Economy
France to vote against Mercosur deal after farmers protest in Paris
President Emmanuel Macron said Thursday that France will oppose a major trade agreement between the European Union and South American nations, as farmers used tractors to blockade roads into Paris and landmarks such as the Arc de Triomphe to protest the proposed deal.
Farmers from the right-wing Coordination Rurale union called for the protests in Paris amid fears the planned free trade agreement with the Mercosur bloc will flood the EU with cheap food imports.
Macron said on social media that France would vote against signing the agreement on Friday, despite having secured “major commitments” from the European Commission.
“The signing of the agreement is not the end of the story. I will continue to fight for the full implementation of the commitments obtained from the European Commission and to protect our farmers,” he said on the social media platform X.
Ireland will also vote against the agreement, its deputy prime minister Simon Harris said earlier. But as the European Commission seems to have secured the support of Italy, the agreement is likely to be adopted during Friday’s vote.
The trade deal, backed by countries such as Germany and Spain, is a political hot potato for the French government, with municipal elections in March and the far right polling strongly ahead of elections to replace Macron in 2027.
French Farm Minister Annie Genevard repeated on Thursday that, even if EU members backed the accord, France would continue to fight against it in the European Parliament, whose approval will also be required for the agreement to enter into force.
This week the European Commission proposed making 45 billion euros ($52.42 billion) of EU funding available earlier to farmers in the bloc’s next seven-year budget and agreed to cut import duties on some fertilizers in a bid to win over countries wavering in their support of Mercosur.
Farmers overrun police checkpoints
On top of Mercosur, farmers also protested against high costs and excessive local regulation and demanded an end to a government policy of culling herds of cows in response to a highly contagious cattle disease, which they consider excessive.
“We are between resentment and despair. We have a feeling of abandonment, with Mercosur being an example,” Stephane Pelletier, a senior member of the Coordination Rurale union, told Reuters beneath the Eiffel Tower.
The farmers overran police checkpoints to enter the city, driving along the Champs Elysees avenue and blocking the road around the Arc de Triomphe before dawn, before gathering in front of the National Assembly.
National Assembly President Yael Braun-Pivet was booed and jostled when she stepped outside the assembly’s gates to talk with the Coordination Rurale protesters.
Dozens of tractors obstructed highways leading into the capital ahead of the morning rush hour, including the A13 leading into Paris from the western suburbs and Normandy, causing 150 km of traffic jams, the transport minister said.
Farmers from the FNSEA and young farmers unions joined them later at the Eiffel Tower in a calm demonstration.
“We’re going to import products from the rest of the world that don’t meet our standards – that’s not possible, that’s unacceptable. So we’re staying mobilized, we’re carrying on,” Arnaud Rousseau, president of the FNSEA farm union told reporters, referring to the Mercosur deal.
Interior Minister Laurent Nunez said more protest actions were planned across the country by farmers on Friday, adding he hoped there would be, as was the case on Thursday, no violence or major damage. He also said the tractors had started leaving Paris.
A draft law currently at the Turkish Parliament is expected to generate at least TL 4.2 billion (nearly $96 million) tax income from a levy on crypto assets, according to its impact analysis.
The law will generate more tax income from crypto assets but this amount cannot currently be calculated exactly as it will be applied for the first time, the analysis said.
Under the draft law proposed by the ruling Justice and Development Party (AK Party), on top of a 0.03% crypto asset transaction tax, a 10% withholding tax will be collected from profits made from crypto asset transactions made on approved platforms.
The analysis report said it was not possible to calculate possible budget revenues from the tax that will be imposed on crypto asset profits.
Separately, a 20% special consumption tax set to be applied to some precious stones as part of the draft law is expected to generate some TL 1.9 billion annual income to the government budget, according to the impact analysis.
The ongoing air war with Iran could cost the country’s economy over 9 billion shekels (about $2.93 billion) per week, the Finance Ministry said on Wednesday.
Under current “red” restrictions by Israel’s Home Front Command that limit traveling to work, order school closings, and mobilization of reserve forces, economic loss is estimated at 9.4 billion shekels a week, largely starting from next week, it said.
The ministry has asked the Home Front to move to “orange” – or limited activity that is less restrictive to workplaces than “red.” In this scenario, the loss to the economy would be 4.3 billion shekels a week.
Israel and the U.S. began bombing Iran on Saturday, triggering a wave of retaliatory strikes across Israel and the Middle East and disrupting energy exports from the Gulf.
U.S. and Israeli officials said the campaign could last weeks.
Schools in Israel are closed this week. Gatherings are banned, while workforce activities are prohibited except for essential services, with most employees working from home.
Hurt somewhat by the genocidal war on Gaza, Israel’s economy grew 3.1% in 2025. In the wake of a cease-fire in October, growth was projected at more than 5% in 2026.
The European Union unveiled new “Made in Europe” regulations on Wednesday sought to strengthen the bloc’s industries amid fierce competition from China, following months of delays caused by disputes over proposals critics call too protectionist.
