Italian banks are among the most profitable in Europe and the outlook is favourable, even if we anticipate lower profits in coming quarters. M&A may reshape the sector, though execution risks are rising.

Without substantive corrective fiscal measures, the US public debt ratio will reach 133% of GDP by 2030, exceeding our forecasts for France (122%) and the UK (111%), while interest payments will average 12% of revenues, at least twice that of peers.

Nicușor Dan’s victory in Romania’s presidential election eases political tensions and supports EU alignment but addressing the widening fiscal deficit, the weak absorption of EU funds and a backlog of reforms remain stark challenges for the authorities.

Operating environment assessments, the starting point for the analytical process, reflect regulatory and supervisory convergence. Ratings are determined by economic, sector and bank-specific factors. Despite uncertainties, the picture is resilient.

Italian NPL collections in March rose 45% month on month, consistent with previous years. But while monthly volumes bounced back from a poor February, they were still 43% below the three-year March average.

The Spanish economy’s growth continues to outpace the euro area’s due to improving labour markets, strong tourism receipts and ample EU funds. Still, further fiscal consolidation and reforms are needed to improve Spain’s resilience to potential shocks.

Wednesday, 28 May, 3 pm CEST

The robust solvency of European banks and their capacity to absorb credit losses from ordinary profitability provide important buffers against credit deterioration at a time when US trade policy is impacting Europe’s growth and interest-rate outlook.

European households will see housing affordability deteriorate as the supply-demand gap persists and prices continue to rise. Stimulus measures are urgently needed to boost housing supply in European countries where the situation is particularly acute.

Political uncertainty in Romania is complicating fiscal consolidation, raising borrowing costs and delaying reforms linked to EU funding while shifts in United States trade and security policy add further challenges to the fiscal and growth outlooks.