The ageing Union's economy
Since 26 May
Europe's competitiveness is squeezed between weak productivity, demographic decline, and the green transition's cost, while persistent inflation, rising borrowing costs, resistance from net contributor states to EU-level spending, and a fragmenting global trade order under Trump's tariff posture and China's retaliatory probes narrow the policy space for the investment surge the Draghi and Letta reports say is needed.
Energy and Inflation
Euro-area inflation has reached 3.8% according to Bundesbank President Nagel, as energy-price increases spread from fuels to gas and electricity. ECB Chief Economist Lane favours a measured response while policymakers check for wage effects. Gas storage is about 72%, the lowest for early October since 2011.
Growth and Markets
Business-cycle indicators show a late-quarter slowdown, with Italy possibly in recession and Germany and France weakening. France's 10-year yield hit its highest since 2002, with the Bund spread above 140bp. A senior Bundesbank official called the bond sell-off a "clear warning sign" that investors doubt governments' control of debt.
Budget and Reform
Ireland's presidency proposed on 10 October cutting the 2028–2034 budget by about €159bn in current prices, to roughly €1.826tn against the Commission's nearly €1.985tn (an 8% cut). Competitiveness, prosperity and security lines would fall 13%, regional, farm and fisheries lines 3%. Frugal states want deeper cuts, while the Commission and Parliament object.
Leaders meet on 15–16 October on competitiveness, energy and the €1bn-a-day China trade deficit, with only 15.7% of Draghi measures fully delivered by July.
Next
European Council summit on competitiveness and energy prices begins
Euro zone finance ministers meet
Who’s who
Ireland's Council presidency, EU Council presidency
Proposes cutting the 2028-2034 EU budget by about €159bn in current prices to roughly €1.826tn, trimming competitiveness funding by about 13%.
Maroš Šefčovič, EU trade commissioner
Calls the deal to halve Chinese hybrid exports a first step and demands concrete results on the €1bn-a-day deficit, threatening protective measures.
António Costa, European Council President
Has put growth, competitiveness and high energy prices on the agenda of the summit starting 15 October.
Frugal states, Net contributor member states
Call even the revised budget package unaffordable.
François-Louis Michaud, European Banking Authority chair
Says supervisors are enhancing monitoring of banks' sovereign-bond portfolios as core-market yields hit multiyear highs.
Timeline
Ireland's Council presidency proposes €140bn cut to 2028–2034 EU budget
Ireland's Council presidency circulated a proposal on 10 October to cut the EU's 2028–2034 budget by about €159 billion in current prices (about €140 billion in 2025 prices), leaving total spending at roughly €1.826 trillion in current prices. Competitiveness funding would fall about 13% and administrative spending 12%. Frugal states called even the revised package unaffordable; cohesion-focused countries opposed cuts to investment priorities.
Costa sets competitiveness and energy costs for 15 October summit agenda
European Council President António Costa said on 9 October that leaders will address economic growth, competitiveness and high energy prices at their Brussels summit beginning 15 October, and review implementation of the One Europe, One Market agenda for 2026–27.
EBA launches enhanced monitoring of banks' sovereign-bond portfolios
EBA chair François-Louis Michaud said on 9 October that supervisors are conducting enhanced monitoring of banks' multitrillion-euro sovereign-bond portfolios, as yields in several core markets reached multiyear highs and borrowing costs worsen public-finance constraints.
Key
EU-China deal halves hybrid and plug-in-hybrid exports to the bloc
EU and Chinese negotiators agreed on 9 October to halve Chinese hybrid and plug-in-hybrid vehicle exports to the bloc, with improved European market access and eased Chinese rare-earth licensing in return. Šefčovič called it a first step, not a final settlement.
Finance ministers agree to widen ESMA powers for capital markets oversight
EU finance ministers agreed on 9 October to widen the supervisory powers of the European Securities and Markets Authority, shifting some market oversight from national authorities to the EU level as part of efforts to revive the Savings and Investments Union.
