European Union

EU’s defence fund is more toy gun than bazooka

18 Mar 2025

The European Commission plans to extend 150 bln euros’ worth of subsidised loans to member states to beef up their military. Only a few countries may tap the facility. Adding conditionality would shrink its attractiveness further. As it is, it is more symbolic than effective.

EU’s big Starlink headache is time, not money

14 Mar 2025

Investors seem confident $3 bln Anglo-French satellite group Eutelsat can replace Elon Musk’s company on Ukraine’s front lines. The swap could be costly, but this won’t deter a newly defence-focused EU. Whether the company can deploy what’s needed quick enough is another matter.

US-EU tariffs are a skirmish in riskier trade war

12 Mar 2025

Brussels reacted to Washington’s steel levies with 26 bln euros of measures on bourbon and other exports. The next steps could see Europe thwacking Big Tech, and President Trump targeting member states. Their effect is less predictable, and likely to be more painful for Europe.

EU banks’ M&A secret weapon nears sell-by date

3 Mar 2025

The ‘Danish Compromise’ lets Europe’s lenders buy insurers while shielding the capital hit. Yet Italy’s battle over $15 bln Banco BPM suggests the tool can also be hard to deploy. If financial groups fear regulators could withdraw the wheeze, maybe it’s no longer much use.

Tank maker’s surge depends on political air cover

18 Feb 2025

Shares in $43 bln Rheinmetall have outperformed chip darling Nvidia since 2021 and doubled since the US election. Investors are implicitly assuming Europe will lift defence spending to at least 3% of GDP while hugely favouring the German firm. They could be wrong on either front.

EU’s Trump plan requires carrots, sticks and vibes

10 Feb 2025

Given the president’s tariff antics, Brussels needs a plan of action. Beyond identifying tit-for-tat levies, the EU may also face US pressure to ease up on Big Tech regulation. The best counter is growth-friendly signals, and to exploit its scope to deploy its own rules flexibly.

US tax weaponisation launches messy European fight

5 Feb 2025

President Trump has begun probes into “discriminatory” tax measures, like France’s 3% Big Tech duty. His retaliation may include hiking levies for foreign firms and wealthy investors in the US. But since Europe is unlikely to cave in on this issue, the crossfire will be intense.

Europe will have to accommodate Trump for now

27 Jan 2025

If the bloc was strong, it could hit back against the new White House resident’s bullying on tax, trade and business. But since it needs US arms to help Ukraine, Brussels will have to cut deals with Donald Trump – while building its strength to gain longer-term independence.

Austria’s right turn adds sand to EU-Ukraine gears

14 Jan 2025

The appointment of right-wing leader Herbert Kickl as chancellor would strengthen Europe’s pro-Putin, eurosceptic club. The group including Hungary and Slovakia is too small to block most EU policies. But Brussels may move more slowly on aid to Ukraine or Russia sanctions.

Meta’s Brussels bark may be worse than its bite

8 Jan 2025

The tech giant’s boss Mark Zuckerberg lambasted the EU for ‘institutionalising censorship’, and said he’ll do less fact-checking. It’s an artful way to both cosy up to President-elect Trump and push back on regulation. But in dealing with Europe, Meta doesn’t hold all the cards.

ECB’s rearview mirror ignores economic crash ahead

10 Dec 2024

The European Central Bank is set to cut rates by just 25 basis points this week because GDP is growing at 0.4% - the quickest since 2022. But inflation is subdued and the outlook for consumers, businesses and exports is weak. The euro zone’s grim future warrants stronger action.

Tycoons’ odd telco bets mask a greater logic

26 Nov 2024

In recent years high-profile, rich investors like Carlos Slim have snapped up stakes in the likes of $19 bln BT. These haven’t always yielded juicy returns, nor prompted strategic shifts. But as a bet on much-needed consolidation, they may yet end up looking smart.

Russian gas to Europe is on the slow road to zero

22 Nov 2024

The slim possibility of a Trump-brokered end to Moscow’s war with Ukraine raises the question of whether the European Union would ever buy more of its fossil fuels. Yet EU reliance on Russian pipeline gas is set to fall further. Moreover, Europe doesn’t need it.

Europe’s Starlink-lite is a worthwhile also-ran

21 Nov 2024

EU satellite players like Eutelsat are debt-laden minnows compared to Elon Musk’s SpaceX-owned behemoth. But given Starlink now owns more than 60% of all working satellites, Europe has to start somewhere. Investors shouldn’t count on galactic returns, though.

Ukraine support is cheaper option for Europe

19 Nov 2024

New US President Donald Trump could cut aid to Kyiv. But the Old Continent has the means, and reasons, to pay up. Letting Russia win would mean more defence spending, a refugee crisis and geopolitical strife. That’s a bigger toll than the 0.4% of GDP the bloc would need to spend.

European airlines’ tough summer adds to M&A logic

11 Nov 2024

Carriers such as $8 bln Lufthansa and $2 bln Air France-KLM saw rising costs and competition on Eastern routes from Chinese rivals. The logical response for EU players is to look West instead. Bidding for Portugal’s state-owned TAP would drive much-needed consolidation.

Europe is unprepared for the Trump storm

6 Nov 2024

The continent faces tariffs and wavering US defence commitments after the Republican candidate clinched the White House. The bloc’s already sluggish economies will suffer. Meanwhile, divided politics will hinder Europe’s capacity to deal with the shock.

Lagarde struggles to dispel market’s gloomy vibes

17 Oct 2024

The European Central Bank lowered its key interest rate to 3.25% but didn’t commit to further cuts. Markets fear a recession and expect borrowing costs to be below 2% in 12 months. President Christine Lagarde may be forced to loosen policy faster – and reassure investors of that.

EU champions’ hope will slam into hard M&A reality

16 Oct 2024

Brussels bigwigs, like new antitrust boss Teresa Ribera, want to create US-style corporate giants. Yet possible options, like a 160-bln-euro Orange-Deutsche Telekom deal, make no industrial sense. The risk is that even if politicians get on board, shareholders won’t.

China’s EU reply cuts odds of damaging tit-for-tat

8 Oct 2024

Days after Brussels voted for electric-vehicle tariffs, Beijing penalised European brandy. Pork, dairy and pricey cars may be next. Yet the moves are well-flagged. And more damaging retorts, like hitting luxury or $9 bln of aircraft-linked imports, seem unlikely for now.