The EU’s India and Mercosur trade deals are politically relevant amid US trade tensions, but medium-term economic benefits look modest relative to potential gains from deeper intra-EU reforms that are more important for European credit profiles.

Scope Ratings requests comments on proposed revisions to its Sovereign Rating Methodology by 27 February 2026. The revised methodology is not expected to affect sovereign ratings assigned by Scope.

Thursday 29 January 2026 - 15:00 (CET)

Tensions over Greenland and growing political crosswinds in Europe are weighing on the region’s medium-term sovereign outlook despite resilient fundamentals while confidence in the US outlook is eroding amid rising concerns over policy reliability.

JD.com’s arrival in European consumer goods retail sets an important precedent for the sector and represents a further shift in commercial spheres of influence in the region.

Resilient profitability, solid asset quality and capital buffers make for a balanced base case for European banks. Alongside stable expected collateral performance, most covered bond programmes can withstand issuer downgrades of up to three notches.

Geopolitical tensions, continued political uncertainty in France, and poor operating efficiency may cloud the outlook for French banks in 2026 in an otherwise supportive operating environment where stable interest rates favour improved profit margins.

The Trump administration’s escalation of political pressure on the Federal Reserve underlines the White House’s increasingly unconventional policy approach which has placed pressure on the long-standing checks and balances of US governance.

The EU NPL ratio continues to be low and stable, but corporate NPLs are elevated in some core countries. At a time of rising geopolitical risk, trade tensions and an uncertain economic outlook, we expect a modest deterioration in asset quality.

The proposed new methodology lays out Scope’s analytical approach for telecommunication companies. The methodology as proposed is expected to have no rating impact on outstanding ratings if implemented as proposed.