FT : Why the EU’s chaotic budget proposal doesn’t add up

VDL’s ‘voodoo maths’
European Commission president von der Leyen yesterday made a pitch for a €2tn budget — a 64 per cent increase compared with the current purse. She swears EU countries won’t have to pay more for it, writes Paola Tamma.

Context: The EU budget is mostly financed by national contributions, with richer countries paying more into it, and other revenue streams such as taxes directly raised by Brussels.

The commission proposal includes a raft of new levies or “own resources” that would collectively raise around €58bn per year, or just over €400bn for the whole 2028-2034 period.

These include a tax on companies with €100mn in annual turnover, another on e-waste, a fee on flown-in packages, and hikes in tobacco tax.

But that leaves a roughly €400bn hole compared with the current budget appropriations of €1.2tn.

“It’s an interesting way to think about it and it doesn’t add up,” said one official in a European finance ministry.

That’s easily explained, commission officials say: countries will be asked to contribute what they will pay at the end of the current budget cycle, which is higher than what they agreed at the start, partly in thanks to carry-overs from previous years. 

EU countries in 2027 will collectively pay in €186.2bn to the budget, according to the commission’s latest forecast. Seven times that — roughly €1.3tn — is the amount of money the commission expects them to cough up for the next budget, enabling von der Leyen to claim that “member states contributions will remain constant as we propose a step change in the new own resources”.

But still, it doesn’t quite add up.

“It will make sense if you believe that money will fall from the sky. But these new own resources will never happen,” the finance ministry official added.

As the commission shared its budget plans with EU countries yesterday evening, one EU ambassador told the commission the near-doubling of the budget was “highly problematic and unjustified,” according to people briefed on the discussions.

A second EU ambassador added: “We have a competitiveness problem in Europe and a debt problem, and this proposal is making both worse,” adding it’s “voodoo maths”.

Bottom line: the proposal is likely to be ripped to pieces as net EU contributors — the likes of Germany, Austria, Sweden, the Netherlands and Finland — refuse to pay the commission’s bill.

>>> What to look at today - 17th of July 2025

The dollar recouped some of Wednesday’s losses and Treasuries slipped after markets had a volatile session on speculation about the future of Federal Reserve Chair Jerome Powell. The greenback gained versus all its Group-of-10 peers, resuming this month’s advance. The yen weakened to 148.51 per dollar as some currency strategists predicted a possible slide past 150. Equity-index futures for the S&P 500 fell 0.2%, following a gain in the US stocks after President Donald Trump played down the prospect he may soon fire Powell. Treasuries dipped with yields on the 10-year rising two basis points to 4.47%. Asian stocks traded in a narrow range. The Aussie declined and government bonds fell as bets the central bank will cut rates in August firmed up. Speculation about Powell whipsawed US markets Wednesday before Trump’s clarifications soothed concerns. Trump wants lower interest rates, the cause of his unhappiness with Powell, just as New York Fed President John Williams defended the central bank’s restrictive stance saying it’s entirely appropriate. In tariff news, Trump dialed down his confrontational tone with China in an effort to secure a summit with counterpart Xi Jinping and a trade deal. Trump also said he would send letters to more than 150 countries notifying them of tariff rates and that the levies imposed could be 10% or 15%. Top bosses at some of Wall Street’s biggest banks emphasized the importance of an independent Fed. Bank of America Corp.’s Chief Executive Officer Brian Moynihan and Goldman Sachs Group Inc.’s David Solomon joined JPMorgan’s CEO Jamie Dimon in stressing how critical the Fed’s autonomy is. Moynihan said in an interview with Bloomberg TV on Wednesday that the Fed was “set up to be independent.” A Trump dismissal of Powell would be an underpriced risk that could trigger a selloff in the dollar and Treasuries, Deutsche Bank AG’s George Saravelos recently said. If Trump were to force Powell out, the subsequent 24 hours would probably see a drop of at least 3% to 4% in the trade-weighted dollar, as well as a 30 to 40 basis point fixed-income selloff, he said. US After Hours SRPT +35.4% higher on restructuring, pipeline prioritization plan; UAL -1.5%lower on earnings; MCRI +15.6%, SPFI +5.3%, AIR +3.7%, REXR +2.2% higher on earnings; STWD -3.3% makes large purchase, offering

