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Business Times
2 days ago
- Business
- Business Times
Europe moves on from economic 'peak pessimism'
JANUARY'S 2025 World Economic Forum in Davos is sometimes seen as the moment that 'peak pessimism' reigned about Europe's future economic and political performance. Yet, fast forward to today and expectations for the region's prospects have improved significantly since. To be sure, Europe continues to have many challenges. However, the mood music has flipped, at a minimum, from 'glass half empty' to 'glass half full'. On Thursday (June 5), for instance, the European Central Bank (ECB) is widely expected by economists to cut interest rates for what would be the eighth time in a little more than a year. This would see the ECB diverge further from the recent path of the US Federal Reserve, which has had rates on hold in 2025. Other central banks in the region have also cut rates too. This includes the Bank of England which has made four cuts of a full percentage point since a peak last year of 5.25 per cent. Yet, it is not just this stimulus from monetary policy that has helped change perceptions of the economic and political outlook for the region. In Europe's largest economy, the new German government has surprised on the upside, despite its erstwhile shaky start in office, with reform of the so-called constitutional balanced budget amendment or debt brake. This could see over one trillion euros of additional spending in the next decade. Moreover, wider supply side reforms could lift the economy further in the next four years of Friedrich Merz's chancellorship. Further, there has also been a resurgence in the European trade liberalisation agenda. Last December, the EU agreed on a big deal with the Mercosur bloc, and it is chasing down agreements with a wide range of other nations. Moreover, the United Kingdom has recently delivered a big trade agreement with India. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up All in all, it is perhaps no big surprise that several big firms have changed their stance on Europe. Research by KKR, for instance, has highlighted an 'investment renaissance' in the region in 2025. This is even before the possibility of potential progress on the competitiveness agenda of former ECB chief (and ex-Italian prime minister) Mario Draghi. This is a political super priority for European Commission president Ursula von der Leyen amid a blizzard of economic initiatives, including a new EU Clean Industrial Deal launched in February which may become the signature issue of her second term of office. This shift in perceptions of Europe in 2025 highlights how sentiment about powers can change, sometimes significantly, in a relatively short space of time. What has underpinned this change is political developments not only economic ones, emanating both from Europe and the United States. In Europe, markets have perceived newfound political resolve following multiple key elections in 2024 and the first half of 2025, including in the United Kingdom and Germany. There is a perception that this may provide a much needed political 'window of opportunity' for reform, including scope for a very significant defence build-up. Yet, the increased positivity of sentiment towards Europe also reflects downgrades in perceptions of the US growth outlook under the second Trump administration. Views of US financial exceptionalism have been badly dented in the last few months, not least because of the chaos of Trump's trade tariff policy. One of the many ironies about the re-election of Donald Trump as US president last year is that this key event might actually strengthen rather than weaken Europe, despite concerns to the contrary. Trump's presidency has, so far at least, been a driver for the region's economic reform and strengthening of security and defence. Yet, we should not get carried away with this positivity. While there is still more potential for Europe to surprise on the upside, the fact that the region is at a possibly big economic and political pivot point means there are less rosy scenarios that may still materialise. What makes Europe's future economic and political pathway hard to forecast is that the regional landscape is characterised by intense volatility, uncertainty, complexity and ambiguity (Vuca). So it is full of both risk and opportunity, with the balance between the two waxing and waning from time to time. At present, there is an upswing in positive perceptions about Europe's prospects, despite the region's ongoing challenges. Yet, several plausible developments could, collectively, help sour sentiment again. One example is the Ukraine war, which shows little, if any, sign of being resolved anytime soon. Indeed, there is a growing possibility that