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Daily Edition · Friday, February 13, 2026
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Covering Feb 13
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What matters today
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1 Munich Security Conference opens — Chancellor Merz declares world order “no longer exists,” calls for “new transatlantic partnership” while revealing nuclear deterrent talks with Macron; 15 EU heads of state, Rubio, Zelenskyy, Wang Yi attend the 62nd edition under theme “Under Destruction”
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2 Ramstein delivers $38bn Ukraine package — Allies confirm one of the largest-ever defence budgets for Kyiv at 33rd Contact Group; $2.5bn for drones, $2bn for air defence, urgent Patriot missile deliveries; Germany leads with €12.5bn, Norway $7bn, Sweden €3.7bn, UK £3bn
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3 Geneva talks confirmed for Feb 17–18 — Kremlin announces trilateral Russia-US-Ukraine negotiations to resume in Switzerland; Medinsky replaces Kostyukov as delegation lead, signalling pivot from military to political issues; territory remains key sticking point
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4 European markets retreat on AI fears — STOXX 600 edges lower as Wall Street tech sell-off spills over; defence stocks buck trend with Aerospace & Defence index up 3%; UK Q4 GDP disappoints at 0.1% growth; ECB holds at 2.0% as eurozone inflation dips to 1.7%
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01
\nMarket Snapshot
\nClose / Intraday Feb 13
\nMarket Snapshot
\nClose / Intraday Feb 13
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| PAIR / INDEX | LEVEL | DAY CHG | SIGNAL |
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| STOXX 600 | ~617 | -0.2% | ▼ AI sell-off contagion from Wall Street; defence stocks buck trend |
| Euro STOXX 50 | ~6,004 | -0.5% | ▼ retreating from 6,100+ record; ASML, Prosus, Infineon -2% each |
| DAX | ~25,015 | -0.3% | ▼ easing from record highs; Siemens steady after guidance lift |
| CAC 40 | ~8,323 | -0.4% | ▼ Adyen -21% drags; Safran +9% on strong results; Sanofi -4.5% |
| FTSE 100 | ~10,386 | +0.2% | ▲ miners rally on metals; NatWest -3.8% post-earnings beat |
| EUR/USD | ~1.1877 | +0.05% | — steady near 52-week highs; +13.5% YoY; ECB watching appreciation |
| GBP/USD | ~1.3624 | Flat | — sterling flat post-GDP miss; BoE cut expectations brought forward |
| Brent Crude | ~$69.15/bbl | -0.4% | ▼ US-Iran talks ease premium; EIA stocks +8.5m bbl; WTI ~$64.50 |
| Gold | ~$5,032/oz | -1.0% | ▼ consolidating after $5,090 ATH last week; silver below $81 |
| Bund 10Y | ~2.88% | +1bp | — steady; ECB on hold at 2%; defence spending may pressure fiscal outlook |
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02
\nConflict & Stability Tracker
\nConflict & Stability Tracker
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\nCritical
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\nCritical
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Ukraine – Russia War
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Four years since full-scale invasion; ~1,250km front line active; Russian winter bombardment targets civilian energy grid; Ramstein confirms $38bn allied support for 2026; Geneva trilateral talks set for Feb 17–18; Medinsky leads Russian delegation; territory remains key sticking point — Russia controls ~20% of Ukraine; ceasefire and DMZ frameworks discussed at Abu Dhabi but no breakthrough; UK/France pledge military hubs on Ukrainian soil post-ceasefire
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\nEscalating
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\nEscalating
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Transatlantic Rift
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Merz warns post-WWII order “no longer exists”; Greenland dispute ongoing — Denmark spending DKK 88bn on Arctic rearmament after Trump military threats; NATO Arctic Sentry mission launched Feb 11; European nuclear deterrent talks between Merz and Macron; MSC survey shows growing European distrust of US; trust deficit at multi-decade low
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\nTense
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\nTense
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Georgia – Democratic Crisis
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University strikes continue; EU accession process suspended; Kulevi oil terminal controversy; pro-EU protests enter fourth month; government accused of democratic backsliding; higher education reforms weaponised as political tool
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\nTense
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\nTense
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Arctic – Greenland Sovereignty
