Category: Ukraine

  • MIL-OSI USA: Fischer Questions John Phelan at Confirmation Hearing

    US Senate News:

    Source: United States Senator for Nebraska Deb Fischer

    Today, U.S. Senator Deb Fischer (R-Neb.), a member of the Senate Armed Services Committee, questioned John Phelan at the confirmation hearing on his nomination to be Secretary of the Navy.

    During the hearing, Senator Fischer asked Phelan about his commitment to ensure that the Department of Defense complies with existing statutory requirements to continue funding the development of the nuclear-armed sea-launched cruise missile (SLCM-N). She also asked about his plans to increase munitions production and address longstanding challenges with the shipbuilding industrial base.

    Click the image above to watch a video of Senator Fischer’s questioning

    Click here to download audio

    Click here to download video

    Fischer Questions Phelan:

    Senator Fischer: I appreciate you putting yourself forward to serve your country in this capacity. Mr. Phelan, in your advanced policy questions to the committee, you stated: “If confirmed, I will ensure that the Department complies with existing statutory requirements to continue funding development of the nuclear sea-launched cruise missile.” Do you stand by that statement? Yes, or no?

    John Phelan: Senator, I think the nuclear sea-launched cruise missile is a very important program. I have not been read in on the briefings on that, but I know it is a critical component to our defense.

    Senator Fischer: 
    And will you follow those statutory requirements?

    John Phelan: Yes, I will.

    Senator Fischer: Thank you, sir. To follow up on the shipbuilding part that’s been discussed by the chairman, the Strategic Posture Commission recommended the establishment of additional shipyards dedicated to nuclear-powered ships and submarines. If confirmed, would you be open to exploring that option?

    John Phelan: Yes, I would, Senator. I think it’s a very important part of our strategic focus.

    Senator Fischer: What we’ve learned from the war in Ukraine is that the United States’ defense industrial base was not equipped to scale up production rates of munitions for these modern conflicts. Is it your view that the United States must further increase munition production capacity?

    John Phelan: Yes, Senator, I think we’re at a critical shortage, and we have far too much dependence on one facility.

    Senator Fischer: Do you have any initial thoughts that you can share with us about steps that maybe you would be taking to ensure that the Navy has the munitions stockpiles that are required to meet the needs of the combatant commanders?

    John Phelan: Yes, Senator. I think, as you know, we are short munitions, as we’ve seen. I think we need to create more of a manufacturing base and incentivize more munitions plants in order to supplement what we already have. So, if confirmed, I intend to focus on this very quickly and get that resolved because I think we’re at a dangerously low level from a stockpile perspective, and as well as new.

    So I will use the skills that I had in the business world in terms of incenting. I think a lot of that also comes with working with you and the committee and Congress because we do need to send signals to the private sector to incentivize them to build these plants to get going. So, ordering and giving them a contract to build I think will be critical. And I’d like to believe we should be able to create a win-win between the private sector and for the taxpayer of the United States.

    Senator Fischer: You mentioned contracts with shipbuilding too: to be able to do a review of those contracts to make sure that there are incentives, so that private companies can make profits with that. You mentioned contracts again now. Would you look at that as well – look in depth on current contracts that we have with regards to our munitions? And if maybe what we’re looking at here are roadblocks in being able to move ahead with being able to provide these munitions?

    John Phelan: Thank you for the question, Senator. Yes, I intend to sit down – day one – and we are going to go through every contract that we have and understand what exactly they say; what flexibility they do or do not give us; what contract needs to change or not change and why. I intend to do the same thing as it relates to an audit.

    I need to understand why the Navy cannot pass an audit. The Marine Corps has done it two years running now. They deserve a lot of credit for that. I think that’s a great thing. We are going to change and create much more accountability and understanding, because all of these things affect readiness. And as I said in my statement, readiness is critical, and I think we are at a very critical inflection point, particularly versus our peer nuclear adversaries.

    So these are all things that are a reflection of a culture, as I mentioned, in decay. We really need to have a tight focus on these things. If we don’t know where our inventory is, how can we have a training mission? You know, I’ve heard stories of training missions that have failed because the equipment wasn’t there, and so we ended up losing that money, and that’s not good.

    Senator Fischer: Thank you very much, sir.

    MIL OSI USA News

  • MIL-OSI United Kingdom: PM meeting with President Trump: 27 February 2025

    Source: United Kingdom – Executive Government & Departments

    Press release

    PM meeting with President Trump: 27 February 2025

    Prime Minister Keir Starmer met President Trump in the White House.

    Prime Minister Keir Starmer and President of the United States Donald Trump met today in the White House. 

    The leaders discussed the depth of the special relationship between their two nations and their commitment to shared security and prosperity.  

    They spoke about the fair, balanced and reciprocal economic relationship that the two countries enjoy. They agreed their teams should work together to deepen this relationship, and to work together to agree a trade deal focused on tech.  

    On defence and security, they agreed that the strength of the UK and US’s intelligence and defence relationship is unrivalled. The Prime Minister underlined the announcement he made this week to increase defence spending to 2.5%  

    The leaders agreed that on Ukraine, talks must work towards a lasting peace. The Prime Minister said the UK is ready to play a leadership role on supporting Ukraine’s future security. They discussed their shared commitment to a ‘peace through strength’ approach and that their teams should collaborate on this. 

    The President accepted an invitation on behalf of His Majesty The King for an unprecedented second State Visit to the United Kingdom.

    Updates to this page

    Published 28 February 2025

    MIL OSI United Kingdom

  • MIL-OSI United Nations: US funding cuts confirmed, ending lifesaving support for women and girls

    Source: United Nations 2

    Humanitarian Aid

    The United States has cut $377 million worth of funding to the UN reproductive and sexual health agency, UNFPA, it was confirmed on Thursday, leading to potentially “devasting impacts”, on women and girls.

    “At 7pm on 26 February, UNFPA was informed that nearly all of our grants (48 as of now) with USAID and the US State Department have been terminated,” the UN agency said in a statement.

    “This decision will have devastating impacts on women and girls and the health and aid workers who serve them in the world’s worst humanitarian crises.”

    The USAID grants were designated to provide critical maternal healthcare, protection from violence, rape treatment and other lifesaving care in humanitarian settings.

    This includes UNFPA’s work to end maternal death, safely deliver babies and address horrific violence faced by women and girls in places like Gaza, Sudan and Ukraine.

    From Afghanistan to Ukraine

    The UN agency partners with 150 countries to provide access to a wide range of sexual and reproductive health services.

    Its goal is ending unmet needs for family planning, preventable maternal death, gender-based violence and harmful practices, including child marriage and female genital mutilation, by 2030.

    “These termination notices include grants for which we had previously received humanitarian waivers, as they were considered lifesaving interventions for the world’s most vulnerable women and girls,” UNFPA said.

    The grants funded programmes in countries including Afghanistan, Chad, the Democratic Republic of the Congo, Haiti, Mali, Sudan, Syria and its neighbouring countries, as well as Ukraine.

    MIL OSI United Nations News

  • MIL-OSI United Kingdom: Prime Minister’s remarks at the White House Press Conference: Thursday 27 February

    Source: United Kingdom – Executive Government & Departments

    Speech

    Prime Minister’s remarks at the White House Press Conference: Thursday 27 February

    Prime Minister Keir Starmer’s opening remarks at the White House press conference.

    Thank you very much, Mr President.

    Thank you for your hospitality, thank you for your leadership.

    This has been a very good and very productive visit.

    And with your family roots in Scotland…

    And your close bond with His Majesty the King…

    It’s good to know…

    That the United Kingdom has a true friend in the Oval Office.

    And it was so good to see the bust of Winston Churchill back in its rightful place just a moment ago.

    But look, in a moment of real danger around the world…

    This relationship matters more than ever.

    We remain each other’s first partner in defence…

    Ready to come to the other’s aid…

    To counter threats, wherever and whenever they may arise.

    No two militaries are more intertwined than ours.

    No two countries have done more together to keep people safe.

    And in a few weeks’ time we’ll mark VE Day…

    The 80th anniversary of Victory in Europe.

    Britain and America fought side-by-side to make that happen –

    One of the greatest moments in our history.

    We stand side-by-side still, today…

    And we’re focused now…

    On bringing an enduring end to the barbaric war in Ukraine.

    Mr President, I welcome your deep, personal commitment…

    To bring peace and stop the killing.

    You have created a moment of tremendous opportunity…

    To reach an historic peace deal –

    A deal that would be celebrated in Ukraine and around the world.

    That is the prize.

    But we have to get it right.

    There’s a famous slogan in the United Kingdom…

    From after the Second World War –

    That is that we have to “win the peace.”

    And that’s what we must do now.

    Because it can’t be a peace that rewards the aggressor…

    Or that gives succour to regimes like Iran.

    We agree – history must be on the side of the peacemaker…

    Not the invader.

    So the stakes, they could not be higher.

    And we’re determined to work together to deliver a good deal.

    We’ve discussed a plan today…

    To reach a peace that is tough and fair…

    That Ukraine will help to shape…

    That is backed by strength –

    To stop Putin coming back for more.

    And I am working closely with other European leaders on this.

    And I am clear –

    That the UK is ready…

    To put boots on the ground and planes in the air to support a deal.

    Working together with our allies,

    Because that is the only way that peace that will last.

    Mr President, in this new era…

    You’re also right that Europe must step up.

    And let me tell you now –

    I see the growing threats we face…

    And so the UK is all in.

    This year we will be giving more military aid to Ukraine than ever.

    And just this week…

    I have set out how we are shouldering more of the security burden.

    We’re already one of the biggest spenders in NATO…

    And now we are going much further…

    Delivering Britain’s biggest sustained increase in defence spending since the Cold War.

    This isn’t just talk – it’s action.

    Rebalancing the transatlantic alliance…

    Making us all stronger…

    And standing up for our shared values and shared security…

    As Britain always has.

    Now, Mr President…

    It’s no secret we’re from different political traditions…

    But there is a lot that we have in common.

    We believe it’s not taking part that counts…

    What counts is winning.

    If you don’t win – you don’t deliver.

    And we’re determined to deliver for the working people of Britain and America –

    Who want – and deserve – to see their lives improve.

    So we’re both in a hurry to get things done.

    And that’s what the UK and the US do when we work together:

    We win – and we get things done.

    So we’ll do what it takes to keep our people safe… 

    We will also work together…

    To deliver some big economic wins that can benefit us both.

    We have $1.5 trillion invested in each other’s economies…

    Creating over 2.5 million jobs across both economies.

    Our trading relationship is not just strong –

    It is fair, balanced and reciprocal.

    We’re leaders together in so many areas…

    Ranked one and two in the world as investment destinations…

    One and two for universities…

    One and two for Nobel prizes…

    One and two in golf, as well – by the way…

    And we’re the only two western countries with trillion dollar tech sectors –

    Leaders in AI…

    And look, we take a similar approach on this issue.

    Instead of over-regulating these new technologies…

    We’re seizing the opportunities they offer.

    So we have decided today to go further…

    To begin work on a new economic deal…

    With advanced technology at its core…

    Look – our two nations, together…

    Shaped the great technological innovations of the last century.

    We have a chance now…

    To do the same for the 21st century…

    I mean – artificial intelligence could cure cancer…

    That could be a moonshot for our age…

    And that’s how we will keep delivering for our people.

    There are so many opportunities.

    Keep our nations strong…

    And fulfil the promise of greatness…

    That has always defined this relationship.

    Finally, to underline the importance of this bond…

    It was my privilege and honour to bring a letter with me today –

    From His Majesty the King…

    Not only sending his best wishes…

    But also inviting the President and the First Lady to make a State Visit to the United Kingdom…

    An unprecedented second State Visit – this has never happened before.

    It’s so incredible it will be historic.

    And I’m delighted that I can go back to His Majesty The King and tell him that President Trump has accepted the invitation.

    So thank you.

    Our teams will now work together to set a date.

    Mr President, we look forward to welcoming you in the United Kingdom.

    Thank you once again.

    Updates to this page

    Published 27 February 2025

    MIL OSI United Kingdom

  • MIL-OSI: HP Inc. Reports Fiscal 2025 First Quarter Results

    Source: GlobeNewswire (MIL-OSI)

    PALO ALTO, Calif., Feb. 27, 2025 (GLOBE NEWSWIRE) — HP (NYSE: HPQ)

    • First quarter GAAP diluted net earnings per share (“EPS”) of $0.59, within the previously provided outlook of $0.57 to $0.63 per share
    • First quarter non-GAAP diluted net EPS of $0.74, within the previously provided outlook of $0.70 to $0.76 per share
    • First quarter net revenue of $13.5 billion, up 2.4% from the prior-year period
    • First quarter net cash provided by operating activities of $0.4 billion, free cash flow of $0.1 billion
    • First quarter returned $0.4 billion to shareholders in the form of share repurchases and dividends
    • Estimated $300 million increase in Future Ready plan annualized gross run rate structural cost savings, to $1.9 billion by end of fiscal year 2025 and estimated $150 million increase in restructuring and other charges to approximately $1.2 billion by the end of fiscal year 2025
    HP Inc.’s fiscal 2025 first quarter financial performance
      Q1 FY25   Q1 FY24   Y/Y
    GAAP net revenue ($B) $ 13.5     $ 13.2     2.4 %
    GAAP operating margin   6.3 %       7.1 %     (0.8) pts
    GAAP net earnings ($B) $ 0.6     $ 0.6     (9)%
    GAAP diluted net EPS $ 0.59     $ 0.62     (5)%
    Non-GAAP operating margin   7.3 %       8.4 %     (1.1)pts
    Non-GAAP net earnings ($B) $ 0.7     $ 0.8     (13)%
    Non-GAAP diluted net EPS $ 0.74     $ 0.81     (9)%
    Net cash provided by operating activities ($B) $ 0.4     $ 0.1     209 %
    Free cash flow ($B) $ 0.1     $ 0.0     180 %
                       

    Notes to table
    Information about HP Inc.’s use of non-GAAP financial information is provided under “Use of non-GAAP financial information” below.