EU selects 46 strategic raw-material projects to cut China dependence
The European Commission announced on 9 October the selection of 46 strategic raw-material projects targeting minerals and components for batteries, defence, aerospace, automotive production, and renewable energy, aimed at reducing dependence on China for critical inputs.
Šefčovič demands concrete results from China trade talks as EU deficit hits €1bn a day
EU trade commissioner Maroš Šefčovič met Chinese Commerce Minister Wang Wentao in Beijing on 8 October for a second round of talks, demanding concrete results to correct a trade deficit running at €1 billion per day. Brussels threatened protective measures if China does not act.
EU draft proposes lower electricity taxes and stricter grid-access rules
A draft proposal seen by El País on 9 October would keep electricity taxation below that on gas and other fossil fuels, let regulators prioritise grid connections where capacity is scarce, and set minimum smart-meter coverage at 50% of consumers by 2030 and 75% by 2033.
Member states prepare €100–200bn cuts to next EU budget
Politico reported on 9 October that member states are preparing cuts of €100 billion to €200 billion from the Commission's June MFF proposal, potentially shrinking the planned €410 billion European Competitiveness Fund and the Global Europe programme.
Commission rejects special fiscal flexibility for Italy and Greece
The European Commission said on 8 October that existing fiscal rules already account for inflationary pressures, rejecting requests from Italy and Greece for additional flexibility. Italy's proposal to redirect inflation-driven VAT revenue toward fuel-price cuts was also turned down, narrowing budget options for indebted southern states as energy costs climb.
ECB publishes September meeting account citing upward inflation risks
The ECB published its September meeting account on 8 October, saying euro-area inflation risks remained tilted upward as energy prices and geopolitical uncertainty intensified, with oil at about $97 a barrel and gas at €73/MWh. The account also said Q2 growth proved more resilient than expected.
Eurozone September manufacturing PMI rises to 52.9
S&P Global reported on 8 October that eurozone manufacturing PMI reached 52.9 in September, its highest level since May 2022. Growth was concentrated in investment goods, while consumer goods demand remained constrained by energy costs.
German industrial production rises 2.0% in August on state spending
Germany's Federal Statistical Office reported on 8 October that industrial output rose 2.0% month-on-month in August, exceeding expectations. The increase was driven primarily by infrastructure and defence spending, following sharp contractions earlier in the quarter.
France 10-year yield hits highest since 2002 as Bund spread tops 140bp
France's 10-year borrowing cost rose on 7 October to its highest level since 2002, with the spread over German Bunds exceeding 140 basis points. Italian yields also climbed as energy-driven inflation revived concerns about indebted eurozone governments' refinancing costs.
Commission prepares possible cap on Chinese hybrid-car imports
Bloomberg reported on 7 October that the European Commission is preparing a possible cap on Chinese hybrid-car imports, one of its strongest trade responses yet, and is examining broader tools to curb rising imports of machinery, textiles, basic metals and chemicals.
EU capitals split over non-EU firms' access to proposed Competitiveness Fund
Politico reported on 7 October that member states disagree over whether companies from outside the EU should access the Competitiveness Fund and under what conditions, exposing tensions between attracting foreign investment and strengthening domestic industrial capacity.
Chinese plug-in hybrid imports surge 86% as EU tariffs fail to curb vehicle inflow
EU imports of Chinese plug-in hybrids rose 86% year-on-year to September with prices down 20%, while battery-electric-vehicle imports grew 40%, Reuters reported on 7 October. More than half of BEV imports came from China despite EU tariffs, intensifying pressure on European carmakers and clean-industrial policy.
IEA board weighs releasing oil and diesel reserves as fuel prices climb
The IEA governing board discussed on 7 October a possible release of oil and diesel stocks, as fuel prices driven by disrupted exports and refinery damage linked to conflicts in Iran and Ukraine raise costs for transport, agriculture, and manufacturing.