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Trump considering “range of options” including military to acquire Greenland; Denmark-US talks ended in “fundamental disagreement”; NATO Arctic Sentry deployment to reassure Washington; 8 European allies face escalating tariff threats; European carmakers and luxury stocks hit
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03
\nFast Take
\nFast Take
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DEFENCEMunich Security Conference opens — 62nd edition kicks off at Bayerischer Hof; Merz opens declaring rules-based order collapsed, warns US cannot “go it alone” in great-power rivalry; confirms nuclear deterrent talks with Macron; pledges Bundeswehr as “strongest conventional army in Europe” with permanent 4,800-troop Lithuania brigade by 2027; Rubio leads large US delegation; Zelenskyy visits German-Ukrainian drone factory near Munich; Macron closes Friday’s programme; over 60 heads of state expected
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UKRAINE$38bn Ramstein package locked in — 33rd Contact Group confirms nearly $38bn for 2026, with $35bn already firmed; $2.5bn for drones, $2bn for air defence, $500m+ for PURL; Germany €12.5bn, Norway $7bn, Sweden €3.7bn, UK £3bn, Denmark $2bn, Spain $1.2bn, Belgium €1bn; urgent Patriot missile deliveries agreed from European stockpiles; Fedorov presented 18 strategic defence projects including expanded missile production and drone assault units
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DIPLOGeneva peace talks set for Feb 17–18 — Kremlin confirms trilateral format; Medinsky replaces Kostyukov, signalling pivot from military to political/territorial issues; Ukraine’s Umerov leads Kyiv delegation; previous Abu Dhabi rounds produced preliminary ceasefire framework and DMZ structure but territory and Western troop presence unresolved; Russia demands Ukraine withdraw from Donbas; Zelenskyy insists on retaining current lines; Lavrov says talks “still a long way” from resolution
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MARKETSEuropean equities slip on AI contagion — STOXX 600 trades ~0.2% lower; STOXX 50 fell 0.5% Thursday after hitting 6,100+ record; Adyen plunged 21% on missed earnings; Safran surges 9% on 15% revenue growth to €31.3bn; Schroders +28.5% on Nuveen’s £9.9bn acquisition; European defence stocks on fourth consecutive day of gains with A&D index +3%; Mercedes-Benz weighed by $1.2bn tariff costs; Sanofi -4.5% after ousting CEO
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ECONOMYUK Q4 GDP disappoints at 0.1% — below 0.2% consensus; construction shrank 2.1%, services flat; full-year 2025 at 1.3%; BoE held at 3.75% in Feb with close 5-4 split; markets now pricing March cut; eurozone HICP at 1.7% in January — below ECB‘s 2% target; core at 2.2% — lowest since Oct 2021; ECB held deposit rate at 2.0% on Feb 5 for fifth consecutive meeting; strong euro creating disinflationary headwind; Bank of America expects final 25bp cut in March
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POLICYEU strategic autonomy push — Leaders’ informal retreat commits to “strategic autonomy” with focus on growth, innovation, and defence independence; Commission to unveil security measures restricting foreign access to EU public funding in March; Parliament adopts tough asylum regulation changes; EU–India FTA signed in January — covering 25% of global GDP; Portugal approves parental consent requirement for under-16 social media access on first reading
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04
\nDevelopments to Watch
\nDevelopments to Watch
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MUNICHEuropean Nuclear Deterrent Breaks Into the Open
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The most consequential line in Merz’s MSC opening speech was not his declaration that the world order has collapsed — that has been conventional wisdom for months — but his confirmation that he and Macron are discussing a joint European nuclear deterrent. The European Nuclear Study Group, led by MSC’s Tobias Bunde, presented findings at the kick-off event on Russian nuclear sabre-rattling and the reliability of US extended deterrence. Merz stated that “in the long run, we will only be successful if we take the other Europeans on board.” NATO’s Rutte countered that US conventional presence remains “crucial,” but the framing has shifted: the question is no longer whether Europe needs independent nuclear capability, but how it gets there. France’s force de frappe provides the only existing European arsenal, and any shared arrangement would require Paris to cede some sovereignty over its most sacred military asset. Germany’s constitutional framework, shaped by post-war renunciation of nuclear weapons, presents additional legal hurdles. The MSC pre-conference survey showed growing numbers of Europeans distrust the US and see it as a potential future threat — providing the political context for what was previously taboo.
