EU Reaches Agreement on Spending Rules

The EU has spent two years making an intensive effort to develop reforms to spending rules. PHILIPPE HUGUEN / AFP/File
The EU has spent two years making an intensive effort to develop reforms to spending rules. PHILIPPE HUGUEN / AFP/File
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EU Reaches Agreement on Spending Rules

The EU has spent two years making an intensive effort to develop reforms to spending rules. PHILIPPE HUGUEN / AFP/File
The EU has spent two years making an intensive effort to develop reforms to spending rules. PHILIPPE HUGUEN / AFP/File

The European Parliament and member states reached an agreement early Saturday on reforms to EU budgetary rules aimed at boosting investment while keeping spending under control.
The text modernizes the current rules, known as the Stability and Growth Pact, created in the late 1990s, which limit countries' debt to 60 percent of gross domestic product and public deficits to three percent, AFP said.
"Deal!," the Belgian Presidency of the Council of the EU said on social media platform X after 16 hours of talks.
The European Union spent two years making an intensive effort to develop reforms supported by the more frugal member states like Germany and other countries, such as France and Italy, which seek more flexibility.
After much wrangling between Berlin and Paris, the 27 member states struck a deal in December, then began talks with negotiators from the European Parliament.
The text was criticized for its great complexity and derided by left-wing officials as a tool for imposing austerity on Europe.
The negotiators finally reached an agreement early Saturday, in time for the text to be voted on in Strasbourg this spring before the parliamentary break ahead of European elections.
The reforms will be formally adopted after agreement between lawmakers and states.
The agreement will allow member states to apply the new rules to their 2025 budgets.
"The new rules will help achieve balanced & sustainable public finances, structural reforms, foster investments, growth & jobs creation in the EU," the Belgian presidency said.
Wiggle room
The former budgetary framework was considered too drastic and was never really respected.
The rules had, however, been suspended since the coronavirus pandemic to give member states wiggle room to spend more during a period of great economic upheaval.
During the initial debates between countries, the battle was fierce over how much those old limits should be relaxed to give more room for investment.
With war raging in Europe and the EU making a green transition push, states led by France argued for allowing more space to finance these key areas, including, for example, supplying critical arms to Ukraine.
While confirming the previous limits on debt and budget deficits, the new agreement allows more flexibility in the event of excessive deficits.
The text provides looser fiscal rules more adapted to the particular situation of each state, allowing big spenders a slower route back to frugality.
The tailor-made approach means each country presents their own adjustment trajectory to ensure their debt's sustainability, giving them more time if they undertake reforms and investments and allowing a less painful return to fiscal health.
Monitoring would focus on expenditure trends, an economic indicator considered more relevant than deficits, which can fluctuate depending on the level of growth.
But Germany and its "frugal" allies managed to tighten this budgetary framework by imposing a quantifiable minimum effort to reduce debt and deficits for all EU countries, despite the reluctance of France and Italy.
These modifications have greatly complicated the text.
"We have a deal! A new economic governance framework was much needed," Dutch MEP Esther de Lange said on X.
"We have ensured that the new fiscal rules are sound and credible, while also allowing room for necessary investments," said de Lange, of the center-right European People's Party Group.
The reforms are also supported by the EU's Renew liberals and a large majority of the Socialist and Democrat groupings.
The Greens and some S&D elected officials, however, reject it, as do the radical left.
These elected officials have denounced a return to austerity after three years of suspended budgetary rules due to the pandemic and war in Ukraine.
"We need investments in industry, in defense, in the ecological transition, that's the urgency today, it is not to bring economically absurd rules up to date," economist and S&D MEP Aurore Lalucq of France told AFP.
She denounced it as a "political error which will be used by populists to attack Europe".



World Food Prices Dip in October, but Remain Higher Than a Year Ago

A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)
A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)
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World Food Prices Dip in October, but Remain Higher Than a Year Ago

A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)
A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)

World food prices edged lower in October as weaker import demand contributed to monthly declines in cereal, dairy and meat prices, but were still nearly 6% higher than a year earlier, the United Nations' Food and Agriculture Organization said on Friday.

The FAO Food Price Index, which tracks monthly changes in international prices for a basket of food commodities, ‌averaged 133.9 points ‌in October, down from a revised ‌135.6 ⁠in September.

The index ⁠was 5.9% higher than a year earlier, but remained 16.4% below its March 2022 peak.

FAO's cereal price index fell 4.5% from September and was 12.6% lower than a year ago, as wheat and maize quotations declined. Wheat prices eased on weak import demand ⁠and improved production prospects, especially in Argentina.

"Expectations of ‌easing constraints on Black ‌Sea export flows added to the downward pressure on prices, ‌although continued disruptions to Black Sea logistics limited the decline," ‌FAO said in a statement.

Maize prices also eased after reaching a three-year high in September, pressured by the US harvest, expectations of ample supplies in South America and renewed ‌prospects of easing tensions in the Black Sea region.

Vegetable oil prices edged up 0.3%, ⁠as ⁠higher soybean and sunflower oil prices more than offset a fall in rapeseed oil prices.

Sugar prices rose 6.6%, their fourth straight monthly increase, to the highest level since December 2024, after rainfall disrupted harvesting in Brazil. They were now 28.8% above a year ago.

