German Chancellor Friedrich Merz marks his first anniversary today, with just 15 percent of Germans expressing a positive opinion of his work — the lowest rating ever recorded for any sitting chancellor. The Alternative für Deutschland leads the CDU 28 percent to 24 percent in the May 2 INSA poll.
The United Kingdom is 24 hours from the May 7 local elections, with voters deciding 5,066 English councillor seats across 136 councils plus the Scottish Parliament and the Senedd in Wales. Italy’s operational 2026 budget pushes public debt to 137.4 percent of GDP with 0.7 percent growth — among the lowest in Europe.
France’s Macron and Britain’s Starmer co-chaired the April 17 International Summit on the Strait of Hormuz. Eurovision faces its largest boycott since 1970.
- ▸Merz year-one: 15% approval, AfD 28% vs CDU 24% — 75 percent of German voters say the coalition is failing and 58 percent say it will not survive until the scheduled 2029 election.
- ▸UK 24 hours to May 7 vote — 5,066 councillors across 136 English councils plus Scottish Parliament and Senedd Wales, with PollCheck projecting 57 councils to change control.
- ▸Eurovision largest boycott since 1970 — Spain, Iceland, Ireland, Slovenia, and the Netherlands all withdraw, leaving the “Big Five” incomplete for the first time since 2011.
01Merz marks first anniversary at record 15 percent approval as AfD leads CDU 28 to 24 percent and 75 percent of voters say coalition is failing
German Chancellor Friedrich Merz reaches the first anniversary of his May 6, 2025 swearing-in today with what the Irish Times called “a bitter year” defined by record-low approval ratings, coalition strain, and the deepest crisis in transatlantic relations of the post-1945 cycle. Forschungsgruppe Wahlen polling reported by the Irish Times confirms that just 15 percent of Germans now have a positive opinion of Merz — the lowest-ever rating for any sitting Chancellor. The polling agency separately found voters’ problem is not the Berlin coalition of Christian Democratic Union and Social Democratic Party but “solely the person of Friedrich Merz.” An INSA survey published May 2 placed the Alternative für Deutschland at 28 percent against the CDU’s 24 percent — a four-point gap. About 75 percent of voters told INSA the coalition was failing, and 58 percent said it would not survive until the scheduled 2029 election.
The structural-economic backdrop is the cumulative pressure documented by Brussels Signal’s May 6 anniversary analysis. Europe’s largest economy has barely grown since the pandemic. After two years of recession and a near-flat 2025, official forecasts now point to growth of approximately 0.5 percent in 2026, even that figure being revised down because of the Iran war and the closure of the Strait of Hormuz. The European Commission says member states have spent an extra €25 billion on energy since the war began. The Berlin coalition has resorted to slashing the mineral oil tax by 17 cents per litre for two months in an attempt to soothe motorists. Merz himself admitted in a recent statement that “the war in Iran is the real cause of the problems we also have in our own country.” German media reported that Merz shouted at his Vice-Chancellor and Finance Minister, Lars Klingbeil, during a crisis meeting on the energy package.
The political-stability question intensifies through the autumn 2026 cycle. SPD co-leader and labour minister Bärbel Bas used the May Day rally to denounce the Conservative welfare cuts as “despicable” and warned of a “swansong” for the German welfare state. Merz responded that “compromise is not a one-way street.” Saxony-Anhalt heads to the polls in September, with the AfD potentially projected to win a minister-president position — what would be the first AfD-led state government. Merz has ruled out cooperation with the AfD via the so-called cordon sanitaire, leaving the SPD as his only path to a majority. The structural-political question is whether the November 2026 budget cycle can be navigated without coalition rupture. In a recent Der Spiegel interview, Merz argued Germans expect democratic politics to work like a delivery service and that the country’s “prosperity illusion will not hold.” Asked on television what advice he would give the man who took the chancellor’s oath a year ago, he had a one-word answer: “Patience.”
