AGP Executive Report

Strait of Hormuz Security: Britain and France say they’re ready to deploy a multinational mission to secure safe shipping through the Strait of Hormuz, with Oman agreeing to cooperate, as Iran warns against foreign military involvement. Corporate Resilience: BASF tells German media it’s coping with Iran-war uncertainty, with limited direct exposure so far, but warns longer disruption could hit demand and pricing. EU–US Trade: A new study says EU–US goods trade hit a record €875bn in 2025 despite tariffs, yet masks damage—especially a sharp drop in EU car exports to the US, with Germany hit hardest. Germany Politics: Thousands protest as AfD re-elects leaders in Erfurt, underscoring rising political risk ahead of regional elections. Energy & Industry: Germany summons China’s ambassador over reports of Russian troops trained in China, while Oman–France deals highlight investment momentum in water and energy. EU Funding for Egypt: Egypt expects €1.5bn from an EU €7.4bn support package within days. Business & Tech: Luxair adds direct flights to Helsinki and Edinburgh, expanding its European network.

EU–India Economic Dialogue: France and India co-chaired talks in Aix-en-Provence on critical minerals, economic sovereignty, security and deeper financial-industry links. AI Regulation Race: Europe’s top bankers and regulators warn AI is moving faster than rules, pushing for public support plus guardrails for market stability. Cyprus Recovery Fund Crunch: Cyprus risks losing €50m–€69m unless MPs quickly approve a rushed bill creating a business development organisation for SME funding. Germany Sick-Leave Overhaul: Germany plans tighter sick-note rules, requiring doctor documentation from day one to curb absenteeism and boost productivity. Strait of Hormuz Security: UK and France call the route a “vital highway” and back Oman-led cooperation, with readiness for a multinational mission. Climate Shock to Costs: Europe faces hotter summers and El Niño is forecast to intensify extreme weather, raising health and economic disruption risks. Rare Earths Trade: Eurostat shows EU rare-earth imports and exports rebounded in 2025, underscoring supply-risk dependence on China and Russia. Ukraine–Poland Reset: Ukraine proposes an “anti-crisis” package to ease tensions, including ministry consultations and historian and religious dialogue. Germany AfD Protests: Thousands block roads ahead of AfD’s Erfurt conference as regional elections loom.

EU Enlargement Momentum: Ireland’s EU presidency helped unlock the next “external relations” cluster for Ukraine and Moldova, with an Intergovernmental Conference expected around July 14. Heat & Public Health: A Europe-wide heatwave exposed over 410 million people in late June, while France reported nearly 9,000 deaths during the peak week—raising pressure on cooling, energy and emergency planning. Germany Labour Reform: Chancellor Friedrich Merz’s package tightens sick leave with a doctor’s note from day one, plus tax relief and pension changes—sparking union backlash. EU–China Trade: Von der Leyen warned the EU is ready to act on China’s subsidised overcapacity and market access gaps unless talks deliver results by October. Armenia Support: The EU pledged tariff-free access for about 80% of Armenian exports and added fresh aid to offset Russian pressure, alongside connectivity and “peace dividends” funding in the region. Digital Identity & Finance: Signicat and TrustTech push reusable identity via private wallets ahead of new EU rules, while Morphic launches MiCA-regulated RGLTD and expands Cashify partnership. Markets: European stocks ended the week higher, with CAC 40 and IBEX 35 rising as rate-hike fears eased.

