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Pembina Pipeline (PBA) has signed a preliminary agreement with Canadian federal and provincial governments, alongside Trans Mountain, to participate in a major nation-building energy infrastructure initiative aimed at expanding global market access for Canadian crude oil.

The multi-stakeholder partnership aims

Published on
02/07/2026 – 15:24 GMT+2

European car suppliers and manufacturers are divided over Brussels’ “Made in Europe” strategy, an effort to shield the EU market from Chinese competition.

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The EU car industry is facing fierce competition from China, threatening hundreds of thousands of jobs across the bloc. To address the issue, the EU is preparing the so-called Industrial Accelerator Act, which is designed to favour electric vehicles constructed mostly with European components in public procurement and public support schemes.

However, EU car suppliers and manufacturers disagree over the proposed law, currently under discussion by EU countries and the European Parliament, which sets a 70 percent local content threshold for electric vehicles.

According to the European Association of Automotive Suppliers (CLEPA), the Commission’s proposal is a step in the right direction. Based on a study commissioned from management consultancy Roland Berger that Euronews has seen, plug-in hybrid electric vehicles and battery-electric vehicles manufactured in Europe already contain between 80 percent and 90 percent made-in-Europe components.

Consequently, it considers the Commission’s 70 percent threshold to be achievable.

But the European Automobile Manufacturers’ Association (ACEA) is pushing for a different methodology, under which regulators would assess finished vehicles instead of the local content in vehicle components.

“A vehicle is far more than the sum of its parts. Its value also lies in the R&D, advanced engineering and highly skilled workforce behind it,” ACEA said in a position paper published on 1 July.

CLEPA responded that under this methodology, a finished vehicle would require only 50 percent EU-made parts and components, with the remaining 20 percent coming from R&D, design and other activities.

This 20 percentage-point dilution of the requirement for EU-made parts “could result in the loss of 350,000 jobs”, CLEPA warned, saying the Commission’s component-level approach would “safeguard the existing manufacturing base”.

“What we are looking at right now is significant competition from best-cost countries, and the dragon in the room is China,” CLEPA Secretary General Benjamin Krieger told Euronews.

“A ‘Made in Europe’ threshold that ignores where the actual parts are built is a label that ignores the European worker,” he said.

Chances are, right about now, you’re considering how you’d like to spend this upcoming Fourth of July weekend. At the beach, maybe, at a barbecue or whatever place sets fireworks pinwheeling through your holiday-happy mind.

Which makes it a perfectly excellent time to talk about elections and vote counting.

Every two years, in the spring and fall, California holds an election. Every two years the state faces an outraged chorus, voices raised nationwide, decrying the length of time it takes to tally the millions of ballots cast and, in a handful of races, determine the winner.

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Then, just as suddenly, the din fades away, the focus shifts and the election process is forgotten until the next round of howling protest.

Just that word, process, can throttle and snuff the life out of the subject.

So it’s good news that lawmakers in Sacramento have used this inattentive time to address the biennial hullabaloo and perhaps shut some people up.

The budget that Gov. Gavin Newsom signed into law Monday includes an additional $40 million aimed at speeding up California’s vote count, and even if the sum is less than half the $90 million sought by reform-minded advocates, it’s something.

Most of the money will go toward staffing, technology and equipment upgrades. Another $10 million will pay for voter education and outreach. A further $750,000 will be used to combat election misinformation. (A $3.50 roll of duct tape would be a far more economical way to address the latter were it applied to the inciteful mouth of America’s election-denier-in-chief. More about him in a moment.)

“While the amount budgeted is less than we had recommended, it still represents a sizable investment that prioritizes timely election results,” said Kim Alexander, head of the nonpartisan California Voter Foundation, which has been at the forefront of election reform efforts in the state.

A surprise Supreme Court decision

As it happens, the budgetary infusion came the same day the U.S. Supreme Court upheld the right of states to count mail ballots that are postmarked by election day, even if they arrive days afterward. In California, where most voters mail their ballots, that lag time can be up to a week.

It was a surprise decision from this most Trump-obeisant court, a setback for the petulant president and a ruling that will have very little effect on California’s prolonged vote counting.

That’s because those late-arriving ballots have very little to do with the time it takes to complete the count. My colleague Kevin Rector reported that in 2024 California tallied more than 406,000 late-arriving mail ballots — which represents only about 2.5% of the more than 16 million ballots cast. The long count is a result of the huge number of ballots placed in drop boxes or arriving at processing facilities on or just before election day — and, really, is it such a bad thing for voters to watch for late developments before letting go of their ballot?