The dairy index fell 1.1%, as lower butter and cheese prices linked to ample supplies and subdued demand outweighed gains in milk powder.

The meat index declined 1.2%, while still slightly above its year-earlier level, as ovine and bovine meat prices fell.


Copper Falls, Set for Worst Week Since March on AI Rout

Copper at the Aurubis copper smelting and refining plant in Hamburg, Germany. (Reuters)
Copper at the Aurubis copper smelting and refining plant in Hamburg, Germany. (Reuters)
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Copper Falls, Set for Worst Week Since March on AI Rout

Copper at the Aurubis copper smelting and refining plant in Hamburg, Germany. (Reuters)
Copper at the Aurubis copper smelting and refining plant in Hamburg, Germany. (Reuters)

Copper dropped on Friday and was set for its biggest weekly drop in London since March, as a rout in technology stocks battered markets.

Benchmark three-month copper on the London Metal Exchange was down 1.3% at $13,663 a metric ton by 0700 GMT. That placed it on track to fall 3.44% in the week, Reuters said.

The most-traded copper contract on the Shanghai Futures Exchange fell 1.08% to 106,830 yuan ($16,018.17) a ton.

The weakness reflects worries over AI investment, ‌with copper increasingly ‌influenced by "sentiment towards data center expansion," said ‌Craig ⁠Lang, principal analyst ⁠at CRU.

Technology shares were battered after Democratic wins in the US midterms fueled concerns that new regulatory oversight could cap the AI buildout.

On the other hand, supply constraints cushioned copper's decline.

"I would be cautious about calling this a sustained correction, given ongoing mine supply challenges and exceptionally tight ⁠metal availability outside the US," Lang said.

Copper stocks ‌in SHFE-monitored warehouses <CU-STX-SGH> fell by ‌over 24% this week to just 33,848 tons — the lowest ‌in almost three years. The closely watched Yangshan copper ‌premium <SMM-CUYP-CN>, a gauge of appetite for imports into key consumer China, increased to $210 a ton on Thursday, matching its record high.

Smelters in the country are facing a double squeeze of negative treatment ‌charges and lower sulfuric acid prices.

Meanwhile, warehouse inventories outside the US have been drawn ⁠down as ⁠material was pulled into the country ahead of a potential tariff on imports of refined copper.

"These physical constraints should provide some support against weaker investor sentiment," Lang said.

Among LME metals, aluminium lost 0.54%, zinc lost 1.42%, lead lost 0.45%, nickel dipped 0.23% and tin gained 0.83%.

On the SHFE, aluminium nudged down only 0.04%, zinc lost 1.35%, lead was little changed, down only 0.03%, nickel rose 2.14% and tin dropped 3.45%.

SHFE inventories were down across the board this week, led by sharp drops in aluminium <AL-STX-SGH> and lead <PB-STX-SGH>.


Emerging Economies Set to Match Advanced Nations’ Renewable Capacity Additions, IEA Says

Workers walk at Kalyon Karapinar solar power plant in Karapinar, Konya province, Türkiye, Oct. 14, 2026. (AP)
Workers walk at Kalyon Karapinar solar power plant in Karapinar, Konya province, Türkiye, Oct. 14, 2026. (AP)
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Emerging Economies Set to Match Advanced Nations’ Renewable Capacity Additions, IEA Says

Workers walk at Kalyon Karapinar solar power plant in Karapinar, Konya province, Türkiye, Oct. 14, 2026. (AP)
Workers walk at Kalyon Karapinar solar power plant in Karapinar, Konya province, Türkiye, Oct. 14, 2026. (AP)

Emerging ‌and developing economies outside China are expected to add as much new renewable energy capacity as advanced economies for the first time over the next five years, driven by the current energy crisis, the International Energy Agency said on Friday.

Gas and oil prices have soared this year as the US-Iran war disrupts traffic through the Strait of Hormuz, a key route for global oil and gas trade.

Global renewable energy ‌capacity is forecast ‌to increase by almost 4,800 gigawatts ‌between ⁠2026 and 2031, ⁠the IEA said in its annual outlook.

Emerging and developing economies are expected to add about 1,100 GW, roughly the same as advanced economies, with China adding around 2,550 GW, the agency said.

Capacity growth in Southeast Asia, Africa and the Middle East is ⁠expected to triple over the period, ‌led mainly by solar installations, ‌the IEA said.

China will remain the biggest contributor to ‌global renewable energy growth, although its share is ‌forecast to fall to 53% by 2031 from 60% in 2025.

India is emerging as the world's second-fastest deployer of renewables and is expected to more than double its contribution ‌to global growth by 2031 to nearly 8.5%.

Grid connection delays remain ⁠a major ⁠challenge, with projects awaiting connections worldwide rising 60% over the past year, equivalent to four times the wind and solar capacity connected to grids during the same period.

Grid constraints are expected to slow growth in advanced economies, with annual additions in Europe through 2031 forecast to remain broadly in line with 2025 levels.

Renewable energy is expected to meet 6% of global transport energy demand by 2031, while higher fuel-blending mandates prompted the IEA to raise its biofuels forecast by 40% from last year's report.