LATAM Read Merz’s record-low first-anniversary approval combined with the AfD’s structural lead operationalises the most consequential central-European political-economic divergence since reunification. Brazilian, Mexican, and Argentine euro-and-bund allocators with German exposure should treat the Saxony-Anhalt September election and the November budget cycle as the binding political-risk repricing windows for the rest of 2026. Background: yesterday’s Europe intelligence brief.
02UK 24 hours from May 7 vote with 5,066 councillors and devolved Scotland and Wales elections as PollCheck projects 57 councils to change control
The United Kingdom is 24 hours from the May 7, 2026 local elections, with voters deciding 5,066 English councillor seats across 2,969 wards on 136 English local authorities — comprising all 32 London borough councils, 32 metropolitan boroughs, 18 unitary authorities, 6 county councils, and 48 district councils — plus six directly elected mayors in England, the Scottish Parliament, and the Senedd in Wales per the Wikipedia tracking. Most of these seats were last fought in 2022. PollCheck’s ward-level projection covering all 136 English councils now estimates that 57 councils will change control on May 7. The site’s analysis identifies Essex, Norfolk, and Suffolk county councils as projected to flip to Reform UK, with Labour projected to lose control in Wigan, Sunderland, and Barnsley. Reform contested wards for the first time at the local level, having gone from “near-zero local presence in 2022 to polling 27 percent or more nationally.” Labour polled 35 percent when most seats up in 2026 were last fought; it now polls around 20 percent.
The campaign architecture intensified through the final weeks. Conservative leader Kemi Badenoch launched the Conservative campaign on March 19 at Sinfonia Smith Square in Westminster, London. Liberal Democrat leader Ed Davey launched the Lib Dem campaign on March 24 at Lovelace Lodge in East Horsley, Surrey. Reform UK’s Nigel Farage launched the campaign on March 10 with 1,500 supporters at GG’s restaurant in Newport on the Isle of Wight, calling this year’s set of local elections the “single most important event” before the next general election. Farage announced January 1 he wanted to spend “every single penny” — more than £5 million over four months on a mass direct-mail and social-media campaign. Reform UK received a £9 million donation from Christopher Harborne in August 2025. The Greens, under leader Zack Polanski, are projected to lead the most votes in four to six London boroughs and could take outright control of Hackney per the Sunday Guardian’s May 6 polling synthesis. The Greens launched on April 9. Your Party announced April 2 it would endorse 250 candidates, a majority being independents.
The structural-political backdrop remains the Mandelson-Epstein scandal, the broader unpopularity of the Starmer government, and the institutional unhappiness with welfare, housing, and migration policy. Sharon Graham, General Secretary of Unite, said in her March 20 speech to refuse workers near a waste depot in Tyseley, Birmingham, that Labour will be “decimated” in the upcoming local elections and should “hang their heads in shame.” Polymarket prices Starmer Out by June 30 at 41.5 percent. The structural-political read is that the May 7 architecture combined with the Reform UK projected sweep make the next 24-hour window the highest-volatility political-risk repricing event since the September 2022 Truss mini-budget. Four combined-authority mayoral elections — Greater Essex, Hampshire and the Solent, Norfolk and Suffolk, and Sussex and Brighton — were delayed to 2028, having been originally scheduled for 2026. The Electoral Commission criticised what it called “unprecedented uncertainty” in the December 2025 government invitation to 63 councils to request postponement.
LATAM Read The May 7 vote operationalises the binding political-risk repricing event for the post-2024 UK political cycle. Brazilian, Mexican, and Argentine sterling-and-gilt allocators should treat the next 24-hour window and Friday county results as the structural-volatility repricing baseline.
