Tag Archives: Europe

EU set to slash 2026 growth forecast amid trade tensions

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EU to Lower Growth Forecasts for 2026 Amid Trade Disputes and Economic Challenges

The European Union is set to reduce its growth forecasts for 2026 as ongoing trade disagreements persist alongside weak economic performance in its largest member countries and political upheaval. The revised outlook, due to be released next week, highlights that Europe’s recovery is much shakier than officials had originally anticipated.

EU officials identify increasing U.S. tariffs and unresolved trade disputes as the top obstacles to growth. The Trump administration’s tariff measures, introduced last year, continue to impact European exporters, particularly in manufacturing-heavy sectors such as steel, machinery, and automobiles.

Brussels had expected pressures to ease by 2026 and anticipated a modest recovery. Previous estimates projected growth around 1.4%, but this figure is now expected to be drastically lower, reflecting the cumulative impact of trade barriers and investor risk.

Trade Tensions Weigh on Business Confidence

The jolts from U.S.-EU trade tensions are causing many businesses to hesitate. Local companies are deferring investments amid concerns about market access, supply chain risks, and tariff uncertainties. Emerging global competition, a stronger euro, and a downturn in foreign demand also contribute to significant headwinds for Europe’s export outlook.

Economists emphasize that the uncertainty itself has become one of Europe’s most serious economic threats—not just the tariffs alone. Confidence has declined, supply-chain planning has become more challenging, and the looming risk of further escalation in trade disputes overshadows every forecast.

Major EU Economies Losing Momentum

Germany, the EU’s largest economy, faces particular difficulties. Despite increased public spending on defense and infrastructure, Germany’s recovery has lagged behind expectations. Industrial production has struggled to gain traction, and longstanding competitiveness issues have resurfaced. What was expected to be Germany’s best post-pandemic growth year is now shaping up as another disappointing cycle.

The country’s Council of Economic Experts recently lowered its 2026 growth forecast to 1%, citing weaker global demand and higher production costs.

France, the bloc’s second-largest economy, deals with different challenges. Although growth has been relatively resilient, political instability is weighing on both consumer and investor confidence. Analysts estimate that around half a percentage point of France’s growth for the year is being shaved off due to domestic political disputes and budgetary tensions.

Structural Risks and Policy Responses

Across the region, policymakers are also expressing concerns about structural risks such as rising energy costs, demographic shifts, and widening innovation gaps compared to the United States and parts of Asia.

The European Central Bank (ECB) has taken measures to support the struggling economy by cutting interest rates several times this year, aiming to stabilize credit conditions and encourage investment. In its latest assessment, the ECB noted that “elevated uncertainty, high effective tariffs, and tightening global competition” remain key factors hampering Europe’s recovery momentum.

Business investment remains weak, and exports are not expected to rebound quickly without a de-escalation of global tensions. Meanwhile, fiscal policy options are increasingly limited.

Fiscal Challenges and Coordinated EU Response

Some member countries, including Italy, have made progress in stabilizing public finances. However, others, such as France, are projected to record some of the largest deficits in the euro area. These divergent budgetary approaches may hinder the EU’s ability to implement a coordinated and robust collective response.

EU leaders are working to strike the right balance between boosting domestic competitiveness and managing complex geopolitical realities. The bloc aims to increase investments in technology, clean energy, industrial resilience, and other strategic areas to shield itself from external shocks.

Looking Ahead: Trade Relations and Economic Prospects

Politically, Brussels continues efforts to stabilize trade relations with Washington. Any easing of tariff pressures or progress toward new trade agreements could quickly improve the economic outlook.

However, officials warn that the risk of new trade disputes remains “high.” Europe must prepare for a potentially prolonged period of global economic fragmentation.

As the message from Europe’s institutions becomes clearer than ever: the recovery is slowing, trade pressures are mounting, and without decisive action, the region’s growth prospects will continue to dim through 2026.

https://bitcoinethereumnews.com/finance/eu-set-to-slash-2026-growth-forecast-amid-trade-tensions/

Digital Euro Faces Uncertain Future as Brussels Rethinks Its Purpose

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The European Union’s Digital Euro Faces a Critical Crossroads

The European Union’s long march toward a digital euro has hit a crossroads. In Brussels, lawmakers are debating whether the continent even needs a central bank digital currency or if private innovation might already be fulfilling that role.

For years, the European Central Bank (ECB) has envisioned a public digital currency that would anchor Europe’s payment system in the 21st century. But a new parliamentary proposal could dramatically slow that momentum.

A Conditional Approach to the Digital Euro

The initiative, introduced by Fernando Navarrete of Spain’s center-right EPP group, argues that a digital euro should only exist if the private sector fails to build a seamless European payment network. In other words, the ECB’s project would become a backup plan, not the default future.

If approved, this “conditional” approach would redefine the EU’s digital finance agenda by prioritizing commercial innovation before central-bank intervention.

Private Competition First

Navarrete’s draft report envisions a “market test” before any online version of the digital euro goes live — a process that would require Brussels to confirm the absence of a pan-European retail payment system before giving the ECB the green light.

His argument is straightforward: if companies can deliver efficient, borderless payment systems on their own, there may be no reason to spend billions of euros building a state-run alternative.