Italy calls for EU budget rules to account for inflation as CPI hits 4.1%
Italy's Economy Minister Giancarlo Giorgetti said on 7 October that EU authorities should account more fully for inflation when assessing deviations from budget targets, as Italian inflation rose to 4.1% and energy costs threaten at least 0.2% of GDP growth next year.
Key
EU drafts crisis response plans for potential mass-casualty Russian hybrid attacks
EU ambassadors are drafting contingency measures including civilian deployment teams and emergency funding to prepare for potential mass-casualty Russian sabotage operations across Europe, adding a security-planning track alongside existing fiscal and competitiveness pressures.
Commission considers broad corporate levy to raise EU revenue
The European Commission is examining changes to its Corporate Resource for Europe proposal that would require companies with more than €100 million in EU revenue to make annual lump-sum payments, seeking revenue from Apple, Meta and Google while avoiding a levy explicitly targeting US digital firms.
Bank of France Governor says France does not need ECB support
Bank of France Governor Emmanuel Moulin said on 7 October that France's economic situation was serious but the ECB did not need to intervene, and that the solution lay in domestic budget deficit reduction.
Euro-area inflation rises to 3.8% in September flash estimate
Annual euro-area inflation accelerated to an estimated 3.8% in September from 3.2% in August, with core inflation at 2.5%. The energy-driven jump narrows the ECB's room to ease policy even as growth weakens.
Commission proposes enlargement management package with gradual integration and Ukraine farm limits
The European Commission proposed a package to manage future enlargement, including gradual integration of candidates into EU programmes, stronger safeguards against democratic backsliding, and possible limits on financial support for Ukraine's agricultural sector. The proposals require approval by all 27 member states.
Mistral AI launches industrial-design model with Airbus and BMW as customers
French AI company Mistral AI unveiled a new model on 6 October targeting industrial design and production, with Airbus and BMW among its customers, narrowing Europe's gap with Chinese competitors in advanced digital applications.
Key
European Parliament approves €115M AGILE defence-innovation fund
Lawmakers voted 536 to 101 in Strasbourg to establish a fast-track funding mechanism for startups developing military AI, robotics, and drone technology ahead of a 2027 rollout.
Poland pledges 102.4 billion zlotys for civil defence and shelter upgrades
Polish Prime Minister Donald Tusk unveiled a 102.4 billion zloty civil protection plan for 2027 to 2031 to build shelters, secure water and energy grids, and expand local rescue systems. The pledge adds to Poland's fiscal commitments as EU recovery transfers decline.
IMF cuts Central Europe medium-term growth outlook to 2.5%
The IMF reported on 6 October that Central and eastern European economies' medium-term growth outlook has fallen to an average 2.5%, from about 5% before EU accession, citing demographic decline, Chinese export pressure and weaker German demand, and urging higher labour-market participation and faster AI adoption.
Von der Leyen delays EU methane import rules, launches refinery dialogue
Von der Leyen announced on 6 October that methane exporters would receive an additional year to prepare for EU methane rules, launched a strategic dialogue on European refining capacity, and pledged measures to raise electricity's share of total energy demand, responding to industry pressure from high costs.
Polish Sejm committee completes Glapiński evidence, sets report for 9 October
The Sejm Constitutional Accountability Committee completed witness hearings on 6 October and scheduled its final report for 9 October, advancing a plenary vote on referring NBP Governor Adam Glapiński to the State Tribunal. The move tests central bank independence in the EU's sixth-largest economy.
Von der Leyen rejects budget-cut demands, proposes centralized EU gas purchasing
Commission President von der Leyen rejected demands from Germany and five allies for deep cuts to the 2028-2034 EU budget and announced a centralized gas-buying mechanism ahead of the mid-October European Council. The plan would appoint a market operator to coordinate joint energy purchases.
Euro-area industrial producer prices rise 5.6% in August on energy costs
Eurostat data showed euro-area energy producer prices rose 5.6% in August from July, with intermediate-goods prices up 0.4% and capital-goods prices up 0.2%. The figures underline how renewed energy costs are feeding through to European manufacturers' input prices.
