What matters today
1 Orbán signals Druzhba pipeline fact-finding could unlock €90B Ukraine loan — in letter to European Council President Costa, Hungary’s PM proposes expert mission to verify pipeline damage and pledges to accept findings; but diplomats say Budapest may also demand €16B SAFE defence loan approval before lifting veto on 20th sanctions package
2 Denmark calls snap election for March 24 — PM Frederiksen capitalises on Greenland standoff polling bump; Social Democrats above 30% on sovereignty-defence platform; election redefines US–Europe relations, rearmament, and Arctic security; coalition partners Liberal and Moderate parties face squeeze
3 UK Green Party wins first-ever by-election — Hannah Spencer takes Gorton & Denton with 40.7% of vote, overturning 13,400 Labour majority; Reform UK second at 28.7%, Labour falls to third at 25.4%; Starmer rejects resignation calls but faces mounting pressure ahead of May local elections; Conservatives lose deposit
4 IAEA brokers local truce at Zaporizhzhia nuclear plant — Russia and Ukraine agree to ceasefire around Europe’s largest NPP to allow repair of 330kV backup power line damaged Feb 10; demining underway for safe access; plant operating on single remaining power line since mid-February; fifth IAEA-negotiated local ceasefire at facility since occupation began
5 Germany paralysed by 48-hour transport strike — Ver.di union shuts buses, trams and U-Bahn across all 16 states from Feb 27; ~100,000 workers at 150 companies walk out over pay, shift lengths and rest periods; fifth round of talks stalled; second major action this month after Feb 2 walkout; S-Bahn, regional and ICE trains unaffected
01
Market Snapshot
Market Snapshot
| Pair / Index | Level | Day Chg |
|---|---|---|
| STOXX Europe 600 | 633 | Flat |
| Euro STOXX 50 | 6,162 | −0.2% |
| DAX (Germany) | 25,289 | +0.45% |
| CAC 40 (France) | 8,621 | +0.72% |
| FTSE 100 (UK) | 10,847 | +0.37% |
| EUR/USD | 1.1800 | Flat |
| GBP/USD | 1.3500 | Flat |
| Bund 10Y Yield | 2.88% | Unch |
| Gold (spot) | $5,238 | +0.4% |
European equities held near record highs as earnings season drove action: LSEG +9% on £3B buyback, Stellantis +6.8% despite first-ever annual loss, Puma +9% on strategy reset. ASML −4.5% tracking Nvidia selloff. FTSE approaching 11,000 for first time. Germany’s 48-hour transport strike added uncertainty to services outlook.
02
Conflict & Stability Tracker
Conflict & Stability Tracker
Critical
Ukraine–Russia
Geneva US-Ukraine talks concluded Feb 26. Next trilateral round likely Abu Dhabi early March. Orbán blocks €90B loan and 20th sanctions package. Russia overnight attacks hit Kharkiv, Zaporizhzhia. Casualty toll now exceeds 1M dead. EU signed €90B loan into law Feb 11 but Hungary blocking final disbursement.
Tense
Hungary–Ukraine Energy
Orbán deploys troops to energy facilities, accuses Ukraine of “oil blockade.” Slovakia suspends electricity exports to Ukraine. Druzhba pipeline damaged Jan 27 by Russian strike; both sides blame the other for delays. Hungary trails in April 12 election polls; pipeline crisis fuels nationalist campaign.
Tense
US–Iran Nuclear
Third round of US-Iran nuclear talks underway in Geneva. Trump threatens military action if deal not reached. European capitals on edge over potential fallout for energy markets and Middle East stability. EU 3 (France, Germany, UK) monitoring but sidelined from main negotiation table.
Watching
Arctic / Greenland
Denmark snap election set for March 24 centres on sovereignty and Arctic defence. US-Denmark-Greenland technical talks on Arctic security framework ongoing. NATO allies discussing Greenland defence bolstering. Frederiksen warns Greenland issue not resolved despite Trump pullback.
