We are 2/3 of the way to the US mid-terms. Trump promised voters 4 main things. End inflation. End forever wars. Drain the swamp. Reverse immigration. On 1, 2 & 3 he has delivered the precise opposite. On 4 the negative consequences of "success" are obvious to many. He is set to lose. What now?

In addition to the usually discussed channels by which the Middle East war affects Europe - oil and gas, fertiliser and food - the role of financial markets deserves attention. (Source: FT) 1/2

If binding climate targets, in place to avoid catastrophic climate change, create an unbearable burden on some industries, there is a case to offer subsidies. But NOT to deviate from the target. Can a journalist ask the German economy minister what she thinks of the "rigid" ECB inflation target.

bsky.app/profile/wahl... Really not one to scaremonger but sometimes people need to get scared to avoid sleepwalking into disaster. If these poll trends stay the same, Germany, and consequently the EU as a whole, will enter a serious political crisis. 1/3

www.theguardian.com/business/202... giftarticle.ft.com/giftarticle/... 2 articles, 1 message. Everyone knows that, to keep the planet inhabitable, we need to decarbonise electricity generation, which is going quite well, and electrify, especially, transport & heating. Which is not going well. 1/3

Made my day!

Europe is taking steps to prevent its core industries being hollowed out by a hypercompetitive China. Much better if CN itself were to finally address imbalances vigorously. Faster wage growth, social policies that reduce household savings, currency appreciation, reduce industrial subsidies. 1/2

Europe spent years debating whether the energy transition was affordable. Spain quietly answered the question: gas now sets its electricity price in only 7% of hours. Strategic autonomy doesn’t arrive via summit communiqués. It’s built in advance — in wind farms, solar parks, and grid investment

www.destatis.de/DE/Presse/Pr... The latest figures show collective bargaining coverage in Germany stagnating at a low level. Less than half of employees are covered. Germany has yet to deliver a government Action Plan to raise the rate to the target of 80%, as required by EU law.

The 28th company regime (aka EU Inc) is well intentioned, but merely declaring that employment rights are not affected is not enough to ensure that it will be so in practice. 👇

Yesterday's Tripartite Social Summit 🧵👇 offers pointers as to the likely outcomes of today's European Council meeting. Unfortunately. In the short term citizens and companies need to see resolute measures to shield the EU from the fallout of the ME war. And a medium-term investment strategy.

🤝 Written by @margitschratz.bsky.social. By FEPS, in collaboration with Friedrich-Ebert-Stiftung | EU Office and @wifo.bsky.social Read the full policy brief: bit.ly/NewOwnResour...

www.etuc.org/en/pressrele... Providing 2nd-row support today for the trade union delegation to the Tripartite Social Summit. Chatham house, but I can share the overall impression: EU leaders remain convinced that supply-side measures such as reducing the "regulatory burden", capital markets... 1/3

The President of the United States, who recently announced that Iran had nothing left, appeals to any country that gets Gulf oil to send ships to open up Hormuz. Countries whose security guarantees he has questioned, imposed tariffs on... They are "reluctant". www.theguardian.com/world/2026/m...

My latest substack on Europe's weak response to the Middle East crisis and the missed opportunity to finally get serious about issuing common debt. (You can sign up for email notification of future posts.)

open.substack.com/pub/andrewwa... The terrible events in the Middle East challenge Europe and also open up opportunities. But geopolitically Europe is failing to stand up for what is right AND in its own interests. And domestically it is missing the opportunity to issue game-changing Eurobonds.

Welcome that vonderLeyen is emphasising the need to power ahead with the Green Deal, not just for climate-protection, but also econ, social & geopolitical reasons. (One oddity: losses to taxpayers, not citizens?) Makes all the more problematic her initial condoning of the illegal attack on Iran.

The Greens are expected to retain the job of leading the state of Baden-Wurttemberg, home to much of Germany's car and engineering industry. New. Cem Oezdemir is set to be the first ever Ministerpräsident with Turkish origins, 65 years after the first guest workers arrived.

Bombing schools & civilian desalination plants, poisoning citizens and wreaking environmental havoc by striking oil facilities in Teheran. These are war tactics the EU rightly excoriates Russia for in Ukraine. Of EU leaders once again only Sanchez seems to be able to say the right thing. No!

www.theguardian.com/business/202... This is a big deal. $130bn, plus interest, is ~half a % point of GDP. That wouldnt always matter so much, but given the level and trajectory of US govt deficits and debt there will be a noticeable additional burden on bond markets. And don't mention the war.

The Austrian finance minister shows how it can and should be done. Picks up arguments against inheritance tax. And shows, in tweet length, why each is wrong. No overdramatising. No finger pointing or badmouthing. Facts. Arguments in simple language. Clear normative orientation.

Making your budget match your priorities. So important.

giftarticle.ft.com/giftarticle/... With energy and fertiliser prices sharply up and food set to follow, a renewed inflationary shock is imminent. Policymakers must learn from the last one. Interest rate hikes are hugely costly. Incomes of vulnerable households should be protected. 1/2

The old debate is conclusively resolved. Nature wins over nurture. The investment genius of the father is passed on through his genes to the son. What other explanation could there possibly be? 🙃

www.socialeurope.eu/european-sov... In parallel with developing strategic autonomy on the world stage, Europe needs to develop further its economic and social model, building on its strengths.

