Good morning. A must-read to start: overnight, Donald Trump has hit trade partners including the EU with new tariffs of at least 10 per cent, over claims that countries are failing to tackle forced labour.
Today, our Dublin correspondent speaks to Ireland’s finance minister about his push to break the deadlock over EU capital market reforms, while I bring you the latest on Iceland’s upcoming referendum on reopening EU accession talks.
Have a great weekend.
Europe Express is edited by Mari Novik. Read the previous edition here. Please send tips, thoughts and feedback to europe.express@ft.com.
Obsessed with compromise
Ireland’s finance minister says he is “slightly obsessed” with finding a compromise that can win backing for a thorny EU financial integration proposal, write Jude Webber and Paola Tamma.
Context: Ireland took over the EU presidency this month, putting finance minister Simon Harris in charge of brokering a deal to deepen the bloc’s capital markets.
The proposal would hand the Paris-based European Securities and Markets Authority direct supervision of key financial market players, including major stock exchanges and crypto trading platforms.
But even the proposal’s biggest supporters — Germany, France, Italy, Spain, Poland and the Netherlands — are seeking carve-outs, for example, Germany’s Deutsche Börse exchange.
To secure a majority, Harris also needs the backing of at least nine more countries, including Luxembourg, which has led opposition to the plans.
One contentious proposal would allow asset managers to “passport” funds across the EU after approval by a single supervisor, potentially reducing Ireland’s and Luxembourg’s share of EU fund domiciles.
Harris declined to say where a compromise might lie, citing Ireland’s neutral role as Council president.
But he stressed the need to demonstrate both the costs and benefits for member states. Some capitals might be waiting because “they might only want to compromise once”, he said.
“I believe to get this done, everybody’s going to need to compromise a bit,” Harris said.
He wants to secure agreement at EU finance ministers’ October meeting after persuading his counterparts earlier this month to commit to reaching a deal.
“It’s kind of make your mind up time for Europe,” said Harris. “I don’t think at this moment of fast-moving [geopolitical] change, we can afford to be mealy in our approach or incremental,” he added.
Chart du jour: Keep it cool
We cannot show you the interactive graphic and will try to fall back to a snapshot image. This is most likely due to connection issues.
More holidaymakers are drawn to spend their summer break at “coolcation” destinations in Nordic countries as traditional tourist hotspots in southern Europe have simply become too hot.
Europe or America
Icelanders are heading for a knife-edge vote on reopening EU accession talks, with US President Donald Trump’s return to the White House reshaping a debate once dominated by economics.
Context: Iceland is preparing for a referendum on August 29 on whether to restart EU membership talks, as it grapples with security concerns that have sharpened due to Trump’s threats to annex Greenland. Any eventual accession would require a separate referendum.
The referendum is entering its final weeks with neither side in a commanding position. An official survey commissioned by the foreign ministry in May found 42 per cent in favour and 39 per cent against restarting talks, with 19 per cent undecided, suggesting the outcome could hinge on late-breaking voters.
“This first became an issue during Trump’s second term. He and his policies are generally despised in Iceland,” said Ólafur Þórður Harðarson, professor of political science at the University of Iceland.
“Many yes-people are emphasising that Iceland has to choose between the values and political structures prevailing in Europe and those emerging in the US under Trump. The no-people claim those worries are unfounded.”
The mid-Atlantic island’s last EU bid was launched in the aftermath of the 2008 financial crisis before a tourism-fuelled economic boom restored confidence that the country could prosper outside the bloc. The accession process was frozen in 2013 after a stand-off with Brussels over fishing rights.
One Icelandic official said the campaign thus far had exposed the country’s long-held sense of exceptionalism. “We’re just this island far, far away. If we just stick our head in the sand, Trump will forget about us. That has been the strategy.”
What to watch today
Informal meeting of EU environment ministers in Dublin.
Defence commissioner Andrius Kubilius joins a roundtable with space companies in Washington.
Now read these
Ukraine drone war: Kyiv is targeting Russia’s largest online retailer in an effort to bring Vladimir Putin’s invasion home to ordinary Russians.
No backlash: Investor demand for private capital funds that explicitly seek positive environmental or social outcomes has held steady in recent years.
Blaming oil prices: The European Central Bank left interest rates unchanged at 2.25 per cent yesterday evening but policymakers discussed a further increase.
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