(Does the name Eric Swalwell ring any bells?)

Lawmakers in California made a purposeful decision that voting should be convenient and not a chore, as a way to to encourage the greatest turnout possible. That’s a good thing if you believe in our system of representative democracy. The voice of the people, and all that.

There wasn’t much hue or cry — especially about mail balloting, which has exploded in popularity and introduces all sorts of time-consuming steps, such as signature verification — until Trump cried fraud and made other specious claims. That’s what happens when you have a sore, whiny loser astride the bully pulpit; Trump is perfectly willing to torch people of good faith and burn working systems to the ground if it salves his eggshell ego.

An election, not a soccer match

Many political commentators are complicit in Trump’s arson.

Awaiting California’s election results, they act like pouty birthday children forced to leave their presents unopened until all the kids have had their cake. They speak of voters losing faith in the election process without explaining the commendable reason for the delay — seeking maximum voter participation — or acknowledging how their impatience contributes to the sense that something wrong is afoot.

At bottom, the push for instant results, and instant gratification, is much more about sating the curiosity of pundits and political junkies than some widespread agita among voters glued to the ballot-counting as if it were a World Cup match.

Is there a soul out there who feels there’s insufficient time between June 8, when the Associated Press called the Los Angeles mayoral race, and June 9, when the call came in the gubernatorial contest, for candidates to present their cases and voters — who haven’t already decided — to make up their minds?

Hang out with family and friends. Enjoy some barbecue. Watch fireworks paint the night sky. There’s plenty of time for speechifying, TV ads and campaign mailers to blitz the state between now and the election on Nov. 3.

Frankly, most Californians welcome the break.

What else you should be reading

The must-read: What you should know about the $351.7 billion state budget Newsom just signed
The deep dive: Costs of Iran war will linger despite conflict’s end, experts say
The L.A. Times Special: This California bill is so bad it has me agreeing with a Trump Republican

Until next time,
mzb
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Published on
02/07/2026 – 9:39 GMT+2

Most Asian stock markets dropped on Thursday, dragged down by a wave of selling in semiconductor shares, as European bourses made a subdued start and Wall Street looked set to open in the red before the release of key US employment figures.

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The pullback centred on the technology sector, where investors retreated from the chip stocks that have powered much of this year’s rally, amid growing unease that the vast sums Big Tech is spending on AI could leave the market awash with supply.

South Korea’s Kospi bore the worst of it, tumbling around 5% as its heavyweight chipmakers slid. Memory specialist SK Hynix lost close to 8% and Samsung Electronics fell more than 6%.

In Tokyo, the Nikkei 225 shed about 1.5%, with chip-equipment maker Tokyo Electron down around 5.6%, while Taiwan’s Taiex slipped 1.1% as TSMC, the world’s largest contract chipmaker, gave up 1.8%.

The falls followed a rough session for chip stocks on Wall Street this Wednesday, where Micron Technology dropped more than 10% and Intel sank around 9%.

The moves stand in sharp contrast to a stellar year for Asian tech, with the Kospi and the Nikkei still up roughly 85% and 34% respectively in 2026.

On the other hand, Hong Kong’s Hang Seng rose about 0.8%, lifted by an 8.7% jump in electric-vehicle maker BYD after it reported a second straight monthly rise in sales, while India’s Sensex added 0.5%.

In Europe, markets opened flat as both the Euro Stoxx 50 and the broader pan-European Stoxx 600 traded within a 1% range at the start of Thursday’s session.

The UK’s FTSE 100, Germany’s DAX 30, France’s CAC 40 and Spain’s IBEX 35, all traded between 0.1% and 0.3% higher.

Italy’s FTSE MIB led the pack and rose about 0.4%.

Oil extends its slide and US jobs in focus

Crude prices fell again, trading below where they sat before the Iran war began in late February, as hopes grew that supplies through the Strait of Hormuz will steadily recover.

Brent crude, the international standard, eased around 1% to about $70.89 a barrel while WTI, the US benchmark, dropped 3% to roughly $69.

Attention now turns to the US, where stock futures edged lower ahead of the June employment report, brought forward a day because of Friday’s Independence Day.

Economists polled by Dow Jones expect around 115,000 jobs were added last month.

