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Eurozone inflation rose to 2.9% in December according to Eurostat

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Eurozone inflation rose to 2.9% in December according to Eurostat

The half percentage point rise on the November figure (2.4%) appeared driven by an abatement in falling energy prices

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Food, alcohol and tobacco were expected to continue with the highest inflation rate in December (6.1%, compared with 6.9% in November), followed by services (4.0%, stable compared with November). But a diminution in energy inflation abated from -11.5% in November to -6.7% in December.

The news is likely to damp hopes of an early interest rate decrease by the European Central Bank in 2024. The bank’s rate stands unchanged from last October at 4%, following steady increases which began in July 2022.

Christine Lagarde, the president of the ECB, voiced concerns late last year that she expected inflation to rise again as subsidies on energy prices were removed. She said last November that it won’t be before the “next couple of quarters” that the ECB will start to cut rates.

Zsolt Darvas, a senior fellow at the Brussels-based think-tank Bruegel, said the rise was in line with expectations since energy prices “very much influence the overall headline inflation rate e-books.”

Of so-called core inflation – which excludes food and energy prices – Darvas said “the important news is that there was a marginal, a very small decline”, from 3.6% in November to 3.4% in December.

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“I think this is the more important news because this reflects the underlying developments of inflation. So it could be that headline inflation might rise a little bit in the coming months. But what the ECB policymakers watch for is how the core inflation will evolve.”

However, Darvas pointed out that the 3.4% core inflation rate remains adrift of the ECB’s 2% inflation target of the European Central Bank.

With wage growth accelerating and inflation broadly slowing, consumer purchasing power is increasing, according to Darvas, which might imply demand pressure, in turn making higher inflation stubborn.

“That’s why I would expect that the ECB will not stop cutting interest rates anytime soon,” Darvas said, adding: “My expectation is that the European Central Bank will keep its current interest rates for many, many additional months because core inflation is still well above the target of 2%.”

Darvas also pointed to escalation of the Middle East conflict as a risk particularly for global global oil and energy prices. Such an escalation “would have an impact all around the world, including in Europe and the eurozone. And that could keep inflation pressure higher for longer.”

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Cape Verde’s dream run continues, becoming smallest country into World Cup knockout round

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Cape Verde’s dream run continues, becoming smallest country into World Cup knockout round

HOUSTON (AP) — Tiny Cape Verde defied odds to become the smallest country to earn a spot in the World Cup knockout round behind the stellar play of Vozinha, the 40-year-old goalkeeper who embodied the grit of his nation.

“We are small,” he said. “But we have big hearts and we are fighters.”

Cape Verde completed an improbable run through the group stage with a third straight World Cup draw, a 0-0 draw against Saudi Arabia on Friday night to advance in the tournament.

The small island nation off the western coast of Africa, which is making its debut on soccer’s grandest stage, already held 2010 champion Spain to a 0-0 draw and then came from behind to get a 2-2 result against Uruguay.

“The team was very eager to show this to the whole world,” Cape Verde coach Bubista said while draped in his country’s flag. “We are proud of having arrived at this stage. We have shown that we are a small country, but that we fight for the things that we want to achieve.”

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Cape Verde’s three points put the team in second place behind Spain, which beat Uruguay on Friday night and won the group.

Cape Verde will play reigning World Cup champion Argentina in Miami on July 3.

Drawing all three group matches doesn’t guarantee advancement at major soccer tournaments. But several teams have done it in the past, including Wales in 1958, Ireland and the Netherlands in 1990, and Chile in 1998. New Zealand, however, also got three draws at the 2010 World Cup and was eliminated.

On the eve of the match, Bubista mused, “everyone is entitled to dream and nothing is impossible.”

The Blue Sharks proved him right, overcoming seemingly insurmountable odds as this country of just more than 500,000 reached the round of 32.

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A woman, her face painted with a flag of the archipelago, held a sign that read: “Small Islands, Big Dreams.”

A dream that these underdogs have made reality as they continue their charmed run on the world stage.

They did it with another strong game from Vozinha, whose tournament success has helped him amass more than 16 million Instagram followers.

He had a save in first half stoppage time, grabbing a header from Mohamed Kanno to keep Saudi Arabia scoreless. Another save came in the 66th minute when he leaped to deflect a shot from Mohammed Abu Al-Shamat.

A third came in the 92nd minute when he stopped a shot by Abdullah Al-Hamdan.

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“There is a lot of quality in our national team,” Vozinha said. “Maybe for many of you, you think the Cape Verdean player is not good enough. But we came here to show that we have a lot of quality and we are here to compete and our players can play everywhere in the big competition, in the big leagues.”

A group of shirtless men in the crowd each painted one letter of his name on their chests as they cheered Cape Verde.