EU Trade & Tariffs: A German Economic Institute study says EU–US goods trade hit a record €875bn in 2025 despite tariff tensions, but masks sharp pain in autos (EU car parts exports to the US down 20.4%). EU E-commerce Crackdown: From 1 July, the EU ended the €150 low-value customs exemption, adding a €3 fee per parcel category—raising costs for Temu and Shein hauls. Competition Law: Europe’s top court upheld Google’s record €4.1bn Android antitrust fine, ending an eight-year fight. Germany Reform Push: Chancellor Merz unveiled a sweeping recovery plan—tax cuts, red tape reduction, and a sick-leave overhaul requiring doctor notes from day one. Energy & Industry: SVOLT at EES Europe presented a full-scenario energy storage strategy for grid and AI data-centre loads. Cyber & Governance: Citizen Lab says a former Greek MEP on the PEGA spyware probe was hacked with Pegasus. Security: The US warns Russia may stage an armed provocation on Polish soil to test NATO resolve. Ukraine Aid: Kyiv says it will buy 100 Patriot missiles using a $1bn EU loan. Climate Pressure: Extreme heat is reshaping consumer behaviour, with research suggesting alcohol sales stop rising past ~32°C. Business Deals: Ferraro acquired Cibitex’s textile finishing unit; Objectway agreed to buy FNZ’s Swiss private banking tech business.

EU Competition: Europe’s top court upheld the EU’s record €4.1bn Google Android antitrust fine, dealing another blow to Big Tech’s mobile “lock-in” model and setting up further legal fallout. German Economy & Labour: Germany’s coalition agreed a sweeping reform package: income tax cuts, pension changes pushing retirement beyond 67, and a crackdown on sick notes (scrapping the easy phone note for one day). Semiconductors & Tech Sovereignty: Infineon opened a €5bn chip plant in Dresden, backed by the EU Chips Act, as Brussels pushes to reduce dependence on Asia and the US. Spain Migration: Spain’s regularisation drive drew 1.17m applications for legal status, with processing already underway for more than 600,000 people. Armenia-EU Support: Ursula von der Leyen pledged €38m in aid and tariff-free access for about 80% of Armenian farm exports as Yerevan faces Russian pressure. China-EU Trade Talks: China invited EU trade chief Šefčovič to co-chair the second ministerial meeting of the new trade and investment consultation mechanism this autumn. Heat & Energy: Europe’s record heatwaves are driving urgent grid and cooling debates, while Ireland’s EU presidency energy summit focused on cross-border power links and resilience. Business Mobility: Germany is pushing visa-free Schengen travel for Bahraini citizens and aims to speed up an EU-GCC free trade deal. Tesla: Tesla posted record Q2 deliveries, with a Europe rebound helping lift hopes for an end to two years of annual declines.

EU-Türkiye Trade Talks: Brussels says closer economic ties can modernize the customs union and boost value-chain integration, as the EU and Türkiye restart high-level economic dialogue after a six-year gap. South Caucasus Connectivity: In Baku, von der Leyen pledged up to €200mn for transport and energy links tied to the Armenia-Azerbaijan peace process, with a wider EU-Azerbaijan connectivity push. US Troop Pullback Shock: The Pentagon review is set to cancel some missile deployments and withdraw F-35 squadrons, raising NATO alarm and forcing Europe to consider costly capability gaps. EU Antitrust: The EU’s top court will rule on Google’s record €4.1bn Android fine, in the latest bid by the US tech giant to overturn the penalty. MiCA Enforcement: The EBA consults on how it will fine issuers of “significant” tokens, ahead of the July 1 licensing deadline. Heatwave & Adaptation: Europe’s record June heat exposed weak adaptation, with Spain reporting excess deaths and disruptions to power and transport. AI Financial Risks: ECB-linked economists warn AI-driven leverage and overvaluation could trigger broader financial instability. China Supply Chain Reality: The EU chamber in China says Europe is becoming more dependent on Chinese supply chains, not less, as firms chase competitiveness. Crypto Ransom Attacks (France): France reports 77 crypto-related wrench incidents in H1 2026, up from 45 in all of 2025, prompting a tougher security plan. Germany Power Mix: Renewables hit a record 57.7% share of Germany’s electricity demand in H1 2026. Business & Tech Expansion: CoStar launches its France platform for commercial real estate data; TeraPlast completes a Spain pipe-factory acquisition; Novartis gets EU approval for Itvisma for broader SMA patients.