German factory orders plunge 10.6% in August, sharpest fall since January
Germany's Federal Statistical Office reported manufacturing orders fell 10.6% month-on-month in August, the sharpest drop since January and far worse than the 1% decline economists expected. The fall complicates hopes for a sustained industrial recovery in Europe's largest economy.
EU trade commissioner to seek rare-earth assurances in China visit
Trade Commissioner Maroš Šefčovič was due to visit China to seek assurances on European access to rare earths and other minerals, EUobserver reported on 5 October. A temporary pause on additional Chinese export restrictions expires in coming weeks, adding urgency to the mission.
ECB chief economist Lane warns energy costs create dual inflation-growth risk
ECB chief economist Philip Lane said on 5 October that the energy-price surge poses direct upside risks to inflation but also downside risks to growth, potentially limiting the monetary tightening required. Bundesbank President Nagel said second-round wage effects have not yet emerged.
Poland adopts 2027 draft budget with 281.2bn PLN deficit as EU recovery transfers drop
The Polish government adopted its 2027 draft budget projecting a 281.2 billion PLN deficit, while net EU transfers will drop to 33.5 billion PLN following the expiration of post-pandemic recovery funds. The fiscal cliff illustrates the broader EU challenge of sustaining investment as temporary common funding mechanisms wind down.
Merz and Macron seek EU trade-coercion tool and climate-cost shields in joint letter
Chancellor Merz and President Macron wrote to Commission President von der Leyen on 5 October calling for powers to swiftly bar coercive trading partners from the single market and for measures shielding energy-intensive exporters from EU climate-rule costs. The joint initiative presses Brussels for a more assertive trade and industrial posture.
Moody's warns EU population could peak as early as 2029
Moody's warned that the EU population could peak as early as 2029, with the working-age-to-over-65 ratio across G7 economies projected to fall from about three to two by 2050, increasing pension and healthcare costs while shrinking productive capacity.
Eurozone composite PMI rises to 53.1 in September, highest since April 2023
The eurozone composite PMI climbed to 53.1 in September, its highest reading since April 2023, with services activity and factory orders strengthening even as employment growth weakened and input prices rose at their fastest pace in four months.
European equity issuance falls about 20% year on year in Q3
European equity issuance dropped roughly 20% year on year in the third quarter as elevated borrowing costs suppressed new share sales, constraining companies' access to capital and complicating the investment push for competitiveness.
Key
French 10-year bond yields surpass 4.9% as public debt reaches €3.6tn
France's 10-year borrowing costs exceeded 4.90% after public debt climbed to 119% of GDP in the second quarter of 2026, intensifying concerns over debt sustainability and foreign investor holdings.
EU governments agree to release additional diesel stockpiles, mull IEA crude coordination
European countries agreed on 5 October to a French proposal to release additional diesel stockpiles amid tighter refined-product supply, with discussions also involving a possible coordinated release of crude reserves by International Energy Agency members.
Lagarde says bond yields restrain growth, backs measured ECB response
ECB President Christine Lagarde said on 4 October that rising government-bond yields would restrain eurozone growth and limit pass-through of energy costs to broader inflation, supporting a measured monetary-policy response. She cited AI-driven productivity gains as a potential cost reducer.
Commission weighs delaying EU methane import rules to 2028
The European Commission is considering postponing the import-related part of the EU methane regulation until 2028, EUobserver reported on 4 October, citing the EU's reliance on imports for nearly 90% of its gas and the ongoing phase-out of Russian supply.
G7 agrees to release up to 100 million barrels of oil and diesel over four months
G7 countries agreed on 3 October to release up to 100 million barrels of oil and diesel over four months and ruled out restricting energy exports between members. European diesel prices had reached about €2.24 per litre, with half of EU consumption covered by imports and refining capacity declining.