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GENEVAMedinsky’s Return Signals Political Phase in Ukraine Talks
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The switch from GRU chief Igor Kostyukov to veteran ideologue Vladimir Medinsky as Russia’s lead negotiator for the Feb 17–18 Geneva round is a deliberate signal. Medinsky led the failed 2022 Istanbul talks and the May 2025 Istanbul session, where he reportedly lectured Ukrainian negotiators on pseudo-historical claims rather than engaging on substance. His return suggests Moscow is pivoting from the military-technical ceasefire discussions that dominated the Abu Dhabi rounds — where preliminary agreement was reportedly reached on ceasefire mechanics and DMZ structure — to maximalist political demands: recognition of annexed territories, Ukrainian neutrality, military size limitations, and a ban on NATO-country troops on Ukrainian soil. Ukraine’s delegation, now led by NSDC chief Rustem Umerov, will push for robust Western security guarantees as the precondition for any territorial conversation. The “coalition of the willing” framework agreed in Paris in January — with UK and French military hubs on Ukrainian territory post-ceasefire — provides Kyiv with leverage. Lavrov’s dismissal of progress as premature, and his accusation that Washington “backed away” from its own proposals, suggests the Kremlin sees the talks as useful for buying time while military operations continue along the 1,250km front.
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BRUSSELS$38bn Ramstein Package Rewrites European Defence Architecture
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The 33rd Ramstein-format meeting on February 12 produced what Ukrainian Defence Minister Mykhailo Fedorov called “one of the largest budgets to support Ukraine” — nearly $38 billion confirmed for 2026, with $35 billion already firmed up. The breakdown reveals a fundamental shift in burden-sharing: Germany leads with €12.5 billion, Norway contributes $7 billion (including $1.4bn for drones and $700m for air defence), Sweden €3.7 billion, and the UK £3 billion including a new £500 million air defence package and £150 million for PURL. Fedorov presented 18 strategic defence projects for 2026, including expanded domestic missile production and specialised drone assault units. Perhaps most significant is the agreement on urgent Patriot missile deliveries from European national stockpiles — quantities pending final government approvals, but deliveries expected imminently. The Netherlands, Estonia, Latvia, and others committed at least 0.25% of GDP to Ukraine’s defence. NATO Secretary General Rutte urged allies to put Ukraine’s needs ahead of “buy European” preferences, creating tension with France’s push for European procurement priority. Ukraine’s total defence budget for 2026 is $120 billion — half domestically funded, half from international partners.
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FRANKFURTECB Trapped Between Strong Euro and Below-Target Inflation
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The European Central Bank finds itself in an unusual bind. Eurozone HICP inflation dropped to 1.7% in January — the lowest since September 2024 and below the 2% target — while core inflation eased to 2.2%, its lowest since October 2021. The euro has surged 13.5% against the dollar over the past year to ~$1.19, its highest since 2021, creating imported disinflationary pressure. Yet the ECB held rates at its February 5 meeting for the fifth consecutive time, with Lagarde reiterating a data-dependent “meeting-by-meeting approach.” The Governing Council is divided: Austria’s Kocher warned that further appreciation could force rate cuts, while France’s Villeroy highlighted the dollar‘s depreciation as a key factor. Deutsche Bank’s base case is a hold through 2026 with the next move being a hike in mid-2027, while Bank of America expects a final 25bp cut in March. The consensus — 85% of Reuters-polled economists expect no change through 2026 — is unusually tight, creating conditions for a disruptive surprise if trade shocks or euro strength accelerate disinflation. The next critical juncture is the March 19 meeting, which will bring updated staff projections.
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LONDONUK Growth Stalls as Bank of England Faces Rate Cut Pressure
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The UK economy grew just 0.1% in Q4 2025, below the 0.2% consensus and matching the anaemic 0.1% of Q3. The full-year figure of 1.3% positions the UK among the stronger G7 performers, but the underlying picture is weaker: construction shrank 2.1%, services showed zero growth, and the data caps a year in which both Autumn Budgets raised taxes to their highest level as a share of GDP in British history. The Bank of England held rates at 3.75% at its February meeting in a close 5-4 vote, with four MPC members already calling for easing. Markets have brought forward expectations for 2026’s first cut from April to March. Sterling remained flat at $1.36, with the pound caught between weak growth data and persistent inflationary pressures that keep the BoE cautious. The political backdrop is turbulent — PM Starmer under pressure from the Epstein files controversy — but the economic reality is simpler: the UK needs stimulus, and the BoE’s voting pattern suggests it agrees. The central bank forecasts 0.2% growth in Q1 2026, with contacts expecting “subdued growth throughout 2026.”