Concerning strategic sectors including cars, green tech and steel, the law, called the “Industrial Accelerator Act”, is part of broader EU efforts to help local industries compete with producers abroad who do not face Europe’s strict regulations and higher energy prices.
“What I am presenting to you today is more than just a change in operating procedures; it is a change in doctrine – one that was unthinkable just a few months ago,” said EU industry chief Stephane Sejourne.
Broadly, the rules aim to ensure that public and foreign investments support manufacturing inside the 27-nation bloc, explained an EU official.
To that end, they say companies that want public money must meet minimum thresholds for EU-made parts and subject large investments from dominant foreign firms to conditions including employing EU workers.
The European Commission said the package aims to bring manufacturing’s share of EU GDP to 20% by 2035, up from about 14% in 2024.
At stake are about 600,000 jobs that Brussels predicts could be lost over the next decade if the bloc’s industrial decline continues on its current path.
What ‘Europe’?
Initially expected last year, the measures strongly backed by France were pushed back several times due to disagreements, with some arguing they run counter the EU’s pro-free-trade spirit.
Much of the discord revolved around the geographical scope of “Made in Europe.”
Skeptics, including the EU’s largest economy Germany, argued trade partners should be included in the definition under a “Made with Europe” approach.
Brussels settled for a compromise based around the principle of reciprocity.
Countries that have deals with the EU allowing for European companies to access public money on par with local firms in the sectors concerned would be brought into the fold.
Others – like Canada – that give preference to local producers will be left out unless they change tack, the official said, noting the rules would be used as a trade tool to negotiate better access for EU companies.
Ahead of publication, the plans had raised concerns among foreign partners, including Türkiye, Britain and Japan.
A full list of who was in and who was out was not yet available.
The “Made in Europe” requirements, which also seek to boost industrial decarbonization, would apply to “strategic sectors”, namely: steel, cement, aluminum, cars, and net-zero technologies.
Governments putting money behind infrastructure projects will have to ensure they include a minimum share of European low-carbon steel, cement and aluminum, among other provisions.
Electric-vehicle (EV) manufacturers will have to make sure at least 70% of their cars’ components are made in the EU to access public money.
Similar rules will apply to batteries, solar, wind, and nuclear.
Investment screening
The proposal, formally known as the “Industrial Accelerator Act”, also aims to ensure foreign companies partner with European firms if they want to set up shop in the bloc.
To do so it imposes conditions on foreign investments of over 100 million euros ($116 million) in “emerging strategic sectors” such as batteries and EVs.
These kick in when they involve an investor from a country that holds more than 40% of the related global manufacturing capacity – an implicit reference to China’s dominance in those sectors.
For such projects to go ahead, foreign investors need to meet four of six conditions including employing at least 50% EU workers, holding no more than 49% of the related EU company, and passing on technological know-how.
That was to counter instances where Chinese firms set up a European plant employing mainly Chinese workers with “very little local added value,” said the EU official speaking on condition of anonymity.
For many, the plans are necessary to boost the development of EU green tech and shield manufacturers from unfair competition from heavily subsidized Chinese rivals.
The goal is to make sure EU taxpayers’ money is “used strategically to strengthen Europe’s industrial base – rather than subsidizing Chinese overcapacity”, said Neil Makaroff of the Strategic Perspectives climate think tank.
But some experts question the EU push.
“If the policy goal is to make sure that your industry is not being destroyed by China, I think we have better instruments,” said Niclas Poitiers, an international trade specialist at the Bruegel think tank, pointing to rules giving the EU power to investigate and counteract unfair foreign subsidies.
The proposal will be subject to approval by EU states and parliament.
A proposed tax on cryptocurrency trading transactions in Türkiye is expected to generate about TL 4.2 billion (nearly $100 million) in annual revenue, according to an impact analysis of a draft bill.
The ruling Justice and Development Party (AK Party) on Monday presented the draft law to Parliament that would introduce a tax on cryptocurrency earnings, along with a transaction fee targeting crypto asset service providers.
The bill is set to be discussed in a parliamentary commission as of Wednesday.
According to the draft text, gains from the buying and selling of crypto assets would be subject to withholding tax, while transactions conducted outside authorized platforms would be taxed through declaration.
Under the proposal, crypto asset service providers would pay a 0.03% transaction tax on sale and transfer transactions they conduct or mediate.
The impact analysis projects that the 0.3% tax on crypto asset buy-and-sell transactions would yield TL 4.2 billion per year.
Under the proposal, a separate 10% withholding tax on gains from trading transactions would also be introduced. However, the analysis said revenue from this measure could not yet be calculated due to insufficient data.
The draft legislation also foresees bringing pearls, diamonds, precious and semi-precious stones under the scope of a 20% special consumption tax. This measure is projected to generate an additional TL 1.9 billion in annual revenue.
The impact of the war in the Middle East on the global economy will depend on its duration and damage to infrastructure and industries in the region, and in particular, whether energy price spikes are short-lived or persistent, the number two official at the International Monetary Fund (IMF) said on Tuesday.
