EU news monthly: Unemployment rate was 5.7% in February 2025

Politics

US President Donald Trump has imposed 20% tariffs on EU exports, announcing much-vaunted "reciprocal tariffs" on trading partners that have sent shockwaves throughout the global economy. Donald Trump also announced tariffs of at least 10% on dozens of other countries, amounting to 34% on China, 26% on India, 25% on South Korea, 24% on Japan, 10% on the UK and levies on a number of other countries.

The EU has unveiled the ReArm Europe plan, which aims to significantly increase investment in defence capabilities in the EU. The plan includes five key measures – freeing up public finances for defence, creating a new 150 billion euro loan facility for joint investments, using the EU budget to support defence projects, mobilising private capital and strengthening the role of the European Investment Bank.

The German parliament has approved an exemption from the debt brake, i.e. the limit on the federal budget deficit, for any amount of defense spending exceeding 1% of GDP and for expenditures for a 500 billion euro fund for infrastructure investments. This will make it possible to finance investments in repairs of roads, railways, bridges and the energy system, as well as schools.

The European Commission has presented a Steel and Metals Action Plan. In the Czech Republic steel production has fallen to a historic low. The aim of the plan is to introduce mechanisms to protect European steelmakers. The Commission will, among other things, tighten existing safeguard measures in the steel sector (import quotas will be reduced from April) and will propose new long-term measures by the end of the year to maintain protection for the EU steel industry. The plan also includes support for the recycling of materials, including the introduction of a trade measure for scrap metal.

Economy

In the fourth quarter of 2024 the hourly labour costs rose by 4.3% in the EU, compared with the same quarter of the previous year, the highest increases in hourly wage costs for the whole economy were recorded in Croatia (+13.9%), Poland (+13.8%) and Romania (+13.1%)

The EU unemployment rate was 5.7% in February 2025, also down from 5.8% in January 2025 and from 6.1% in February 2024.

The EU annual inflation was 2.7% in February 2025, down from 2.8% in January. A year earlier, the rate was 2.8%. The lowest annual rates were registered in France (0.9%) and Ireland (1.4%). The highest annual rates were recorded in Hungary (5.7%) and Romania (5.2%). Compared with January 2025, annual inflation fell in fourteen Member States, remained stable in six and rose in seven.

In January 2025, compared with December 2024, seasonally adjusted production in construction decreased by 0.2% in the EU. In January 2025, compared with January 2024, production in construction remained stable in the euro area and increased by 0.2% in the EU, among Member States for which data are available, the highest annual increases in production in construction were recorded in Slovenia (+10.7%), Slovakia (+8.5%) and Czechia (+8.4%). The largest decreases were observed in Hungary (-9.6%) and France (-7.1%).

Sectors

Airbus continues to develop a hydrogen aircraft. After years of research, hydrogen propulsion appears to be the most promising path to decarbonizing aviation, according to the company. It is continuing work on a hydrogen aircraft concept with four electric engines powered by fuel cells.

The construction of an industrial zone in Dolní Lutyňa is being postponed as the investor is waiting for a more suitable time. The state is keeping the identity of the interested party secret, but according to the media it is believed to be the South Korean company Samsung. According to the European NGO Transport & Environment, every second gigafactory in Europe, which investors have announced creating, is under threat - among other reasons, due to lower than expected demand for electric cars, competition from China and falling prices of raw materials for batteries.

The European operator Eutelsat is ready to take over in Ukraine from Starlink. It is prepared to provide the country with up to 40 thousand Internet terminals, thus replacing the current services provided by Elon Musk’s American Starlink system. In 2022 Eutelsat acquired OneWeb, which operates 652 satellites in low orbit. Although this is significantly less than the seven thousand satellites of Starlink, Eutelsat can still compete with it in certain locations.

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