Merz consults leading candidates to succeed Lagarde at ECB
Chancellor Friedrich Merz was due to meet Spain's Pablo Hernández de Cos and the Netherlands' Klaes Knot, leading candidates to succeed Christine Lagarde as ECB president, Bloomberg reported on 3 October. Knot's meeting was expected within days.
Bundesbank doubles 2026 Germany growth forecast to about 1%
Bundesbank President Joachim Nagel said on 3 October that Germany could grow about 1% in 2026, double the bank's June forecast, citing resilient production, export demand, and government investment. He cautioned that Germany's potential growth rate remains low.
Poland targets year-end nuclear EPC contract with Westinghouse and Bechtel
Poland aims to finalize an engineering and construction contract with Westinghouse and Bechtel for the Choczewo nuclear plant by late 2026, as surveys show Polish consumers prioritize domestic technology sovereignty despite household bill concerns.
Renault announces €10bn five-year EV investment plan in France
Renault announced on 3 October a plan to invest more than €10 billion in France over five years to expand electric-vehicle and affordable-car production, with French output expected to rise at least 25% in 2026. The investment deepens the company's industrial shift toward EVs.
China opens anti-dumping probe into EU chemical exports
China launched an anti-dumping investigation into EU p-nitrotoluene chemical imports on 3 October, after domestic producers cited a near 60% price drop over three years. The probe follows three similar EU investigations launched the prior week, widening the trade-pressure front for European manufacturers already strained by energy costs.
European governments agree to tap strategic diesel reserves
European governments agreed to release strategic diesel reserves over a 20-day period, sending oil prices lower as markets priced in reduced risk of a US diesel-export ban. Implementation depends on national decisions.
G7 leaders hold talks on fuel crisis as Trump presses Europe on diesel
G7 leaders held talks on 2 October on the fuel-supply crisis as the Trump administration pressed European governments to release strategic reserves or face a diesel-export ban. The discussions came with EU diesel at €2.23 a litre and energy inflation at 18.8%.
Standard Chartered shifts to forecast 25bp ECB rate hike in December
Standard Chartered shifted its ECB forecast on 2 October from a pause to a 25-basis-point deposit-rate hike in December, taking it to 2.75%, citing stronger-than-expected inflation and resilient activity. The ECB's next scheduled meeting is 29 October.
France proposes coordinated EU release of strategic diesel stocks
France proposed on 2 October that EU member states coordinate a release of strategic diesel stocks to curb fuel prices after the Trump administration threatened a diesel-export ban. The proposal aimed at an emergency response rather than a structural fix to Europe's energy-cost disadvantage.
Eurozone inflation jumps to 3.8% in September on fuel and gas costs
Eurozone inflation accelerated to 3.8% in September from 3.2% in August, Eurostat reported on 2 October, driven by fuel and natural-gas costs. Core inflation rose to 2.5%, keeping markets focused on the prospect of further ECB rate increases.
Euro hits 17-month low as French yields reach 14-year high
The euro fell to a 17-month low against the dollar on 2 October as French 10-year borrowing costs climbed to a 14-year high, extending a global bond sell-off. The energy shock and rising political risk are weighing on confidence in the single currency.
EU states discuss releasing diesel reserves after Trump export-ban threat
EU countries discussed releasing strategic diesel stocks on 1 October after the Trump administration threatened a diesel-export ban, Reuters reported. Member states were due to meet the European Commission on 2 October to coordinate a response, with EU diesel averaging $9.53 a gallon.
Euro-area bond stress spreads beyond France
Risk premiums on euro-area government bonds rose sharply on 1 October as concerns over France's fiscal position spread to other markets, Bloomberg reported, tightening financing conditions for governments across the currency bloc.
Commission reports €17.9bn in EU energy support spending for 2026
The European Commission reported on 1 October that EU governments spent €17.9 billion on energy support in 2026 to cushion households and companies from rising oil and gas costs, while urging more targeted assistance rather than broad-based measures.