    Net revenue and EPS results
    HP Inc. and its subsidiaries (“HP”) announced fiscal 2025 first quarter net revenue of $13.5 billion, up 2.4% (up 3.3% in constant currency) from the prior-year period.

    “We are pleased with our Q1 performance, achieving revenue growth for the third straight quarter and advancing our strategy to lead the future of work,” said Enrique Lores, HP President and CEO. “Our progress was fueled by a strong commercial business in Personal Systems and momentum in our key growth areas, including AI PCs. We are focused on taking decisive action to address evolving market conditions in the near-term, while investing in our long-term growth.”

    “In Q1 we drove solid progress against our financial commitments for the year and are raising our Future Ready savings target from $1.6 to $1.9 billion dollars by the end of fiscal year 2025,” said Karen Parkhill, HP CFO. “We are holding our outlook for the year and remain focused on disciplined execution as we continue to invest for the future.”

    First quarter GAAP diluted net EPS was $0.59, down from $0.62 in the prior-year period and within the previously provided outlook of $0.57 to $0.63. First quarter non-GAAP diluted net EPS was $0.74, down from $0.81 in the prior-year period and within the previously provided outlook of $0.70 to $0.76. First quarter non-GAAP net earnings and non-GAAP diluted net EPS excludes after-tax adjustments of $139 million, or $0.15 per diluted share, related to restructuring and other charges, acquisition and divestiture charges, amortization of intangible assets, non-operating retirement-related credits, tax adjustments, and the related tax impact on these items.

    Asset management
    HP’s net cash provided by operating activities in the first quarter of fiscal 2025 was $0.4 billion. Accounts receivable ended the quarter at $4.2 billion, down 5 days quarter over quarter at 28 days. Inventory ended the quarter at $8.4 billion, up 9 days quarter over quarter to 72 days. Accounts payable ended the quarter at $16.5 billion, up 1 day quarter over quarter to 139 days.

    HP generated $70 million of free cash flow in the first quarter. Free cash flow includes net cash provided by operating activities of $374 million adjusted for net investments in leases from integrated financing of $(2) million and net investments in property, plant, equipment and purchased intangible of $302 million.

    HP’s dividend payment of $0.2894 per share in the first quarter resulted in cash usage of $0.3 billion. HP also utilized $100 million of cash during the quarter to repurchase approximately 2.7 million shares of common stock in the open market. HP exited the quarter with $2.9 billion in gross cash, which includes cash and cash equivalents of $2.9 billion, restricted cash of $14 million and short-term investments of $3 million included in other current assets. Restricted cash is related to amounts collected and held on behalf of a third party for trade receivables previously sold.

    Fiscal 2025 first quarter segment results

    • Personal Systems net revenue was $9.2 billion, up 5% year over year (up 5% in constant currency) with a 5.5% operating margin. Consumer PS net revenue was down 7% and Commercial PS net revenue was up 10%. Total units were down 1% with Consumer PS units down 11% and Commercial PS units up 6%.
    • Printing net revenue was $4.3 billion, down 2% year over year (down 1% in constant currency) with a 19.0% operating margin. Consumer Printing net revenue was up 5% and Commercial Printing net revenue was down 7%. Supplies net revenue was down 1% (flat in constant currency). Total hardware units were up 5%, with Consumer Printing units up 7% and Commercial Printing units flat.

    Outlook
    For the fiscal 2025 second quarter, HP estimates GAAP diluted net EPS to be in the range of $0.62 to $0.72 and non-GAAP diluted net EPS to be in the range of $0.75 to $0.85. Fiscal 2025 second quarter non-GAAP diluted net EPS estimates exclude $0.13 per diluted share, primarily related to restructuring and other charges, acquisition and divestiture charges, amortization of intangible assets, non-operating retirement-related credits, tax adjustments, and the related tax impact on these items.

    For fiscal 2025, HP estimates GAAP diluted net EPS to be in the range of $2.86 to 3.16 and non-GAAP diluted net EPS to be in the range of $3.45 to $3.75. Fiscal 2025 non-GAAP diluted net EPS estimates exclude $0.59 per diluted share, primarily related to restructuring and other charges, acquisition and divestiture charges, amortization of intangible assets, non-operating retirement-related credits, tax adjustments, and the related tax impact on these items. For fiscal 2025, HP anticipates generating free cash flow in the range of $3.2 to $3.6 billion.

    HP’s outlook reflects the added cost driven by the current U.S. tariff increases on China, and associated mitigations. The company has made significant progress building a globally diverse supply chain, and by the end of fiscal year 2025, expects more than 90 percent of HP products sold in North America will be built outside of China. China will continue to be an important manufacturing hub for the rest of the world.

    More information on HP’s earnings, including additional financial analysis and an earnings overview presentation, is available on HP’s Investor Relations website at investor.hp.com.

    HP’s FY25 Q1 earnings conference call is accessible via audio webcast at www.hp.com/investor/2025Q1Webcast.

    About HP Inc.
    HP Inc. (NYSE: HPQ) is a global technology leader and creator of solutions that enable people to bring their ideas to life and connect to the things that matter most. Operating in more than 170 countries, HP delivers a wide range of innovative and sustainable devices, services and subscriptions for personal computing, printing, 3D printing, hybrid work, gaming, and more. For more information, please visit http://www.hp.com.

    Use of non-GAAP financial information
    To supplement HP’s consolidated condensed financial statements presented on a generally accepted accounting principles (“GAAP”) basis, HP provides net revenue on a constant currency basis, non-GAAP total operating expense, non-GAAP operating profit, non-GAAP operating margin, non-GAAP other income and expenses, non-GAAP tax rate, non-GAAP net earnings, non-GAAP diluted net EPS, free cash flow, gross cash and net cash (debt) financial measures. HP also provides forecasts of non-GAAP diluted net EPS and free cash flow. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the tables below or elsewhere in the materials accompanying this news release. In addition, an explanation of the ways in which HP’s management uses these non-GAAP measures to evaluate its business, the substance behind HP’s decision to use these non-GAAP measures, the material limitations associated with the use of these non-GAAP measures, the manner in which HP’s management compensates for those limitations, and the substantive reasons why HP’s management believes that these non-GAAP measures provide useful information to investors is included under “Use of non-GAAP financial measures” after the tables below. This additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for net revenue, operating expense, operating profit, operating margin, other income and expenses, tax rate, net earnings, diluted net EPS, cash provided by operating activities or cash, cash equivalents, and restricted cash prepared in accordance with GAAP.

    Forward-looking statements
    This document contains forward-looking statements based on current expectations and assumptions that involve risks and uncertainties. If the risks or uncertainties ever materialize or the assumptions prove incorrect, they could affect the business and results of operations of HP Inc. and its consolidated subsidiaries which may differ materially from those expressed or implied by such forward-looking statements and assumptions.

    All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including, but not limited to, projections of net revenue, margins, expenses, effective tax rates, net earnings, net earnings per share, cash flows, benefit plan funding, deferred taxes, share repurchases, foreign currency exchange rates or other financial items; any projections of the amount, timing or impact of cost savings or restructuring and other charges, planned structural cost reductions and productivity initiatives; any statements of the plans, strategies and objectives of management for future operations, including, but not limited to, our business model and transformation, our sustainability goals, our go-to-market strategy, the execution of restructuring plans and any resulting cost savings (including the fiscal 2023 plan), net revenue or profitability improvements or other financial impacts; any statements concerning the expected development, demand, performance, market share or competitive performance relating to products or services; any statements concerning potential supply constraints, component shortages, manufacturing disruptions or logistics challenges; any statements regarding current or future macroeconomic trends or events and the impact of those trends and events on HP and its financial performance; any statements regarding pending investigations, claims, disputes or other litigation matters; any statements of expectation or belief as to the timing and expected benefits of acquisitions and other business combination and investment transactions; and any statements of assumptions underlying any of the foregoing.   Forward-looking statements can also generally be identified by words such as “future,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “will,” “would,” “could,” “can,” “may,” and similar terms.

    Risks, uncertainties and assumptions that could affect our business and results of operations include factors relating to HP’s ability to execute on its strategic plans, including the previously announced initiatives, business model changes and transformation; the development and transition of new products and services and the enhancement of existing products and services to meet evolving customer needs and respond to emerging technological trends, including artificial intelligence; the use of artificial intelligence; the impact of macroeconomic and geopolitical trends, changes and events, including the ongoing military conflict in Ukraine, continued instability in the Middle East or tensions in the Taiwan Strait and South China Sea and the regional and global ramifications of these events; volatility in global capital markets and foreign currency, increases in benchmark interest rates, the effects of inflation and instability of financial institutions; risks associated with HP’s international operations and the effects of business disruption events, including those resulting from climate change; the need to manage (and reliance on) third-party suppliers, including with respect to supply constraints and component shortages, and the need to manage HP’s global, multi-tier distribution network and potential misuse of pricing programs by HP’s channel partners, adapt to new or changing marketplaces and effectively deliver HP’s services; the execution and performance of contracts by HP and its suppliers, customers, clients and partners, including logistical challenges with respect to such execution and performance; the competitive pressures faced by HP’s businesses; the impact of third-party claims of IP infringement; successfully innovating, developing and executing HP’s go-to-market strategy, including online, omnichannel and contractual sales, in an evolving distribution, reseller and customer landscape; successfully competing and maintaining the value proposition of HP’s products, including supplies and services; challenges to HP’s ability to accurately forecast inventories, demand and pricing, which may be due to HP’s multi-tiered channel, sales of HP’s products to unauthorized resellers or unauthorized resale of HP’s products or our uneven sales cycle; the hiring and retention of key employees; the results of our restructuring plans (including the fiscal 2023 plan), including estimates and assumptions related to the cost (including any possible disruption of HP’s business) and the anticipated benefits of our restructuring plans; the protection of HP’s intellectual property assets, including intellectual property licensed from third parties; disruptions in operations from system security risks, data protection breaches, or cyberattacks; HP’s ability to maintain its credit rating, satisfy its debt obligations and complete any contemplated share repurchases, other capital return programs or other strategic transactions; changes in estimates and assumptions HP makes in connection with the preparation of its financial statements; the impact of changes to federal, state, local and foreign laws and regulations, including environmental regulations and tax laws; integration and other risks associated with business combination and investment transactions; our aspirations related to environmental, social and governance matters; potential impacts, liabilities and costs from pending or potential investigations, claims and disputes; the effectiveness of our internal control over financial reporting; and other risks that are described in HP’s Annual Report on Form 10-K for the fiscal year ended October 31, 2024 and HP’s other filings with the Securities and Exchange Commission (“SEC”). HP’s fiscal 2023 plan includes HP’s efforts to take advantage of future growth opportunities, including but not limited to, investments to drive growth, investments in our people, improving product mix, driving structural cost savings and other productivity measures. Structural cost savings represent gross reductions in costs driven by operational efficiency, digital transformation, and portfolio optimization. These initiatives include but are not limited to workforce reductions, platform simplification, programs consolidation and productivity measures undertaken by HP, which HP expects to be sustainable in the longer-term. These structural cost savings are net of any new recurring costs resulting from these initiatives and exclude one-time investments to generate such savings. HP’s expectations on the longer-term sustainability of such structural cost savings are based on its current business operations and market dynamics and could be significantly impacted by various factors, including but not limited to HP’s evolving business models, future investment decisions, market environment and technology landscape.

    As in prior periods, the financial information set forth in this document, including any tax-related items, reflects estimates based on information available at this time. While HP believes these estimates to be reasonable, these amounts could differ materially from reported amounts in HP’s Annual Report on Form 10-K for the fiscal year ending October 31, 2025, Quarterly Reports on Form 10-Q for the fiscal quarters ending April 30, 2025 and July 31, 2025, and HP’s other filings with the SEC. The forward-looking statements in this document are made as of the date of this document and HP assumes no obligation and does not intend to update these forward-looking statements.

    HP’s Investor Relations website at investor.hp.com contains a significant amount of information about HP, including financial and other information for investors. HP encourages investors to visit its website from time to time, as information is updated, and new information is posted.   The content of HP’s website is not incorporated by reference into this document or in any other report or document HP files with the SEC, and any references to HP’s website are intended to be inactive textual references only.