EU Heat Debate: MEPs sparred in the European Parliament over how to respond to Europe’s scorching heat, with arguments ranging from faster decarbonisation to whether people should prioritise cooling and practical resilience. EU Customs Shake-up: The EU’s new €3 fee on low-value parcels (ending the de minimis exemption) starts rolling out, raising costs for e-commerce shippers and putting pressure on cross-border delivery volumes. Ireland Takes EU Presidency: Ireland begins a six-month Council presidency focused on competitiveness, values and security, with the hard work ahead on the next EU budget talks. Ukraine Accession Push: Zelenskyy says the EU should back opening accession negotiation clusters, demanding unanimity despite friction with some member states. Germany-Argentina Minerals Deal: Germany and Argentina sign a critical minerals cooperation memorandum aimed at reducing supply-chain risks and boosting processing value in Latin America. Microsoft Ireland Tax: New EU country-by-country reporting shows Microsoft’s Irish operations paid $5.6bn in tax on $47bn pretax profit, underlining Ireland’s role in EU corporate revenues. FedEx Supply Chain Sale: CMA CGM agrees to buy FedEx Supply Chain for $1.4bn, expanding its contract logistics footprint. Azerbaijan Connectivity Boost: The EU launches a €200m connectivity package for the South Caucasus, plus €20m for peace programmes, as Brussels deepens the energy-and-trade partnership. Crypto Regulation Tension: Poland’s crypto firms struggle to get MiCA licenses at home, pushing some to seek authorisation elsewhere in the EU.

EU Trade & Customs: The EU ended the duty-free “low-value parcel” exemption for imports under €150 and starts a temporary €3 levy per item (with a transition to 2028), aiming to cut safety risks and customs overload from China-led e-commerce. EU Industry: New steel rules take effect, with quotas and higher duties on imports beyond them to shield EU makers from global overcapacity. Eurozone Inflation: Inflation cooled in Germany, France and Italy in June, easing pressure on the ECB as energy shock effects fade. Heatwave & Energy Demand: Record-breaking European heat is driving surging cooling demand and exposing infrastructure strain; a study also finds most homes and workplaces lack enough nearby tree canopy for meaningful cooling. UK Energy Costs: Britain’s energy price cap rise is expected to push millions toward fuel poverty. Ireland EU Presidency: Ireland takes over the EU Council presidency with a competitiveness-and-security agenda, with Ukraine membership talks high on the agenda. Poland-Ukraine Row (Fact-check): A claim that Poland’s deputy PM would block Ukraine’s EU entry with “Bandera” wording was misattributed; the quote was taken out of context. Logistics Investment: Poland’s Loconi Intermodal begins building a rail terminal in Zbąszynek with EU funding, targeting 2028 operations. Business & Tech: Spain tells state-linked firms to avoid new Palantir contracts over sensitive-data concerns.

Romania Fiscal Reset: Romania is in a “forced correction” as its fiscal deficit is cut by half, public spending falls in real terms for the first time in six years, and public wages drop while tax growth slows. Germany Labour Mismatch: Despite vacancies, Germany’s unemployment stays stubbornly high, highlighting skills gaps as employers struggle to fill hundreds of job types. EU Markets & Crypto: Strike gets full MiCA authorization across all 27 EU states while Binance faces service restrictions after missing the July 1 licensing deadline. EU Trade Shield: The EU’s new steel import regime starts July 1, with tariff-free quotas and higher duties above quota to counter global overcapacity. AI Boost for Markets: Europe’s STOXX 600 posts its biggest quarterly gain in over five years as AI optimism lifts tech and chip stocks. Spain Housing Tax Change: Spain plans to raise VAT on holiday homes to 21% as part of a broader housing package. Security & Drones: Latvia and Ukraine plan a joint drone factory near the Russian border, while Spain and other states warn of rising foreign-drone disruptions at airports and bases. Monaco Blast Probe: Monaco investigates an attempted murder after an explosion injured a Ukrainian businessman and family. EIB Morocco Push: The EIB targets over €700m in Morocco financing for 2026, focusing on infrastructure, private sector support and education. Climate Pressure: Europe’s heatwave fallout keeps growing, with warnings on health and infrastructure strain.