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ARCTICGreenland Standoff Reshapes NATO’s Northern Flank
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The Greenland crisis — triggered by Trump’s stated intent to acquire the Danish autonomous territory using “a range of options” including military force — has become Europe’s most visible sovereignty test since Russia’s invasion of Ukraine. Denmark’s response has been escalatory in its own right: Deputy PM Troels Lund Poulsen announced DKK 88 billion ($13.8 billion) in Greenland rearmament, the largest Arctic defence commitment in Danish history. Eight European allies face escalating tariff threats linked to their opposition to the acquisition. NATO launched its Arctic Sentry mission on February 11, an apparent attempt to demonstrate alliance relevance to Washington while reassuring nervous Europeans. The standoff has crystallised a broader realignment: European carmakers and luxury stocks were hit hard on the tariff threats, the Stoxx Europe 600 Automobiles & Parts index fell 2.2% on the initial announcement, and Denmark’s insistence that sovereignty is non-negotiable has become a rallying point for pan-European solidarity. At MSC, the Greenland question looms over every conversation about whether the transatlantic alliance can survive a US administration that treats allies’ territory as negotiable.
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CORPORATEEuropean Earnings Season: Defence Up, Tech Down, Luxury Mixed
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European Q4 earnings are revealing a two-speed continent. Defence and aerospace names are surging — Safran climbed 9% on Friday after net income rose 3.5% to €3.17 billion on 15% revenue growth to €31.3 billion, while Thales gained 8.3% after its Samsung security chip won a CES 2026 award. The European Aerospace & Defence index has posted four consecutive days of gains as rearmament becomes the continent’s defining investment theme. On the other side, tech-adjacent names are getting hammered: Adyen plunged 21% after missing earnings estimates, tracking global AI capex anxiety. Luxury is bifurcated — Hermès rose 2.8% on a 9.8% Q4 revenue jump driven by US and Japan, while Unilever warned 2026 sales growth would land at the lower end of guidance. Siemens lifted earnings guidance on AI/data centre demand but closed roughly flat after an initial 7% surge. The most significant deal: U.S. investment manager Nuveen acquiring London-listed Schroders for £9.9 billion, creating a $2.5 trillion asset manager. Mercedes-Benz reported full-year earnings more than halving, with $1.2 billion attributed to US tariff costs — a preview of the damage Trump’s trade policy is inflicting on European industry.
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05
\nSovereign & Credit Pulse
\nSovereign & Credit Pulse
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| COUNTRY | KEY DEVELOPMENT | CREDIT SIGNAL |
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| Germany | Merz opens MSC; €12.5bn Ukraine aid — largest donor; permanent Lithuania brigade; DAX at ATH above 25,000 | GDP forecast 1.2% for 2026; CPI 2.0% Jan; debt brake under pressure from defence spending surge; fiscal expansion risk |
| United Kingdom | Q4 GDP 0.1% — below consensus; BoE held 3.75% in close 5-4 vote; £3bn Ukraine military aid | Full-year 2025 at 1.3%; March rate cut priced in; taxes at historic % of GDP; construction -2.1% |
| France | Macron closes MSC Friday; Safran +9% on strong defence earnings; nuclear deterrent talks with Germany | Inflation at 0.4% — lowest in eurozone; pushing “buy European” defence procurement; fiscal deficit concerns persist |
| Eurozone | ECB held at 2.0% for fifth consecutive meeting; HICP 1.7% Jan — below target; EUR/USD ~1.19 | Core inflation 2.2% — lowest since Oct 2021; 85% of economists expect no change through 2026; strong euro disinflationary |
| Denmark | DKK 88bn Greenland rearmament — largest Arctic commitment in history; sovereignty standoff with US | AAA-rated; fiscal space exists for defence surge; tariff threats from US add economic risk |
| Ukraine | $38bn allied package for 2026; $120bn total defence budget; Geneva talks Feb 17–18 | Half defence budget foreign-funded; debt restructuring ongoing; economy grew ~4% in 2025; war risk remains primary driver |
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06
\nPower Players
\nPower Players
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| WHO | ROLE | WHY IT MATTERS |
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| Friedrich Merz | Chancellor, Germany | Opens MSC with landmark speech; reveals nuclear deterrent talks with Macron; pledges Bundeswehr as strongest army in Europe; acknowledged Vance “was right” on cultural gap while rejecting MAGA ideology |
| Emmanuel Macron | President, France | Closes MSC Friday; pushing European nuclear autonomy and “buy European” defence procurement; leading “coalition of the willing” with UK on Ukraine security guarantees |
| Volodymyr Zelenskyy | President, Ukraine | At MSC lobbying ahead of Geneva; visited German-Ukrainian drone factory with Pistorius; $38bn Ramstein strengthens negotiating position; insists on retaining current territorial lines |
| Marco Rubio | US Secretary of State | Leading large US delegation to MSC; speaking Saturday; met Merz on sidelines; key figure in Ukraine peace process; managing transatlantic tensions |
