World
State of the Union: Zelenskyy's attempts to drum up new support
This edition of State of the Union focuses on the crucial visit of Ukrainian president Volodymyr Zelenskyy to the U.S., the latest economic forecast by the EBRD and attempts to support the struggling German car industry.
For weeks now, Europe is anxiously looking at its number one economic powerhouse, Germany – to be more precise: at the country’s ailing car manufacturers, some of Germany’s industrial pillars.
A serious car crisis in the Federal Republic, triggered by a quasi-collapse of the electrical vehicle market, could have severe consequences elsewhere in the EU.
Threats of historic job cuts, plant closures at Volkswagen and plunging earnings at Mercedes-Benz and BMW prompted emergency talks at Berlin’s economy ministry this week.
But given strained federal finances and fights with China over tariffs, the government’s toolbox is rather empty.
Nonetheless, economy minister Robert Habeck expressed his willingness to help but excluded quick fixes: “Everyone has said that planning is the most important thing. And that means long-term planning. Not a flash-in-the-pan action, because this only has the effect of pumping up the market again in the short term and then possibly collapsing again.”
Germany is in the uncomfortable position today to be forced to re-orient its entire manufacturing sector that depended on cheap Russian energy.
You can already hear Ukraine’s president Zelenskyy shouting: “I told you so!”
Zelenskyy was at the United Nations this week to drum up support for what he called his “victory plan”.
He also reacted to pleas from the European far-left and far-right to negotiate with Russia:
“We know some in the world want to talk to Putin. We know it. To meet, to talk, to speak. But what could they possibly hear from him? That he’s upset because we are exercising our right to defend our people, or that he wants to keep the war and terror going just so no one thinks he was wrong.”
How the Ukrainian economy keeps suffering from the war was detailed this week by the latest outlook from the European Bank for Reconstruction and Development.
The EBRD covers not only Ukraine, but large parts of eastern Europe and central Asia. The bank’s findings are an important bellwether for the global economy.
We spoke to Beata Javorcik, the chief economist of the EBRD.
Euronews: So, your latest Regional Economic Prospects report is called “Along the adjustment path” – that sounds like a friendly way of saying “It’s disappointing”. What do the economies you invest in need to adjust to?
Javorcik: Well, the situation in Europe remains quite challenging. We continue to have very high prices of energy. Particularly the price of natural gas is five times as high as in the US. The demand for exports, particularly from Germany, is muted. Given the difficult situation of the German economy and, finally, the costs of borrowing continue to be high, there is this extra risk premium, this extra interest rate. Countries in the regions had to pay when the war in Ukraine started. And this risk premium continues to be there.
Euronews: On the upside are a decline in inflation and an increase in real wages. What exactly happened?
Javorcik: Well, by historical standards we have seen a very fast disinflation process, though of course the adjustment is not done yet. Inflation remains above the pre-COVID level, but on the positive side we have managed to avoid a hard landing. So, this fight with inflation has come without very big unpleasant effects in terms of unemployment. As the inflation episode started, we saw a big decline in real wages, but then real wages started catching up. That was visible in the last few months in the last year. They are not yet back to the pre-COVID trend, but they have certainly caught up in a significant way.
Euronews: I guess there are still some remaining inflationary pressures – what are they?
Javorcik: Inflation still remains high in some countries, such as Turkey or Egypt, still in high double digits. And depreciation of domestic currencies, which has made imports more expensive, has contributed to further inflation.
Euronews: One country is still in the spotlight: Ukraine. How are they coping with the ongoing war economically?
Javorcik: Well, despite the war early this year, so in the first quarter, Ukrainian economy managed to grow very fast. The bleak Black Sea corridor allowed Ukraine to export grain as well as metals and ores. But then this heavy bombing and destruction of electricity infrastructure happened. And that made the situation very difficult. There are rolling blackouts. There are shortages of electricity. The country is importing electricity from Europe, but it comes at a higher cost. And that’s weighing down on the economy.