03
Fast Take
Fast Take
ENERGY
Druzhba pipeline becomes electoral weapon — Orbán links veto to April 12 Hungarian election; Zelenskyy tells him to ask Putin for “energy ceasefire”; EU Oil Coordination Group says no energy security threat to bloc from suspension
Druzhba pipeline becomes electoral weapon — Orbán links veto to April 12 Hungarian election; Zelenskyy tells him to ask Putin for “energy ceasefire”; EU Oil Coordination Group says no energy security threat to bloc from suspension
POLITICS
UK two-party system fractures — Gorton & Denton shows Greens and Reform UK squeezing Labour and Conservatives from both flanks; political scientist John Curtice says elections “no longer won on centre ground”
UK two-party system fractures — Gorton & Denton shows Greens and Reform UK squeezing Labour and Conservatives from both flanks; political scientist John Curtice says elections “no longer won on centre ground”
MACRO
Eurozone January inflation confirmed at 1.7%, below ECB’s 2% target; core at 2.2% — lowest since Oct 2021; euro strength at 1.18 adds downward pressure; ECB “monitoring” currency but rules out FX intervention
Eurozone January inflation confirmed at 1.7%, below ECB’s 2% target; core at 2.2% — lowest since Oct 2021; euro strength at 1.18 adds downward pressure; ECB “monitoring” currency but rules out FX intervention
EARNINGS
Allianz posts biggest-ever operating profit at €17.4B (+8.4% YoY); Rolls-Royce forecasts £4B+ 2026 profit with up to $12B buyback; LSEG unveils £3B buyback on 56% pre-tax profit surge; Stellantis reports first-ever annual loss on €25.4B EV write-downs
Allianz posts biggest-ever operating profit at €17.4B (+8.4% YoY); Rolls-Royce forecasts £4B+ 2026 profit with up to $12B buyback; LSEG unveils £3B buyback on 56% pre-tax profit surge; Stellantis reports first-ever annual loss on €25.4B EV write-downs
DEFENCE
UK and French paratroopers rehearse rapid deployment as 10,000-troop Ukraine peacekeeping force takes shape; EU SAFE defence instrument processing national applications; Germany’s €500B infrastructure fund feeding into real economy
UK and French paratroopers rehearse rapid deployment as 10,000-troop Ukraine peacekeeping force takes shape; EU SAFE defence instrument processing national applications; Germany’s €500B infrastructure fund feeding into real economy
TRADE
Trump’s 15% blanket global tariff weighs on EU export outlook; US Supreme Court struck down “reciprocal” tariffs Jan 20 but new levies imposed immediately; EU-India FTA signed last month covers 25% of global GDP
Trump’s 15% blanket global tariff weighs on EU export outlook; US Supreme Court struck down “reciprocal” tariffs Jan 20 but new levies imposed immediately; EU-India FTA signed last month covers 25% of global GDP
04
Developments to Watch
Developments to Watch
Orbán’s Druzhba Gambit: Fact-Finding Mission as Veto Exit Ramp
In a letter to European Council President António Costa dated Feb 26, Hungarian PM Viktor Orbán proposed sending an expert mission to the Ukrainian section of the Druzhba oil pipeline to assess damage from a Jan 27 Russian strike. Orbán pledged to accept the mission’s findings, signalling a potential off-ramp from his veto on the €90 billion EU loan to Ukraine and the 20th sanctions package against Russia. However, Politico reports that Budapest’s manoeuvring may be broader: two diplomats say Hungary may continue blocking until the European Commission approves its €16 billion SAFE defence loan application. The stakes are enormous — Ukraine faces a funding crunch and risks running out of money by spring. The pipeline dispute has become entangled with Hungary’s April 12 elections, where Orbán trails opposition challenger Péter Magyar by double digits. Orbán wrote a separate open letter to Zelenskyy accusing him of pursuing an “anti-Hungarian policy” while deploying troops to guard Hungarian energy infrastructure.
