landing between the European Central Bank’s baseline and adverse scenarios, its President Christine Lagarde said Tuesday, the Wall Street Journal reported. The ECB last month published three scenarios of the impact of the Iran war on the eurozone. The adverse scenario predicts a sharper rise in inflation and lower growth than the baseline, though the impact wouldn’t be as pronounced as its severe scenario.
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Five European Union countries are calling for a windfall tax on energy companies' profits in reaction to rising fuel prices due to the Iran war, according to a letter from finance ministers to the EU Commission seen by Reuters on Saturday. The finance ministers of Germany, Italy, Spain, Portugal and Austria made the joint call for an EU-wide tax in a letter dated Friday. Such a measure could help fund relief for consumers in the face of high energy prices and be a signal that "we stand united and are able to take action", they said.
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Italy’s deficit breached the European Union’s ceiling last year in the biggest fiscal setback for Prime Minister Giorgia Meloni’s government since she took office in 2022, Bloomberg News reported. The shortfall was 3.1% of gross domestic product, according to data published on Friday by the national statistics institute in Rome, confirming a preliminary estimate. Read more. (Subscription required.)
The European Central Bank’s next interest rate move will very likely be an increase, although it is still too early to say when it will start hiking, ECB policymaker Francois Villeroy de Galhau said on Thursday, Reuters reported.