IMF First Deputy Managing Director Dan Katz told the Milken Institute Future of Finance conference in Washington that if there is prolonged uncertainty from the conflict and a prolonged impact on energy prices, “I would expect central banks to be cautious and respond to the situation as it materializes.”
He said the conflict could be “very impactful on the global economy across a range of metrics, whether it’s inflation, growth, and so on,” but it was still early to have a firm conviction.
Before the U.S. and Israeli airstrikes on Iran and counterattacks across the region, the IMF had forecast solid global gross domestic product (GDP) growth of 3.3% in 2026, powering through tariff disruptions due in part to the continued AI investment boom and expectations of productivity gains.
Katz said that the economic impact from the Middle East conflict would be influenced by its duration and further geopolitical developments.
Earlier, the IMF said it was monitoring the conflict’s disruptions to trade and economic activity, surging energy prices and increased financial market volatility.
“The situation remains highly fluid and adds to an already uncertain global economic environment,” the fund said in a statement issued from Washington. Katz said the IMF will look at the conflict’s direct impacts on the region, including damage to infrastructure and disruptions to key sectors.
“Tourism is an important one. Air travel. Is there physical damage to infrastructure, production facilities, and the big industry in particular that everyone will be focused on is, of course, the energy industry,” he said.
Oil rose further on Tuesday as Iran vowed to attack ships passing through the Strait of Hormuz. Brent crude oil, the global benchmark, surged to $83 per barrel, up 15% from its level on Friday.
Katz said he expected central banks to “look through” a temporary rise in energy prices, given their focus on core inflation. But central banks could respond if a more persistent energy shock results in “a destabilizing of inflation expectations.”
He said the post-COVID-19 pandemic inflation spike of 2022 was influenced by energy impacts from Russia’s invasion of Ukraine, with more pass-through from headline inflation to core inflation.
“And so I’m sure central banks, as they are thinking about how the geopolitical situation is translating into energy markets, will be looking at the lessons of the pandemic and seeing if they can apply any of those lessons in setting monetary policy,” Katz said.
Türkiye’s inflation rate rose slightly on an annual basis to 31.5% in February, largely as expected, while the monthly figure cooled, official data showed on Tuesday.
The increase from nearly 30.7% in January marked the first uptick in the annual rate in months and tees up a tough rate decision for the central bank next week.
On a monthly basis, inflation cooled to 2.96%, compared to the higher-than-expected 4.84% increase in January, the Turkish Statistical Institute (TurkStat) said.
Beyond the price pressure, market turmoil due to war between the U.S. and Israel and neighboring Iran prompted emergency measures by the top institutions, including the central bank and the capital markets board.
These included some $8 billion in foreign exchange sales on Monday, resulting in a roughly 300 basis-point rise in the overnight rate to about 40%.
The renewed geopolitical risks, according to analysts, could prompt the Central Bank of the Republic of Türkiye (CBRT) to respond by officially halting an easing cycle that began in late 2024.
In January, the Monetary Policy Committee (MPC) trimmed the bank’s main policy interest repo rate by less-than-expected 100 basis points to 37%.
In February, monthly inflation was driven by housing and food costs, according to the TurkStat, marking the second month of pressure that has raised worries about a disinflation trend that began in 2024.
Food and drinks prices rose by 6.8% over the course of the month, and housing expenditure by 2.4%, the figures showed.
Geopolitical turmoil
Treasury and Finance Minister Mehmet Şimşek said he expected the recent high food price increases to be offset in the coming period, depending on weather conditions, while acknowledging the energy price rises triggered by the Iran conflict.
“We are working to limit the inflationary impact of rising oil prices due to geopolitical developments,” he wrote on the social media platform X, adding that all policy tools are being used in coordination to sustain the disinflation process.
Year-over-year, the price surges were particularly marked in education (55.7%), housing (42.3%) and food and non-alcoholic beverages (36.4%).
Şimşek said food prices rising significantly above their long-term averages caused a temporary spike in annual inflation.
“Core goods inflation receded to 16.6%. Meanwhile, service inflation, where rigidity is high, fell below 40%, the lowest level in the last 47 months. This outlook indicates that the downward trend in inflation continues,” the minister said.
The TurkStat data also showed the domestic producer price index rose 2.43% month-over-month in February for an annual increase of 27.56%.
The central bank has, in recent weeks, kept rate-cut expectations on track even as it has repeated it was ready to tighten policy if needed.
JPMorgan, which, like most analysts, had previously predicted another cut at the central bank’s March 12 policy meeting, said on Monday it now expects the bank to hold rates. It also revised its year-end inflation forecast to 25% from 24%.
Last month, the central bank nudged up its year end inflation forecast range by two percentage points to 15%-21% and maintained its interim 16% target.
But amid rising geopolitical tensions and higher oil prices, market participants have begun revising their year-end inflation forecasts upward, from levels around 22% a few months ago to 25% or higher.
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