But Vozinha had a much bigger fan among the crowd of 68,278 as his mother Ana Candida Evora watched from a luxury suite, waving a tiny Cape Verde flag. It was her second match of the tournament after missing Vozinha’s epic seven-save performance against Spain because of visa issues.

Cape Verde had a chance to score in the 50th minute, but Kevin Pina’s shot from distance was just above the crossbar. Another chance came in the 74th minute when Laros Duarte’s shot from the middle of the box was stopped by goalkeeper Mohammed Al-Owais.

A last chance to score came in the final seconds when Nuno da Costa sent a shot from the middle of the box wide left.

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But it didn’t matter because a couple of minutes after the final whistle, Spain completed its victory over Uruguay and set off a joyous celebration among Cape Verde’s players and fans, many of whom cried as they rejoiced.

Having led his squad to new heights, Bubista was asked if he could have imagined such a run entering the tournament.

“I’ve always said that sooner or later Cape Verde would be on such a stage,” he said. “Of course it’s hard to have such a forecast, but I always knew.”

Saudi Arabia was eliminated after finishing with two points in the group stage.

“We were very poor in terms of creating things, controlling the game and creating actions,” coach Georgios Donis said. “And one cannot win a game this way. It would be very difficult.”

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See more of AP’s World Cup coverage here

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Rubio announces framework deal between Israel and Lebanon as experts warn Iran will fight to sabotage it

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Rubio announces framework deal between Israel and Lebanon as experts warn Iran will fight to sabotage it

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Secretary of State Marco Rubio and Israeli Prime Minister Benjamin Netanyahu welcomed the U.S.-brokered framework agreement between Jerusalem and Lebanon on Friday as a robust first step toward peace and a rejection of Iranian interference in the region.

The breakthrough could lead to a path of diplomatic normalization between the two countries, Lebanon and Israel, that are in a formal state of war. The framework agreement may impede the Iran-backed terrorist movement Hezbollah that has gained control over parts of the Lebanese state, according to experts.

Hezbollah and Israel have fought two wars since the terrorist organization joined Hamas’ invasion of Israel in Oct. 7, 2023 and following U.S.-Israeli attacks on Iran in February.

US ENVOY NEARS LEBANON-ISRAEL CEASEFIRE THAT WOULD DISARM HEZBOLLAH TERROR GROUP

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Hezbollah launches long-range missiles from Lebanon into northern Israel within 48 hours of strikes on Iran, escalating the widening conflict amid Operation Epic Fury. (Hadi Mizban/AP)

Rubio said, “Today is a good day in that we are happy to announce a framework agreement between the sovereign government of Lebanon and, of course, the government of Israel, with a mediation and support of the United States of America, that begins to put in place a framework for lasting peace and security.”

He added, “And that’s what these two nations deserve.”

According to the Press Service of Israel (TPS-IL), Netanyahu termed the deal “a severe blow to Iran.” He added that the Islamic Republic seeks to force an Israeli withdrawal from southern Lebanon, and “essentially Israel, Lebanon and the United States are telling them: This is none of your business. You have no role in southern Lebanon — neither you, nor Hezbollah nor any other terrorist organization.”

U.S. Ambassador to Israel, Mike Huckabee, wrote on X:” Was there all week but had to fly back to Israel Thursday night. Historic opportunity but key is disarming Hezbollah, evil terrorists who have killed Americans. Israel, Lebanon sign framework peace agreement following US-backed negotiations.”

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Secretary of State Marco Rubio and Israel’s Ambassador to the U.S. Yechiel Leiter applaud after signing a framework agreement between Israel and Lebanon with State Department Counselor Daniel Holler, and Lebanon’s Ambassador to the U.S. Nada Hamadeh, at the State Department in Washington, D.C., U.S., June 26, 2026.  (Ken Cedeno/Reuters)

Lebanon’s President Joseph Aoun, in an Arabic-language X Post, thanked the U.S. administration, led by President Donald Trump, “for its efforts in hosting and facilitating the negotiations and for supporting Lebanon’s position.”

Rubio’s optimistic announcement encouraged some veteran Lebanon experts about a historic opportunity for peace, while others warned about the necessity to proceed with caution.

Guila Fakhoury, whose father, Amer, was kidnapped by Hezbollah in 2019, told Fox News Digital that “Today marks a historic achievement. For the first time since 1983, Lebanon and Israel have reached an agreement through direct negotiations. It also represents a fundamental shift in regional dynamics, demonstrating that Lebanon’s future need not be contingent upon broader regional negotiations or arrangements negotiated through proxy influence. In that sense, this agreement supersedes previous efforts to tie Lebanon’s stability and sovereignty to external agendas.”

Fakhoury, added, “If these commitments are fulfilled, this agreement could become the foundation for long-term cooperation, security, economic opportunity and shared stability that benefits both the Lebanese and Israeli people.”