The figure carries extra weight under the new Federal Reserve chair, Kevin Warsh, with investors wary that a strong reading could harden the case for keeping interest rates higher for longer.

According to economists at Capital Economics, demand for AI may keep growing but at a slower pace than many expect, a caution that helped sour sentiment towards the sector.

Additional sources • AP

For more than three years, the ‘Magnificent Seven’ or ‘Mag 7’, which includes Nvidia, Apple, Microsoft, Alphabet, Amazon, Meta and Tesla, carried Wall Street.

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Then came June 2026.

Nvidia dropped over 5%, Microsoft fell about 17%, its worst monthly performance since December 2000, Alphabet declined nearly 6%, Amazon lost roughly 12% and Meta dropped around 11%.

As for Apple and Tesla, the companies had directionally different but equally volatile monthly moves.

Apple made a new all-time high closing price of $315.2 on the second day of the month but subsequently declined more than 10% from that peak.

On the other hand, Elon Musk’s company dropped more than 6% in the first week of June but clawed most of that back by the close of the month, ending roughly flat.

Taken together, the ‘Magnificent Seven’ erased about $2.3 trillion (€2tn) in market value in a single month.

What made the selloff remarkable was its breadth. Usually one or two stocks stumble while the others hold up. This time, nearly every member of the group moved lower.

The Roundhill Magnificent Seven ETF (MAGS), which holds all seven companies, fell about 13% from its late May record high.

So what happened to Wall Street’s favorite technology stocks? And why are investors backing away?

Growing pains and spending

The MAGS ETF bled more than $700 million (€615mn) over the month, its worst outflow since it launched in 2023, according to TradingView data. For a fund that had become the simplest way to bet on the US tech boom, the reversal was striking.

One name outside the club had it even worse. Oracle, a hyperscaler not included in the ‘Magnificent Seven’, crashed around 35%, its steepest month since September 1990, after alarming investors with a surge in AI spending and debt.

The fall wiped roughly $100 billion (€87.9bn) off the fortune of co-founder and billionaire Larry Ellison. The market punished the biggest AI spenders, and the numbers explain it.

The five largest hyperscalers are set to spend more than $700 billion (€615bn) on AI infrastructure this year. Microsoft alone is heading towards roughly $190 billion (€167bn), according to estimates from the Bank of America.

The bank said that hyperscaler capital spending has jumped from about 70% of operating cash flow in 2025 to nearly 100% in 2026.

The translation is simple: far less capital left over for share buybacks and dividends, and an increasingly larger bill that will need to be justified with future revenue as costs are climbing too.

The ‘Magnificent Seven’ are the biggest buyers of the memory that feeds AI data centres, and those chips have become scarce and expensive.

Micron Technology, one of the main memory chipmakers, reported earnings per share of $24.67 for its latest quarter, up from $1.68 a year earlier, close to a fifteenfold jump.

Prices for DRAM, the memory inside almost every device, rose as much as 98% in the first quarter alone, a surge some in the industry have nicknamed “RAMageddon”.

A quieter shift beneath the surface

While the biggest technology stocks struggled, the rest of the market continued to rise.

LPL Financial chief equity strategist Jeff Buchbinder points to that trend. Excluding the ‘Magnificent Seven’, the remaining S&P 500 companies grew earnings by 17.5% in the first quarter, helped in part by semiconductor and memory producers.

Buchbinder expects that figure to exceed 20.5% in the second quarter. Meanwhile, the earnings growth projection for the ‘Magnificent Seven’ will be lower than that.

In other words, the other 493 companies are now growing earnings faster than the market’s biggest stars, and investors have noticed.

By late June, the S&P 493 – which excludes the ‘Magnificent Seven’ – had climbed 13.7% for the year. In contrast, the ‘Magnificent Seven’ basket was down 6.6%, while the broader S&P 500 posted a more modest 7.4% gain.

According to veteran investor Ed Yardeni, investors are beginning to show signs of AI fatigue, questioning whether unprecedented spending on infrastructure will ultimately generate attractive returns as cheaper open source models proliferate and AI token prices continue to decline.

Are the ‘Magnificent Seven’ still “magnificent”?

The ‘Magnificent Seven’ still delivered an estimated 29% earnings growth in the first quarter, and they are unlikely to lose their leadership positions anytime soon.

Yet, the debate has shifted.