EU–China Trade Talks: The EU and China launched a three-month ministerial dialogue to cool a €360bn trade imbalance, with “tangible results” expected by October and a new mechanism to monitor import surges. AI Risk Watch: The BIS says AI spending is propping up growth, but warns over-commitment could trigger the next economic crash. Poland–Sweden Defence Deal: Poland ordered three Saab A26-type submarines in a SEK 47bn deal, leasing a Swedish boat until 2032 to rebuild Baltic undersea capability and jobs. Crypto Regulation Push: With MiCA deadlines looming, Coinbase, Kraken and OKX are offering transfer bonuses and prize draws to lure users away from platforms restricting EEA access. France Retail Crackdown: France’s parliament passed tougher rules on “ultra-fast fashion” platforms like Shein and Temu, adding per-item fees and advertising limits. Spain Rail Disruption: Renfe cut 320 train services ahead of a nationwide strike, while minimum service levels remain. Energy & Industry: Poland’s battery materials push got a boost as Kinterra Capital bought rights to a €1.63bn cathode precursor plant near Opole.

UK Politics & Devolution: Labour leadership favourite Andy Burnham is set to unveil his economic “circuit-breaker” plan, including a “No 10 in the North” and “good growth in every postcode,” as he positions himself to lead after Keir Starmer’s resignation. Inflation Watch (UK): Bank of England chief economist Huw Pill warns against complacency, saying inflation still sits above target and policy has not been restrictive enough. Markets (Europe): J.P. Morgan lifts its year-end STOXX 600 and Eurozone equity targets, citing stronger earnings and a calmer geopolitical backdrop after US-Iran de-escalation. EU Trade & Regulation: The EU is moving to tighten rules on major cloud providers, with Amazon and Microsoft cloud services flagged for stricter gatekeeper oversight under the EU’s digital framework. Climate & Costs (Europe): A record-breaking heatwave is driving excess deaths and food-supply stress, while Dublin’s tourism-driven growth is also blamed for rising rents and property prices. Tech & Industry: Soitec and ZenSemi team up to scale 300mm BCD-on-SOI for next-gen power chips, and JD.com expands Europe-wide robot repair services via local centres.

EU Trade & E-commerce: From July 1, the EU will add a fixed €3 customs surcharge on small non-EU parcels up to €150, hitting ultra-cheap cross-border shopping from Shein and Temu and aiming to tighten control. Brexit Aftermath: A new look at the UK’s 10-year Brexit fallout cites research pointing to lower GDP, investment, jobs and productivity versus what would have happened otherwise. Heatwave Shock: A record-breaking European heatwave is already linked to about 1,000 excess deaths in France, with power, transport and health systems under strain. Digital Tax Clash: Trump threatens 100% tariffs on countries introducing digital taxes; the EU says it has sovereign rights to regulate and tax, and will respond to unilateral moves. AI Supply Chain Risk: US restrictions on Anthropic’s advanced models have disrupted Irish and European businesses that built products on the platform. Germany Aid Under Fire: Germany’s development aid strategy faces criticism as funding cuts and lack of a clear partnership-based approach undermine humanitarian reach. Fintech Jobs: Trading 212 plans a Dublin EU hub, creating 40 roles as it expands regulated activities.