Denmark Snap Election: Frederiksen Bets on Greenland Surge
Danish PM Mette Frederiksen called snap parliamentary elections for March 24, capitalising on a surge in support tied to her firm stance against Trump’s designs on Greenland. The Social Democrats have climbed above 30% in polls after months of decline linked to cost-of-living concerns. Frederiksen framed the vote as existential: “We must define our relationship with the US. We must arm ourselves to ensure peace on our continent.” The election was not required until October 2026, making this an 18-month acceleration. Frederiksen’s platform includes retirement age reform, a wealth tax, and continued defence of Danish sovereignty. King Frederik X accepted the dissolution. The three-party coalition — Social Democrats, Liberals, and Moderates — will face a fragmented field in the 179-seat Folketing. Technical talks on an Arctic security framework with the US and Greenland continue in parallel.
Gorton & Denton: UK Green Party’s Seismic By-Election Win
Hannah Spencer, a 34-year-old plumber and councillor, won the Gorton & Denton by-election with 14,980 votes (40.7%), overturning a Labour majority of more than 13,400 from the 2024 general election. Reform UK’s Matt Goodwin came second with 10,578 votes (28.7%), while Labour’s Angeliki Stogia fell to third with 9,364 (25.4%). The Conservatives lost their deposit with just 706 votes. Turnout was 47.6% — unusually high for a by-election. It is the Greens’ first-ever parliamentary by-election victory and their first seat in northern England, giving them five MPs total. Labour had blocked Greater Manchester Mayor Andy Burnham from standing as candidate, a decision now under intense scrutiny. PM Starmer rejected calls to resign, saying he would “keep fighting for as long as I’ve got breath in my body.” The result piles pressure ahead of May 7 local elections where Labour expects heavy losses. Reform leader Farage alleged “sectarian voting and cheating” without evidence. Election observers reported high levels of family voting at 68% of polling stations.
Zaporizhzhia Nuclear Truce: IAEA Brokers Fourth Local Ceasefire
Russia and Ukraine agreed on Feb 27 to a local ceasefire around the Zaporizhzhia Nuclear Power Plant — Europe’s largest — to allow repairs to a critical 330kV backup power line. The truce was brokered by IAEA Director General Rafael Grossi, who confirmed that “demining activities are ongoing to ensure safe access for the repair teams.” The plant, occupied by Russian forces since March 2022, has not produced electricity for over three years but still requires external power to keep its six reactors cooled and prevent a catastrophic accident. Since mid-February, the facility has been running on a single remaining power line after the backup was damaged by military activity on Feb 10. This is the fifth IAEA-negotiated local ceasefire at the site. Ukrainian grid technicians will carry out the repairs under IAEA monitoring. Rosatom confirmed the truce through state media. The plant’s control remains a key sticking point in US-mediated peace negotiations, with the proposed trilateral management model (Ukraine-US-Russia) rejected by Kyiv as legitimising occupation. The IAEA has previously warned that persistent military strikes on Ukraine’s electrical infrastructure pose direct risks to all five of the country’s nuclear sites.
Germany Paralysed: Ver.di 48-Hour Transport Strike Hits All 16 States
Buses, trams and U-Bahn trains ground to a halt across Germany on Feb 27 as Ver.di, one of the country’s largest trade unions, launched a 48-hour strike affecting approximately 100,000 workers at 150 transport companies in all 16 federal states. Cities including Berlin, Munich, Hamburg and Frankfurt saw local transit networks shut down entirely from 3am Friday, with services not expected to resume until early Sunday. The action is the second major walkout this month — a warning strike on Feb 2 had already paralysed much of the country’s urban transport. Ver.di deputy chair Christine Behle said “employers clearly still do not understand that there can be no functioning public transport service in the long term if we do not make decisive improvements to working conditions now.” The union is demanding reduced weekly hours and shorter shifts, longer rest periods between shifts, and higher allowances for night and weekend work. Exact demands vary by state. S-Bahn commuter lines, regional trains and long-distance Deutsche Bahn services (ICE, IC) are unaffected as DB is not part of the current bargaining round. Talks are now entering a fifth round, with no resolution in sight and further action possible in March.