Investors are no longer asking whether AI will transform the economy. They are asking when hundreds of billions of dollars in AI investment will begin producing meaningful returns.

June may have offered the first clear answer.

The AI trade is no longer a one way bet on seven companies. The ‘Magnificent Seven’ created the AI boom, but they are no longer the only way to invest in it.

Immigrants detained at two federal facilities in California have launched a boycott in protest of increasing and, in their view, burdensome prices at the facilities’ commissaries for items including tampons, coffee and soup.

The Times reviewed a grievance letter and spoke with three detainees who are involved in the boycott at the California City Detention Facility, about 80 miles east of Bakersfield, and at the Golden State Annex in McFarland.

More than 300 detainees are estimated to have signed grievance letters sent recently to facility administrators, according to advocates with the California Collaborative for Immigrant Justice.

Both facilities are operated by private prison corporations — the California City facility by Tennessee-based CoreCivic and the Golden State Annex by Florida-based GEO Group.

The Times has reached out to the Department of Homeland Security, GEO Group and CoreCivic for comment.

Detainees are provided certain essentials, such as food and soap, free of charge, but many also purchase items at commissary stores that are of better quality or otherwise unavailable. Detainees said shampoo and other hygiene items sometimes run out for days and that meals are small or exacerbate diabetes and other health issues.

“The three daily meals that CoreCivic provides at California City Detention Facility are the bare minimum to keep a person alive,” they wrote. “Because of this, charging inflated prices on necessities is considered price gouging and profiteering against vulnerable incarcerated population who have no ability to refuse or shop elsewhere.”

The detainees said an 8 oz. jar of Folgers instant coffee costs $18 at the California City facility, a single instant ramen soup is 75 cents and a box of 40 tampons costs nearly $21.

At Walmart, the same Folgers coffee costs $8.97, Maruchan chicken ramen soup is 50 cents and 40 Tampax tampons are $12.19.

U.S. Immigration and Customs Enforcement detains immigrants for civil purposes. Detention is meant to facilitate removal proceedings but is not meant to be punitive.

Detainees are paid $1 per day under a voluntary work program for cleaning or cooking. Many detainees rely on money from family and friends.

In their grievance letter, the detainees called the markups an unacceptable business practice with no apparent limit. They said they view the situation as an example of captive market exploitation and economic coercion.

The detainees requested a review of commissary pricing by facility leaders, a comparison of prices with prison industry standards, an immediate reduction in prices of essential items and the implementation of reasonable price caps. They also requested an increase in the portions of daily meals, including for meals meeting religious requirements, which they said are particularly small.

In May, the California State Senate passed a bill that would prohibit the excessive markup of products sold at private detention centers, limiting prices to 35% above the vendor cost. Existing California law already limits such markups in state prisons. The bill is now in the Assembly.

Priya Patel, an attorney at the California Collaborative for Immigrant Justice, represents people who have been detained at both facilities. She said that during legal service consultations, commissary pricing frequently comes up.

“The higher the prices get, the higher of an impact the conditions have on people and the more difficult it becomes to fight their cases,” Patel said.

The collaborative is one of the organizations that brought a lawsuit last year alleging inadequate medical care, as well as insufficient clothing, food, water and outdoor recreation time at the California City facility, which can hold more than 2,500 people. The lawsuit remains ongoing; in March, a U.S. district judge in San Francisco appointed an external monitor to ensure the facility provides “constitutionally adequate health care.”

The lawsuit describes multiple commissary-related issues. For example, it says the facility doesn’t provide headphones for tablets, making private phone calls — including privileged calls with attorneys — impossible unless the detainee can afford to purchase headphones from the commissary.

“One detained person has difficulty walking and standing for extended periods of time without shoes that provide arch support,” the complaint says. “He arrived at California City with appropriate shoes to accommodate his mobility disability, which were approved as an accommodation at a prior ICE facility. California City staff confiscated those shoes and instead provided him with plastic, orange sandals.”

“Several weeks after staff confiscated his shoes, he had an appointment with a doctor at California City,” it continues. “The doctor told the him … to buy different shoes from commissary to accommodate his foot condition.”

A contract between CoreCivic and ICE for the California City facility, dated April 1, 2025, says the contractor must provide notice of any price increases and that “any revenues earned in excess of what is required for commissary operations shall be used solely to benefit aliens at the facility.”

Alfredo Parada Calderon, 52, has been detained at the California City facility since September. He said commissary prices were already high before they increased around mid-June.

