Aligning the tracks of Europe’s digital finance landscape will reinforce the euro’s global role, increase resilience against economic fragmentation and enhance European autonomy. Slow movers among European banks could face revenue and funding pressures.

The European Commission (EC) has prepared an innovative if complex plan to mobilise seized Russian assets to fund Ukraine. This initiative is critical given the absence of any credible alternative for providing sustained financial support.

Less dilution of equity capital certificates issued at a discount to book value would support savings banks’ credit profiles, but maintaining the cap on ECC holder representation on supervisory boards could have negative implications.

Spain needs to encourage more investment in its electricity grid and storage capacity by allowing utilities to earn higher returns while ensuring growing volumes of renewable energy do not distort market pricing.

Slovakia’s government is continuing efforts to reduce the budget deficit despite sluggish growth but the risk of missing targets amid worsening fiscal fatigue is rising. Use of temporary measures raises doubts over the durability of the adjustments.

Poland’s structurally embedded spending increases and wider budget deficits highlight its fiscal vulnerabilities as institutional gridlock hampers any durable adjustment. Yet resilient growth and EU financial support are containing debt-servicing costs.

Corporate NPL ratios remain high, particularly in Germany, France, Austria and Belgium, while geopolitical risks and trade tensions have rendered the economic outlook uncertain. Our baseline of a moderate deterioration in asset quality remains intact.

The latest government shutdown in the United States occurred as a result of policy disagreements between Republicans and Democrats on issues such as healthcare, but it reflects the country’s deepening political polarisation.

Following MPS’s acquisition of Mediobanca and BPER’s takeover of BPSO, we expect Banco BPM to play a more active role in Italy’s banking consolidation wave, which is being driven by financial as well as strategic and political factors.

As Russia’s war in Ukraine war drags on with no end in sight, the challenges for Ukraine’s debt sustainability and finances are mounting. Addressing them requires the use of frozen Russian reserves. Deeper debt restructuring should also be considered.