| Christine Lagarde | President, ECB | Navigating rate hold consensus; Council divided on euro appreciation risk; maintaining data-dependent approach; March 19 meeting critical with updated projections |
| Kaja Kallas | EU Foreign Affairs Chief | Hosting informal EU FM gathering at MSC Sunday; speaking on “Reclaiming Agency” panel Friday; representing EU at G7 FM meeting Saturday |
| Mark Rutte | NATO Secretary General | Praised European “shift in mindset”; launched Arctic Sentry; pushed allies to prioritise Ukraine needs over buy-European preferences |
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07
\nRegulatory & Policy Watch
\nRegulatory & Policy Watch
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| JURISDICTION | MEASURE | STATUS / IMPACT |
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| EU | CBAM working party meeting; Chinese EV countervailing duties amended | Chemical giants lobbying to weaken carbon pricing; separate undertaking from some Chinese EV makers; EP Trade Committee to Philippines Feb 16–18 |
| EU | Digital Omnibus simplification; audiovisual media consultation | EDPB meeting Feb 13; consultation open through May 2026; Action Plan Against Cyberbullying launched |
| Portugal | Parental consent for under-16 social media access | First reading passed; one of first concrete EU-level moves on youth digital protection |
| NATO/EU | Defence spending beyond 2% GDP; foreign funding restrictions | Commission unveils security measures restricting foreign access to EU public funding in March; counter-drone action plan presented |
| EU | Asylum regulation changes — faster processing; safe third country concept | Parliament adopted; established Union-level “safe countries of origin” list; implementation timeline at Council |
| EU | Banking market competitiveness; credit risk simplification | Commission call for evidence through Mar 11; EBA consultation on credit risk; Nuveen–Schroders creating $2.5tn asset manager |
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08
\nCalendar
\nNext 72 Hours
\nCalendar
\nNext 72 Hours
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| DATE | EVENT | SIGNIFICANCE |
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| Feb 13–15 | Munich Security Conference — 62nd edition | Merz, Macron, Rubio, Zelenskyy, Wang Yi; transatlantic relations and Ukraine front and centre |
| Feb 15 | G7 Foreign Ministers meeting at MSC | Kallas representing EU; Ukraine, Iran, and trade on agenda; Rubio attending |
| Feb 16 | Eurogroup Meeting | Finance ministers on fiscal coordination; defence spending implications for fiscal rules |
| Feb 17 | ECOFIN Council | Economic and Financial Affairs — competitiveness, banking union, fiscal coordination |
| Feb 17–18 | Geneva Peace Talks — Russia-US-Ukraine trilateral | Medinsky vs Umerov; territorial and security guarantee issues; Abu Dhabi framework tested |
| Mar 19 | ECB Rate Decision | Updated staff projections; euro appreciation may force dovish tilt; BoA expects final 25bp cut |
| Mar 2026 | BoE Rate Decision / EU Security Measures Unveil | Markets pricing 25bp cut to 3.50%; Commission restricts foreign access to EU public funding |
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09
\nBottom Line
\nBottom Line
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Europe enters one of its most consequential security weekends in years. The Munich Security Conference is not just theatre — Merz’s nuclear deterrent revelation, the $38 billion Ramstein commitment, and the Geneva talks announcement within 48 hours collectively signal that Europe is preparing for a world where American protection is conditional rather than guaranteed. The “Under Destruction” theme is apt: the post-WWII security architecture is being actively dismantled from both sides of the Atlantic. What makes this moment different from previous hand-wringing is the specificity: Merz named nuclear deterrence, Fedorov presented 18 concrete defence projects, Peskov confirmed Geneva dates, and Denmark committed $13.8 billion to defend Greenland from its own ally. Markets remain remarkably sanguine — the STOXX 600 near record highs, defence stocks on a tear, and the euro at multi-year peaks — suggesting investors see opportunity in European rearmament and fiscal expansion, even as the continent navigates its deepest strategic realignment since the Cold War. The ECB’s dilemma encapsulates the broader tension: inflation below target, a strong currency, and a geopolitical landscape demanding massive fiscal commitments that could reignite price pressures down the road. Geneva next week will test whether the Abu Dhabi ceasefire framework holds, but the real question is whether Europe’s newfound resolve on defence and autonomy survives the first genuine US demand for concessions. The through-line is clear: Europe is learning to speak the language of power — Merz said as much — but it is still learning to pay for it.
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Europe Intelligence Brief
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Daily Edition · Friday, February 13, 2026
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This is part of The Rio Times’ coverage of European economic developments and financial markets.
Related: Brazil Morning Call | Global Economy Briefing