Parada Calderon said he asked an ICE officer why the prices had increased so much. The officer said he wasn’t aware of the change but that the vendor is Keefe Group, which supplies commissaries at prisons and immigrant detention centers across the country.

Detainees in his dormitory submitted a grievance about commissary prices, Parada Calderon said. The answer was vague.

“They’re blaming it on inflation,” he said.

Parada Calderon said his family sends him about $100 per month to spend on commissary items, which he spends on packets of crackers, coffee, soups, soap, shampoo, deodorant and chips.

“Enough is enough,” he said. “It’s a horrible enough place to be in and you guys are making it even more horrible, not just for me but for my family. The detainees want to be heard and this is the only option we actually have — a peaceful protest.”

Tommaso Bardelli, a researcher at New York University who studies mass incarceration, said the families of most people in prison are working class and may sacrifice their electricity bill or credit card payment to send money to their incarcerated relatives. The money they send no longer pays for small luxuries, he said, because prisons have over the years reduced how much they spend per person on necessities such as food.

Bardelli published a research article in 2022 about inequality within prison commissary stores. Commissary is often now the difference between starving and a semi-normal diet, he said.

The White House submitted a 927-page financial disclosure to the US Office of Government Ethics on Tuesday, offering the fullest picture yet of how US President Donald Trump’s fortune has grown since he returned to office in January 2025.

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Barely established when he was sworn in, Trump’s crypto businesses now generate more revenue than large parts of the property empire he spent decades assembling with his family, earning the US president more than $1.2 billion (€1.05bn) last year.

Two ventures account for the bulk of the crypto windfall.

World Liberty Financial, the firm launched in 2024 by Trump’s sons and business partners, brought in more than $500 million (€438mn) from selling new crypto products, among them so-called governance tokens, which grant holders voting rights in certain company decisions but no ownership stake.

A separate business tied to the $TRUMP “meme” coin, a cryptocurrency bearing the US president’s face and name, generated a further $635 million (€557mn) from token sales.

Trump’s crypto activities appear to be a major driver of the near tripling of his personal fortune, which Forbes estimates rose from $2.3 billion (€2bn) to $6.5 billion (€5.7bn) between 2024 and 2026.

For many buyers, the story has been far less lucrative.

The $TRUMP coin, which briefly traded above $74 in the days after its launch, has since collapsed to under $2, while World Liberty’s tokens have shed around 80% of their value since they began trading last September.

Since the disclosure lists only revenue and not profit, the true scale of Trump’s personal gains cannot be known. However, the filing shows that the US president and his family collected fees and royalties up front, while many investors have seen the value of their holdings fall sharply.

Among those investors was Chinese-born crypto billionaire Justin Sun, who poured $75 million (€65.7mn) into the governance tokens and $200 million (€175.3mn) into both $TRUMP and $MELANIA meme coins.

A US fraud case against him was later paused before being resolved with a $10 million (€8.7mn) settlement. Sun has denied any connection between his spending and the outcome of his legal troubles.

After the release of the filing, the White House also rejected suggestions of any ethical concerns.

“Neither the President nor his family has ever engaged, or will ever engage, in conflicts of interest,” Principal Deputy US Press Secretary Anna Kelly said in a statement to AFP.

Kelly said US President Donald Trump had “proudly made the United States the crypto capital of the world.”

“All actions by President Trump and his administration are taken in the best interest of the American people, and any so-called ‘reporters’ pushing otherwise are recycling the same, tired, false narrative that Democrats and the legacy media have been pushing for a decade,” Kelly added.

Beyond crypto: Trump’s wider business empire

The filing also details an aggressive international expansion, with new hotel, resort and condominium agreements generating millions of dollars in countries that were negotiating with Washington over trade and security at the same time.

A development in the United Arab Emirates earned the Trump business around $10.4 million (€9.1mn) last year, one in Saudi Arabia roughly $9 million (€7.9mn), and projects in Qatar, Romania and Vietnam were $5 million (€4.3mn) apiece.

Closer to home, the US president’s established businesses boomed alongside all the new ventures.

Mar-a-Lago, Trump’s private club in Florida, generated around $77 million (€67.5mn), a jump of roughly 50% on the previous year, as heads of state and executives flocked to the property during his new term.

The disclosure also reveals the wide range of ways the Trump brand is now monetised.