    Editorial contacts

    HP Inc. Media Relations
    MediaRelations@hp.com

    HP Inc. Investor Relations
    InvestorRelations@hp.com

    HP INC. AND SUBSIDIARIES
    CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
    (Unaudited)
    (In millions, except per share amounts)
     
      Three months ended
      January 31, 2025   October 31, 2024   January 31, 2024
    Net revenue:          
    Products $ 12,695     $ 13,241     $ 12,419  
    Services   809       814       766  
    Total net revenue   13,504       14,055       13,185  
    Cost of net revenue:          
    Products   10,194       10,593       9,871  
    Services   470       461       426  
    Total cost of net revenue   10,664       11,054       10,297  
    Gross profit   2,840       3,001       2,888  
    Research and development   397       392       399  
    Selling, general and administrative   1,459       1,409       1,383  
    Restructuring and other charges   70       121       63  
    Acquisition and divestiture charges   6       12       27  
    Amortization of intangible assets   63       76       81  
    Total operating expenses   1,995       2,010       1,953  
    Earnings from operations   845       991       935  
    Interest and other, net   (141 )     (129 )     (142 )
    Earnings before taxes   704       862       793  
    (Provision for) benefit from taxes   (139 )     44       (171 )
    Net earnings $ 565     $ 906     $ 622  
               
    Net earnings per share:          
    Basic $ 0.60     $ 0.94     $ 0.63  
    Diluted $ 0.59     $ 0.93     $ 0.62  
               
    Cash dividends declared per share $ 0.58     $     $ 0.55  
               
    Weighted-average shares used to compute net earnings per share:          
    Basic   948       959       995  
    Diluted   957       971       1,002  
    HP INC. AND SUBSIDIARIES
    ADJUSTMENTS TO GAAP NET EARNINGS, EARNINGS FROM OPERATIONS,
    OPERATING MARGIN AND DILUTED NET EARNINGS PER SHARE
    (Unaudited)
    (In millions, except per share amounts)
     
      Three months ended
      January 31, 2025   October 31, 2024   January 31, 2024
      Amounts   Diluted
    net
    earnings

    per share
      Amounts   Diluted
    net
    earnings

    per share
      Amounts   Diluted
    net
    earnings

    per share
    GAAP net earnings $ 565     $ 0.59     $ 906     $ 0.93     $ 622     $ 0.62
    Non-GAAP adjustments:                      
    Restructuring and other charges   70       0.07       121       0.13       63       0.06
    Acquisition and divestiture charges   6       0.01       12       0.01       27       0.03
    Amortization of intangible assets   63       0.07       76       0.08       81       0.08
    Debt extinguishment costs               3                  
    Non-operating retirement-related credits    (5 )     (0.01 )     (2 )           (2 )    
    Tax adjustments(a)   5       0.01       (216 )     (0.22 )     17       0.02
    Non-GAAP net earnings $ 704     $ 0.74     $ 900     $ 0.93     $ 808     $ 0.81
                           
    GAAP earnings from operations $ 845         $ 991         $ 935      
    Non-GAAP adjustments:                      
    Restructuring and other charges   70           121           63      
    Acquisition and divestiture charges   6           12           27      
    Amortization of intangible assets   63           76           81      
    Non-GAAP earnings from operations  $ 984         $ 1,200         $ 1,106      
                           
    GAAP operating margin   6.3  %         7.1  %         7.1  %    
    Non-GAAP adjustments   1.0  %         1.4  %         1.3  %    
    Non-GAAP operating margin   7.3  %         8.5  %         8.4  %    

    (a)     Includes tax impact on non-GAAP adjustments.

    HP INC. AND SUBSIDIARIES
    CONSOLIDATED CONDENSED BALANCE SHEETS
    (Unaudited)
    (In millions)
     
      As of
      January 31, 2025   October 31, 2024
    ASSETS      
    Current assets:      
    Cash, cash equivalents and restricted cash $ 2,894     $ 3,253  
    Accounts receivable, net   4,188       5,117  
    Inventory   8,443       7,720  
    Other current assets   4,309       4,670  
    Total current assets   19,834       20,760  
    Property, plant and equipment, net   2,900       2,914  
    Goodwill   8,599       8,627  
    Other non-current assets   7,597       7,608  
    Total assets $ 38,930     $ 39,909  
           
    LIABILITIES AND STOCKHOLDERS’ DEFICIT      
    Current liabilities:      
    Notes payable and short-term borrowings $ 1,418     $ 1,406  
    Accounts payable   16,483       16,903  
    Other current liabilities   9,533       10,378  
    Total current liabilities   27,434       28,687  
    Long-term debt   8,273       8,263  
    Other non-current liabilities   4,295       4,282  
    Stockholders’ deficit   (1,072 )     (1,323 )
    Total liabilities and stockholders’ deficit $ 38,930     $ 39,909  
    HP INC. AND SUBSIDIARIES
    CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
    (Unaudited)
    (In millions)
     
      Three months ended
      January 31, 2025   January 31, 2024
    Cash flows from operating activities:      
    Net earnings $ 565     $ 622  
    Adjustments to reconcile net earnings to net cash provided by operating activities:      
    Depreciation and amortization   197       205  
    Stock-based compensation expense   192       177  
    Restructuring and other charges   70       63  
    Deferred taxes on earnings   (23 )     (5 )
    Other, net   35       (20 )
    Changes in operating assets and liabilities, net of acquisitions:      
    Accounts receivables   966       446  
    Inventory   (751 )     (47 )
    Accounts payable   (397 )     (744 )
    Net investment in lease related to integrated financing   2       (62 )
    Taxes on earnings   12       49  
    Restructuring and other   (74 )     (87 )
    Other assets and liabilities   (420 )     (476 )
    Net cash provided by operating activities   374       121  
    Cash flows from investing activities:      
    Investment in property, plant, equipment and purchased intangible   (302 )     (158 )
    Purchases of available-for-sale securities and other investments   (3 )      
    Maturities and sales of available-for-sale securities and other investments   5        
    Collateral posted for derivative instruments         (70 )
    Net cash used in investing activities   (300 )     (228 )
    Cash flows from financing activities:      
    Proceeds from short-term borrowings with original maturities less than 90 days, net         100  
    Proceeds from debt   82       92  
    Payment of debt and associated costs   (50 )     (49 )
    Stock-based award activities and others   (92 )     (76 )
    Repurchase of common stock   (100 )     (500 )
    Cash dividends paid   (273 )     (275 )
    Net cash used in financing activities   (433 )     (708 )
    Decrease in cash, cash equivalents and restricted cash   (359 )     (815 )
    Cash, cash equivalents and restricted cash at beginning of period   3,253       3,232  
    Cash, cash equivalents and restricted cash at end of period $ 2,894     $ 2,417  

      

    HP INC. AND SUBSIDIARIES
    SEGMENT/BUSINESS UNIT INFORMATION
    (Unaudited)
    (In millions)
     
      Three months ended   Change (%)
      January 31, 2025   October 31, 2024   January 31, 2024   Q/Q   Y/Y
    Net revenue:                  
    Commercial PS $ 6,645     $ 6,522     $ 6,045     2 %     10 %
    Consumer PS   2,579       3,069       2,764     (16)%     (7)%
    Personal Systems   9,224       9,591       8,809     (4)%     5 %
    Supplies   2,826       2,865       2,863     (1)%     (1)%
    Commercial Printing   1,144       1,262       1,227     (9)%     (7)%
    Consumer Printing   299       325       285     (8)%     5 %
    Printing   4,269       4,452       4,375     (4)%     (2)%
    Corporate Investments(a)   11       11       2     NM     NM
    Total segment net revenue   13,504       14,054       13,186     (4)%     2 %
    Other(a)         1       (1 )   NM     NM
         Total net revenue $ 13,504     $ 14,055     $ 13,185     (4)%     2 %
                       
    Earnings before taxes:                  
    Personal Systems $ 507     $ 550     $ 537          
    Printing   810       874       872          
    Corporate Investments   (27 )     (37 )     (37 )        
    Total segment earnings from operations   1,290       1,387       1,372          
    Corporate and unallocated cost and other   (114 )     (102 )     (89 )        
    Stock-based compensation expense   (192 )     (85 )     (177 )        
    Restructuring and other charges   (70 )     (121 )     (63 )        
    Acquisition and divestiture charges   (6 )     (12 )     (27 )        
    Amortization of intangible assets   (63 )     (76 )     (81 )        
    Interest and other, net   (141 )     (129 )     (142 )        
         Total earnings before taxes $ 704     $ 862     $ 793          

    (a)     “NM” represents not meaningful.

    HP INC. AND SUBSIDIARIES
    SEGMENT OPERATING MARGIN SUMMARY
    (Unaudited)
     
      Three months ended   Change (pts)
      January 31, 2025   October 31, 2024   January 31, 2024   Q/Q   Y/Y
    Segment operating margin:                  
    Personal Systems  5.5 %     5.7 %     6.1 %     (0.2)pts   (0.6)pts
    Printing  19.0%     19.6 %     19.9 %     (0.6)pts   (0.9)pts
    Corporate Investments(a) NM     NM     NM     NM   NM
    Total segment  9.6 %     9.9 %     10.4 %     (0.3)pts   (0.8)pts
                             

    (a)     “NM” represents not meaningful.

    HP INC. AND SUBSIDIARIES
    CALCULATION OF DILUTED NET EARNINGS PER SHARE
    (Unaudited)
    (In millions, except per share amounts)
     
      Three months ended
      January 31, 2025   October 31, 2024   January 31, 2024
    Numerator:          
    GAAP net earnings $ 565   $ 906   $ 622
    Non-GAAP net earnings $ 704   $ 900   $ 808
               
    Denominator:          
    Weighted-average shares used to compute basic net earnings per share   948     959     995
    Dilutive effect of employee stock plans(a)   9     12     7
    Weighted-average shares used to compute diluted net earnings per share   957     971     1,002
               
    GAAP diluted net earnings per share $ 0.59   $ 0.93   $ 0.62
    Non-GAAP diluted net earnings per share $ 0.74   $ 0.93   $ 0.81

    (a)     Includes any dilutive effect of restricted stock units, stock options and performance-based awards. 

    Use of non-GAAP financial measures

    To supplement HP’s consolidated condensed financial statements presented on a GAAP basis, HP provides net revenue on a constant currency basis, non-GAAP total operating expense, non-GAAP operating profit, non-GAAP operating margin, non-GAAP other income and expenses, non-GAAP tax rate, non-GAAP net earnings, non-GAAP diluted net EPS, free cash flow, gross cash and net cash (debt). HP also provides forecasts of non-GAAP diluted net EPS and free cash flow.

    These non-GAAP financial measures are not computed in accordance with, or as an alternative to, GAAP in the United States. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the tables above or elsewhere in the materials accompanying this news release.

    Use and economic substance of non-GAAP financial measures
    Net revenue on a constant currency basis excludes the effect of foreign currency exchange fluctuations calculated by translating current period revenues using monthly exchange rates from the comparative period and excluding any hedging impact recognized in the current period. Non-GAAP operating margin is defined to exclude the effects of any amounts relating to restructuring and other charges, acquisition and divestiture charges, amortization of intangible assets. Non-GAAP net earnings and non-GAAP diluted net EPS consist of net earnings or diluted net EPS excluding those same charges, non-operating retirement related (credits)/charges, debt extinguishment costs (benefit), tax adjustments and the amount of additional taxes or tax benefits associated with each non-GAAP item.

