stability and growth pact

Italy's sovereign debt risk premium briefly hit its highest level in over six months on Thursday as investors repositioned for lower growth and a higher public deficit, and shifted their focus to negotiations for European Union fiscal rules.

European Commission President Ursula von der Leyen has revealed an 800-billion-euro defence plan to strengthen Europe's military capabilities. The 'ReArm Europe Plan' aims to increase national defence spending, streamline joint procurement, and enhance support for Ukraine, emphasizing collective European security investment.

European Union Commissioner for Economy Paolo Gentiloni said on Saturday he was confident an agreement over re-implementing EU budget rules would be reached by year-end, ruling out an extension of their suspension into 2024.

PM Modi’s remarks in Rajya Sabha, during the debate on the motion of thanks on the President’s address, came even as the treaty with the US is yet to be formally signed. It’s being seen as an indication that the two sides may have resolved their differences. The formal announcement of the deal is likely next week.

France and Germany are set to discuss the strictness of new EU fiscal and debt rules, with the aim of reaching a pan-European agreement by the end of the year. The talks are part of a revision of the EU's fiscal rules that have been suspended since 2020 and are due to be reinstated in 2024. Both countries believe that an agreement between them could lead to acceptance from other EU member states. The stability and growth pact rules currently limit budget deficits to 3 per cent of GDP and debt to 60 per cent, but many European governments exceed these limits.

CII president Rajiv Memani emphasizes that India needs 10% average nominal GDP growth annually to realize its Viksit Bharat vision by 2047. He anticipates the India-US interim trade pact will reduce uncertainty, fostering technology transfers and partnerships. CII projects India's economic growth between 6.4% and 6.7% this fiscal year, driven by strong domestic demand.

"Yesterday I met the king ... and I sought his permission to dissolve the parliament. And the king agreed to my request to dissolve parliament today," Ismail Sabri Yaakob said in a televised address to the nation.

British Prime Minister Keir Starmer arrived in Mumbai with a large business delegation to bolster trade and investment following a landmark free trade pact. Starmer emphasized the economic opportunities and cultural ties, aiming to leverage India's growing economy for UK prosperity. The visit includes discussions on defense, AI, and cultural exchanges, underscoring a deepening partnership.

Germany, under Finance Minister Lars Klingbeil, plans significant investments in defense and infrastructure. This move signals a shift from fiscal restraint. The plan, however, tests the EU's fiscal rules. Concerns arise about potential violations of deficit and debt limits. Some fear this could set a precedent, prompting other nations to demand similar flexibility.

This will be a rare occasion when Abe or any other important international leader skips New Delhi during a stand-alone bilateral visit by a head of state or government to the country.

Aiming to enhance the road and transmission capacity of Nepal, the multimillion-dollar Millennium Challenge Corporation (MCC) pact has started its work formally from Wednesday.

Prime Minister Manmohan Singh has said that commitment by Indian and Chinese leaderships to maintain peace and tranquillity at borders pending boundary settlement is an important guarantor for further progress in Sino-Indian ties, particularly growth of 2.5 billion people.

Pakistan PM Shehbaz Sharif met IMF MD Kristalina Georgieva in Paris on Thursday for release of halted funds ahead of the credit line’s expiry next week. The Paris pitch came amid claims back home that Shehbaz’s finance minister Ishaq Dar slapped a reporter who asked him questions on the stalled funds.

It is perplexing how the world's most populous democracy is so flawed. How can a country, whose elections are cited as an exuberant example of people-power, produce governments that serve their people so badly?

Malaysian Prime Minister Anwar Ibrahim highlighted ASEAN's partnership with India as a driver of stability and prosperity, with both sides aiming to finalize the AITIGA trade pact this year. Prime Minister Modi reaffirmed India's commitment to ASEAN's central role in the Indo-Pacific, emphasizing their shared vision for global stability and development.

India and Mauritius have signed eight key Memorandums of Understanding to enhance cooperation in banking, trade, security, and governance. Prime Ministers Narendra Modi and Pravind Jugnauth emphasized the strong historical and cultural ties, with a new vision for shared growth and security across regions being also outlined.

India and Nepal signed a new bilateral trade treaty, which comes into effect immediately offering an upgraded seven-year pact with proviso for automatic renewal every seven years, opening a new port as well as land and air routes to Nepal.

Commerce and Industry Minister Anand Sharma and his Nepali counterpart on Tuesday signed a new bilateral trade treaty in Kathmandu, which comes into effect immediately.

British Prime Minister Keir Starmer is pushing for the swift implementation of the India-UK Free Trade Agreement, calling it a significant post-Brexit achievement. He highlighted the immense opportunities for both nations, emphasizing that the deal is a 'launchpad' for future economic cooperation. Starmer's visit with a large delegation aims to maximize the benefits of this landmark agreement.

The renewed focus on Europe must be analysed in the context of the changing geopolitics, India's own priorities, Europe's relevance in the post-Brexit period.

The Bank of Canada has paused its interest rate cuts at 2.75 percent, ending a series of seven consecutive reductions. This decision is influenced by escalating global trade tensions, particularly those involving the US. Heightened uncertainty surrounding tariffs and trade policies has clouded the economic outlook, prompting a cautious approach.

The free trade agreement between India and the UAE has opened huge opportunities and businesses of both countries should look at taking the bilateral trade to $250 billion by 2030, commerce and industry minister Piyush Goyal said on Monday.

PM Manmohan Singh on Thursday said the “large-scale’’ Posco steel project in Odisha is set to be operational in the coming weeks.

Aaditya Mattoo, World Bank’s chief economist for the East Asia and Pacific Region and author of the World Development Report 2020. In an interview, he suggested international cooperation on taxation while maintaining that tax cuts alone do not drive investments if fundamentals aren't strong. "You first need to make profits for the profit tax to matter," he said.