The US president earned millions from a sprawling range of branded goods, from sneakers and watches to bumper stickers, with Trump-branded watches alone bringing in $4.7 million (€4.1mn), and more than $200,000 (€175,300) coming from the “God Bless the USA” Bible, a branded edition promoted with country singer Lee Greenwood.

Branded merchandise of this kind, sold by a sitting US president, has no precedent.

A 1978 law requires the president and vice president of the United States to declare their income as well as their assets.

First Lady Melania Trump’s income is also set out in her husband’s financial disclosure, including more than $10 million (€8.7mn) tied to a biographical Amazon documentary and over $500,000 (€438,250) from her memoir.

For comparison, US Vice President JD Vance reported between $1 million (€876,500) and $5 million (€4.4mn) in royalties from his 2016 book “Hillbilly Elegy”.

Critics have long argued that such arrangements blur the line between public office and private profit. The White House rejects the charge outright.

When Klarna chose New York over Europe for its stock market listing, it highlighted a challenge Brussels has been trying to solve for years: Europe’s fastest-growing companies often look across the Atlantic for deeper pools of capital.

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As the EU seeks to build its own AI champions, strengthen its defence industry and keep more high-growth companies raising money at home, one question remains: why does a bloc with €37tn in household savings still struggle to finance its own fastest-growing businesses?

Now the European Union has stepped up efforts to reform its capital markets, aiming to make capital flow more freely across the bloc.

Policymakers are pursuing incremental reforms, including greater supervisory alignment, but a fully unified capital market is likely to take many years, as member states struggle to agree on key technical details, slowing the process.

The competitiveness challenge

The current speed of negotiations does not reflect the urgency being expressed by the EU’s political leadership: Europe needs more integrated capital markets to compete globally with major powers such as the US and China.

To do so, billions need to be invested in strategic sectors such as AI and defence, amid intense geopolitical uncertainty, including wars and trade tensions.

Lacking strategic industrial and technological leadership means sacrificing geopolitical power and economic resilience, especially in a global landscape where dominance, or even survival, depends on control over resources and expertise.

This narrative has been championed by leading EU politicians, including European Commission President Ursula von der Leyen, whose goal of making Europe more competitive on the global stage has become the North Star of her political mandate.

For this reason, von der Leyen tasked former European Central Bank President and Italian Prime Minister Mario Draghi with preparing a report on EU competitiveness, which identified capital markets reform as one of its central recommendations.

Presented in autumn 2024, the report says Europe needs €750bn-€800bn in investment each year, equivalent to up to 5% of GDP, to fulfil its competitiveness goals and remain globally competitive.

“It’s ‘Do this,’ or it’s a slow agony,” Draghi warned in one of his best-known remarks. Draghi describes this “agony” as a prolonged and cumulative erosion of Europe’s economic position, driven by structural weaknesses such as high energy costs and a fragmented single market, which together make the continent less conducive to investment and innovation.

The EU is focusing on two priorities to unlock the potential of its capital markets.

The first is convincing households to invest, mobilising a small percentage of the estimated €37tn in savings. The second is integrating national financial markets across the EU to reduce barriers within the single market, making it easier for businesses to raise funding and for investors to put their money to work.

For this to happen, households need better access to capital markets, along with a better understanding of how to invest and the potential benefits involved. For example, greater participation in financial markets can help individuals build their retirement savings.

At the same time, Brussels must advance the legislative framework — known as the Savings and Investments Union (SIU) — to enable these reforms to take place.

Why do businesses find it easier to seek funding in the US?

Capital markets are marketplaces where individuals, institutions and governments buy and sell long-term financial instruments, such as equities or debt.

They offer businesses a way to raise funds and support their growth. However, scaling up in Europe remains challenging. Cross-border operations can be costly, time-consuming and involve significant administrative burdens. This is because rules differ between member states, and even where they are the same, their implementation may differ.

These are among the reasons why firms in Europe obtain most of their financing through bank credit.

“What we need to develop is a more diversified funding source,” the head of the European Securities and Markets Authority (ESMA), Verena Ross, told Euronews in an exclusive interview with Euronews Business editor Angela Barnes.

Without enough diversification, businesses look for other markets where funding is more readily available, such as the US.

“The US capital market benefits from a more consolidated supervisory approach. There are fewer layers of bureaucracy and red tape because the US uses a single currency,” Rebecca Christie, senior fellow at Brussels-based think tank Bruegel, told Euronews.

