European leaders are trying to exert some influence to rein in a potential spiraling of the conflict in the Middle East with calls for an end to hostilities and a return to dialogue.
UK Prime Minister Keir Starmer today called on Trump to keep the door open for talks on Iran’s nuclear program. Iran’s Foreign Minister, Abbas Araghchi, is to meet with counterparts from the UK, France, and Germany tomorrow in Geneva. The European Union’s top diplomat, Kaja Kallas, will be present. —Jennifer Duggan
What You Need to Know Today
Three interest-rate cuts in just over 24 hoursby central banks in Europe highlighted a shift as monetary officials seek to manage the fallout from Trump’s unpredictable trade policies. Central bankers in Switzerland and Sweden had suggested as recently as March that they were most likely done loosening, but the Swiss National Bank instead trimmed borrowing costs by 25 basis points today, following a similar move by Sweden’s Riksbank a day earlier. Norway’s pivot was altogether more dramatic, with another quarter-point cut that none of the economists surveyed by Bloomberg predicted.
Iran is racing to get its oil out into the world, satellite images show. Oil is gushing out of the nation’s ports and onto ocean-tankers, ensuring revenues would continue — at least for a while — if shipments are disrupted. Despite the surge, storage tanks at the nation’s critical export terminal at Kharg Island are brimming with crude. Traders and investors are parsing every piece of data available to understand how oil from the Islamic Republic and the wider Gulf region will be affected if the US joins Israel’s offensive. Meanwhile, fewer commercial vessels appear to be entering the Strait of Hormuz, a vital chokepoint exports from the Persian Gulf to the world.
Satellite image of Kharg Island, Iran on June 11.
Forty-eight hours before Israel struck Iran last week, Tehran’s foreign minister, Abbas Araghchi, met his Saudi counterpart at an annual retreat for diplomats in Norway. Neither had any idea that two days later Israeli bombs would rain down on Tehran and Iranian nuclear sites, effectively killing the US negotiations and putting the Middle East on the brink of another major war that could destabilize the entire region. Israel’s intentions were no secret. But we’re told that Arab states were still shocked Prime Minister Benjamin Netanyahu attacked as US-Iran nuclear talks were ongoing.
Spain will oppose NATO plans to raise the target for members’ defense spending to 5% of GDP. It will potentially set up a clash with Trump, who wants Europe to spend more on its own security. Spanish Prime Minister Pedro Sanchez told North Atlantic Treaty Organization Secretary General Mark Rutte in a letter seen by Bloomberg that he would oppose the new spending proposal, which the alliance is seeking to lock in at a summit next week.
Europe risks drifting into stagnationwithout urgent action to tackle slowing growth, weak investment and rising geopolitical threats, the International Monetary Fund warned. Trade tensions and low demand are choking momentum, with risks tilted sharply to the downside, the Washington-based institution said in a statement on Thursday. The euro area is expected to grow just 0.8% in 2025, despite record-low unemployment and inflation near target. To revive productivity, the IMF called for a “decisive push” for a long-delayed deepening of the European Union’s single market.
President Vladimir Putin’s top economic officialsopenly argued over the state of Russia’s economy during a session at a flagship forum. Economy Minister Maxim Reshetnikov issued his starkest warning yet that the country may be teetering on the edge of a recession during a heated exchange with other officials at Russia’s St. Petersburg International Economic Forum. His comments came in sharp contrast to Bank of Russia Governor Elvira Nabiullina, who downplayed recession fears and suggested the economy was undergoing a necessary adjustment.
Increasing power demand to cool homes in Spain is putting pressure on energy prices after the country’s grid boosted its reliance on gas generation in the wake of a massive blackout. The output of Spanish gas-fired power plants has jumped 58% since the April 28 nationwide outage, according to data from Entso-E. This is being done to better stabilize the network, with cheaper wind generation curtailed to balance the power mix, while soaring temperatures across Europe increase the use of air conditioning.