Nikkei +0.31% Hang Seng +0.14% CSI +0.40% Shanghai +0.08% Shenzen +0.91%

Eur$ 1.1622 CNH 7.1811 CNY 7.1779 JPY 148.39 GBP 1.3395 CHF 0.8023 RUB 77.9761 TRY 40.2590 WTI$ 66.72 +0.50% Gold 3,338 -0.30% BTC 118,678 -1.10% ETH 3,377 -0.28%

S&P -0.04% Nasdaq +0.08% EuroStoxx +0.90% FTSE +0.55% Dax +0.79% SMI +1,06%

Macro :
- Strategists’ S&P 500 Index Estimates for Year-End 2025 (Table)
- FED BEIGE BOOK: ACTIVITY INCREASED SLIGHTLY FROM MAY TO JULY
- FDA TO REVOKE 52 FOOD REGULATION STANDARDS
- Bank of Ireland Revises Up Economic Outlook on Export Surge
- Slovakia Rejects EU Gas Deal, Vows to Block Russia Sanctions

Keep an eye on :
- ABBN SW : ABB 2Q Operating Ebita Beats Estimates
- AEGN GA : Aegean Air to Serve India Market With Two A321 Neo XLR Aircraft
- AIR FP : Airbus to Provide Another $94 Million to Spirit AeroSystems
- AA US : Alcoa 2Q Adjusted Ebitda Beats Estimates
- AA US : Alcoa Says Trump’s Tariffs Added $115 Million in Aluminum Costs
- ASML NA : Roiled by Tariff Noise, ASML CEO Meets With Dutch Trade Minister
- ASSAB SS : Assa Abloy 2Q Organic Revenue Beats Estimates
- BA/ LN : BAE Says Drone-Fired Rocket Shows Path to Cheap Air Defense
- BAYN GY : Bayer Granted FDA Orphan Drug Status for Emodepside
- BA US : Trump’s Trade Deal Pushes Garuda to Learn to Love 737 Max Again
- BONAVA SS : Bonava 2Q Operating Profit SEK78M
- CAMX SS : Camurus 2Q Revenue Beats Estimates
- CLAB SS : Cloetta 2Q Operating Profit SEK188M
- COA LN : Coats to Acquire Ortholite at Initial Enterprise Value of $770MDKSH
- ATD CN : *SEVEN & I SHARES FALL 9% AFTER COUCHE-TARD WITHDRAWS OFFER
- DKSH SW : DKSH 1H Operating Profit Meets Estimates
- EQT SS : EQT 1H Adjusted Ebitda Beats Estimates
- ESSITYA SS : Essity 2Q Revenue Misses Estimates
- EVO SS : Evolution Maintains FY Ebitda Margin Forecast
- RF FP : Eurazeo Growth Fund Gets €650 Million in First Close
- FSKRS FH : Fiskars 2Q Revenue Misses Estimates
- GPI IM : KKR Said to Mull Acquisition of Health-Care Technology Firm GPI
- GXI GY : Gerresheimer Ends Talks With Private Equity on Takeover Offer
- GSF NO : Grieg Seafood Sells Units to Cermaq for NOK10.2b: M&A Snapshot
- HNSA SS : Hansa Biopharma 2Q Net Revenue Misses Estimates
- IPN FP : Ipsen Granted FDA Orphan Drug Status for Elafibranor
- LR FP : Legrand Raises FY Sales Growth Guidance, Legrand Boosts FY Targets as AI Rush Fuels Data Center Demand
- EMG LN : Man Group to Buy Bardin Hill in US Private Credit Expansion
- MED SW : Medartis Sees KeriMedical Stake Purchase as Earnings Positive
- NCC LN : NCC Group Weighs Sale of Cybersecurity Arm: Sky
- NEX FP : US to Ban Any Chinese Technology in Submarine Cables, FT Says
- ALCOX FP : Nicox, Kowa in Deal for Glaucoma Treatment NCX 470 Rights
- NDA FH : Nordea Earnings Meet Estimates as Lending Income Drop Continues
- NOVN SW : Novartis Raises 2025 Core Operating Income Guidance
- NOVN SW : Novartis Names Mukul Mehta as CFO From March 16, 2026
- PUB FP : Publicis FY Organic Revenue Forecast Beats Estimates
- PUIG SM : Puig 2Q Fragrances and Fashion Revenue Misses Estimates
- RATOB SS : Ratos 2Q Operating Profit From Continuing Ops Misses Estimates
- SAN FP : Sanofi Extends Blueprint Tender Offer to July 17
- SRPT US : Sarepta Slashes Workforce After Patient Deaths on Gene Therapy
- SCANFL FH : Scanfil 2Q Turnover Misses Estimates
- 3382 JP : Seven & i Bond Spreads Seen Narrowing After Takeover Bid Pulled
- SFSN SW : SFS 1H Sales CHF1.54B Vs. CHF1.54B Y/y
- UHR SW : Swatch 1H Operating Profit Misses Estimates
- SWEDA SS : Swedbank 2Q Net Income Beats Estimates
- TEL2B SS : Tele2 2Q Adjusted Ebitda Beats Estimates
- TEL NO : Viaplay Buys Telenor’s 50% Stake in Allente Group for SEK1.1b
- TSLA US : Brussels stalls probe into Elon Musk’s X amid US trade talks
- TSLA US : Tesla Readies a Six-Seat Version of Its Model Y SUV (Correct)
- 2330 TT : TSMC : TSMC Profit Surges Again After AI Drives Big Jump in Sales
- TGS NO : TGS 2Q Pretax Loss $44.7M, Est. Profit $16.2M
- TOM NO : Tomra 2Q Revenue EU325M
- UBI FP : Ubisoft Names Derennes, Guillemot as New Subsidiary Co-CEOs
-UCG IM : UniCredit May Ask to Postpone BPM Takeover Bid Deadline: Sole
- VERK FH : Verkkokauppa.com 2Q Revenue Beats Estimates
- VPLAYB SS : Viaplay 2Q Ebit SEK88M Vs. SEK7M Y/y
- VIRP FP : Virbac 2Q Organic Revenue at Constant FX, Scope +6.4%
- VOLCARB SS : Volvo Car 2Q Revenue Beats Estimates
- VOLVB SS : Volvo AB Earnings Beat Estimates on Firmer Europe Market
- WISE LN : Wise 1Q Volume Misses Estimates

