European Reality Check

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The EU’s new competition rules are going live — here’s how tech giants are responding​

March 6th marks a long-awaited moment of change: it’s the deadline for tech’s biggest “gatekeepers” to comply with the European Union’s Digital Markets Act, or DMA. The DMA requires powerful companies to allow more interoperability and avoid preferencing their own digital services. It’s generated disputes over which services should be included, sparked excitement among smaller competitors, and resulted in changes to how companies handle fundamental parts of their business. And in March 2024, after years of debate, the rules are coming into force.

The EU has designated six companies as gatekeepers, which it defines as large digital platforms providing “core” services like app stores, search engines, and web browsers. The DMA’s restrictions apply to specific services within these companies: Alphabet, Amazon, Apple, ByteDance, Meta, and Microsoft. Here’s what each has been doing to meet — and fight — those demands.

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www.theverge.com

The EU’s new competition rules are going live — here’s how tech giants are responding

The Digital Markets Act’s deadline for compliance is imminent. Its six designated ‘gatekeepers’ have fought the rules, but also bent to them.
www.theverge.com www.theverge.com
 

Swiss National Bank makes surprise rate cut, getting ahead of global peers​

ZURICH, March 21 (Reuters) - The Swiss National Bank cut its main interest rate by 25 basis points to 1.50% on Thursday, a surprise move which made it the first major central bank to dial back tighter monetary policy aimed at tackling inflation.

The central bank, in the first rate decision since long-serving Chairman Thomas Jordan said he would step down in September, also cut its interest rate on sight deposits to 1.50%.

The SNB's decision, its first rate cut in nine years, was the first in a busy day for central banks in Europe, with the Bank of England and Norwegian central bank also announcing their latest policy decisions. The Norges Bank kept its rates on hold and economists also expect no change from the Bank of England.

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EU leaders to back tighter euro zone fiscal stance in 2025​

BRUSSELS, March 22 (Reuters) - European Union leaders will back on Friday a slightly tighter fiscal policy for the euro zone next year, to help bring down inflation and make public finance more stable after the excess spending of the COVID pandemic and the energy price crisis.

The endorsement comes after finance ministers of the 20 countries using the euro agreed on March 11 on fiscal policy guidelines for 2025 to take into account new fiscal rules that give more time to cut debt while maintaining investment.

"The European Council endorses ... the ...recommendation on the economic policy of the euro area," draft conclusions of the EU leaders say.

The endorsed recommendation says that the new fiscal rules would require an overall slightly contractionary fiscal stance in the euro zone in 2025.

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Middle East tensions pose the biggest threat to rate cuts, European Central Bank policymaker says​

  • Geopolitical risk is the biggest threat to a prospective rate cut from the European Central Bank, according to ECB policymaker Robert Holzmann.
  • ECB President Christine Lagarde on Tuesday said the central bank was closing in on a rate reduction, barring any major surprises.
  • The ECB on Thursday left its policy unchanged for the fifth consecutive meeting, but signaled that cooling inflation means the institution could soon start to moderate rates.
Tensions in the Middle East pose the biggest threat to a prospective interest rate cut from the European Central Bank, according to ECB policymaker Robert Holzmann.

“At this stage, I think the biggest threat is geopolitics, because we have seen what’s happened in the Middle East,” Austrian central bank governor Holzmann told CNBC’s Karen Tso on Wednesday on the sidelines of the International Monetary Fund Spring Meetings.

“As you can imagine, only when a boat is sunk in the [Strait] of Hormuz and you may have a different oil price, and this of course may require us to rethink our strategy,” he added.

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Europe's bank earnings to offer interest rate reality check​

LONDON/FRANKFURT/MADRID, April 22 (Reuters) - Investors should get a clearer picture this week of whether higher interest rates are still boosting European bank profits or if a year-long share price rally will run out of steam.

Britain's Lloyds Banking Group (LLOY.L), opens new tab is the first of the big European lenders to report its first quarter earnings on April 24, before BNP Paribas (BNPP.PA), opens new tab, Deutsche Bank (DBKGn.DE), opens new tab and Barclays (BARC.L), opens new tab publish theirs the following day.

After years of low interest rates, a surge in borrowing costs has been a game changer for bank profits in Europe, whose shares have soared on the resulting shareholder payouts.

"What is fundamentally different is that we are out of negative rates. That has had a fundamental impact on the outlook (for banks) and it still does," said Christian Edelman, Co-Head of Europe at consulting group Oliver Wyman.

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European Investment Bank steps up multi-billion defence investments​

  • Russian military clout dwarfs Ukraine, Europe tries to catch up
  • European Investment Bank eyes multi-billion backing for defence
  • EIB chief says that will accelerate this year
BERLIN, June 24 (Reuters) - The European Investment Bank (EIB) intends to ramp up its investments in European defence such as drones, satellites and cyber security, aiming to inject a further 6 billion euros ($6.4 billion) into the sector, its head told Reuters.