03Italy’s 2026 budget pushes public debt to 137.4 percent of GDP with 0.7 percent growth among lowest in Europe as €4.5 billion bank levy operationalises
Italian Prime Minister Giorgia Meloni’s 2026 budget, given final parliamentary approval on December 30, 2025 and operational since January, pushes Italian public debt to 137.4 percent of GDP — proportionally the second-highest in the eurozone after Greece — from 134.9 percent in 2025 per the Treasury’s tracking and Reuters reporting. The budget aims to lower the 2026 fiscal deficit to 2.8 percent of GDP from a targeted 3 percent in 2025, paving the way for Italy’s exit from the European Commission’s excessive deficit procedure in 2026. The full-year growth target is just 0.7 percent — among the lowest in Europe alongside Germany. The bill entails tax cuts and spending hikes worth approximately €22 billion in 2026, mainly benefiting low- and middle-income workers and firms investing in high-tech capital equipment. The €4.5 billion bank levy framework is now in operational implementation per Glass Almanac’s tracking.
The structural-economic question is whether the bank-levy architecture can absorb without compromising the broader credit-flow framework. The European Central Bank warned that the budget could lead to domestic banks cutting their already modest flow of credit to families and firms and could hurt investors’ confidence in Italy. The bank-and-insurance contribution covers approximately €4 billion in 2026 within a broader plan to raise more than €11 billion from the financial sector through 2028. Tax hikes include the doubling of the existing levy on the purchase of shares and other financial instruments — the so-called Tobin Tax — aiming to garner around €1 billion over three years. The Treasury forecast in September that the politically sensitive tax burden would rise to 42.8 percent this year from 41.7 percent in 2022, when Meloni took office. Among last-minute changes, senators approved an amendment stating that the gold reserves held by Italy’s central bank belong to “the people” — an initiative that drew criticism from the European Central Bank.
Meloni told reporters via X after the December 30 final approval that “the budget is serious and responsible, built in a challenging context, which concentrates the limited resources available on families, work, businesses and health care.” Elly Schlein, leader of Italy’s main opposition centre-left Democratic Party, said the government was pursuing a damaging policy of budgetary austerity that was not doing enough to boost Italy’s lacklustre economy. Approximately €5 billion is directed to healthcare in 2026, expected to finance the recruitment of more than 6,000 nurses and approximately 1,000 doctors. Italy will introduce a levy of €2 on parcels valued up to €150 sent from non-EU countries, targeting online platforms — a structural shift in the post-Trump-administration commercial framework. Italy’s Africa CEO Forum Kigali participation May 14-15 covered in yesterday’s intelligence brief continues the Mattei Plan continental positioning.
LATAM Read Italy’s 137.4 percent debt projection and the 0.7 percent growth among Europe’s lowest confirm the structural southern-European fiscal-credibility cycle. Brazilian and Mexican euro-and-BTP allocators with Italian exposure should treat the EU excessive-deficit-procedure exit timing and the bank-levy implementation as binding signals for Q3 sovereign-debt repricing.
04France’s Lecornu government continues post-no-confidence as Macron-Starmer April 17 Hormuz Joint Statement and Le Pen July 7 Court of Appeal anchor strategic positioning
French Prime Minister Sébastien Lecornu survived two no-confidence motions on January 23, 2026, filed by La France Insoumise and the Rassemblement National over his efforts to pass the government’s budget through rarely-invoked provisions of the constitution per Wikipedia’s France 2026 timeline. The Lecornu government continues to operate under the Renaissance umbrella alongside Defence Minister Catherine Vautrin. President Emmanuel Macron and British Prime Minister Keir Starmer co-chaired the International Summit on the Strait of Hormuz on April 17, with both governments issuing the Joint Statement on the Strait of Hormuz Maritime Navigation Initiative per the Élysée’s official agenda. The framework operationalises the Franco-British strategic-coordination architecture against the cumulative Iran-war pressure, with France having deployed an aircraft carrier strike group, two helicopter carriers, and eight warships to the eastern Mediterranean.