the conflict could continue into 2026, despite Trump's campaign pledge to resolve it within a day of taking office. Perhaps the central challenge facing the region, however, is enhancing its competitiveness, particularly in the EU's largest economies: Germany, France, and Italy. All three still face significant economic problems whereas some southern European powers such as Spain, Greece and Portugal, plus much of Eastern Europe, have outperformed the EU growth average in recent years, a trend likely to continue in the medium term. Failure to reform, economically, will intensify the political challenges facing Europe. Right-wing populism has not lost its appeal, as was shown in last Sunday's Polish presidential election result, which saw conservative historian Karol Nawrocki elected. A fan of Trump, Nawrocki flew to Washington during the election campaign for a brief meeting and a thumbs-up photo of himself with the US president in the Oval Office. Indeed, the rise of right-wing populism may yet help make for an existential crisis for the EU. No less a figure than Draghi highlighted this possibility last September in his European competitiveness report. Moving from domestic to international politics, the geopolitical context facing Europe is also likely to continue to be very difficult in the second half of the 2020s, whether or not Trump can deliver a sustainable deal to end the Ukraine war. This would primarily be because of continuing security problems posed by Russia. Beyond Moscow, there are wider challenges, including the possibility of significant migration flows from the region's southern borders, plus ongoing tensions in the Middle East. So, while the 1920s became known as the prosperous 'Roaring 20s', a century later there is a significant risk that the 2020s will be seen as a much more difficult 'Warring 20s' that help pivot Europe's future in a negative direction. Taken together, this showcases the potential tipping point that Europe may still be at. The first half of 2025 has been, overall, more positive than many expected, but big challenges still lie ahead, which could change the picture again in a significantly more negative direction. The writer is an associate at LSE IDEAS at the London School of Economics
Yahoo
03-03-2025
- Business
- Yahoo
Fugro restarts hydrocarbon and LNG projects in US after Trump's election
Dutch geological data company Fugro has resumed several US hydrocarbon and liquefied natural gas (LNG) projects following Donald Trump's election. Fugro CEO Mark Heine noted that the US Government issued licenses previously on hold under Joe Biden's administration, reported Reuters. The company is also optimistic about offshore wind development in Asia and Europe. Fugro's offshore wind projects in the Americas account for 7% of its turnover. However, US renewables projects lacking permits or power purchase agreements face uncertainty, with operators potentially shifting focus to Europe. "It comes at the right time because operators will move their investment capacity to Europe and it will boost the renewable energy in Europe," Heine said. In January, Trump ordered a pause on new federal offshore wind leasing, focusing on maximising US oil and gas production. Fugro anticipates that the EU Clean Industrial Deal will enhance offshore wind development, aiding the EU's transition to cleaner fuels. Fugro reported adjusted earnings before interest and taxes (EBIT) of €71.8m ($74.69m) in the fourth quarter (Q4), surpassing the company-compiled consensus of €54m. Despite this, the group's Q4 revenue fell slightly short of analysts' expectations due to US political uncertainties. Heine said: 'Our financial performance in 2024 was good, as we delivered well against the mid-term targets of our strategy Towards Full Potential. We significantly improved our EBIT margin, as well as our operating cash flow. In three out of four regions, we realised double-digit EBIT margins, driven by both our Marine and Land activities. We are also pleased to be able to raise our dividend to €0.75 per share, combined with a return on capital employed of 18.1%, above our mid-term target. 'The strong improvement in EBIT and cash flow was delivered in a year in which our top-line growth was impacted by developments in our Americas and Middle East markets. Although overall lower than anticipated, Fugro generated revenue growth driven by the Europe-Africa and Asia-Pacific regions.' Further setbacks are expected in the first half of the year. In the Americas, which contribute 22% of Fugro's revenue, sales decreased by 11.5% organically in Q4 to €137.8m, primarily affecting the geophysical business line. "Fugro restarts hydrocarbon and LNG projects in US after Trump's election" was originally created and published by Offshore Technology, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Sign in to access your portfolio