UK Politics & Economy: Andy Burnham is set to replace Keir Starmer, but his growth push may be constrained by Labour’s election platform and the “revolving-door” reality of Britain’s fast-changing government. Climate & Public Costs: A record heatwave is sweeping Europe, with Germany hitting a new high of 41.5°C and deaths and hospital strain reported across France and beyond; scientists say human-caused climate change made it “virtually impossible” without it. EU Budget & Ireland Presidency: Ireland’s EU presidency agenda is shaped by war-driven security demands, energy pressures, competitiveness gaps and a tougher 2028-2034 budget negotiation. Trade & Tariffs: Trump threatens 100% tariffs on countries imposing digital services taxes, setting up a fresh EU-US trade clash. EU Digital Regulation: The MiCA rollout continues as EU authorities push crypto providers to wind down services ahead of deadlines, while firms scramble for licenses. Markets & Ownership: Spain’s Ibex 35 is increasingly controlled by foreign funds, underscoring how global capital shapes European equity markets. Energy & Sanctions Enforcement: An explainer shows EU sanctions often fail at national borders and in enforcement gaps, even when Brussels writes the rules. EU Industry Rules: Germany, France and the Netherlands urge tougher EU action against ultra-fast fashion. Logistics & Trade Links: China-Europe Railway Express volumes keep rising, with Poland a key hub as cargo value expands. Environment vs Infrastructure: France’s Camargue flamingo reserve faces pressure from a proposed high-voltage power line, prompting an appeal to President Macron.

Heatwave Shock: Europe’s record-breaking heat is battering daily life and infrastructure, with Germany setting fresh all-time temperature highs and transport disruptions, while the UK faces school closures and critical NHS incidents—raising urgent questions about cooling, power resilience, and climate readiness. Trade War Flashpoint: Donald Trump escalated the digital services tax fight by threatening 100% tariffs on any European country that taxes US tech firms, prompting EU pushback and renewed risk of a wider US-EU trade clash. Digital Regulation & Crypto: Binance’s EU licensing squeeze continues as it withdraws a Greece application and clients brace for MiCA-driven wind-downs; Coinbase and OKX are positioning to attract users after Binance’s regulatory setbacks. EU Migration Policy: The EU extended temporary protection for Ukrainians but excluded military-age men, a move that could reshape labour, welfare, and defence-related planning across member states. West Africa Realignment: Burkina Faso severed ties with France, deepening the Sahel’s political and security reordering and setting up new economic and diplomatic consequences for European partners. Business & Industry Deals: Persistent Systems moves to acquire Nagarro to build a global AI engineering group, while Ecopetrol and Germany’s GIZ plan synthetic aviation fuel studies in Cartagena. EU Governance: Ireland prepares to take over the EU presidency, aiming to steer negotiations amid wars, migration pressure, and competitiveness stress.

EU Tax & Transparency: Spain removed Gibraltar from its non-cooperative tax blacklist, alongside Barbados, Dominica, Seychelles and Trinidad & Tobago, citing updated OECD/EU tax transparency standards. Crypto Regulation: As MiCA’s July 1 deadline nears, EU regulators are pushing non-compliant firms to wind down, while firms race to pick the right licensing country; Germany leads by volume, with Luxembourg, Malta and Ireland also attracting major players. Security & Organized Crime: Europol says Europe’s “most threatening” criminal networks have swelled to about 400,000 members across 731 gangs, spanning drugs, cyber crime and migrant smuggling. Energy Markets: European gas prices edged higher after renewed US-Iran tensions around the Strait of Hormuz, with storage still below seasonal norms and LNG competition expected to tighten. EU Policy for Growth: The Commission unveiled first-ever strategies for islands and coastal communities, aiming to cut the “cost of insularity” via transport, housing, digital and energy measures. Trade Tensions: Trump threatened 100% tariffs on imports from any country imposing digital services taxes on US tech, setting up a fresh EU-US showdown. Business & Ownership: Indotek completed its takeover of Auchan Hungary, making the retailer fully Hungarian-owned while keeping the Auchan brand and supply links. Climate Shock: A record-breaking heatwave is disrupting health, power and water systems across Europe, with the UN weather agency warning of major impacts on labour productivity and ecosystems.