The structural-political backdrop is the cumulative Macron foreign-policy positioning. Macron has now made 334 international presidential trips to 99 states since his May 14, 2017 inauguration per Wikipedia’s May 2026 update. Macron announced January 15 the deployment of additional military forces to Greenland after a Defense Council meeting amid US threats to annex the island. Macron announced an increase in France’s nuclear weapons stockpile for the first time in decades, citing global threats including Russia’s war on Ukraine, China’s growing military power in Asia, and changing US defence priorities. Denmark and France made an agreement on strategic nuclear deterrence — though French nuclear weapons are not to be located on Danish territory. France deployed Rafale fighter jets to the UAE on March 3 in response to Iranian attacks. A French soldier was killed and six others injured in a drone attack on their base in Mala Qara, Iraq, on March 12. The French Navy boarded the suspected Russian shadow fleet vessel Deyna in the Mediterranean Sea on March 20.
The structural-political backdrop continues to be the May 13, 2027 term expiration. The Bardella positioning awaits the July 7, 2026 Le Pen Court of Appeal hearing, which will define the Rassemblement National’s 2027 candidate architecture. Macron’s Polymarket-tracked approval at 19 percent favourable remains last among European leaders YouGov tracks. The cumulative architecture means France’s Hormuz leadership and the post-Trump-administration European strategic-political reset operate against the domestic political-credibility floor through the 2027 cycle. The first round of French municipal elections took place on March 15, 2026 — providing an early indicator of the broader political baseline. Macron earlier congratulated Hungary’s Péter Magyar on his April 12 election victory via X and via direct phone call, marking the first explicit Élysée endorsement of the Tisza framework.
LATAM Read The Macron-Starmer April 17 Joint Hormuz Summit and the Lecornu government’s continued operation against domestic political-credibility pressure confirm the structural-political-and-strategic divergence inside the post-2024 European cycle. Brazilian and Argentine corporate-strategy desks with French and British partnership exposure should treat the July 7 Le Pen ruling and the 2027 French presidential cycle as binding signals for Q3 positioning.
05Eurovision 2026 Vienna faces largest boycott since 1970 as Spain, Iceland, Ireland, Slovenia, and Netherlands all withdraw over Israel participation
Eurovision 2026, scheduled for May 12-14 (semi-finals) and May 16 (final) at the Wiener Stadthalle in Vienna, faces the largest boycott in the contest’s history since 1970, with broadcasters from 35 countries participating — two fewer than in 2025 and the smallest number since 2003 per Wikipedia’s official tracking. Iceland (RÚV), Ireland (RTÉ), the Netherlands (AVROTROS), Slovenia (RTVSLO), and Spain (RTVE) — all of which participated in 2025 — have opted not to take part in protest at the inclusion of Israel in the context of the Gaza war and the Israeli government’s attempts to influence the results in the previous two editions. The absence of Spain marks the first time the “Big Five” has been incomplete since its 2011 expansion with Italy. The Big Five — France, Germany, Italy, Spain, and the United Kingdom — were given automatic-qualifier status in recognition of their financial contributions to the European Broadcasting Union.
The structural-cultural backdrop is the institutional reset across multiple national broadcaster levels. Slovenia’s RTVSLO announced on December 4 — following the EBU general assembly vote — its boycott of the event, neither competing in nor broadcasting the contest. The Slovenian broadcaster will instead air a slate of programmes called “Voices of Palestine” from May 10 to May 20 in lieu of the contest. Switzerland’s Nemo, who won for Switzerland in 2024, returned their trophy to the EBU in protest. Ireland’s Charlie McGettigan, who won for Ireland in 1994 alongside Paul Harrington, later said he would return his trophy as well. The Vienna event is presented by Victoria Swarovski and Michael Ostrowski, with Emily Busvine as green-room host. Bulgaria, Romania, and Moldova are returning after multi-year absences. Estonia’s Vanilla Ninja and San Marino’s Senhit are the contest’s two returning artists.
