With only slowly recovering economic growth and structurally high interest costs, Hungary needs sustained fiscal discipline to ensure budget deficits narrow gradually and debt-to-GDP stabilises before and after parliamentary elections due next spring.

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.

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.

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.

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.

Germany’s ramp-up of infrastructure and defence spending will likely be more gradual than planned, posing risks to an already fragile growth outlook, particularly if additional investments and associated private-sector co-investment fail to materialise.

The decision to keep rates on hold last week confirms that the ECB remains in wait-and-see mode. With inflation around 2%, there is little justification for a cut next month. The economy is relatively resilient and risks to inflation are balanced.

The Fed’s expected 25bp rate cut on Wednesday appears premature given the latest increase in headline inflation to 2.9%, an economy still expanding at around 2%, the uncertain effects of higher tariffs and only modest signs of labour market softening.