Photo : Reuters
19 June 2025, Thursday | NIAS Europe Daily Brief #1161
By Lekshmi MK
THE CZECH REPUBLIC
Government survives no-confidence vote amid the election campaigning months
On 18 June, the centre-right Czech government led by Prime Minister Petr Fiala survived a no-confidence vote that the opposition launched over a bitcoin-related scandal. The controversy started after Justice Minister Pavel Blazek accepted a USD 45 million donation in bitcoin from an ex-convicted cybercriminal who operated an illegal drug market. The donated 468 bitcoins represented about 30 per cent of the assets that courts previously returned to the convict. Blazek resigned on 31 May, denying illegal conduct but acknowledging a political and ethical error. Fiala admitted that accepting the donation was a mistake, but his coalition, holding a majority, defeated the motion after two days of debate. The opposition party (ANO), a right-wing populist political party led by businessman Andrej Babiš, accused the government of money laundering, but it fell short of 101 votes. The affair came amid months of campaigning before the general election scheduled for 03 October, with ANO leading in the polls. ("Czech government survives no-confidence motion over bitcoin scandal," Reuters, 19 June 2025)
HUNGARY
Government officials hold Talks with the US to offset tariffs
On 19 June, Hungarian officials said they entered talks with the US to establish a business agreement. The agreement aimed to offset potential US tariffs, targeting sectors like space, military, and energy. State Secretary Levente Magyar confirmed that discussions focused on several specific projects and that both sides had seen room for cooperation. He emphasised that no immediate deal was expected but that both sides hoped for benefits to Hungary. Prime Minister Viktor Orbán earlier said he expected to sign a business with US within six months and stated that tariffs would negatively affect Hungarian industry, especially cars. He acknowledged that Hungary, as an EU member, could not sign separate trade deals with the US, but he maintained that a business agreement could still be achieved. The talks came down amid a slowdown in Hungary’s economic recovery and rising inflation, along with the rising risk of US tariffs on its key auto exports. US delayed a 50 per cent tariff on EU imports until 09 July, to allow further negotiations with the bloc. (Catarina Demony, "Hungary discussing business deal with US to counter tariff impact," Reuters, 19 June 2025)
SPAIN
Disruptions in the parliament over the corruption case
On 19 June, the Spanish parliament gathering resulted in chaos over a corruption case involving Prime Minister Pedro Sánchez’s officials. It was the first parliament session after a corruption scandal that took place. The opposition party demanded the Prime Minister's resignation in the session, where PP lawmakers chanted “ Resignation!” The disruption took place due to a high-ranking official who allegedly took kickbacks for awarding public contracts. The confrontation marked a significant escalation in Spain's political crisis. Sánchez accused the opposition parties on opposition parties, deflecting his criticisms. Sánchez maintained his stance that he was not aware of the corruption of his officials, but he promised zero tolerance towards corruption. (Malek Fouda, “Chaos erupts as Sánchez, Feijóo trade corruption allegations in parliamentary session,” Euronews, 19 June 2025)
INTERNATIONAL
Von der Leyen criticises China's pattern of “dominance, dependency, and blackmail” towards trade partners at the G7 Summit
On 18 June, the EU accused China of dominating trade all over the world. For this, China replied to those accusations be baseless and these remarks reflect double standards. Von der Leyen criticised China's pattern of “dominance, dependency, and blackmail” towards trading partners. China expressed strong dissatisfaction with their criticisms. The President of China, Xi Jinping, said both sides should uphold multilateralism, safeguard fairness and justice and oppose unilateralism. The main focus of the accusation of Von der Leyen was on rare earth materials, which the commission had described as alarming. China holds a quasi-monopolistic position over rare earth materials. According to the EU this is not only a bargaining chip but also a weapon to undermine its competitors in key industries. China claimed their accusations to be false and used this as an excuse to suppress their industrial progress. (Jorge Liboreiro, “China hits back at Ursula von der Leyen's 'baseless, biased' speech at G7 summit,” Euronews, 19 June 2025)
“Middle East conflict adds uncertainty to trade” says IMF Chief
On 18 June, IMF Managing Director Kristalina Georgieva said that the Middle East conflict worsened the global economic outlook, which already been strained by ongoing trade wars. She explained that the trade disputes led to a projected 0.5 per cent point decline in global growth. She also added that the conflict added further repercussions to the business. She noted that the return of US President Trump to power reignited tariffs on Mexico, Canada, China, and the EU. The negotiations were underway, with the EU facing steep penalties on steel, cars, and general exports. Despite these challenges, she said the global economy remained resilient to shocks, but that economic uncertainty became a routine. She recommended that countries should work on reforms to build resilience and should seize opportunities like the US-China trade deal and the UK-US agreement, which represented positive signs. (Peggy Corlin, "Middle East conflict adding to uncertainty amid trade tensions, IMF chief says," Euronews, 18 June 2025)