>>> Europe : Brokers Upgrades & Downgrades - 17th of July 2025

>>> Up
* Citigroup Raised to Buy at DBS Bank; PT $100
* Elisa Raised to Accumulate at Inderes; PT 50 euros
* Lloyds Raised to Outperform at KBW; PT 90 pence
* Palantir Raised at Mizuho as Growth Eases Valuation Risk (1)
* Sweco Raised to Buy at Nordea; PT 178 kronor
* Symrise Raised to Neutral at Van Lanschot Kempen; PT 90 euros
* Tesco PT Raised to 460 pence from 395 pence at Citi
* Wells Fargo Raised to Buy at DBS Bank; PT $88
* Wizz Air Raised to Equal-Weight at Barclays; PT 1,100 pence

>>> Down
* Gerresheimer Cut to Dropped Coverage at DBS Bank
* Kempower Cut to Sell at SEB Equities; PT 12.10 euros
* Renault Cut to Neutral at Mediobanca SpA; PT 50 euros
* Starbucks Cut to Underperform at Jefferies; PT $76

>>> Initiation
* BE Semiconductor Rated New Hold at Baptista Research
* Corbion Reinstated Sell at Van Lanschot Kempen; PT 16 euros
* IMCD Rated New Buy at Baptista Research; PT 152.50 euros
* ISS Rated New Buy at Berenberg; PT 234 kroner
* Kerry Group Rated New Neutral at Van Lanschot Kempen
* Verallia Reinstated Buy at Citi; PT 37.70 euros

>>> Call
* Coats’ Acquisition of Ortholite Seems Decent Fit, Analysts Say
* Italgas a Buy at Citi on Scope for Growth Through Consolidation
* Nvidia’s H20 Chip Supply to Boost China Cloud, Server Firms: JPM