Christie also said the US benefits from having a long-established federal system and from the dollar’s status as the world’s dominant reserve currency, both of which reduce barriers and increase its attractiveness.

“Anybody who needs financing has an incentive to go to US markets because that’s where the money is,” she said.

A less fragmented European capital market would have far-reaching implications, including making more capital available for strategic investments and strengthening the euro’s international role as a global currency — another major ambition of the current EU leadership amid the dollar’s declining role.

“We live in a global world and, particularly, capital markets are global by their nature. We also need to be attractive to overseas investors, whether they are American, Asian or from wherever they come, and make sure that Europe is a destination for that investment capital,” Ross told Euronews.

Why is a capital markets union so hard to achieve?

Despite broad agreement that capital markets need greater integration, there is still strong disagreement over how to make it happen.

The capital markets union legislation forms part of the Savings and Investments Union (SIU), a package of legislative proposals currently under negotiation.

One of the key pieces of legislation aimed at harmonising capital markets is the Market Integration and Supervision Package, known as MISP.

Despite the intensification of talks on MISP in recent months, member states have yet to reach a common position, particularly on how to harmonise capital markets supervision.

Last spring, the six largest European economies — Germany, France, Spain, Italy, Poland and the Netherlands — made a proposal setting out how to centralise supervisory powers.

In particular, they propose transferring some supervisory powers to ESMA, but there is no consensus on whether to proceed, an EU diplomat told Euronews on condition of anonymity. Even among those who agree, there are differing views on how and over what timeframe this should be implemented.

“The problem with the integration of capital markets is not even a political one; it is more a national issue,” Aurore Lalucq, chair of the European Parliament’s Committee on Economic and Monetary Affairs, who played an important role in the legislation, told Euronews.

“I think there will be progress in supervision, but there are a lot of details that will be tough to negotiate due to very different perspectives,” Lalucq added, referring to the fact that member states have very different capital market cultures.

Klarna’s decision to look across the Atlantic for deeper capital markets illustrates the challenge Europe faces. While there is broad agreement that the bloc needs to mobilise more private investment, national interests continue to slow progress towards a truly unified capital market.

Gov. Gavin Newsom has signed off on a 100% state tax on money any Californians receive from Trump’s $1.8-billion “anti-weaponization” fund for his political allies.

Newsom unveiled his proposal in May, after Trump’s Justice Department said it would create a fund to compensate Trump’s allies who claim they have “suffered weaponization and lawfare” under Biden’s Justice Department.

The settlement fund was criticized by politicians on both sides of the aisle, including Sen. Mitch McConnell (R-Ky.), who described it as a “slush fund to pay people who assault cops.”

The fund remains in legal limbo. Earlier this month, a federal judge in Virginia extended a court-ordered block on the plan, which critics warned could be used to pay pardoned Jan. 6 rioters.

Fast-tracked into law as part of Senate Bill 122, Newsom’s plan imposes “a tax on any settlement fund payment from the federal Anti-Weaponization Fund, or any subsequent fund, settlement, or agreement, as provided, at a rate of 100%,” according to the bill text. The tax applies to all tax years between 2026 and 2030.

Newsom signed the bill Tuesday. In a statement, his office said the tax is meant to ensure that, should Trump’s fund proceed, California recipients won’t “receive favorable state treatment on those payments.”

“We believe democracy is worth defending, the rule of law matters, and public dollars should support victims—not those who attacked the very institutions that protect our freedoms,” Newsom said in the statement.

University of Southern California law professor Ariel Jurow Kleiman, an expert on tax law and policy, said that while Newsom’s tax is a “novel legal strategy,” she believes there is “no categorical legal restriction” preventing California from implementing it.

States have a “wide degree of discretion” to design their tax systems — including how they define income — so long as they do not violate their constitutions, Jurow Kleiman said.

If a California resident wanted to challenge the tax in court, they would need to show they were harmed by it to have standing to sue, according to Jurow Kleiman. That would mean receiving a payment from Trump’s settlement fund and then paying the 100% California tax. Unless the settlement fund is established and distributes payments, that scenario is unlikely.

While there have been proposals to levy a 100% tax on income above certain thresholds — Sen. Bernie Sanders (I-Vt.) in 2023 said he supports a 100% tax on income exceeding $1 billion — Jurow Kleiman said she is not aware of any governments that have adopted such a policy.