    HP’s management uses these non-GAAP financial measures for purposes of evaluating HP’s historical and prospective financial performance, as well as HP’s performance relative to its competitors. HP’s management also uses these non-GAAP measures to further its own understanding of HP’s segment operating performance. HP believes that excluding the items mentioned above for these non-GAAP financial measures allows HP’s management to better understand HP’s consolidated financial performance in relation to the operating results of HP’s segments, as HP’s management does not believe that the excluded items are reflective of ongoing operating results. More specifically, HP’s management excludes each of those items mentioned above for the following reasons:

    • Restructuring and other charges are (i) costs associated with a formal restructuring plan and are primarily related to employee separation from service and early retirement costs and related benefits, costs of real estate consolidation and other non-labor charges; and (ii) other charges, which includes non-recurring costs including those as a result of information technology rationalization efforts and transformation program management and are distinct from ongoing operational costs. HP excludes these restructuring and other charges (and any reversals of charges recorded in prior periods) for purposes of calculating these non-GAAP measures because HP believes that these costs do not reflect expected future operating expenses and excluding such expenses for purposes of calculating these non-GAAP measures is useful to management and investors in evaluating HP’s current operating performance and comparing operating performance to other periods.
    • HP incurs cost related to its acquisitions and divestitures, which it would not have otherwise incurred as part of its operations. The charges are direct expenses such as third-party professional and legal fees, integration and divestiture-related costs, as well as non-cash adjustments to the fair value of certain acquired assets such as inventory and certain compensation charges related to cash settlement of restricted stock units and performance-based restricted stock units towards acquisitions. These charges related to acquisitions and divestitures are inconsistent in amount and frequency and are significantly impacted by the timing and nature of HP’s acquisitions or divestitures. HP believes that eliminating such expenses for purposes of calculating these non-GAAP measures is useful to management and investors in evaluating HP’s current operating performance and comparing operating performance to other periods.
    • HP incurs charges relating to the amortization of intangible assets. Those charges are included in HP’s GAAP earnings, operating margin, net earnings and diluted net EPS. Such charges are significantly impacted by the timing and magnitude of HP’s acquisitions and any related impairment charges. Consequently, HP excludes these charges for purposes of calculating these non-GAAP measures because HP believes doing so is useful to management and investors in evaluating HP’s current operating performance and comparing operating performance to other periods.
    • HP incurs debt extinguishment (benefit)/costs includes certain (gain)/loss related to repurchase of certain of its outstanding U.S. dollar global notes or termination of commitments under revolving credit facilities. These (gain)/loss resulting from debt redemption transactions are partially or more than offset by costs such as bond repurchase premiums, bank fees, unpaid accrued interests, etc. HP excludes these (benefit)/costs for the purposes of calculating these non-GAAP measures because HP believes doing so is useful to management and investors in evaluating HP’s current operating performance and comparing operating performance to other periods.
    • Non-operating retirement-related (credits)/charges includes certain market-related factors such as interest cost, expected return on plan assets, amortized actuarial gains or losses, associated with HP’s defined benefit pension and post-retirement benefit plans. The market-driven retirement-related adjustments are primarily due to the changes in the value of pension plan assets and liabilities which are tied to financial market performance and HP considers these adjustments to be outside the operational performance of the business. Non-operating retirement-related (credits)/charges also include certain plan curtailments, settlements and special termination benefits related to HP’s defined benefit pension and post-retirement benefit plans. HP believes that eliminating such adjustments for purposes of calculating non-GAAP measures is useful to management and investors in evaluating HP’s current operating performance and comparing operating performance to other periods.
    • HP recorded tax adjustments including tax expenses and benefits from internal reorganizations, realizability of certain deferred tax assets, various tax rate and regulatory changes, and tax settlements across various jurisdictions. HP excludes these adjustments for the purposes of calculating these non-GAAP measures because HP believes doing so is useful to management and investors in evaluating HP’s current operating performance and comparing operating performance to other periods.

    Free cash flow is a non-GAAP measure that is defined as cash flow provided by (used in) operating activities adjusted for net investment in leases from integrated financing and net investments in property, plant, equipment and purchased intangible. Gross cash is a non-GAAP measure that is defined as cash, cash equivalents and restricted cash plus short-term investments and certain long-term investments that may be liquidated within 90 days pursuant to the terms of existing put options or similar rights. HP’s management uses free cash flow and gross cash for the purpose of determining the amount of cash available for investment in HP’s businesses, repurchasing stock and other purposes. HP’s management also uses free cash flow and gross cash to evaluate HP’s historical and prospective liquidity. Because gross cash includes liquid assets that are not included in cash, cash equivalents and restricted cash, HP believes that gross cash provides a helpful assessment of HP’s liquidity. Because free cash flow includes net cash provided by (used in) operating activities adjusted for net investment in leases from integrated financing and net investments in property, plant, equipment and purchased intangible. HP believes that free cash flow provides a useful assessment of HP’s liquidity and capital resources. Net cash (debt) is defined as gross cash less gross debt after adjusting the effect of unamortized premium/discount on debt issuance, debt issuance costs and gains/losses on interest rate swaps.

    Key Growth Areas
    Key Growth Areas represent HP’s businesses which management expects to collectively grow at a rate faster than HP’s core business with accretive margins in the longer term. HP’s Key Growth Areas are comprised of:

    Hybrid Systems: Video conferencing solutions, cameras, headsets, voice, and related software capabilities

    Advanced Compute Solutions: Diverse portfolio encompassing high-performance computing, mobile and desktop workstations, retail workstations, retail solutions, and emerging technologies to address complex computational tasks, data-intensive applications, and evolving industry needs.

    AI PC: PCs, excluding Workstations, equipped with dedicated hardware components like Neural Processing Units (NPUs), are designed to facilitate and enhance the execution of AI and machine learning tasks.

    Workforce Solutions: Managed services (Managed Print Service and Device-as-a-Service), digital services and lifecycle services

    Consumer Subscriptions: Instant Ink services, other consumer subscriptions and consumer digital services

    Industrial Graphics: Large Format Industrial, Page Wide Press (PWP), Indigo and Page Wide Industrial packaging solutions and supplies

    3D & Personalization: Portfolio of additive manufacturing solutions and supplies including end-to-end solutions such as moulded fiber, footwear and orthotics

    Material limitations associated with use of non-GAAP financial measures
    These non-GAAP financial measures may have limitations as analytical tools, and these measures should not be considered in isolation or as a substitute for analysis of HP’s results as reported under GAAP. Some of the limitations in relying on these non-GAAP financial measures are:

    • Items such as amortization of intangible assets, though not directly affecting HP’s cash position, represent the loss in value of intangible assets over time. The expense associated with this change in value is not included in non-GAAP operating margin, non-GAAP net earnings and non-GAAP diluted net EPS, and therefore does not reflect the full economic effect of the change in value of those intangible assets.
    • Items such as restructuring and other charges, acquisition and divestiture charges, amortization of intangible assets are excluded from non-GAAP operating margin. In addition, non-operating retirement-related (credits)/charges, debt extinguishment costs (benefit) and tax adjustments are excluded from non-GAAP other income and expenses, non-GAAP tax rate, non-GAAP net earnings and non-GAAP diluted net EPS. These items can have a material impact on the equivalent GAAP earnings measure and cash flows.
    • HP may not be able to immediately liquidate the short-term and certain long-term investments included in gross cash, which may limit the usefulness of gross cash as a liquidity measure.

    Other companies may calculate the non-GAAP financial measures differently than HP, limiting the usefulness of those measures for comparative purposes.

    Compensation for limitations associated with use of non-GAAP financial measures
    HP accounts for the limitations on its use of non-GAAP financial measures by relying primarily on its GAAP results and using non-GAAP financial measures only supplementally. HP also provides reconciliations of each non-GAAP financial measure to its most directly comparable GAAP measure within this news release and in other written materials that include these non-GAAP financial measures, and HP encourages investors to review those reconciliations carefully.

    Usefulness of non-GAAP financial measures to investors
    HP believes that providing net revenue on a constant currency basis, non-GAAP total operating expense, non-GAAP operating profit, non-GAAP operating margin, non-GAAP other income and expenses, non-GAAP tax rate, non-GAAP net earnings, non-GAAP diluted net EPS, free cash flow, gross cash and net cash (debt) to investors in addition to the related GAAP financial measures provides investors with greater insight to the information used by HP’s management in its financial and operational decision making and allows investors to see HP’s results “through the eyes” of management. HP further believes that providing this information better enables HP’s investors to understand HP’s operating performance and financial condition and to evaluate the efficacy of the methodology and information used by HP’s management to evaluate and measure such performance and financial condition. Disclosure of these non-GAAP financial measures also facilitates comparisons of HP’s operating performance with the performance of other companies in HP’s industry that supplement their GAAP results with non-GAAP financial measures that may be calculated in a similar manner.

    The MIL Network

  • MIL-OSI: PubMatic Announces Fourth Quarter and Fiscal Year Ended 2024 Financial Results

    Source: GlobeNewswire (MIL-OSI)

    FY Revenue of $291.3 million, up 9% over 2023;

    Delivered FY 2024 net income of $12.5 million or 4% margin;

    FY adjusted EBITDA increased 23% over 2023 and was $92.3 million or 32% margin;

    Revenue in Q4 from CTV more than doubled year over year and represented 20% of total revenue;

    Supply Path Optimization represented 53% of total activity in 2024;

    Repurchased 4.3 million shares in 2024, representing 7.9% of fully diluted shares as of December 31, 2024

    NO-HEADQUARTERS/REDWOOD CITY, Calif., Feb. 27, 2025 (GLOBE NEWSWIRE) — PubMatic, Inc. (Nasdaq: PUBM), an independent technology company delivering digital advertising’s supply chain of the future, today reported financial results for the fourth quarter and fiscal year ended December 31, 2024.

    “Revenue growth in the year more than doubled over 2023, driven by strength in CTV, emerging revenue streams, and marquee customers choosing PubMatic to build and scale their ad businesses. Our revenue mix is evolving; in the fourth quarter, CTV more than doubled to 20% of total revenue. These achievements mark an inflection point in our underlying business that highlights critical scale on our platform and a significant shift in ad buying toward channels with the highest consumer engagement such as CTV, mobile app and commerce media,” said Rajeev Goel, co-founder and CEO at PubMatic. “Today, our omnichannel platform serves publishers, media buyers, commerce media networks, and curation/data providers, all of which are turning to sell side technology for critical end-to-end solutions needed to build their ad businesses. As we look to 2025, we expect accelerated growth in our underlying business as ad buyers seek premium, brand safe, curated inventory in the open internet.”

    Fiscal Year 2024 Financial Highlights

    • Revenue for the full year 2024 was $291.3 million, an increase of 9% over $267.0 million in 2023;
    • Gross profit was $190.2 million, or 65% margin, an improvement of 250 basis points over 2023;
    • Revenue from omnichannel video in 2024 grew 37% over the same period last year;
    • Net dollar-based retention1 was 107% for the year ended December 31, 2024;
    • GAAP net income was $12.5 million with a margin of 4%, or $0.23 per diluted share in 2024, an increase over net income2 of $8.9 million with a margin of 3%, or $0.16 per diluted share in 2023;
    • Adjusted EBITDA was $92.3 million, or 32% margin, an increase over adjusted EBITDA of $75.3 million, or 28% margin, in 2023;
    • Non-GAAP net income was $42.5 million, or $0.78 per non-GAAP diluted share in 2024, an increase over non-GAAP net income of $32.0 million, or $0.57 per non-GAAP diluted share in 2023;
    • Net cash provided by operating activities in 2024 was $73.4 million, compared to $81.1 million in the full year 2023;
    • Generated free cash flow of $34.9 million in 2024, down 34% over 2023;
    • Ended 2024 with total cash, cash equivalents, and marketable securities of $140.6 million with no debt, a decrease of 20% over the full year 2023; and
    • Through December 31, 2024, used $134.6 million in cash to repurchase 8.3 million shares of Class A common stock with $40.4 million available from the 2024 repurchase program.

    Fourth Quarter 2024 Financial Highlights

    • Revenue in the fourth quarter of 2024 was $85.5 million, an increase of 1% over $84.6 million in the same period of 2023;
    • GAAP net income was $13.9 million with a margin of 16%, or $0.26 per diluted share in the fourth quarter, compared to GAAP net income of $18.7 million with a margin of 22%, or $0.34 per diluted share in the same period of 2023;
    • Adjusted EBITDA was $37.6 million, or 44% margin, compared to $38.9 million, or 46% margin in the same period of 2023;
    • Non-GAAP net income was $21.4 million, or $0.41 per non-GAAP diluted share in the fourth quarter, compared to non-GAAP net income of $24.4 million, or $0.45 per non-GAAP diluted share in the same period of 2023; and
    • Net cash provided by operating activities was $18.0 million, compared to $28.7 million in the same period of 2023.

    The section titled “Non-GAAP Financial Measures” below describes our usage of non-GAAP financial measures. Reconciliations between historical GAAP and non-GAAP information are contained at the end of this press release following the accompanying financial data.

    “In 2024, we delivered record share of revenue for CTV, mobile app and emerging revenues, and achieved an all-time high of Supply Path Optimization activity. We also significantly expanded our margins, once again, demonstrating the strength of our durable model and our strategic commitment to steward both operational excellence and targeted investments for growth,” said Steve Pantelick, CFO at PubMatic. “In Q4, strong growth in the underlying business helped offset softer spending from the large DSP buyer we previously called out mid year. Going forward, we are taking a conservative approach as it relates to this buyer, and expect total revenues to grow year over year in the second half of the year once we lap this impact at the end of Q2 2025. Our underlying business, which excludes revenue from this DSP and political, is targeted to grow 15%+ and represent over two thirds of total company revenues in 2025.”

    Business Highlights

    Omnichannel platform drives revenue in key secular growth areas

    • Full year revenue from high value formats and channels, mobile and omnichannel video3, grew 17% over 2023.
    • In Q4, revenue from omnichannel video, which includes CTV, grew 37% year-over-year.
    • CTV reached scale, and was 20% of revenue in the fourth quarter, driven by growing inventory supply, SPO relationships, and strength in political advertising.
    • Revenue from mobile app grew 16% over 2023 as we scaled to over 900 mobile app publishers.