Reuters
28-02-2025
- Business
- Reuters
Geo-data firm Fugro says US hydrocarbon and LNG projects resumed after Trump win
Feb 28 (Reuters) - Dutch geological data specialist Fugro ( opens new tab has restarted multiple projects in the U.S. hydrocarbon and LNG sectors since Donald Trump's election and is optimistic about offshore wind development in Asia and Europe, its CEO told Reuters on Friday. Mark Heine said the U.S. government had issued licenses put on hold by the former administration of Joe Biden, without giving any further details on the U.S. projects. U.S. renewables projects that had not yet secured permits or power purchase agreements were now in doubt, he said, predicting that operators would move to Europe. Offshore wind represents 7% of Fugro's turnover in the Americas. Trump in January issued an order to pause new federal offshore wind leasing, while promising to focus on his policies on maximizing already record-high U.S. oil and gas production. Fugro is "very optimistic" on offshore wind market trends in Europe and Asia, notably in South Korea and Japan, which are actively developing. It expects the recently announced EU Clean Industrial Deal to boost offshore wind development and support the 27-member bloc's transition to cleaner fuels, which will benefit the group. "It comes at the right time because operators will move their investment capacity to Europe and it will boost the renewable energy in Europe," Heine said. Fugro posted adjusted EBIT at 71.8 million euros ($74.69 million) in the fourth quarter, ahead of a company-compiled consensus of 54 million euros, sending its shares up 5.6% at 0852 GMT after they rose as much as 11%. However, the group's fourth-quarter revenue, which came slightly below analysts' expectations, was affected by political uncertainties in the U.S., with further setbacks anticipated in the first half of the year. In the Americas, which makes up 22% of the group revenue, sales were down 11.5% organically in the fourth quarter at 137.8 million euros, due to uncertainty associated with U.S. elections and potential policy changes, notably impacting the geophysical business line. ($1 = 0.9614 euros)
Reuters
26-02-2025
- Business
- Reuters
What's in the EU's plan to boost clean tech, lower energy bills?
BRUSSELS, Feb 26 (Reuters) - The European Commission proposed on Wednesday to make 100 billion euros ($104.97 billion) available to support EU-made clean manufacturing along with measures to lower power bills. The EU Clean Industrial Deal aims to provide support for energy-hungry industries that face "high energy costs, unfair global competition and complex regulations" while also boosting the clean-tech sector. Here are some of the main elements: LOWERING ENERGY BILLS * The Commission will launch a pilot plan worth 500 million euros with the European Investment Bank (EIB) to guarantee long-term renewable power purchase agreements, with a focus on small and medium businesses * The EIB will also launch a package to back manufacturers of power grid components worth at least 1.5 billion euros * State aid rules are to be simplified in June 2025 * The new package aims to fast-track clean energy permitting in the fourth quarter of 2025 and European Grid Package in the first quarter of 2026 * It plans to extend gas storage targets beyond 2025 with more flexibility CLEAN TECH BOOST * The Commission proposes to establish the Industrial Decarbonisation Bank in 2026 with 100 billion euros in funding based on the existing Innovation Fund and revenues from parts of the Emissions Trading Scheme (ETS) * EU-level private funding tool InvestEU will be amended to mobilise 50 billion euros in extra financing * Current EU budget will provide a total of 1 billion euros * Plan will recommend member states slash electricity taxes * It will revise public procurement rules in 2026 to favour EU suppliers CIRCULAR ECONOMY AND TRADE * Plan will set up joint purchasing centre for metals and minerals vital for businesses in clean tech and for the bloc's decarbonisation targets * EU plans to adopt Circular Economy Act in 2026 to bring down feedstock costs and incentivise recycling of critical raw material waste * It will launch new clean trade partnerships globally and simplify carbon duties (CBAM) * CBAM review set for the third quarter of 2025 before it starts collecting fees on imports of steel, cement and other goods in 2026 * Make fast use of anti-dumping and anti-subsidy duties to battle global surpluses SECTORAL ACTION PLANS * Automotive sector to be adopted on March 5 * Steel and metals action plan in second quarter of 2025 * Chemicals industry to be adopted in late 2025 * Sustainable Transport Investment Plan in 2025
