President Donald Trump’s verdict on Europe: a group of “declining” nations led by “weak” peoples.
His criticism in a recent interview with Politico adds to a tough period for the European Union, which faces challenges that will test Europe’s leaders on many fronts in the final weeks of the year.
Next week is shaping up to be a big one, with a high-stakes summit in Brussels and the European Central Bank’s last policy meeting of the year. Let’s take a look at some of the key topics for next week.
Thawing frozen assets
At the summit in Brussels on Thursday, which could be extended until Friday, European leaders are expected to tackle their most pressing challenges: how to build up military capabilities and help finance the war in Ukraine.
Key to this is an agreement on how billions in frozen Russian assets will be used to back a 210 billion euro ($246 billion) loan to Kiev. Securing Ukraine’s borders as part of the peace deal also remains important, with President Volodymyr Zelenskiy proposing an internal vote or referendum on whether to allow parts of the Donbas region to be transferred to Russia as part of the US peace plan.
Tensions between the White House and Europe following President Trump’s comments are only complicating the process, with NATO Secretary-General Mark Rutte issuing a stark warning this week: “We (Europe) are Russia’s next target and we are already in harm’s way.”
EU vs. US, trade vs. technology
Another troubling front for Europe is the Big Tech sector. The bloc has been heavily criticized by the Trump administration for targeting U.S. tech giants. U.S. Trade Representative Jamieson Greer said he was “disappointed” by the EU’s use of the Digital Services Act, despite agreeing to “fair treatment” for U.S. digital giants as part of a trade deal in July.
The bloc fined X for violating content moderation laws and placed Google under antitrust investigation for using content to inform AI models. meanwhile, Meta It has offered to make changes to Facebook and Instagram’s services to avoid further investigation and fines from the EU.
promising policy
There are some positive signs in Europe this week. The European Central Bank will hold its last policy meeting of the year on Thursday. In an interview with the Financial Times, ECB President Christine Lagarde said in an interview with the Financial Times that the ECB was likely to raise its forecast for annual GDP growth again in December, after raising its forecast for annual GDP growth to 1.2% in September.
The general consensus is that this improved outlook will also support the central bank’s decision to keep interest rates on hold at 2% for another month. Throughout December, ECB Governing Council members themselves reinforced this message.
Isabel Schnabel: Interest rates are unlikely to change anytime soon
François Villeroy de Galhau: “There’s no reason to raise interest rates any time soon.”
Gediminas Simkus: No price change required
Joachim Nagel: Interest rates are currently at a good level
This week’s events:
Monday: EU Foreign Affairs Council meeting
Tuesday: EU General Affairs Council meeting
Wednesday: EU inflation data, UK inflation data, German IFO index
Thursday: EU Summit, ECB Meeting, BOE Meeting, British Banking Meeting, Norges Bank Meeting
Friday: EU summit may continue