>>> Stoxx 600 Pre-Market Indications

  • Standard Chartered (STD TH) +4.5%
    • NOTE: StanChart’s SC Ventures Names Pollina as Vice Chairman Americas
    • NOTE: Leveraged Finance Banker McDonald Joins Standard Chartered
  • ASML (ASME TH) +3.9%
    • NOTE: Yesterday, ASML Sinks as Cautious Tone Over 2026 Hits Sector: Street Wrap
  • Legrand (LRC TH) +3.6%
    • Legrand Raises FY Sales Growth Guidance
  • Rolls-Royce (RRU TH) +2.9%
  • Publicis (PU4 TH) +2.7%
    • Publicis Raises Forecast for Year After String of Client Wins
  • Legal & General (LGI TH) +2.4%
  • Renault (RNL TH) +1.7%
  • Deutsche Bank (DBK TH) +1.3%
  • Siemens (SIE TH) +1.3%
  • Euronext (ENXB TH) +1.3%
  • Essity (ESWB TH) -1.5%
    • Essity 2Q Revenue Misses Estimates
  • Gerresheimer (GXI TH) -7.5%
    • Gerresheimer Ends Talks With PE Investors on Takeover Offer (1)

>>> TradeGtae Pre-Market Indications

DAX:
  • Siemens (SIE TH) +1.5%
  • Deutsche Bank (DBK TH) +1.3%
  • Siemens Energy (ENR TH) +1.3%
    • Dutch Government Ditches ‘Not Realistic’ Offshore Wind Goal
  • BASF (BAS TH) +1.2%
  • Symrise (SY1 TH) +1.1%
    • Symrise Raised to Neutral at Van Lanschot Kempen; PT 90 euros
MDAX:
  • HelloFresh (HFG TH) +2.3%
  • Evonik (EVK TH) +1.5%
  • Fuchs (FPE3 TH) +1.4%
  • Lanxess (LXS TH) +1.3%
  • Hensoldt (HAG TH) +1.1%
  • Gerresheimer (GXI TH) -7.2%
    • Gerresheimer Ends Talks With PE Investors on Takeover Offer (1)
SDAX:
  • Formycon (FYB TH) +5.6%
  • Friedrich Vorwerk Group SE (VH2 TH) +4.3%
  • Salzgitter (SZG TH) +1.4%

>>> US After Hours Summary: SRPT +35.4% higher on restructuring, pipeline priori

After Hours Summary: SRPT +35.4% higher on restructuring, pipeline prioritization plan; UAL -1.5%lower on earnings; MCRI +15.6%, SPFI +5.3%, AIR +3.7%, REXR +2.2% higher on earnings; STWD -3.3% makes large purchase, offering

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: MCRI +15.6%, SPFI +5.3%, AIR +3.7%, REXR +2.2%, SNV +1.5%, SLG +1.4%, AA +0.9%,

Companies trading higher in after hours in reaction to news: SRPT +35.4% (restructuring, pipeline prioritization plan, job cuts, anmes new CFO and COO; provides update on ELEVIDYS label, provides guidance), ADTN +2.2% (Dan Niles comment on X), BPOP +2% (increases dividend; also $500 mln share repurchase program), RIG +1.4% (issues fleet status report), RF +0.7% (increases dividend), FUBO +0.7% (NMAX expands carriage partnership with FUBO), DG +0.3% (CFO to step down), GAIN +0.1% (acquires Global Grab Technologies), PFG +0.1% (reports June AUM),

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: TFIN -5.5%, FR -2.7%, UAL -1.5%, HOMB -1.1%,

Companies trading lower in after hours in reaction to news: INGR -7.3% (President Trump says Coke to use real sugar), BRCC -6% (stock offering), MP -5.8% (commences $500 mln stock offering), ADM -5.7% (President Trump says Coke to use real sugar), SQNS -5.1% (series of ADS offerings), STWD -3.3% (to acquire Fundamental Income Properties for $2.2 bln; also 25.5 mln share offering), BVN -1.2% (production update), NMAX -1% (NMAX expands carriage partnership with FUBO), UNP -0.9% (increases dividend), BKNG -0.2% (KAYAK for Business signs partnership with HQ)