    High consumer engagement channels fuel ad demand and sell-side data curation

    • New and expanded partnerships announced in 2024 with premium streaming brands including Roku, Dish Media, Disney+ Hotstar, TCL and Xumo. We now work with 80% of the top 30 streaming publishers.
    • The number of Activate customers grew nearly 6x over 2023.
    • Supply Path Optimization represented 53% of total activity on our platform in 2024, up from 45% in 2023.
    • Connect drives more performant, targeted ad campaigns across the open internet, offering 190 data sets to ad buyers on PubMatic. Connect is a leading platform for data providers and curators to integrate first-party data, package inventory, sell to, and optimize outcomes for ad buyers.

    Focused investments drive long-term growth opportunities

    • More than doubled total addressable market to over $120 billion via products that address four key stakeholders across the digital advertising ecosystem: publishers, media buyers, curators and data providers, and commerce media networks.
    • Contribution from emerging revenue streams, which expand beyond ad monetization services, doubled from 2023.

    Recent product launches

    • Launched CTV Marketplaces, offering ad buyers pre-curated CTV inventory available only on PubMatic, built directly from our sell side technology. CTV Marketplaces allows publishers to unlock more value from their inventory and provides ad buyers off-the-shelf, easy to buy premium content and targeted audiences, including curated live sports inventory.
    • Launched Creative Category Manager, a generative AI solution that scans and classifies each video ad creative on granular criteria. First used to unlock millions of dollars in political ad spend, it drove significant CTV revenue. This gen AI solution will soon expand to other use cases and verticals.
    • Launched PubMatic Assistant, a gen AI powered reporting tool that allows publishers to request any report or data using simple plain language text queries. As a result, publishers can streamline analytics, enhance productivity and unlock new growth opportunities by uncovering insights in big data. This powerful tool removes barriers to adoption and drives increased platform usage.

    2024 operating priorities drove profitable growth

    • Aligned with our growth investments, increased global headcount in 2024 by 11% over 2023, adding new team members across product management, engineering and go-to-market teams to accelerate long-term revenue growth.
    • Infrastructure optimization initiatives and investments drove nearly 263 trillion impressions processed in 2024, an increase of 25% over 2023.
    • Cost of revenue per million impressions processed decreased 18% on a trailing twelve month period, as compared to the prior period.
    • Scaled adoption of generative AI drove increased engineering productivity by 15%+ which led to faster software development, testing and release processes.

    Financial Outlook

    Q1 outlook includes the continued headwind from one of our top DSP buyers that revised its auction approach in late May 2024. Adjusted EBITDA expectation assumes a negative FX impact predominately from Euro and Pound Sterling expenses. It also assumes that general market conditions do not significantly deteriorate as it relates to current macroeconomic and geopolitical conditions.

    Accordingly, we estimate the following:

    For the first quarter of 2025, we expect the following:

    • Revenue to be in the range of $61 million to $63 million.
    • Adjusted EBITDA to be in the range of $5 million to $7 million.

    Although we provide guidance for adjusted EBITDA and free cash flow, we are not able to provide guidance for net income, the most directly comparable GAAP measure. Certain elements of the composition of GAAP net income, including stock-based compensation expenses, are not predictable, making it impractical for us to provide guidance on net income or to reconcile our adjusted EBITDA guidance to net income without unreasonable efforts. For the same reason, we are unable to address the probable significance of the unavailable information.

    Conference Call and Webcast details

    PubMatic will host a conference call to discuss its financial results on Thursday, February 27, 2025 at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time). A live webcast of the call can be accessed from PubMatic’s Investor Relations website at https://investors.pubmatic.com. An archived version of the webcast will be available from the same website after the call.

    Non-GAAP Financial Measures

    In addition to our results determined in accordance with U.S. generally accepted accounting principles (GAAP), including, in particular operating income, net cash provided by operating activities, and net income, we believe that adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income, non-GAAP earnings per share and free cash flow, each a non-GAAP measure, are useful in evaluating our operating performance. We define adjusted EBITDA as net income adjusted for stock-based compensation expense, depreciation and amortization, unrealized loss and impairment of equity investment, interest income, acquisition-related and other expenses, and provision for income taxes. Adjusted EBITDA margin represents adjusted EBITDA calculated as a percentage of revenue. We define non-GAAP net income as net income adjusted for unrealized loss on equity investments, stock-based compensation expense, acquisition-related and other expenses, and adjustments for income taxes. We define non-GAAP free cash flow as net cash provided by operating activities reduced by purchases of property and equipment and capitalized software development costs.

    In addition to operating income and net income, we use adjusted EBITDA and non-GAAP net income as measures of operational efficiency. We believe that these non-GAAP financial measures are useful to investors for period to period comparisons of our business and in understanding and evaluating our operating results for the following reasons:

    • Adjusted EBITDA and non-GAAP net income are widely used by investors and securities analysts to measure a company’s operating performance without regard to items such as stock-based compensation expense, depreciation and amortization, interest expense, and provision for income taxes that can vary substantially from company to company depending upon their financing, capital structures and the method by which assets were acquired; and,
    • Our management uses adjusted EBITDA and non-GAAP net income in conjunction with GAAP financial measures for planning purposes, including the preparation of our annual operating budget, as a measure of operating performance and the effectiveness of our business strategies and in communications with our board of directors concerning our financial performance; and adjusted EBITDA provides consistency and comparability with our past financial performance, facilitates period-to-period comparisons of operations, and also facilitates comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results.

    Our use of non-GAAP financial measures has limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of our financial results as reported under GAAP. Some of these limitations are as follows:

    • Adjusted EBITDA does not reflect: (a) changes in, or cash requirements for, our working capital needs; (b) the potentially dilutive impact of stock-based compensation; or (c) tax payments that may represent a reduction in cash available to us;
    • Although depreciation and amortization expense are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; and
    • Non-GAAP net income does not include: (a) unrealized losses resulting from our equity investment; (b) the potentially dilutive impact of stock-based compensation; (c) income tax effects for stock-based compensation and unrealized losses from our equity investment; or (d) acquisition-related and other expenses.

    Because of these and other limitations, you should consider adjusted EBITDA and non-GAAP net income along with other GAAP-based financial performance measures, including net income and our GAAP financial results.

    Forward Looking Statements

    This press release contains “forward-looking statements” regarding our future business expectations, including our guidance relating to our revenue and adjusted EBITDA for the first quarter of 2025, our expectations regarding our adjusted EBITDA, free cash flow, capital expenditures, future hiring, future market growth, our long-term revenue growth, target revenue and our ability to gain market share. These forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions and may differ materially from actual results due to a variety of factors including: our dependency on the overall demand for advertising and the channels we rely on; our existing customers not expanding their usage of our platform, or our failure to attract new publishers and buyers; our ability to maintain and expand access to spend from buyers and valuable ad impressions from publishers; the rejection of the use of digital advertising by consumers through opt-in, opt-out or ad-blocking technologies or other means; our failure to innovate and develop new solutions that are adopted by publishers; the war between Ukraine and Russia and the resumption of conflict between Israel and Palestine, and the related measures taken in response by the global community; the impacts of inflation as well as fiscal tightening and volatile interest rates; public health crises, including the resulting global economic uncertainty; limitations imposed on our collection, use or disclosure of data about advertisements; the lack of similar or better alternatives to the use of third-party cookies, mobile device IDs or other tracking technologies if such uses are restricted; any failure to scale our platform infrastructure to support anticipated growth and transaction volume; liabilities or fines due to publishers, buyers, and data providers not obtaining consents from consumers for us to process their personal data; any failure to comply with laws and regulations related to data privacy, data protection, information security, and consumer protection; and our ability to manage our growth. Moreover, we operate in a competitive and rapidly changing market, and new risks may emerge from time to time. For more information about risks and uncertainties associated with our business, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of our SEC filings, including but not limited to, our annual report on Form 10-K and quarterly reports on From 10-Q, copies of are available on our investor relations website at https://investors.pubmatic.com and on the SEC website at www.sec.gov. All information in this press release is as of February 27, 2025. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

    About PubMatic

    PubMatic is an independent technology company maximizing customer value by delivering digital advertising’s supply chain of the future. PubMatic’s sell-side platform empowers the world’s leading digital content creators across the open internet to control access to their inventory and increase monetization by enabling marketers to drive return on investment and reach addressable audiences across ad formats and devices. Since 2006, PubMatic’s infrastructure-driven approach has allowed for the efficient processing and utilization of data in real time. By delivering scalable and flexible programmatic innovation, PubMatic improves outcomes for its customers while championing a vibrant and transparent digital advertising supply chain.

     
     
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (In thousands)
    (unaudited)
     
        December 31,
    2024
      December 31,
    2023
    ASSETS        
    Current assets        
    Cash and cash equivalents   $ 100,452     $ 78,509  
    Marketable securities     40,135       96,835  
    Accounts receivable, net     424,814       375,468  
    Prepaid expenses and other current assets     10,145       11,143  
    Total current assets     575,546       561,955  
    Property, equipment and software, net     58,522       60,729  
    Operating lease right-of-use assets     44,402       21,102  
    Acquisition-related intangible assets, net     4,284       5,864  
    Goodwill     29,577       29,577  
    Deferred tax assets     24,864       13,880  
    Other assets, non-current     2,324       2,136  
    TOTAL ASSETS   $ 739,519     $ 695,243  
    LIABILITIES AND STOCKHOLDERS’ EQUITY        
    Current liabilities        
    Accounts payable   $ 386,602     $ 347,673  
    Accrued liabilities     26,365       25,684  
    Operating lease liabilities, current     5,843       6,236  
    Total current liabilities     418,810       379,593  
    Operating lease liabilities, non-current     39,538       15,607  
    Other liabilities, non-current     3,908       3,844  
    TOTAL LIABILITIES     462,256       399,044  
    Stockholders’ Equity        
    Common stock     6       6  
    Treasury stock     (146,796 )     (71,103 )
    Additional paid-in capital     275,304       230,419  
    Accumulated other comprehensive loss     (636 )     (4 )
    Retained earnings     149,385       136,881  
    TOTAL STOCKHOLDERS’ EQUITY     277,263       296,199  
    TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY   $ 739,519     $ 695,243  
     
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    (In thousands, except per share data)
    (unaudited)
     
        Three Months Ended December 31,   Year Ended December 31,
          2024     2023     2024     2023
    Revenue   $ 85,502   $ 84,600   $ 291,256   $ 267,014
    Cost of revenue(1)     24,935     24,208     101,027     99,229
    Gross profit     60,567     60,392     190,229     167,785
    Operating expenses:(1)                
    Technology and development     7,831     6,846     33,263     26,727
    Sales and marketing     23,763     20,353     95,369     82,803
    General and administrative(2)     14,171     12,780     57,670     56,219
    Total operating expenses     45,765     39,979     186,302     165,749
    Operating income     14,802     20,413     3,927     2,036
    Total other income, net     3,618     2,632     13,847     8,469
    Income before income taxes     18,420     23,045     17,774     10,505
    Provision for income taxes     4,521     4,343     5,270     1,624
    Net income   $ 13,899   $ 18,702   $ 12,504   $ 8,881
    Net income per share attributable to common stockholders:                
    Basic   $ 0.29   $ 0.37   $ 0.25   $ 0.17
    Diluted   $ 0.26   $ 0.34   $ 0.23   $ 0.16
    Weighted-average shares used to compute net income per share attributable to common stockholders:                
    Basic     47,993     50,659     49,213     51,760
    Diluted     52,623     54,940     54,294     56,027
     
    (1)Stock-based compensation expense includes the following:
    STOCK BASED COMPENSATION EXPENSE
    (In thousands)
    (unaudited)
     
        Three Months Ended December 31,   Year Ended December 31,
          2024     2023     2024     2023
    Cost of revenue   $         438   $         383   $         1,855   $         1,472        
    Technology and development             1,625             1,137             6,313             4,346        
    Sales and marketing             3,247             2,589             13,407             10,462        
    General and administrative             4,099             3,228             16,101             12,582        
    Total stock-based compensation   $         9,409   $         7,337   $         37,676   $         28,862        
     

    (2)On June 30, 2023, a Demand Side Platform buyer of our platform filed for Chapter 11 bankruptcy. As a result of this bankruptcy, we recorded incremental bad debt expense of $5.7 million which is reflected in our GAAP net income and adjusted EBITDA results for the year ended December 31, 2023.

