Europe·since 26 May·565 entries
The ageing Union's economy
Europe's competitiveness is squeezed between weak productivity, demographic decline, and the green transition's cost, while an energy-driven inflation shock, rising borrowing costs, resistance from net contributor states to EU-level spending, and a fragmenting trade order under US tariffs and Chinese export pressure narrow the policy space for the investment surge the Draghi and Letta reports say is needed.
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This week4 entries
State of playtoday 19:59
Energy Shock and Rates
Eurozone inflation hit 4.0% in October on Eurostat's flash estimate, with energy up 20.8% year on year. Gas prices briefly reached €100 per megawatt-hour in late October, and the Commission puts the rise in the energy import bill at more than €127 billion since the Iran war began.
The ECB held its deposit rate at 2.50% on 29 October. In a Reuters poll of 10–12 November, all 71 economists expected a December rise to 2.75%, and 46 saw that as the peak. They forecast inflation of 3.1% in 2026 and 2.8% in 2027, with growth of 1.1% and 1.3%.
Growth and Industry
A BusinessEurope survey of 12 November found negative sentiment among industrial firms down to 33% from 62% in June, yet concern about inflation and sovereign debt is growing. Germany's VCI raised its 2026 chemical sales forecast to 3.5% from 2.5%, but price rises, not output, drive it, and it demands action on energy costs and bureaucracy.
Reuters notes China makes about 75% of the world's electric vehicles and over 80% of battery cells, so electrification deepens Chinese dependence.
Budget and Policy
Merz wants the post-2027 EU budget focused on defence and competitiveness, while Dombrovskis warns energy prices, deficits and debt narrow fiscal room. The next tests are the Commission's autumn forecast on 17 November and the Semester package on 24 November.
What comes next
- in 5 daysCommission autumn economic forecast
- in 8 daysUK-EU summit in Brussels
- in 12 daysCommission European Semester autumn package
- in 14 daysEuro-area leaders meet to discuss ECB top job
Open questions
- Will member states accept a 2028-2034 budget cut of €100bn to €200bn without gutting the competitiveness fund?
- Will Poland follow through on its threat to block the 2028-2034 budget over the ETS revenue plan?
Who is who8
Christine Lagarde ECB President
Held the deposit rate at 2.50% on 29 October and will leave on 7 February 2027, nine months before her term ends.
12 Nov
Klaas Knot Candidate for ECB President
Nominated by the Netherlands on 6 November to succeed Lagarde.
7 Nov
Pablo Hernández de Cos Candidate for ECB President
Nominated by Spain on 6 November to succeed Lagarde; Reuters, citing the FT, reports France may back him.
12 Nov
Ireland's Council presidency EU Council presidency
Proposes cutting the 2028-2034 EU budget by about €159bn in current prices to roughly €1.826tn, and leaders did not bridge divisions on it; talks resume in November.
22 Oct
Poland EU member state government
Rejects routing 30% of ETS auction revenue into the EU budget and could block the 2028-2034 package; wanted a three-year methane-rule delay, while governments agreed one year.
7 Nov
Frugal states Net contributor member states
Call even the revised budget package unaffordable.
10 Oct
Friedrich Merz German Chancellor
Proposed EU-level critical raw materials reserves on 7 November, citing dependence on China, and wants the post-2027 budget focused on defence and competitiveness.
12 Nov
Italian government Italian national government
Approved measures on 9 November to curb gas-driven electricity bills, over producers' objections, and has not picked an ECB candidate.
10 Nov
Numbers
French 10-year government bond yield
4.93→5 %
19/10 → 21/10 · pollar.news
Promises7
Donald Tuskopen
Tusk will ask President Nawrocki to appoint finance minister Domański deputy prime minister.
20 Oct · pollar.news
EU leadersopen
Leaders will complete capital-markets integration and the savings-and-investment agenda by end-2026.
16 Oct · due 31 Dec · mobil.aa.com.tr
Marine Le Penopen
If elected, she will keep French financial aid to Ukraine for six months after taking office, then stop it.
14 Oct · six months after taking office · pollar.news
Poland's Ministry of Energy, PEJ and PGEopen
Poland will select a technology partner for its second nuclear plant in 2027 and start construction around 2032.
13 Oct · technology partner 2027, construction around 2032 · pollar.news
Marine Le Penopen
If elected, she will cut France's EU contribution by €11bn in her first year.
13 Oct · first year in office · pollar.news
EU and China negotiatorsopen
Chinese hybrid and plug-in-hybrid exports to the EU will be halved, with eased Chinese rare-earth licensing in return.
9 Oct
Maroš Šefčovičopen
The EU will take protective measures against China if Beijing does not act to correct the trade deficit.
8 Oct · pollar.news
Chronicle565 entries since 26 May
9–15 November1 entry
Italy's government approved measures on 9 November to reduce the effect of rising gas prices on household and business electricity bills. Energy producers criticised the plan because they would bear part of the cost.
2–8 November7 entries
German Chancellor Friedrich Merz proposed EU-level reserves of materials used in batteries, semiconductors and electric motors on 7 November, citing dependence on China. The Commission selected 46 strategic raw-material projects across 16 member states in October.
EU governments agreed on 6 November to postpone methane-reporting rules for oil, gas and coal importers by one year, Reuters reported. They cited energy market disruption linked to the conflict involving the United States, Israel and Iran.
Spain nominated Pablo Hernández de Cos and the Netherlands nominated former central-bank governor Klaas Knot on 6 November to succeed Christine Lagarde at the ECB. Italy has not picked a side, and governments aim to agree a successor by their mid-December summit.
The European Parliament's environment committee approved on 4 November a 300-day cap on environmental permits for strategic projects, 36 votes to 35 with 11 abstentions. It covers chips, net-zero technology, raw materials, ports and railways, and is not yet law.
The Commission and member states committed €525 million on 4 November: €440 million in grants for commercial chip development and €85 million for a European Chips Design Platform, aimed at narrowing the gap with the United States and China.
Eurostat's flash estimate, published on 4 November, put eurozone annual inflation at 4.0% in October, up from 3.8% in September, with energy prices up 20.8% year on year. The reading is a three-year high and strengthens expectations of an ECB hike in December.
Schaeffler said on 3 November it will cut 3,460 jobs and close four German plants and one in Belgium, with about 2,660 German jobs affected by 2028. It cited weak combustion-engine demand and slow EV adoption, and expects €300 million annual savings by 2030.
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