European Union's Ambitious Budget Plan Shakes Markets

Following the announcement of a new €2 trillion budget by European Commission President Ursula von der Leyen, major European equities closed lower. The budget, spanning from 2028 to 2034, aims to significantly increase funding across various sectors including border management, defense, and support for Ukraine.

Market Reactions Across Europe

The DAX and CAC 40 saw modest declines, with notable drops in Volkswagen and Renault shares. ASML Holding experienced the most significant loss, while the FTSE 100 in London also closed slightly lower. Despite the market's negative response, the euro and pound strengthened against the dollar.

Key Budget Highlights

The budget includes a tripling of funds for border management, €131 billion for defense and space, a €100 billion support package for Ukraine, and a €400 billion crisis reserve fund. These measures reflect the EU's commitment to addressing current and future challenges.