World
Iran closes Strait of Hormuz over ceasefire violations
World
Keir Starmer reportedly considering stepping down as PM and could announce timetable for departure
British PM Keir Starmer could face leadership challenge amid internal troubles
British Prime Minister Keir Starmer faces significant internal pressure following Andy Burnham’s special election win, potentially triggering a leadership contest. Starmer is under fire for economic pressures, illegal immigration issues, and controversies surrounding his previous role in prosecuting grooming gangs. Elon Musk also accused Starmer of complicity.
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British Prime Minister Keir Starmer is reportedly considering stepping down and could announce a timetable for his departure as early as Monday, according to a report published Saturday.
Britain’s Observer newspaper reported that Starmer was discussing his future with his wife at his Chequers country residence before making a final decision.
The outlet reported that senior Labour Party figures expect a statement addressing his future as early as next week.
A government source told Reuters that Starmer remains focused on governing and pointed to previous comments in which he vowed to remain in office.
AS EPSTEIN-LINKED APPOINTMENT SPARKS BACKLASH, UK PM STARMER FACES PARTY REVOLT AMID RESIGNATION CALLS
British Prime Minister Keir Starmer awaits Switzerland’s Federal President Guy Parmelin on the sidelines of the G7 summit, in Evian-les-Bains, France, Tuesday. (Isabel Infantes/Pool Reuters via AP)
Fox News Digital has reached out to the prime minister’s office for comment.
Pressure on Starmer has been building for months amid growing dissatisfaction within his party and concerns over the government’s handling of the economy and cost-of-living issues.
The political threat to Starmer intensified Friday after rival Andy Burnham won a seat in Parliament, positioning him to mount a formal leadership challenge.
LABOUR MP PUTS CABINET ‘ON NOTICE,’ THREATENS TO TRIGGER LEADERSHIP CHALLENGE AGAINST STARMER BY MONDAY
Britain’s Labour party candidate Andy Burnham speaks to supporters after the Makerfield by-election in Ashton in Makerfield, England, Friday. (Jon Super/AP)
Starmer congratulated Burnham following the victory, writing on X that voters, “chose Labour’s campaign of hope and optimism over division and hate.”
When asked about Burnham’s apparent ambitions to replace him, Starmer insisted he intends to remain in office.
“I’ve said repeatedly I’m not going to walk away from that,” Starmer said.
UK’S STARMER JUGGLES TROUBLE AT HOME AS HE WALKS GEOPOLITICAL TIGHTROPE WITH TRUMP
Sir Keir Starmer is battling to save his position and refusing to stand aside despite dozens of Labout MP’s demanding he resigns. (Leon Neal/Getty Images)
Starmer has led the Labour Party since 2020 and became prime minister in 2024.
Calls for his resignation intensified last month, with more than 100 Labour lawmakers publicly urging him to step aside or set out a timetable for his departure. Several parliamentary aides also resigned in protest.
The internal revolt followed a series of disappointing local election results for Labour, which lost hundreds of council seats across England, surrendered long-held ground in Wales and fell behind political rivals in Scotland.
UK Prime Minister Keir Starmer speaks a news conference at Downing Street in London, March 5. (Tolga Akmen/EPA/Bloomberg via Getty Images, File)
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Starmer’s popularity has also declined amid a persistently high cost of living, sluggish economic growth and criticism over his acceptance of gifts from wealthy donors.
Fox News Digital’s James Cirrone and Emma Bussey, and Reuters contributed to this report.
World
Trump vows Iran will not charge Strait of Hormuz tolls, but says US might
United States President Donald Trump has pledged there will be no tolls for passage through the Strait of Hormuz, unless they are collected by his own country.
Trump’s statement, made in a Saturday afternoon post on Truth Social, is the latest sign that a recently signed memorandum of understanding (MOU) may be unravelling.