ECB's Nagel rejects using monetary tools to target French bond spreads
ECB policymaker Joachim Nagel said on 1 October that the central bank's debt-buying instruments are designed to safeguard price stability, not to target individual countries' sovereign-bond spreads. His comments came as the French-German yield spread widened to its highest level since the eurozone debt crisis.
Germany sharply upgrades 2026 and 2027 growth forecasts
The German government is set to raise its 2026 growth forecast to 1.3% from 0.5% and its 2027 forecast to 1.1% from 0.9%, Reuters reported on 1 October, with the revised figures due for official presentation on 8 October. The upgrade reflects resilient industrial output despite elevated energy costs.
EU steel exports fall 20% in H1 2026 as US shipments drop 29%
EU steel exports fell 20% in the first half of 2026, with shipments to the United States down 29%, data showed on 1 October. High energy costs, US tariffs, and Chinese oversupply drove the decline as EU raw-steel production also decreased.
Eurozone manufacturing PMI hits 52.9, fastest in over four years
The eurozone manufacturing PMI rose to 52.9 in September from 52.7 in August, S&P Global data showed on 1 October, the fastest expansion in over four years. Input and output price inflation accelerated, reinforcing expectations of further ECB rate increases.
ECB asks EU leaders to begin post-Lagarde succession planning
The ECB asked EU leaders to begin selecting a successor to Executive Board member Isabel Schnabel, Bloomberg reported on 1 October, potentially as part of a wider package including the succession to President Christine Lagarde. The move initiates the central bank's leadership transition.
France presents €54bn deficit-reduction plan targeting 5% of GDP by 2027
The French government presented deficit-reduction measures on 1 October targeting 5% of GDP by 2027, down from 5.4%, as the final major budget proposal before next year's elections. The plan tests investor confidence in French debt amid borrowing costs near multi-year highs.
Commission proposes consolidating EU spending into reform-linked national plans
The Commission proposed consolidating agricultural, regional, and migration spending into national partnership plans linked to economic reforms, Politico reported on 1 October. The model mirrors the recovery fund and intensifies the battle over EU budget control between Brussels and member states.
EU and Canada to unveil strategic partnership at October Montreal summit
The EU and Canada will unveil a wide-ranging strategic partnership at a 29 October Montreal summit, covering critical minerals, energy supplies, digital trade, and joint firefighting aircraft purchases. The accord diversifies EU supply chains as energy costs and trade fragmentation pressure manufacturers.
Polish investors commit 500M PLN to Synthos small modular reactor venture
Polish business leaders committed 500 million PLN to Synthos Green Energy's small modular reactor programme at a Warsaw conference, backing plans to build up to 26 BWRX-300 reactors by 2032. The investment adds domestic capital to Poland's nuclear push.
Italy cuts growth forecast to 0.6% as confidence weakens
Italy cut its growth forecast to 0.6% for both 2026 and 2027, citing higher energy prices and Middle East instability, as business and consumer confidence fell in September according to data reported on 30 September.
Meloni and Mitsotakis press EU for fiscal flexibility on energy costs
Italian Prime Minister Giorgia Meloni and Greek Prime Minister Kyriakos Mitsotakis appealed on 30 September for greater EU fiscal flexibility to shield households and firms from energy-driven inflation, with Italy's deficit expected above the 3% reference value this year.
Bruegel analysis finds proposed MFF covers only 12–22% of EU investment gap
A Bruegel analysis published on 30 September found that the Commission's proposed €2 trillion 2028–2034 budget would cover only 12–22% of the investment gap for projects with European spillovers and 4–8% of total investment needs. The figures quantify the shortfall between Draghi-era ambitions and available funding.
French bond yields hit 4.80% as Lecornu warns of crisis before budget
French 10-year bond yields reached 4.80% as Prime Minister Sébastien Lecornu warned lawmakers of a crisis before presenting a €54 billion recovery budget. France's spread over German bonds widened to 1.20 percentage points, intensifying fiscal-pressure concerns at the eurozone core.