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HEZBOLLAH DISARMAMENT DEADLOCK RISKS CIVIL WAR, ANALYSTS SAY, AS US PREPARES FOR ISRAEL–LEBANON TALKS

Hezbollah al-Mahdi scouts parade with large portraits of Iran’s late leader Ayatollah Khomeini and Supreme Leader Ayatollah Ali Khamenei during an event for Jerusalem Day in Nabatiyeh, Lebanon, on Aug. 1, 2013. (Hussein Malla/AP Photo)

She continued, “However, whether this agreement brings lasting peace and stability will depend entirely on its implementation. The Lebanese state and its legitimate institutions must be the ones to create stability, not external actors or armed organizations operating outside government authority.”

Walid Phares, a leading U.S. expert on Lebanon and the Mideast, told Fox News Digital, “This agreement is just a ceasefire not a conduit to a larger peace deal. Hezbollah take orders from Iran. It’s clear Tehran will complain about such a deal and pressure the negotiators to get some statement from Washington asserting the Islamic Republic’s say over Lebanon. Hezbollah will attack the deal but will pray Israel won’t strike. The Trump administration will have to calibrate between the Rubio-sponsored agreement on Lebanon and the fragility of the situation in the Gulf.”

Prime Minister Benjamin Netanyahu during his conversation with U.S. President Donald Trump. (Avi Ohayon / GPO)

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He added, “The regime is telling Hezbollah ‘keep the narrative up and radical but let us get the money first.’ Israel is giving its public something and mindful of Trump’s concerns about the deal with Iran. The Lebanese government is hoping their army does not have to engage. The only unknown is the ability of the Lebanese opposition to rise and resist Hezbollah. We are still inside the Lebanese status quo.”

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Sen. Tom Cotton, R-Ark., posted on X following the news that, “Hezbollah savages have American blood on their hands. I applaud President Trump and @SecRubio for forging this important agreement that will restrain Iran’s terrorist proxy. Let me be clear: Tehran has no future in Lebanon.”

Hanin Ghaddar, a senior fellow at The Washington Institute for Near East Policy, wrote on X: “Absolutely a breakthrough,” This is the first agreement between Israel and Lebanon since 1983. A clear and loud ‘NO’ to Iran as it challenges its efforts to control Lebanon ‘s file.”

She added, “But as the 1983 agreement was toppled by the bad guys then (Assad regime), Iran will try everything to make sure this one fails as well. Lebanon and Israel have a responsibility in making sure this agreement is protected, and its implementation is successful. We will probably not have another chance.”

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Trump threatens 100% tariffs over EU digital tax

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Trump threatens 100% tariffs over EU digital tax

President Donald Trump on Friday threatened a 100% tariff on imports from any country that imposes a tax on digital services provided by United States companies.

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In a social media post, Trump took aim at European countries, he said, that are discussing the “imminent” implementation of taxes on American companies.

The US president has repeatedly sought to use tariffs to deter such taxes, but many countries are seeking revenue as their economies increasingly operate in digital realms dominated by American companies.

“Please let this statement serve to represent that any Country that imposes such a Tax will immediately be met with a 100% tariff on any and all Goods sent to the United States of America,” Trump wrote.

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He added that the new tax would supersede any previously negotiated trade deals. Trump said the penalty would apply to any country that moves forward with such a tax, but he singled out European nations in his post.

Trump has consistently opposed international attempts to tax or regulate American tech giants. Last year, he threatened fresh tariffs on any nation attempting to do so, writing in a post last August that digital taxes and regulations “are all designed to harm, or discriminate against, American Technology.”

The warning arrives just ahead of Trump’s 4 July deadline for the European Union and the US to begin implementing a trade agreement that caps most tariffs on EU exports at 15%.

The EU finalised that trade deal with the United States in May. It followed months of internal EU debate after European Commission chief Ursula von der Leyen initially reached a tentative agreement last year during a visit to Trump’s golf course in Scotland.

The issue of digital tax remained unresolved

Digital taxes were excluded from that pact and remain a primary source of friction between the US and the European bloc.

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While the US government has previously launched Section 301 investigations into digital services taxes, it remains unclear how Trump intends to enforce his latest threat, or whether the tariffs would be applied globally or targeted at specific countries first.

Britain, having left the EU, has levied its own 2% digital services tax since 2020 on revenue generated by search engines, social media platforms and online marketplaces that “derive value” from UK users.

In a policy document released at the time, the British government argued that existing corporate tax rules for digital firms had “led to a misalignment between the place where profits are taxed and the place where value is created.”

The UK tax features specific thresholds, ensuring it is primarily paid by major multinational corporations. The policy was implemented to “ensure the large multinational businesses in-scope make a fair contribution to supporting vital public services,” the document noted.

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