The structural-political question is whether the European Broadcasting Union framework can absorb the cumulative reputational and institutional pressure from the boycott while maintaining the contest’s commercial-cultural viability through the 2027 cycle. The EBU has been characterised by several media outlets as facing “the biggest crisis in the history of the Eurovision Song Contest.” The friendship-gift transfer between Conradin Cramer, president of the Basel-Stadt government representing 2025 host city Basel, and Michael Ludwig, the mayor and governor of Vienna, took place at the January 12 ceremony. The cumulative architecture establishes Vienna as the institutional anchor for the boycott-defined Eurovision and the structural-cultural-political signal for the rest of 2026.
LATAM Read The Eurovision boycott confirms the institutional-cultural alignment of southern and northern European public broadcasters on the Israel framework. Brazilian and Mexican broadcasting and entertainment-industry desks with European partnership exposure should treat the post-Vienna calibration as the binding signal for Q3 cultural-content positioning.
06Continental cascade — Magyar government Day 2, Sweden September 13, Denmark Frederiksen lost majority, and Slovakia-Poland-Estonia-Ireland Magyar congratulations
Hungary’s Péter Magyar government enters Day 2 of operation following yesterday’s inauguration covered in yesterday’s intelligence brief, with the forint at a four-year high and the €18 billion frozen-EU-funds unlock pursuit operational. Sweden’s general election remains scheduled for September 13, 2026 with Prime Minister Ulf Kristersson congratulating Magyar’s victory and saying the election “marks a new chapter in the history of Hungary.” Denmark’s incumbent Prime Minister Mette Frederiksen’s coalition lost its majority in the Folketing per Wikipedia’s tracking of the March 2026 Danish general election cycle. Slovakia’s Prime Minister Robert Fico continues to position as the only post-Magyar opponent of Brussels per Pravda France’s tracking. Slovak President Peter Pellegrini and Magyar continue to clash over the Felvidék terminology covered in yesterday’s intelligence brief.
The continental institutional-political response includes Polish Prime Minister Donald Tusk’s congratulation of Magyar — Pravda’s tracking documented Tusk as “even more happy than Peter Magyar himself for his victory.” Estonian Prime Minister Kristen Michal said “Hungarians have made a historic choice for a free and strong Hungary in a united Europe, rejecting forces that ignore their interests.” Irish Taoiseach Micheál Martin commended “the Hungarian people who turned out in such high numbers to exercise their democratic choice.” UK Prime Minister Keir Starmer called Magyar’s win “a historic moment, not only for Hungary, but for European democracy.” German Chancellor Friedrich Merz said: “Let’s join forces for a strong, secure and, above all, united Europe.” Swiss Eurovision boycott extends into the broader Swiss-EU package Q3 vote schedule. Norway’s ETIAS 2026 implementation continues. Storm Kristin caused €6 billion in damage in central Portugal in January, with 15 deaths and 2,000 injuries — the largest single-event continental-European loss of Q1 2026 per Wikipedia’s tracking.
LATAM Read The continental cascade across Hungary, Sweden, Denmark, Slovakia, Poland, Ireland, Estonia, and the broader European-political response to the Magyar transition confirms the structural-political consolidation of Brussels-aligned framework against the residual Fico-Slovakia opposition. Brazilian and Argentine continental-strategy desks should track Sweden’s September 13 election as the binding signal for the post-Hungary structural-political reset.
| INSTRUMENT | LEVEL | MOVE | NOTE |
| FTSE 100 | 8,684 | ▼ −0.41% | Pre-vote sterling pressure; Polymarket Starmer Out 41.5% Jun 30 |
| DAX | 19,318 | ▼ −0.62% | Merz year-one 15% approval; AfD-CDU 28-24 INSA |
| CAC 40 | 7,621 | → −0.10% | Defence stocks lifting; Macron 19% approval baseline |
| FTSE MIB | 36,082 | ▼ −0.27% | Bank levy implementation; 137.4% debt watch |
| IBEX 35 | 12,438 | ▼ −0.38% | Eurovision boycott + Israel rupture compress sentiment |
| BUX (Hungary) | 87,180 | ▲ +0.88% | Forint 4-year high day 2; €18B EU funds unlock track |
| GBP/USD | 1.2418 | ▼ −0.16% | Pre-vote 24-hour countdown; Starmer Out pricing |
| EUR/USD | 1.0840 | ▼ −0.11% | Range-bound ahead of ECB June meeting |
| 10Y Bund | 2.86% | → +2 bp | 3.00% break is structural-rerating trigger watch |
| 10Y BTP | 3.74% | → +1 bp | BTP-Bund spread 88 bp; Italian fiscal-credibility cycle |
What is Friedrich Merz’s approval rating on his first anniversary as German Chancellor?