     
    CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
    (In thousands)
    (unaudited)
     
        December 31,
          2024       2023  
    CASH FLOW FROM OPERATING ACTIVITIES:        
    Net Income   $ 12,504     $ 8,881  
    Adjustments to reconcile net income to net cash provided by operating activities:        
    Depreciation and amortization     45,352       44,770  
    Stock-based compensation     37,676       28,862  
    Provision for doubtful accounts           5,675  
    Deferred income taxes     (10,984 )     (13,406 )
    Accretion of discount on marketable securities     (4,117 )     (4,093 )
    Non-cash lease expense     6,801       6,145  
    Other     (25 )     45  
    Changes in operating assets and liabilities:        
       Accounts receivable     (49,345 )     (75,716 )
       Prepaid expenses and other current assets     (5,826 )     3,918  
       Accounts payable     38,096       79,687  
       Accrued liabilities     9,627       3,035  
       Operating lease liabilities     (6,531 )     (5,789 )
       Other liabilities, non-current     197       (893 )
    Net cash provided by operating activities     73,425       81,121  
    CASH FLOWS FROM INVESTING ACTIVITIES:        
    Purchases of and deposits on property and equipment     (17,592 )     (10,601 )
    Capitalized software development costs     (20,936 )     (17,687 )
    Purchases of marketable securities     (142,016 )     (140,603 )
    Proceeds from sales of marketable securities           18,873  
    Proceeds from maturities of marketable securities     202,858       111,000  
    Net cash provided by (used in) investing activities     22,314       (39,018 )
    CASH FLOWS FROM FINANCING ACTIVITIES:        
    Payment of business combination indemnification claims holdback     (2,148 )      
    Proceeds from issuance of common stock for employee stock purchase plan     2,368       1,869  
    Proceeds from exercise of stock options     1,765       1,549  
    Principal payments on finance lease obligations     (131 )     (126 )
    Payments to acquire treasury stock     (75,332 )     (59,268 )
    Net cash used in financing activities     (73,478 )     (55,976 )
    NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS     22,261       (13,873 )
    Effect of foreign currency on cash     (318 )      
    CASH AND CASH EQUIVALENTS – Beginning of year     78,509       92,382  
    CASH AND CASH EQUIVALENTS – End of year   $ 100,452     $ 78,509  
     
    RECONCILIATION OF GAAP NET INCOME TO NON-GAAP ADJUSTED EBITDA AND NON-GAAP NET INCOME
    (In thousands, except per share amounts)
    (unaudited)
     
        Three Months Ended December 31,   Year Ended December 31,
          2024       2023       2024       2023  
    Reconciliation of net income:                
    Net income   $ 13,899     $ 18,702     $ 12,504     $ 8,881  
    Add back (deduct):                
    Stock-based compensation     9,409       7,337       37,676       28,862  
    Depreciation and amortization     11,421       11,039       45,352       44,770  
    Interest income     (1,604 )     (2,515 )     (8,477 )     (8,828 )
    Provision for income taxes     4,521       4,343       5,270       1,624  
    Adjusted EBITDA1   $ 37,646     $ 38,906     $ 92,325     $ 75,309  
                     
    Revenue   $ 85,502     $ 84,600     $ 291,256     $ 267,014  
    Adjusted EBITDA margin     44 %     46 %     32 %     28 %
        Three Months Ended December 31,   Year Ended December 31,
          2024       2023       2024       2023  
    Reconciliation of net income per share:                
    Net income   $ 13,899     $ 18,702     $ 12,504     $ 8,881  
    Add back (deduct):                
    Stock-based compensation     9,409       7,337       37,676       28,862  
    Adjustment for income taxes     (1,865 )     (1,590 )     (7,728 )     (5,695 )
    Non-GAAP net income1   $ 21,443     $ 24,449     $ 42,452     $ 32,048  
    GAAP diluted EPS   $ 0.26     $ 0.34     $ 0.23     $ 0.16  
    Non-GAAP diluted EPS   $ 0.41     $ 0.45     $ 0.78     $ 0.57  
    GAAP weighted average shares outstanding—diluted     52,623       54,940       54,294       56,027  
    Non-GAAP weighted average shares outstanding—diluted     52,623       54,940       54,294       56,027  
     
    SUPPLEMENTAL CASH FLOW INFORMATION
    COMPUTATION OF FREE CASH FLOW, A NON-GAAP MEASURE
    (In thousands)
    (unaudited)
     
        Three Months Ended December 31,   Year Ended December 31,
          2024       2023       2024       2023  
    Reconciliation of cash provided by operating activities:                
    Net cash provided by operating activities   $ 18,048     $ 28,674     $ 73,425     $ 81,121  
    Less: Purchases of property and equipment     (4,324 )     (5,177 )     (17,592 )     (10,601 )
    Less: Capitalized software development costs     (4,868 )     (3,962 )     (20,936 )     (17,687 )
    Free cash flow   $ 8,856     $ 19,535     $ 34,897     $ 52,833  
     

    1 Net income, Adjusted EBITDA, and Non-GAAP net income for the twelve months ended December 31, 2024 include other income of $4.0 million related to our efforts to build and test integrations with the Google Privacy Sandbox.


    1 Net dollar-based retention is calculated by starting with the revenue from publishers in the trailing twelve months ended December 31, 2023 (“Prior Period Revenue”). We then calculate the revenue from these same publishers in the trailing twelve months ended December 31, 2024 (“Current Period Revenue”). Current Period Revenue includes any upsells and is net of contraction or attrition, but excludes revenue from new publishers. Our net dollar-based retention rate equals the Current Period Revenue divided by Prior Period Revenue. Net dollar-based retention rate is an important indicator of publisher satisfaction and usage of our platform, as well as potential revenue for future periods.
    2 Fiscal year 2023 GAAP net income includes approximately $5.7 million of incremental bad debt expense related to the bankruptcy of a Demand Side Platform buyer of our platform.
    3 Omnichannel video spans across desktop, mobile and CTV devices.

    The MIL Network

  • MIL-OSI: ARRAY Technologies, Inc. Reports Financial Results for the Fourth Quarter and Full Year 2024

    Source: GlobeNewswire (MIL-OSI)

    Fourth Quarter 2024 Financial Highlights

    • Revenue of $275.2 million
    • Gross Margin of 28.5%
    • Adjusted gross margin(1) of 29.8%
    • Net loss to common shareholders of $(141.2) million
      • Net loss to common shareholders inclusive of $74.0 million non-cash goodwill impairment charge and $91.9 million non-cash long-lived intangible asset write-down associated with the 2022 STI acquisition
    • Adjusted EBITDA(1) of $45.2 million
    • Net loss per basic and diluted share of $(0.93)
    • Adjusted net income per diluted share(1) of $0.16

    Full Year 2024 Financial Highlights

    • Revenue of $915.8 million
    • Gross Margin of 32.5%
    • Adjusted gross margin (1) of 34.1%
    • Net loss to common shareholders of $(296.1) million
      • Net loss to common shareholders inclusive of $236.0 million non-cash goodwill impairment charge and $91.9 million non-cash long-lived intangible asset write-down associated with the 2022 STI acquisition
    • Adjusted EBITDA(1) of $173.6 million
    • Net loss per basic and diluted share of $(1.95)
    • Adjusted net income per diluted share(1) of $0.60
    • Free cash flow(1) of $135.4 million
    • Total executed contracts and awarded orders at December 31, 2024 were $2.0 billion

    ALBUQUERQUE, N.M., Feb. 27, 2025 (GLOBE NEWSWIRE) — ARRAY Technologies (NASDAQ: ARRY) (“ARRAY” or the “Company”), a global leader in utility-scale solar tracking, today announced financial results for its fourth quarter and full year ended December 31, 2024.

    “ARRAY delivered strong fourth quarter and full year 2024 results, we exceeded the mid-point of our fourth quarter revenue guidance and achieved record gross margin on the full year. Our ongoing focus on operational execution continues to translate into robust profitability and healthy cash flow. We finished 2024 with an orderbook of $2 billion, representing 10% year-on-year growth. We are pleased with our results, which delivered significant progress in both market share and commercial growth. Thank you to our employees for their continued focus and hard work. Additionally, we are on track to deliver 100% domestic content solar trackers by the first half of 2025. Our OmniTrack™ product continues to gain traction in the market, and now accounts for over 20% of our orderbook. We are excited about our investment in Swap Robotics, a disruptive technology driving automation in PV installations. We believe the integration of Swap Robotics technology into our product portfolio will drive project efficiencies and cost savings for our customers,” said Chief Executive Officer, Kevin G. Hostetler.

    Mr. Hostetler continued, “While persistent headwinds, including permitting and interconnection delays, shortages of high-voltage circuit breakers and transformers, and labor constraints—continue to impact project timelines in the United States, we experienced the market stabilizing by year-end, in contrast to the delays experienced in the middle of the year. In Europe, we anticipate modest growth in 2025 as we are well positioned to capture additional market share. However, in Brazil, macro factors such as currency devaluation, volatile interest rates, and newly introduced tariffs on solar components have impacted growth. For 2025, at the midpoint of our guidance, ARRAY expects to deliver over 20% year-over-year revenue growth. We are optimistic about future demand growth for utility-scale solar energy both domestically and internationally and confident that our value proposition in the industry will continue to propel growth for years to come.”

    First Quarter and Full Year 2025 Guidance

    Given the uncertainty in the utility-scale solar energy market and headwinds we experienced during 2024 which pushed out project timelines, we are providing guidance for the first quarter of 2025. It is not our intention to provide quarterly guidance in the future. For the quarter ending March 31, 2025, the Company expects:

    • Revenue to be in the range of $260 million to $270 million
    • Adjusted EBITDA margin(2) to be in the range of 11% to 13%

    For the year ending December 31, 2025, the Company expects:

    • Revenue to be in the range of $1.05 billion to $1.15 billion
    • Adjusted EBITDA(2) to be in the range of $180 million to $200 million
    • Adjusted net income per share(2) to be in the range of $0.60 to $0.70

    Supplemental Presentation and Conference Call Information

    ARRAY has posted a supplemental presentation to its website, which will be discussed during the conference call hosted by management today (February 27, 2025) at 5:00 p.m. (ET). The conference call can be accessed live over the phone by dialing (877)-869-3847 (domestic) or (201)-689-8261 (international) and entering the passcode 13750627 or via webcast of the live conference call by logging onto the Investor Relations sections of the Company’s website at http://ir.arraytechinc.com. A telephonic replay will be available approximately three hours after the call by dialing (877)-660-6853 (domestic), or (201)-612-7415 (international) with the passcode 13750627. The replay will be available until 11:59 p.m. (ET) on March 13, 2025. The online replay will be available for 30 days on the same website immediately following the call.

    About ARRAY Technologies, Inc.

    ARRAY Technologies (NASDAQ: ARRY) is a leading global provider of solar tracking technology to utility-scale and distributed generation customers, who construct, develop, and operate solar PV sites. With solutions engineered to withstand the harshest weather conditions, ARRAY’s high-quality solar trackers, software platforms and field services combine to maximize energy production and deliver value to our customers for the entire lifecycle of a project. Founded and headquartered in the United States, ARRAY is rooted in manufacturing and driven by technology – relying on its domestic manufacturing, diversified global supply chain, and customer-centric approach to design, deliver, commission, train, and support solar energy deployment around the world. For more news and information on ARRAY, please visit arraytechinc.com.

    Investor Relations Contact:
    Keith Jennings
    505-437-0010
    investors@arraytechinc.com

    Media Contact:
    Nicole Stewart
    505-589-8257

    Forward-Looking Statements

    This press release contains forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, technology or product developments, financing and investment plans, dividend policy, competitive position, industry and regulatory environment, potential growth opportunities and the effects of competition. Forward-looking statements include statements that are not historical facts and can be identified by terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “anticipates,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will,” “would,” “designed to” or similar expressions and the negatives of those terms.

    ARRAY’s actual results and the timing of events could materially differ from those anticipated in such forward-looking statements as a result of certain risks, uncertainties and other factors, including without limitation: changes in growth or rate of growth in demand for solar energy projects; competitive pressures within our industry; factors affecting viability and demand for solar energy, including but not limited to, the retail price of electricity, availability of in-demand components like high voltage breakers, various policies related to the permitting and interconnection costs of solar plants, and the availability of incentives for solar energy and solar energy production systems, which makes it difficult to predict our future prospects; competition from conventional and renewable energy sources; a loss of one or more of our significant customers, their inability to perform under their contracts, or their default in payment; a drop in the price of electricity derived from the utility grid or from alternative energy sources; fluctuations in our results of operations across fiscal periods, which could make our future performance difficult to predict and could cause our results of operations for a particular period to fall below expectations; any increase in interest rates, or a reduction in the availability of tax equity or project debt capital in the global financial markets, which could make it difficult for customers to finance the cost of a solar energy system; existing electric utility industry policies and regulations, and any subsequent changes or new related policies and regulations, may present technical, regulatory and economic barriers to the purchase and use of solar energy systems, which may significantly reduce demand for our products or harm our ability to compete; the interruption of the flow of materials from international vendors, which could disrupt our supply chain, including as a result of the imposition of new and/or additional duties, tariffs and other charges or restrictions on imports and exports; changes in the global trade environment, including the imposition of import tariffs or other import restrictions; geopolitical, macroeconomic and other market conditions unrelated to our operating performance including but not limited to a pandemic, the Ukraine-Russia war, attacks on shipping in the Red Sea, conflict in the Middle East, and inflation and interest rates; our ability to convert our orders in backlog into revenue; the reduction, elimination or expiration, or our failure to optimize the benefits of government incentives for, or regulations mandating the use of, renewable energy and solar energy, particularly in relation to our competitors; failure to, or incurrence of significant costs in order to, obtain, maintain, protect, defend or enforce, our intellectual property and other proprietary right; delays in construction projects and any failure to manage our inventory; significant changes in the cost of raw materials; disruptions to transportation and logistics, including increases in shipping costs; defects or performance problems in our products, which could result in loss of customers, reputational damage and decreased revenue; delays, disruptions or quality control problems in our product development operations; our ability to retain our key personnel or failure to attract additional qualified personnel; additional business, financial, regulatory and competitive risks due to our continued planned expansion into new markets; cybersecurity or other data incidents, including unauthorized disclosure of personal or sensitive data or theft of confidential information; a failure to maintain an effective system of integrated internal controls over financial reporting; our substantial indebtedness, risks related to actual or threatened public health epidemics, pandemics, outbreaks or crises; changes to laws and regulations, including changes to tax laws and regulations, that are applied adversely to us or our customers, including our ability to optimize those changes brought about by the passage of the Inflation Reduction Act or any repeal thereof; and the other risks and uncertainties described in more detail in the Company’s most recent Annual Report on Form 10-K and other documents on file with the SEC, each of which can be found on our website, www.arraytechinc.com.

    Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

    Non-GAAP Financial Information

    This press release includes certain financial measures that are not presented in accordance with U.S. generally accepted accounting principles (“GAAP”), including Adjusted gross profit, Adjusted gross margin, Adjusted EBITDA, Adjusted net income, Adjusted net income per share, Adjusted general and administrative expense and Free cash flow.

    We define Adjusted gross profit as gross profit plus (i) amortization of developed technology and (ii) other costs if applicable. We define Adjusted gross margin as Adjusted gross profit as a percentage of revenue. We define Adjusted EBITDA as net income (loss) plus (i) other expense, net, (ii) foreign currency (gain) loss, net, (iii) preferred dividends and accretion, (iv) interest expense, (v) income tax (benefit) expense, (vi) depreciation expense, (vii) amortization of intangibles, (viii) amortization of developed technology, (ix) equity-based compensation, (x) change in fair value of contingent consideration, (xi) impairment of long-lived assets, (xii) goodwill impairment, (xiii) certain legal expenses, and (xiv) other costs. We define Adjusted net income as net income (loss) to common shareholders plus (i) amortization of intangibles, (ii) amortization of developed technology, (iii) amortization of debt discount and issuance costs (iv) preferred accretion, (v) equity-based compensation, (vi) change in fair value of contingent consideration, (vii) impairment of long-lived assets, (viii) goodwill impairment, (ix) certain legal expenses, (x) other costs, and (xi) income tax (benefit) expense adjustments. We define Adjusted general and administrative expense as general and administrative expense less (i) equity based compensation, (ii) certain legal expenses, (iii) other costs and (iv) income tax expense adjustments. We define Free cash flow as Cash provided by (used in) operating activities less purchase of property, plant and equipment and cash payments for the acquisition of right-of-use assets.

    A detailed reconciliation between GAAP results and results excluding special items (“non-GAAP”) is included within this presentation. We calculate net income (loss) per share as net income (loss) to common shareholders divided by the basic and diluted weighted average number of shares outstanding for the applicable period and we define Adjusted net income per share as Adjusted net income (as detailed above) divided by the basic and diluted weighted average number of shares outstanding for the applicable period.

    We believe that these non-GAAP financial measures are provided to enhance the reader’s understanding of our past financial performance and our prospects for the future. Our management team uses these non-GAAP financial measures in assessing the Company’s performance, as well as in planning and forecasting future periods. The non-GAAP financial information is presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with GAAP and may be different from similarly titled non-GAAP measures used by other companies.

    Among other limitations, Adjusted gross profit, Adjusted gross margin, Adjusted EBITDA and Adjusted net income do not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments; do not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations; do not reflect income tax expense or benefit; and other companies in our industry may calculate Adjusted gross profit, Adjusted gross margin, Adjusted EBITDA and Adjusted net income differently than we do, which limits their usefulness as comparative measures. Because of these limitations, Adjusted gross profit, Adjusted gross margin, Adjusted EBITDA and Adjusted net income should not be considered in isolation or as substitutes for performance measures calculated in accordance with GAAP.

    We compensate for these limitations by relying primarily on our GAAP results and using Adjusted gross profit, Adjusted gross margin, Adjusted EBITDA and Adjusted net income on a supplemental basis.

    You should review the reconciliation of gross profit to Adjusted gross profit and net income (loss) to Adjusted EBITDA and Adjusted net income below and not rely on any single financial measure to evaluate our business.

    (1) A reconciliation of the most comparable GAAP measure to its Non-GAAP measure is included below.
    (2) A reconciliation of projected Adjusted gross profit, Adjusted gross margin, Adjusted EBITDA and Adjusted net income per share, which are forward-looking measures that are not prepared in accordance with GAAP, to the most directly comparable GAAP financial measures, is not provided because we are unable to provide such reconciliation without unreasonable effort. The inability to provide a quantitative reconciliation is due to the uncertainty and inherent difficulty predicting the occurrence, the financial impact and the periods in which the components of the applicable GAAP measures and non-GAAP adjustments may be recognized. The GAAP measures may include the impact of such items as non-cash share-based compensation, revaluation of the fair-value of our contingent consideration, and the tax effect of such items, in addition to other items we have historically excluded from Adjusted EBITDA and Adjusted net income per share. We expect to continue to exclude these items in future disclosures of these non-GAAP measures and may also exclude other similar items that may arise in the future (collectively, “non-GAAP adjustments”). The decisions and events that typically lead to the recognition of non-GAAP adjustments are inherently unpredictable as to if or when they may occur. As such, for our 2025 outlook, we have not included estimates for these items and are unable to address the probable significance of the unavailable information, which could be material to future results.

    Array Technologies, Inc. and Subsidiaries
    Consolidated Balance Sheets (unaudited)
    (in thousands, except per share and share amounts)
     
      December 31,
        2024       2023  
    ASSETS
    Current assets      
    Cash and cash equivalents $ 362,992     $ 249,080  
    Restricted cash   1,149        
    Accounts receivable, net   275,838       332,152  
    Inventories   200,818       161,964  
    Prepaid expenses and other   157,927       89,085  
    Total current assets   998,724       832,281  
           
    Property, plant and equipment, net   26,222       27,893  
    Goodwill   160,189       435,591  
    Other intangible assets, net   181,409       354,389  
    Deferred income tax assets   17,754       15,870  
    Other assets   41,701       40,717  
    Total assets $ 1,425,999     $ 1,706,741  
           
    LIABILITIES, REDEEMABLE PERPETUAL PREFERRED STOCK AND STOCKHOLDERS’ EQUITY
    Current liabilities      
    Accounts payable $ 172,368     $ 119,498  
    Accrued expenses and other   91,183       70,211  
    Accrued warranty reserve   2,063       2,790  
    Income tax payable   5,227       5,754  
    Deferred revenue   119,775       66,488  
    Current portion of contingent consideration   1,193       1,427  
    Current portion of debt   30,714       21,472  
    Other current liabilities   15,291       48,051  
    Total current liabilities   437,814       335,691  
           
    Deferred income tax liabilities   21,398       66,858  
    Contingent consideration, net of current portion   7,868       8,936  
    Other long-term liabilities   18,684       20,428  
    Long-term warranty   4,830       3,372  
    Long-term debt, net of current portion   646,570       660,948  
    Total liabilities   1,137,164       1,096,233  
           
    Commitments and contingencies (Note 16)      
           
    Series A Redeemable Perpetual Preferred Stock: $0.001 par value; 500,000 shares authorized; 460,920 and 432,759 issued, respectively; liquidation preference of $493.1 million at both dates   406,931       351,260  
           
    Stockholders’ equity      
    Preferred stock $0.001 par value – 4,500,000 shares authorized; none issued at respective dates          
    Common stock $0.001 par value – 1,000,000,000 shares authorized; 151,951,652 and 151,242,120 shares issued at respective dates   151       151  
    Additional paid-in capital   297,780       344,517  
    Accumulated deficit   (370,624 )     (130,230 )
    Accumulated other comprehensive income (loss)   (45,403 )     44,810  
    Total stockholders’ equity   (118,096 )     259,248  
    Total liabilities, redeemable perpetual preferred stock and stockholders’ equity $ 1,425,999     $ 1,706,741  
    Array Technologies, Inc. and Subsidiaries
    Consolidated Statements of Operations (unaudited)
    (in thousands, except per share amounts)
     
      Three Months Ended
    December 31,
      Year Ended
    December 31,
        2024       2023       2024       2023  
    Revenue $ 275,232     $ 341,615     $ 915,807     $ 1,576,551  
    Cost of revenue:              
    Cost of product and service revenue   193,273       253,746       603,572       1,146,442  
    Amortization of developed technology   3,640       3,640       14,558       14,558  
    Total cost of revenue   196,913       257,386       618,130       1,161,000  
    Gross profit   78,319       84,229       297,677       415,551  
                   
    Operating expenses:              
    General and administrative   45,663       43,710       160,567       159,535  
    Change in fair value of contingent consideration   396       732       125       2,964  
    Depreciation and amortization   8,702       9,567       36,086       38,928  
    Long-lived assets impairment   91,904             91,904      
    Goodwill impairment   74,000             236,000        
    Total operating expenses   220,665       54,009       524,682       201,427  
                   
    (Loss) income from operations   (142,346 )     30,220       (227,005 )     214,124  
                   
    Other income (expense), net   654       (888 )     (1,008 )     (1,015 )
    Interest income   4,092       2,206       16,777       8,330  
    Foreign currency (loss) gain, net   (3,442 )     (326 )     (4,515 )     (53 )
    Interest expense   (9,007 )     (8,857 )     (34,825 )     (44,229 )
    Total other (expense) income   (7,703 )     (7,865 )     (23,571 )     (36,967 )
                   
    (Loss) income before income tax expense (benefit)   (150,049 )     22,355       (250,576 )     177,157  
    Income tax (benefit) expense   (23,146 )     3,013       (10,182 )     39,917  
    Net (loss) income   (126,903 )     19,342       (240,394 )     137,240  
    Preferred dividends and accretion   14,338       13,332       55,670       51,691  
    Net (loss) income to common shareholders $ (141,241 )   $ 6,010     $ (296,064 )   $ 85,549  
                   
    (Loss) income per common share              
    Basic $ (0.93 )   $ 0.04     $ (1.95 )   $ 0.57  
    Diluted $ (0.93 )   $ 0.04     $ (1.95 )   $ 0.56  
                   
    Weighted average common shares outstanding              
    Basic   151,944       151,175       151,754       150,942  
    Diluted   151,944       152,110       151,754       152,022  
    Array Technologies, Inc. and Subsidiaries
    Consolidated Statements of Cash Flows (unaudited)
    (in thousands)
     
      Three Months Ended
    December 31,
      Year Ended
    December 31,
        2024       2023       2024       2023  
    Operating activities:              
    Net income (loss) $ (126,903 )   $ 19,342     $ (240,394 )   $ 137,240  
    Adjustments to net income (loss):              
    Goodwill impairment   74,000             236,000        
    Impairment of long-lived assets   91,904             91,904        
    Provision for bad debts   (1,357 )     2,644       2,058       2,527  
    Deferred tax benefit   (30,371 )     (6,534 )     (37,650 )     (8,862 )
    Depreciation and amortization   9,206       9,950       38,221       40,268  
    Amortization of developed technology   3,640       3,640       14,558       14,558  
    Amortization of debt discount and issuance costs   1,435       1,447       6,087       10,570  
    Gain on debt refinancing         (457 )           (457 )
    Equity-based compensation   3,498       2,845       10,349       14,540  
    Change in fair value of contingent consideration   396       732       125       2,964  
    Warranty provision   3,127       1,075       3,163       4,666  
    Write-down of inventories   442       1,844       2,923       6,431  
    Changes in operating assets and liabilities, net of business acquisition:              
    Accounts receivable   (442 )     99,164       41,423       92,800  
    Inventories   (14,823 )     54,189       (44,787 )     66,743  
    Income tax receivables   33       (3,156 )     (4,112 )     9  
    Prepaid expenses and other   (24,505 )     (8,700 )     (69,708 )     (10,840 )
    Accounts payable   24,475       (52,097 )     58,180       (37,654 )
    Accrued expenses and other   34,492       (10,019 )     (436 )     5,325  
    Income tax payable   3,790       2,666       (863 )     1,936  
    Lease liabilities   (2,894 )     9,227       (8,624 )     1,177  
    Deferred revenue   8,443       (33,821 )     55,563       (111,986 )
    Net cash provided by operating activities   57,586       93,981       153,980       231,955  
    Investing activities              
    Purchase of property, plant and equipment   (1,701 )     (5,374 )     (7,305 )     (16,989 )
    Retirement/disposal of property, plant and equipment   (4 )     168       34       168  
    Cash payments for the acquisition of right-of-use assets   (11,276 )           (11,276 )      
    SAFE Investment   (3,000 )           (3,000 )      
    Sale of equity investment               11,975        
    Net cash used in investing activities   (15,981 )     (5,206 )     (9,572 )     (16,821 )
    Financing activities              
    Series A equity issuance costs                     (1,509 )
    Tax withholding related to vesting of equity-based compensation   (18 )           (1,752 )      
    Proceeds from issuance of other debt   74,035       2,795       93,059       63,311  
    Principal payments on term loan facility   (1,075 )     (1,075 )     (4,300 )     (74,300 )
    Principal payments on other debt   (72,545 )     (19,039 )     (97,424 )     (88,063 )
    Contingent consideration payments               (1,427 )     (1,200 )
    Net cash used in financing activities   397       (17,319 )     (11,844 )     (101,761 )
    Effect of exchange rate changes on cash and cash equivalent balances   (10,233 )     3,614       (17,503 )     1,806  
    Net change in cash and cash equivalents   31,769       75,070       115,061       115,179  
    Cash and cash equivalents and restricted cash, beginning of period   332,372       174,010       249,080       133,901  
    Cash and cash equivalents and restricted cash, end of period $ 364,141     $ 249,080     $ 364,141     $ 249,080  
                   