Ukraine Peace Talks: Geneva Wrap-Up, Abu Dhabi Next
Ukrainian and US negotiating teams concluded talks in Geneva on Feb 26, with Zelenskyy announcing the next trilateral round will “most likely” take place in Abu Dhabi in early March. Chief negotiator Rustem Umerov said the Geneva session focused on economic recovery and “long-term support mechanisms” including US investment and post-war reconstruction planning. Zelenskyy called for a leaders-level summit, arguing that in Russia’s “personalist regime,” only heads of state can resolve key issues. Russian envoy Kirill Dmitriev also met Witkoff and Kushner in Geneva but did not comment publicly. The Kremlin maintains that Ukrainian troop withdrawal from Donetsk remains a precondition. Meanwhile, the EU Parliament approved the €90B Ukraine loan on Feb 11 (458–140), but Hungary’s veto blocks final disbursement. First payment was targeted for April. UK and French paratroopers are rehearsing rapid deployment as a potential 10,000-troop peacekeeping force takes shape.
05
Sovereign & Credit Pulse
Sovereign & Credit Pulse
| Country | S&P | 10Y Yield | Signal |
|---|---|---|---|
| Germany | AAA | 2.88% | €500B infrastructure fund feeding through; GDP rebounding; fiscal pivot bolsters outlook |
| France | AA− | 3.25% | 2026 budget passed after 3 no-confidence votes; deficit target 5.0% of GDP; ECB rate hold supports borrowing costs |
| United Kingdom | AA | 4.35% | Retail sales +1.8% Jan; Jan surplus £30.4B (double YoY); BoE rate at 3.75%; by-election shakes political stability |
| Hungary | BBB | 6.85% | Isolated in EU over Ukraine veto; election Apr 12; Orbán trailing; energy dispute weighs on FDI sentiment |
06
Power Players
Power Players
Viktor Orbán
PM, Hungary
Pivoting from hardline veto to Druzhba fact-finding proposal; managing election calendar and EU isolation simultaneously; letter to Costa admits “political difficulties” caused by blocking stance; deployed troops to energy sites.
Mette Frederiksen
PM, Denmark
Called snap election 18 months early to ride Greenland-sovereignty polling wave; framing vote as generational choice on European defence autonomy and US relations; platform includes wealth tax and retirement reform.
Keir Starmer
PM, United Kingdom
Suffers humiliating third-place by-election finish in century-old Labour stronghold; rejects resignation calls but faces mounting backbench pressure; Mandelson-Epstein scandal and Downing Street departures compound political woes; May elections loom.
Rafael Grossi
Director General, IAEA
Brokered fifth local ceasefire at Zaporizhzhia NPP to restore backup power supply; dispatched Vienna team to monitor frontline repairs; consistently positioned IAEA as indispensable mediator on nuclear safety amid war; warned persistent strikes on Ukraine’s grid endanger all five nuclear sites.
Volodymyr Zelenskyy
President, Ukraine
Pushing for leaders-level summit after Geneva talks; told Orbán to negotiate “energy ceasefire” with Putin; lobbying for 2027 EU accession date; warned pipeline repairs impossible while Russia attacks repair crews; called for world to “stop Russian oil.”
07
Regulatory & Policy Watch
Regulatory & Policy Watch
EU SANCTIONS
20th anti-Russia sanctions package blocked by Hungary alongside €90B loan; Orbán links both to Druzhba pipeline dispute; enhanced cooperation mechanism may bypass veto for loan but not sanctions; EU Commission delaying Hungary’s €16B SAFE defence loan as counter-pressure.
20th anti-Russia sanctions package blocked by Hungary alongside €90B loan; Orbán links both to Druzhba pipeline dispute; enhanced cooperation mechanism may bypass veto for loan but not sanctions; EU Commission delaying Hungary’s €16B SAFE defence loan as counter-pressure.
ECB POLICY
Deposit rate held at 2.00%, refinancing at 2.15% since Feb 5 meeting. BofA expects final 25bp cut March 2026, then prolonged hold. Euro strength near 1.18 and below-target inflation (1.7%) raising pressure for dovish pivot. Germany/France/Spain flash CPI data due Friday.