Friedrich Merz reaches his first anniversary as German Chancellor today May 6, 2026 with just 15 percent of Germans expressing a positive opinion of his work per Forschungsgruppe Wahlen — the lowest-ever rating for any sitting chancellor. An INSA survey published May 2 placed the AfD at 28 percent against the CDU’s 24 percent. About 75 percent of voters told INSA the coalition was failing, and 58 percent said it would not survive until the scheduled 2029 election. Merz himself told Der Spiegel that “the prosperity illusion will not hold.”
When are the UK local elections and what is at stake?
The UK local elections take place on Thursday May 7, 2026 — 24 hours from today. Voters decide 5,066 English councillor seats across 2,969 wards on 136 English local authorities, plus six directly elected mayors, the Scottish Parliament, and the Senedd in Wales. PollCheck projects 57 councils will change control. Reform UK is projected to take Essex, Norfolk, and Suffolk county councils. Labour is projected to lose Wigan, Sunderland, and Barnsley. Reform UK polled 27 percent or more nationally in pre-vote tracking, up from near-zero in 2022.
What is Italy’s 2026 budget framework and what is the public debt level?
Italy’s 2026 budget, given final parliamentary approval on December 30, 2025 and operational since January, pushes public debt to 137.4 percent of GDP from 134.9 percent in 2025 — proportionally the second-highest in the eurozone. The growth target is 0.7 percent — among the lowest in Europe. The budget includes a €4.5 billion bank levy, broader €11 billion financial-sector contributions through 2028, and a doubled Tobin Tax. Italy is on track to exit the European Commission’s excessive deficit procedure in 2026.
What is the Macron-Starmer Hormuz Joint Statement?
French President Emmanuel Macron and British Prime Minister Keir Starmer co-chaired the International Summit on the Strait of Hormuz on April 17, 2026, with both governments issuing the Joint Statement on the Strait of Hormuz Maritime Navigation Initiative per the Élysée’s official agenda. France has deployed an aircraft carrier strike group, two helicopter carriers, and eight warships to the eastern Mediterranean. The framework operationalises Franco-British strategic coordination against the cumulative Iran-war pressure.
Which countries are boycotting Eurovision 2026?
Iceland (RÚV), Ireland (RTÉ), the Netherlands (AVROTROS), Slovenia (RTVSLO), and Spain (RTVE) have all withdrawn from Eurovision 2026 Vienna in protest at the inclusion of Israel in the context of the Gaza war. This marks the largest boycott since 1970 — only 35 countries are participating, two fewer than in 2025 and the smallest number since 2003. The absence of Spain marks the first time the “Big Five” has been incomplete since its 2011 expansion. RTVSLO will instead air “Voices of Palestine” from May 10 to May 20.
When does Hungary’s Magyar government enter operation?
Péter Magyar took office on May 5, 2026 as Hungary’s Prime Minister, ending Viktor Orbán’s 16-year continuous Fidesz-KDNP rule. The Tisza Party won the April 12 election with 138 seats in the 199-member National Assembly, ultimately securing 141 seats after diaspora ballots — a two-thirds constitutional supermajority. The forint has rallied to one of its strongest levels in four years on reduced political-risk premiums. The government’s most urgent priority is to unlock approximately €18 billion in frozen EU funds, with €10 billion at risk of expiring at the end of August.
Updated: 2026-05-06T07:30:00Z by Europe Intelligence Desk