The plan underscores an increasing willingness in Europe to lend to defence companies after Russia's invasion of Ukraine changed an entrenched view that the region was safe from attack and could rely on the United States for protection.

"It's clear we need to reinforce Europe´s security and defence industry," EIB president Nadia Calvino told Reuters. "We have earmarked 8 billion euros to invest in this area, of which only 2 billion have been invested."

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Euro currency emerges a winner from market turmoil​

  • Euro now 2nd best performing major currency vs USD in 2024
  • Could rally to $1.12 near-term, FX analysts say
  • Gains seen limited, uncertainties still high
Aug 21 (Reuters) - The euro is trading at its highest this year against the dollar, emerging as a clear winner from the recent ructions in global currency markets that have unsettled a strong dollar and halted a relentless slide in Japan's yen.

Having broken decisively above the symbolic $1.10 level , the euro's more than 2.5% gain in August sets the currency up for its best month since November.

Traders, distracted up until now by the yen's sudden surge after a surprise July 31 Bank of Japan rate hike and a broad-dollar pounding as expectations for U.S. interest rate cuts grow, are paying attention.

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searcher said:
LONDON, April 25 (Reuters) - An initiative to offer an instant payments service in Europe from the end of 2023 said on Tuesday it has acquired two payment firms and obtained the backing of more banks after scaling back ambitions to take on U.S. payments giants Visa and Mastercard.

The European Payments Initiative (EPI) said it planned to acquire Dutch payments scheme Currence iDEAL, and PQI, a Luxembourg-based payment solutions provider that services iDEAL.

www.reuters.com

More banks join European instant payments pilot from end 2023

An initiative to offer an instant payments service in Europe from the end of 2023 said on Tuesday it has acquired two payment firms and obtained the backing of more banks after scaling back ambitions to take on U.S. payments giants Visa and Mastercard.
www.reuters.com www.reuters.com
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Related.

Swiss launch instant payments to catch up with Europe​


  • Instant payment option covers 95% of Swiss retail transactions
  • Swiss play catch-up with Europe's more advanced instant payments
  • Instant payments reduce settlement risk, could boost business
  • Swiss remain attached to physical cash payments survey shows
ZURICH, Aug 21 (Reuters) - Swiss companies and consumers are now able to make instant electronic payments, catching up with other European financial centres where the ultra-fast transfers are increasingly popular.

Instant payments allow credit transfers within 10 seconds of a payment being made rather than waiting for days for the transaction to clear. They have been in use in Europe since 2017 and in the U.S. since last year.

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"Where were you when the global debt trap exploded?"
 
Central banks want to keep pace with the Fed. Watch the embers of inflation reignite...
 
If we were in a real free economy onstead of semiplanned they would be raising rates and allowing bad businesses to fail.
 
Prince Michael of Liechtenstein said:
Europe requires leaders with the traits of Argentine President Javier Milei to implement strict economic reforms.
...
The traditional EU engine is broken, and it is Central European countries where the most economic optimism is now shining through.

After the Liberals shed their coalition partners, Christian Lindner, the party’s head, rightly stated that Germany might need personalities with the aspects of Javier Milei – the recently elected president of Argentina – to implement stringent economic reforms and shrink the government. He also suggested that someone like Elon Musk could be beneficial on the entrepreneurial front.

Mr. Merz reacted with outrage and indignation at these perhaps provocative but sound statements. Like Ms. Merkel, Mr. Merz may now consider a shift toward socialism as the safer path to power. It might, however, be better to have free-market, liberal economic programs in combination with conservative politics.

Mario Draghi, the former president of the European Central Bank and Italian prime minister, devised a master plan to revive the EU’s competitiveness. While he accurately pointed out the bloc’s problems, his proposed solutions doubled down on the very policies that caused the issues, like asserting that salvation lies in the old French call for unionizing debt. As Swiss banker Christof Reichmuth has said, the diagnosis was right, but the therapy is questionable. I would add that Mr. Draghi’s plan would, in fact, kill the patient.

If Mr. Merz does not pivot toward a more market-oriented approach and if France only attempts to solve its budgetary problems through unionizing debt, the EU’s decline will accelerate. Then Europe might not need just one Mr. Milei – who likes to brandish a chainsaw to symbolize his attitude toward budget cuts – but 26 of them.
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www.gisreportsonline.com

Europe’s future: Meltdowns or chainsaws? – GIS Reports

France and Germany are taking the wrong approach to their economic problems, speeding up the decline in Europe.
www.gisreportsonline.com www.gisreportsonline.com

 
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