German unemployment tops three million in September
German unemployment rose above three million in September as the economy lost momentum in the third quarter, with energy inflation reaching 14.9%. The figure deepens concerns about the labour market's capacity to sustain growth amid demographic decline and energy-cost pressure.
Poland's Domański attends G20 trade talks in Milwaukee, seeks permanent seat
Finance Minister Andrzej Domański joined a G20 ministerial meeting in Wisconsin on 30 September, holding bilateral trade discussions and rejecting dialogue with Russian delegates. Poland is pursuing a permanent G20 seat, positioning itself in global trade governance.
UK PM Burnham puts EU rejoining on table ahead of Brussels summit
British Prime Minister Andy Burnham outlined four paths for long-term EU ties, ranging from the status quo to full EU membership, ahead of a bilateral Brussels summit expected on 20 November 2026. The options widen the scope of UK-Brussels relations beyond trade.
Eurozone inflation prints at 3.6% in September, pressuring ECB
Eurozone inflation rose to 3.6% in September, up from 3.2% in August, Reuters reported on 30 September. Energy-price increases linked to the Iran conflict drove the acceleration, and economists warned inflation could approach 4% if energy costs stay elevated.
Spanish CPI rises to 5% in September, highest since February 2023
Spanish consumer-price inflation rose to 5% in September from 4.6% in August, exceeding the 4.9% median forecast and reaching its highest level since February 2023, Bloomberg reported on 29 September. The reading adds to pressure for further eurozone monetary tightening.
French public debt hits 119% of GDP
French public debt reached a record 119% of GDP, figures reported on 29 September showed. The increase tightens fiscal constraints on France as weak growth and higher borrowing costs limit room for public investment.
Irish minister signals US diesel export ban unlikely
Irish Energy Minister Darragh O'Brien said on 29 September that US officials had signaled Trump was unlikely to impose the reported 90-day diesel export ban. He warned the measure would still have a "distinct impact" on EU fuel supplies if enacted.
Six net contributors demand cuts to proposed €1.98 trillion MFF
Six net contributor governments including Germany sent a joint letter to the Irish EU presidency demanding cuts of several hundred billion euros from the proposed 2028–2034 Multiannual Financial Framework. The pushback narrows the fiscal space for joint investment in competitiveness and defence.
EU defence ministers debate Article-4-style crisis protocol
EU defence ministers meeting in Brussels evaluated military readiness shortfalls and discussed an emergency response mechanism analogous to NATO Article 4, plus naval shortages in the Red Sea. The debate tests whether the bloc can translate capability gaps into common funding decisions.
Trump administration weighs 90-day diesel export ban, El País reports
The Trump administration is considering a 90-day diesel export ban through end-2026, five sources told El País on 26 September. The measure would coincide with peak winter diesel demand in Europe and North America, threatening to tighten supplies and raise costs for households and manufacturers already facing record fuel prices.
Bloomberg survey puts eurozone September inflation at 3.7%, up from 3.2%
A Bloomberg survey published on 25 September forecast annual eurozone consumer-price growth at 3.7% for September, up from 3.2% in August, with higher energy costs the main driver. The acceleration complicates the ECB's response to the energy shock amid weak underlying growth.
European gas prices above €80/MWh push coal past gas in power merit order
European gas prices rose above €80/MWh on 24 September, a three-year high, after disruptions to LNG shipments through the Strait of Hormuz. Coal and lignite plants became more profitable than gas-fired generation for the first time since at least 2024, potentially reversing part of Europe's emissions-reduction progress.
Ifo business-climate index rises to 89.9 in September
The Ifo business-climate index rose to 89.9 in September from 88.8 in August, figures reported on 24 September showed. The improvement suggested Germany's economy was proving more resilient than expected, though the survey did not dispel concerns about elevated energy costs and longer-term structural weakness.
German institutes raise 2026 forecast to 1.3% but project 0.4% growth in 2028
Germany's leading economic institutes raised their 2026 growth forecast to 1.3% and 2027 to 1.1% in reporting published on 24 September, but projected only 0.4% growth in 2028 as a shrinking labour force caps potential output. Inflation was forecast at 2.8% in 2026 and 3.2% in 2027.