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“There will be NO TOLLS in the Hormuz Strait for 60 days during the Cease Fire Period, and there will be NO TOLLS after the 60 day period has expired,” Trump wrote, “unless they are imposed by and for the United States of America.”
Since the US and Israel launched a war against Iran on February 28, Iran has successfully used the Strait of Hormuz as a pressure point, closing the strategic waterway to traffic.
But under the terms of Wednesday’s ceasefire memorandum, the strait is supposed to reopen for an interim period of 60 days. During that time, Iran is barred from charging vessels for passage.
On Saturday, however, Iran’s joint military command said it had closed the Strait of Hormuz, citing a “clear breach” of the memorandum’s commitments.
US Central Command (CENTCOM), the agency that oversees military operations in the region, denied that report and maintained that the traffic continues to flow through the waterway.
The Strait of Hormuz has long been a flashpoint in the conflict between the US and Iran. Nearly 20 percent of the world’s oil and natural gas is transported through the strait, as well as about 30 percent of the global fertiliser trade.
Closure of the strait has caused global fuel costs to soar and has tested agricultural sectors across the world.
Trump had responded to Iran’s chokehold over the strait by imposing a US naval blockade on Iran’s ports in the region.
But that naval blockade was lifted under the terms of Wednesday’s memorandum. The deal also paused fighting on all fronts in the regional conflict, including in Lebanon.
The memorandum, though, was not intended as a long-term deal. It serves as a launching point for negotiations on key issues, including the future of Iran’s nuclear programme.
Several points of divergence also went unaddressed in the memorandum. Nowhere does the memo say that future tolls cannot be collected from the strait after the 60-day period expires.
Before the war, there was no charge for passage through the strait. Trump himself said in an interview with The New York Times that the waterway should remain “permanently toll-free”.
But he appeared to reverse course in Saturday’s post, once again floating the possibility that the US could extract tolls in the strait, while barring Iran from doing so.
No fees should be levied, Trump wrote, “unless they are imposed by and for the United States of America, should the deal not be completed”.
He explained that such a charge would compensate the US “for services rendered as the Guardian Angel to the countries of the Middle East for purposes of both past, present, and future reimbursement of costs”.
Trump used similar language in his New York Times interview earlier this week, floating the US becoming “the guardian of the Middle East” in exchange for 20 percent of its revenue.
Saturday’s post is not the first time Trump has mused about the US imposing tolls in the strait, either.
In April, for instance, he discussed the idea with reporters, saying, “What about us charging tolls? I’d rather do that than let them have them. Why shouldn’t we? We’re the winner. We won.”
There has been no indication that Trump’s plans have been officially presented to countries in the region, many of whom have struck a careful balance in their dealings with both the US and Iran during the war.
Iranian officials, meanwhile, have repeatedly said they will not rule out imposing tolls in the strait, framing the issue as a matter of sovereignty and regional negotiation. The strait sits between Iran and Oman.
Further discussions are expected on the matter in the coming weeks.
But such negotiations have been thrown into jeopardy amid ongoing Israeli military operations in Lebanon, which threaten to violate Wednesday’s ceasefire memorandum.
Iran claimed that Saturday’s closure of the strait was a result of new Israeli attacks in southern Lebanon, which killed dozens of people after the ceasefire was announced.
Iranian officials have also said that any upcoming talks should focus on proper implementation of the initial memorandum, and that the 60-day negotiating period stipulated in Wednesday’s deal would begin after that was settled.
Pakistan, a top mediator between the US and Iran, has said that follow-up talks are set to begin in Switzerland on Sunday.
Switzerland’s Federal Department of Foreign Affairs has confirmed that an Iranian delegation, led by parliamentary Speaker Mohammad Bagher Ghalibaf and Foreign Minister Abbas Araghchi, has already arrived for the negotiations.
On the US side, Trump’s son-in-law Jared Kushner, special envoy Steve Witkoff and Vice President JD Vance are expected to attend.
Vance departed for Switzerland late Saturday.
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