Key events
Germany’s growth forecast halved on fears over impact of Middle East war
Over in Germany, leading economic institutes cut their growth forecasts for the country, warning that surging inflation resulting from the Middle East war and rising energy costs would hit Europe’s top economy hard.
The German economy should grow by 0.6% in 2026, the seven institutes said, down from a September forecast of 1.3%, while inflation is predicted to stand at 2.8%, up from 2.0%.
Ukrainian drone manufacturers to meet with Romania to discuss joint production using EU funds
Meanwhile, Ukrainian drone manufacturers are meeting Romanian defence ministry and army officials in Bucharest this week to discuss potential joint production under a new European Union rearmament funding mechanism, the ministry said in a statement quoted by Reuters.
Romania, an EU and Nato state, shares a 650-km land border with Ukraine and has had drones breach its airspace and fragments fall on its territory repeatedly since Russia began attacking Kyiv’s ports located across the Danube from Romania.
Reuters noted that the EU has allotted Romania €16.6bn under its new rearmament initiative SAFE, which will begin later this year, and defence minister Radu Miruță said the country wanted to spend 200 million euros for joint drone production.
Fifteen Ukrainian companies will continue discussing the project in Bucharest in the coming days, he added.
Morning opening: Zelenskyy hopes for ‘results’ in talks with US over Easter ceasefire
Jakub Krupa
With most eyes still on the Middle East, and growing US frustrations with European Nato allies’ over their decisions to deny the use of their bases for offensive operations in Iran, there is often much less focus on Ukraine.
But the two universes will collide today, as the wartorn country’s president, Volodymyr Zelenskyy, will sit down for talks with the US negotiators to discuss the last steps to end the Russian invasion of Ukraine.
Speaking to EU foreign ministers visiting Ukraine yesterday, Zelenskyy brought up his proposal of a ceasefire over the Easter holidays, saying he wanted the US to support this idea.
“We are waiting for a response from Russia. Tomorrow I will speak with the American team, including on this issue. We hope for results,” he said.
I will keep an eye for the latest updates.
Meanwhile, Europe is increasingly thinking about how to soften the economic blow of the continuing Middle East war and energy disruptions, with growing concerns about what it could mean for several EU countries who are particularly vulnerable to any disruptions to imports from the Gulf. Gulp.
I will bring you all the latest here.
It’s Wednesday, 1 April 2026, it’s Jakub Krupa here, and this is Europe Live.
Good morning.