European EV sales jump 52% as record fuel prices accelerate shift from combustion engines
European electric-car sales rose 52% as fuel prices reached record highs, Bloomberg reported on 24 September. The jump indicates the energy shock is accelerating the shift from combustion engines while adding pressure on household budgets.
ECB chief economist says wage reaction to energy shock remains limited
ECB chief economist Philip Lane said on 23 September that wages were not reacting materially to this year's energy-driven inflation, attributing workers' restraint partly to awareness of competition with China and automation risk. The assessment informs ECB rate deliberations as energy costs push prices higher.
ECB says larger European firms could narrow EU–US productivity gap
The ECB said on 23 September that larger European companies could substantially narrow the bloc's productivity gap with the United States, linking firm scale to the competitiveness challenge the Draghi and Letta reports identify.
France's composite PMI increases to 51.2 in September
France's preliminary composite PMI increased to 51.2 in September, marking the fastest private-sector expansion in over two years. The rebound was driven by services, but input and output prices rose at their quickest pace since May.
Germany's composite PMI rises to 53.8 in September
Germany's composite Purchasing Managers' Index rose to 53.8 in September, its highest level since October 2025. Services returned to growth, while manufacturing remained in expansion, though input costs increased at their fastest pace in four months.
EU and Philippines reach initial free-trade agreement
The EU and the Philippines announced an initial free-trade agreement on 22 September, removing tariffs on over 94% of bilateral goods. The deal expands access for EU machinery, transport equipment, and agri-food exporters as the bloc broadens Asian trade links.
Istat confirms Italy 2025 deficit at 3.1%, delaying exit from EU excessive deficit procedure
Istat confirmed on 22 September a 2025 budget deficit of 3.1% of GDP, keeping Italy in the EU's excessive deficit procedure and pushing any procedural exit to 2027, narrowing Rome's fiscal room.
Macron presses Commission to loosen EU fuel rules as supplies tighten
Macron wrote to von der Leyen asking the Commission to postpone methane-reporting requirements for oil and gas importers and to relax fuel-quality rules so refineries can produce up to 20% more oil products, citing constrained supply.
Czech Finance Ministry plans refinery windfall tax through 2027
The Czech Finance Ministry announced on 21 September a planned windfall tax on refineries, levying 50% of margin increases above 2025 levels through 2027, with expected annual proceeds of about $260m. The tax requires parliamentary approval and accompanies October fuel margin caps.
Czechia reinstates fuel price caps and trims diesel excise from 1 October
Czechia will reinstate price caps on gasoline and diesel from 1 October, with a temporary diesel excise cut to the EU minimum through October. The measures follow national petrol prices at their highest since August 2022.
Germany cuts energy taxes on fuel from 1 October through year-end
Germany will cut energy taxes on petrol and diesel by €0.14 per litre from 1 October through end-2026, responding to national averages near €2.43/litre for diesel. The temporary cut eases pressure on logistics and industrial operators without addressing underlying supply costs.
Commission proposes data-centre energy and water efficiency disclosure rules
The European Commission proposed on 21 September rules requiring data centres in Europe to disclose how efficiently they use energy and water. The initiative reflects concern over resource consumption as electricity and fuel prices remain a core competitiveness issue.
Volkswagen intensifies restructuring after profit warning
Volkswagen announced on 21 September it will intensify its restructuring programme after a profit warning exposed sectoral strain from high costs, overcapacity, US tariffs, and fierce Asian competition. Union representatives urged stronger protection against unfair competition and a more effective EU subsidy policy.
Volkswagen works council calls for coordinated European industrial strategy
VW's works council urged company management and policymakers on 21 September to take stronger action to support Europe's car industry, citing high energy prices, Chinese and US EV competition, and green-transition regulatory pressures. VW operates across Germany, Slovakia, Spain and Czech Republic.