“The ECB has been calling for a solution — public or private — to connect Europe’s payment systems,” Navarrete told reporters. “The private market should have the first chance to do that.”

Concerns and Criticism

Critics warn that this approach could derail years of technical and political progress.

The ECB views the digital euro not as competition to banks but as a guaranteed European alternative to U.S.-based payment networks such as Visa, Mastercard, and PayPal.

A Split Vision for Europe’s Money

The timing of Navarrete’s report has raised eyebrows. It arrived just as the ECB announced plans to begin pilot testing the digital euro in 2027, with a possible rollout in 2029.

This coincidence underscores a growing divide between the bloc’s technocrats, who want to move forward swiftly, and lawmakers, many of whom fear the ECB is moving too fast without sufficient proof of public need.

Navarrete insists he is not trying to kill the project. “I’m not for or against the digital euro,” he said. “But we must ensure stability and proportionality.”

The Offline Digital Euro Compromise

While the online version faces pushback, Navarrete’s plan supports developing an offline digital euro. This version would function more like digital cash stored locally on secure devices and transferrable even without internet access.

He argues this offline model would preserve Europeans’ right to hold central bank money “under all circumstances” without destabilizing the banking sector.

The report also calls for strict limits on how much digital euro any one person can hold — a safeguard against deposit flight from commercial banks during periods of stress.

ECB’s Response and Next Steps

The ECB has responded cautiously, describing the proposal as a “constructive step” toward Parliament’s position while reaffirming its commitment to completing preparatory work.

“Europe needs a payments system that works everywhere and for everyone,” said Executive Board Member Piero Cipollone, adding that the digital euro project remains vital for economic sovereignty.

Despite this, the central bank faces an uphill political battle. With several parties skeptical about the necessity of a digital euro, reaching consensus could take years. Legislative negotiations are not expected to conclude before mid-2026.

Between Sovereignty and Market Reality

Europe’s digital currency debate captures a larger philosophical divide: Should the future of money be designed by central banks or discovered by the market?

For ECB supporters, a digital euro symbolizes independence — a European answer to American and Chinese payment dominance.

For skeptics, it is a bureaucratic solution in search of a problem.

Navarrete’s proposal effectively challenges the ECB to prove its relevance: if private firms can unify Europe’s fragmented payment systems, the digital euro may never need to exist.

Whether that bet pays off will depend not on ideology, but on what happens first — innovation from the market, or exhaustion from Brussels.

The information provided in this article is for educational purposes only and does not constitute financial, investment, or trading advice.

Source: Coindoo agencies.

https://coindoo.com/digital-euro-faces-uncertain-future-as-brussels-rethinks-its-purpose/

How Bethpage Black turned Blue after brilliant session for Europe

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Europe took a decisive step towards retaining the Ryder Cup after another brilliant morning session of fourballs. They won three of the four matches 3-1 to move to an 8.5-3.5 lead, going into the afternoon fourballs with a commanding position.

Bryson DeChambeau and Cameron Young beat Matt Fitzpatrick and Ludvig Aberg 4&2. DeChambeau and Young struck first blood for the Americans, getting ahead early before a wave of blue followed behind. They went ahead at the third hole, but the European pair quickly hit back on the next hole. The Europeans then took control by winning the seventh, eighth, and ninth holes consecutively, moving into an unassailable position. They sealed the victory with a birdie on the 16th.

Score: Europe 5.5, USA 3.5

Rory McIlroy and Tommy Fleetwood defeated Harris English and Collin Morikawa 3&2. It was déjà vu for Fleetwood Mac as they overwhelmed the American duo for a second consecutive morning. Though Keegan Bradley stood by Morikawa and English and their team got off to a hopeful start by winning the first hole, McIlroy and Fleetwood quickly showed their dominance. Birdies at the second and third holes turned the match around, followed by further wins at the fifth, seventh, and eighth holes, putting them four up. The Americans mounted a brief comeback to narrow the gap to two under, but a European birdie on the 16th hole sealed the victory.

Score: Europe 6.5, USA 3.5

Jon Rahm and Tyrrell Hatton continued their brilliant form to beat Xander Schauffele and Patrick Cantlay 3&2. The LIV teammates squandered a two-up lead to be all square, but Rahm’s brilliant chip from the edge of a bunker gave Europe the advantage once again. They did not relinquish the lead, securing birdies at the 12th and 16th holes to claim another point. This victory marked five wins from five fourball matches for Rahm.

Score: Europe 7.5, USA 3.5

Robert MacIntyre and Viktor Hovland edged out Russell Henley and Scottie Scheffler 1 up in a nail-biting encounter. Vik and Bob proved they are no comedy act, shooting down the stars and stripes of America with a tense victory. This was the only match that went to the 18th hole. The United States, having come back from two down, leveled the match at the 13th. However, momentum swung back to Europe as a birdie at the 14th put them ahead again. Clutch putts from MacIntyre at the 15th and Hovland at the 17th holes ensured the team took the crucial point.

With this dominant morning session, Europe now leads 8.5 to 3.5, putting them in a strong position to retain the Ryder Cup as the afternoon fourball matches approach.
https://www.breakingnews.ie/sport/how-bethpage-black-turned-blue-after-brilliant-session-for-europe-1811941.html