Deposit rate held at 2.00%, refinancing at 2.15% since Feb 5 meeting. BofA expects final 25bp cut March 2026, then prolonged hold. Euro strength near 1.18 and below-target inflation (1.7%) raising pressure for dovish pivot. Germany/France/Spain flash CPI data due Friday.
UK FISCAL
BoE rate at 3.75% after Dec 25bp cut; 70% market pricing for another cut to 3.50% at Mar 5 meeting; UK public sector January surplus at £30.4B (double YoY); retail sales +1.8% in Jan. Gorton result intensifies pressure on fiscal policy direction ahead of May elections.
BoE rate at 3.75% after Dec 25bp cut; 70% market pricing for another cut to 3.50% at Mar 5 meeting; UK public sector January surplus at £30.4B (double YoY); retail sales +1.8% in Jan. Gorton result intensifies pressure on fiscal policy direction ahead of May elections.
EU FIREARMS
European Commission proposed new EU-wide rules to tackle trafficking of illicit firearms on Feb 26; aims to make investigations and prosecutions more effective across member states; responds to rising organised crime and terrorism concerns.
European Commission proposed new EU-wide rules to tackle trafficking of illicit firearms on Feb 26; aims to make investigations and prosecutions more effective across member states; responds to rising organised crime and terrorism concerns.
08
Calendar & Watchlist
Calendar & Watchlist
| Date | Event | Why It Matters |
|---|---|---|
| Feb 28 | Germany & France flash CPI | Sets expectations for Eurozone-wide data Mar 3; critical for ECB March meeting calculus |
| Early Mar | Ukraine–Russia–US trilateral talks, Abu Dhabi | Fourth round; Zelenskyy pushing for leaders-level summit format |
| Mar 5 | Bank of England rate decision | Markets pricing 70% chance of cut to 3.50%; UK data mixed |
| Mar 24 | Denmark parliamentary election | Tests Frederiksen’s Greenland mandate; reshapes Nordic defence posture |
| Apr 12 | Hungary parliamentary election | Orbán trailing Magyar; outcome determines EU cohesion on Ukraine support |
| May 7 | UK local & devolved elections | Labour expected to suffer; potential trigger for Starmer leadership challenge |
09
Bottom Line
Bottom Line
Europe’s political centre is under siege from every direction today. In Manchester, a plumber just overturned a century of Labour dominance in a result that may redefine British politics as thoroughly as Brexit did. In Copenhagen, a Social Democrat PM is calling an early election not to escape bad polling but to lock in a sovereignty surge before it fades. In Budapest, an increasingly desperate autocrat is weaponising a damaged oil pipeline to extract concessions from 26 fellow EU members while trailing in his own election polls. And at Zaporizhzhia, Europe’s largest nuclear power plant sits occupied, shut down, and dependent on a single power line while the IAEA brokers yet another local truce just to keep repair crews alive long enough to prevent a catastrophic accident.
The common thread is that Europe’s institutional architecture — designed for consensus, gradualism, and committee rooms — is being stress-tested by events that demand speed, decisiveness, and political courage. The EU’s €90 billion lifeline for Ukraine has been approved by parliament, signed into law, and is desperately needed in Kyiv — yet a single member state’s energy grievance can freeze it. Britain’s first-past-the-post system assumes two dominant parties, but tonight three separate insurgencies are eroding that assumption simultaneously. And the continent’s largest nuclear facility requires a UN-mediated ceasefire just to reconnect a backup power cable — a reminder that the war’s most dangerous risks are not always on the frontline.
Markets are remarkably sanguine through all of this. European equities sit at record highs, earnings season has been strong, and the economic data — while slightly disappointing this week — shows a continent growing at potential with inflation near target. The disconnect between political volatility and market calm may reflect a bet that institutions will ultimately hold, or it may reflect complacency. The next eight weeks — from German and French CPI prints through the Danish and Hungarian elections — will test which interpretation is correct.