By failing to call for an immediate cessation of hostilities and openly backing Trump and Netahjahu's attack on Iran, European leaders (von der Leyen, Merz, Macron, Starmer) undermine the case for international solidarity with Ukraine.

German wages rose last year by 4.2% in nominal and 1.9% in real terms, as inflation has subsided. This follows 2.9% in 2024. This will underpin consumption & growth in DE and EU this year. The other side of the €coin: the wage level is only back to its 2019 pre-covid level. bsky.app/profile/tage...

An interesting paper coming out on the 4th anniversary of the Russian invasion. The title is a bit misleading, though, the evidence the authors have collated shows that military sanctions have been very (albeit it not 100%) successful for the last two years. Evasion a major problem 2022 & 23.

Four long years ago we awoke to news that war in Europe had started. 💔 Brussels stands with Ukraine.

Politically the US Supreme Court striking down Trump's IEEPA tariffs is a big deal. Yet Trump's decision to impose a global 15% tariff, using a different legal base, means an even higher tariff wall for EU exporters. Meanwhile, competitors incl China & benefit from cuts. 1/2

Maybe AI is a superior form of intelligence, after all 🤔

There is a case for simplifying EU legislation. But it's not key to gaining competitiveness. And the so-called omnibus process does not allow proper consideration of the costs and benefits of regulation. Now employers want an omnibus process for important elements of EU social & employment leg'n. 🚨

With tariff turmoil and government shutdown, US GDP figures have been hard to interpret. The best guess is that the US economy is spluttering along at a respectable rate, policy shocks notwithstanding. Certainly not Trump's "best ever" economy. But not the stagflation I & others had expected. 1/2

If you had the slightest doubt as to how to interpret Rubio's speech at the MSC, you just need to see who he visits afterwards. bsky.app/profile/eura... That Rubio received a standing ovation & gushing praise shows how ill served Europe is by its transatlantic-oriented foreign policy elite network

Interlude Somebody picked this book up today at the bookshop ... but then got distracted by the games and didn't make it to the checkout. 😜

Rubio just made a speech to the European defense community in Munich that did not mention Ukraine. Or democracy. Or US business deals with Russia. Or the administration's plans to support the European far right. But there were lots of nice words about our common civilization.

My take on the meeting of EU leaders: a missed opportunity to launch an investment-led recovery open.substack.com/pub/andrewwa... If you want analysis of European economic and employment issues in your inbox - roughly weekly, I hope! - you can sign up for a free substack subscription.

Of all the decisions that Trump's ignorance, venality and lust for power have led him to take, this could well be the most damaging. The full-on revert to fossil fuels this presages brings the threat of devastating climate change closer still.

Beyond the specific focus on Trump, it is pretty astounding how widespread and deeply-held is the belief that the Right is the only reliable steward of the economy while Left governments are a recipe for economic disaster. In US at least, the centre left seems bad at politics rather than economics.

An idea whose time is at least 15 years overdue... #Eurobonds

Buy European clauses in public procurement and state subsidy regines certainly raise issues. But I agree with Sandor. Their blanket rejection from first principles is naive and misguided in a world characterised by strategic players and discrepancies between short and long run interests.

The Epstein revelations are shocking and this shameful past requires proper investigation. But let that not distract us from crimes being committed today and the harm and suffering they will cause in the near future! These are of a whole different order of magnitude and could still be prevented.

A welcome and important development in Portugal 👇. More broadly, in EU countries and at EU level, the democratic forces need to engage with each other pragmatically to craft policy solutions that deliver for citizens. Gridlock (France) and delay (EP vote on Mercosur) just benefit the far-right.

He's a pilot with real flying exoerience. Where he may clash with orthodoxy is on taking off and, more troublingly, landing.

We'll take our stand for this land And the stranger in our midst. We'll remember the names of those who died On the streets of Minneapolis The Boss on 🎯& on 🔥

giftarticle.ft.com/giftarticle/... Good work @financialtimes.com shows Trump's ICE attacks on migrants are not just racist and murderous, they are also very costly to taxpayers & so profitable for contractors. $22bn works out at $64 for every US man, woman & child, just for contracted services.

If Trump and his henchmen's disparaging comments about Europe have done something useful, it is to focus European minds on the need to speed up EU decision-making. This is an old debate. It cannot be a simple 2-speed Europe, with two separate country blocks. 1/2

An article that will doubtless repay detailed study. The authors provide empirical evidence for the intuitive view that support for the EU depends in part on whether, at a given point in time, the EU is pursuing policies closer or further from voters' (left-right) political preferences.

More evidence that the pro-worker talk of right-wing governments is just that, talk. How one year of ‘America First’ left workers behind - giftarticle.ft.com/giftarticle/...

❗#JobAlert: upcoming deadline The ETUI is looking for a Database Administrator to play a central role in managing the Institute’s #data-related activities. Don't miss the opportunity to be part of a dynamic research environment! 🔗 Apply by 31 January: etui.org/4Z5 @andrewwatteu.bsky.social