The finance policy battles shaping 2025 – POLITICO

Eurozone Inflation Drops Below ECB TargetIn May, Eurozone inflation fell to 1.9%, below the European Central Bank's (ECB) 2% target for the first time in seven months, leading economists to predict potential interest rate cuts. The euro declined by 0.3% following the data release, with expectations for a quarter-point rate cut to 2% anticipated at the ECB's upcoming meeting. Analysts suggest further easing is likely, with core inflation also decreasing to 2.3%, indicating a trend...

SummaryIndia and the EU have made significant progress in trade negotiations, reaching consensus on eight of approximately twenty chapters, while agreeing to exclude sensitive agricultural products like dairy from the deal. This development comes amidst efforts to strengthen economic ties and mitigate the effects of U.S. tariffs, with expectations of finalizing the agreement by December. Key issues still remain, including access for cars and spirits and the EU's carbon border adjustment mechanism, which India opposes...

The UK, under Prime Minister Sir Keir Starmer, aims to enhance its military readiness amid rising threats from Russia, but questions remain about the government's ability to deliver on its ambitious defense rhetoric. Recent strategic reviews propose a £15bn investment in nuclear capabilities and a focus on domestic military production, yet the planned increase in force numbers and defense spending may fall short of transformative goals, risking the UK's influence within NATO. Experts warn that...

A Berlin court ruled that Germany unlawfully turned away asylum seekers at the border without adequate assessment, undermining Chancellor Friedrich Merz's immigration policy initiated after a violent incident involving an Afghan asylum seeker. The court's decision involved three Somali asylum seekers who, despite expressing intent to apply for asylum, were sent back to Poland, mandating Germany to fully assess their claims per EU regulations. Merz's efforts to tighten immigration come amid rising support for the...

The EU has imposed restrictions on imports of Chinese medical devices in response to allegations of discrimination against foreign manufacturers in public contract bids, requiring exclusion of Chinese bidders from contracts over €5mn for five years. This marks the first application of the International Procurement Instrument, aimed at opening overseas markets, as the EU seeks to address trade tensions exacerbated by China's "Made in China" policy, which prioritizes domestic suppliers. While the EU is open...

The European Commission has approved a joint venture among BAE Systems (UK), Leonardo (Italy), and the Japan Aircraft Industrial Enhancement Co for the production of a next-generation fighter jet, responding to concerns over reliance on US defense equipment. This initiative, part of the Global Combat Air Programme, aims to have aircraft operational by 2035, enhancing defense capabilities against rising threats from Russia and China. The UK's recent defense plan includes substantial investments in modernization, highlighting...