    Supplemental cash flow information              
    Cash paid for interest $ 8,989     $ 8,995     $ 38,655     $ 43,949  
    Cash paid for income taxes (net of refunds) $ 2,746     $ 9,145     $ 27,966     $ 45,942  
                   
    Non-cash investing and financing              
    Dividends accrued on Series A $ (13,668 )   $ 6,803     $ 7,246     $ 26,370  
    Array Technologies, Inc.
    Adjusted Gross Profit, Adjusted EBITDA, Adjusted Net Income, General and Administrative Expense, and Free Cash Flow Reconciliation (unaudited)
    (in thousands, except per share amounts)
     

    The following table reconciles Gross profit to Adjusted gross profit:

      Three Months Ended
    December 31,
      Year Ended
    December 31,
        2024       2023       2024       2023  
    Revenue   275,232       341,615       915,807       1,576,551  
    Cost of revenue   196,913       257,386       618,130       1,161,000  
    Gross profit   78,319       84,229       297,677       415,551  
    Gross margin   28.5 %     24.7 %     32.5 %     26.4 %
                   
    Amortization of developed technology   3,640       3,640       14,558       14,558  
    Adjusted gross profit   81,959       87,869       312,235       430,109  
    Adjusted gross margin   29.8 %     25.7 %     34.1 %     27.3 %
     

    The following table reconciles Net income to Adjusted EBITDA:

      Three Months Ended
    December 31,
      Year Ended
    December 31,
        2024       2023       2024       2023  
    Net (loss) income $ (126,903 )   $ 19,342     $ (240,394 )   $ 137,240  
    Preferred dividends and accretion   14,338       13,332       55,670       51,691  
    Net (loss) income to common shareholders $ (141,241 )   $ 6,010     $ (296,064 )   $ 85,549  
    Other expense, net   (4,746 )     (1,318 )     (15,769 )     (7,315 )
    Foreign currency loss (gain), net   3,442       326       4,515       53  
    Preferred dividends and accretion   14,338       13,332       55,670       51,691  
    Interest expense   9,007       8,857       34,825       44,229  
    Income tax (benefit) expense   (23,146 )     3,013       (10,182 )     39,917  
    Depreciation expense   1,140       772       4,410       2,669  
    Amortization of intangibles   8,142       9,186       33,811       37,607  
    Amortization of developed technology   3,640       3,640       14,558       14,558  
    Equity-based compensation   3,498       2,648       10,349       14,578  
    Change in fair value of contingent consideration   396       732       125       2,964  
    Long-lived assets impairment   91,904             91,904        
    Goodwill impairment   74,000             236,000        
    Certain legal expenses(a)   2,240       244       6,773       898  
    Other costs(b)   2,586       736       2,628       736  
    Adjusted EBITDA $ 45,200     $ 48,178     $ 173,553     $ 288,134  
     

    (a) Represents certain legal fees and other related costs associated with (i) Actions filed against the company and certain officers and directors alleging violations of the Securities Exchange Acts of 1934 and 1933, which litigation was dismissed with prejudice by the Court on May 19, 2023 and subsequently appealed. The appeal has been fully briefed, argued, and the Company is awaiting a decision, and (ii) legal and success fees related to a regional tax dispute for a period prior to the acquisition of STI, and (iii) other litigation and legal matters. We consider these costs not representative of legal costs that we will incur from time to time in the ordinary course of our business.

    (b) For the three months ended December 31, 2024, other costs represent costs related to the settlement of a regional tax dispute for a period prior to the acquisition of STI. For the twelve months ended December 31, 2024, other costs also include costs related to Capped-Call accounting treatment evaluation and the settlement of a regional tax dispute. For the three months ended December 31, 2023, other costs represent costs related to Capped-Call accounting treatment evaluation.

    The following table reconciles Net income to Adjusted net income:

      Three Months Ended
    December 31,
      Year Ended
    December 31,
        2024       2023       2024       2023  
    Net (loss) income $ (126,903 )   $ 19,342     $ (240,394 )   $ 137,240  
    Preferred dividends and accretion   14,338       13,332       55,670       51,691  
    Net (loss) income to common shareholders $ (141,241 )   $ 6,010     $ (296,064 )   $ 85,549  
    Amortization of intangibles   8,142       9,187       33,811       37,607  
    Amortization of developed technology   3,640       3,640       14,558       14,558  
    Amortization of debt discount and issuance costs   1,547       1,447       6,199       10,570  
    Preferred accretion   7,093       6,528       27,510       25,320  
    Equity based compensation   3,498       2,648       10,349       14,578  
    Change in fair value of contingent consideration   396       732       125       2,964  
    Impairment of long-lived assets   91,904             91,904        
    Goodwill impairment   74,000             236,000        
    Certain legal expenses(a)   2,240       244       6,773       898  
    Other costs(b)   2,586       736       2,628       736  
    Income tax expense adjustments(c)   (28,688 )     (4,757 )     (42,596 )     (20,863 )
    Adjusted net income $ 25,117     $ 26,415     $ 91,197     $ 171,917  
                   
    (Loss) income per common share              
    Basic $ (0.93 )   $ 0.04     $ (1.95 )   $ 0.57  
    Diluted $ (0.93 )   $ 0.04     $ (1.95 )   $ 0.56  
    Weighted average number of common shares outstanding              
    Basic   151,944       151,175       151,754       150,942  
    Diluted   151,944       152,110       151,754       152,022  
                   
    Adjusted net income per common share              
    Basic $ 0.17     $ 0.17     $ 0.60     $ 1.14  
    Diluted $ 0.16     $ 0.17     $ 0.60     $ 1.13  
    Weighted average number of common shares outstanding              
    Basic   151,944       151,175       151,754       150,942  
    Diluted   152,255       152,110       152,285       152,022  
     

    (a) Represents certain legal fees and other related costs associated with (i) Actions filed against the company and certain officers and directors alleging violations of the Securities Exchange Acts of 1934 and 1933, which litigation was dismissed with prejudice by the Court on May 19, 2023 and subsequently appealed. The appeal has been fully briefed, argued, and the Company is awaiting a decision, and (ii) legal and success fees related to a regional tax dispute for a period prior to the acquisition of STI and (iii) other litigation and legal matters. We consider these costs not representative of legal costs that we will incur from time to time in the ordinary course of our business.

    (b) For the three months ended December 31, 2024, other costs represent costs related to the settlement of a regional tax dispute for a period prior to the acquisition of STI. For the twelve months ended December 31, 2024, other costs also include costs related to Capped-Call accounting treatment evaluation and the settlement of a tax dispute. For the three months ended December 31, 2023, other costs represent costs related to Capped-Call accounting treatment evaluation.

    (c) Represents the estimated tax impact of all Adjusted Net Income add-backs, excluding those which represent permanent differences between book versus tax.

    The following table reconciles General and administrative expense to Adjusted general and administrative expense:

           
      Three Months Ended
    December 31,
      Year Ended
    December 31,
        2024       2023       2024       2023  
    General and administrative expense   45,663       43,710       160,567       159,535  
    Equity based compensation   3,498       2,648       10,349       14,578  
    Certain legal expenses(a)   2,240       244       6,773       898  
    Other costs(b)   2,586       736       2,628       736  
    Income tax expense adjustments(c)   (28,688 )     (4,757 )     (42,596 )     (20,863 )
    Adjusted general and administrative expense   25,299       42,581       137,721       154,884  
     

    (a) Represents certain legal fees and other related costs associated with (i) Actions filed against the company and certain officers and directors alleging violations of the Securities Exchange Acts of 1934 and 1933, which litigation was dismissed with prejudice by the Court on May 19, 2023 and subsequently appealed. The appeal has been fully briefed, argued, and the Company is awaiting a decision, and (ii) legal and success fees related to a regional tax dispute for a period prior to the acquisition of STI and (iii) other litigation and legal matters. We consider these costs not representative of legal costs that we will incur from time to time in the ordinary course of our business.

    (b) For the three months ended December 31, 2024, other costs represent costs related to the settlement of a regional tax dispute for a period prior to the acquisition of STI. For the twelve months ended December 31, 2024, other costs also include costs related to Capped-Call accounting treatment evaluation and the settlement of a tax dispute. For the Three months ended December 31, 2023, other costs represent costs related to Capped-Call accounting treatment evaluation.

    (c) Represents the estimated tax impact of all Adjusted Net Income add-backs, excluding those which represent permanent differences between book versus tax.

    The following table reconciles new cash provided by operating activities to Free cash flow:

      Three Months Ended
    December 31,
      Year Ended
    December 31,
        2024       2023       2024       2023  
    Net cash provided by operating activities   57,586       93,981       153,980       231,955  
    Purchase of property, plant and equipment   (1,701 )     (5,374 )     (7,305 )     (16,989 )
    Cash payments for the acquisition of right-of-use assets   (11,276 )           (11,276 )      
    Free cash flow   44,609       88,607       135,399       214,966  

    The MIL Network

  • MIL-OSI Global: Trump mineral deal with Ukraine offers hope but little in the way of security

    Source: The Conversation – UK – By Jonathan Este, Senior International Affairs Editor, Associate Editor

    If you want to get an idea of how Donald Trump’s mind works (and this can change from day to day, as we know), it’s worth taking a look at his TruthSocial website. As I write, beneath a video pinned to the top of his feed featuring an AI-generated vision of “Trump Gaza” (complete with casinos, shopping malls and a giant golden statue of the man himself), can be found a clue to the frenetic presidential activity of the past month.

    In a post threatening legal action against any writer or publisher whose “Fake books” offends, Trump refers to himself as “a President who is being given credit for having the Best Opening Month of any President in history”. Apparently George Washington is second on that list – and, given that Potus #1 took 33 days to sign the first bill passed under the new US constitution, you could say Potus #47 has left him trailing in his wake.

    Of course #47 appears to face fewer constitutional constraints than his illustrious predecessor.

    Sadly, though, Trump will be unable to include in this list the deal he has reportedly just struck with Volodymyr Zelensky which swaps a share in Ukraine’s mineral wealth for an as yet unspecified security guarantee.

    Precise details of this deal aren’t confirmed. But we’re told that the original US$500 billion (£394 billion) demand has been dropped in return for a share in an investment fund into which Ukraine will contribute 50% of the revenue from its mineral resources. “What better could you have for Ukraine than to be in an economic partnership with the United States?” commented US national security adviser, Mike Waltz.


    Sign up to receive our weekly World Affairs Briefing newsletter from The Conversation UK. Every Thursday we’ll bring you expert analysis of the big stories in international relations.


    But for the sake of social media, a deal’s a deal and can be trumpeted as such. Zelensky is heading to Washington to sign the agreement and we shall find out in due course whether or not this will assure Ukraine’s future security. There is still the actual peace deal with Russia to work out, after all.

    Another landmark foreign policy deal brokered by the Trump White House was with the Taliban in 2020 and concerned the future of Afghanistan. And, as Philip A. Berry writes, Zelensky can take little comfort in that.

    Berry, a research fellow at King’s College London, who has extensive experience of working with anti-narcotics agencies in Afghanistan, points to similarities in the way Trump managed negotiations with the Taliban and his deal-making with Ukraine and discussions so far with Russia. The Afghan government was largely cut out of the negotiations, as Trump has threatened to do to Ukraine with regards a peace deal. And like the current situation, Trump’s regular public utterances seriously undermined the talks. Berry concludes:

    Trump’s Taliban deal excluded the US’s ally, conceded too much to an adversary, and was partly motivated by the perception of wasting American dollars in a far-off land. Unfortunately, these hallmarks are all too evident in the president’s stance on Ukraine. Zelensky can only hope that things work out better this time around.




    Read more:
    How Trump the ‘master deal-maker’ failed when it came to negotiating with the Taliban in Afghanistan


    Trust will be absolutely vital if the US and Ukraine are to conclude this agreement and, more critically, if they are to reach terms with Russia that will guarantee the “just peace deal” that Zelensky craves, writes David J. Wilcox of the University of Birmingham. Wilcox points to the relationship of trust built by Mikhail Gorbachev and Ronald Reagan in the 1980s which paved a way for a series of nuclear weapons reduction treaties between the Soviet Union and the US.

    It has just been announced that preparations are being made for “expert-level” talks between the US and Russia, but, as Wilcox points out, “any negotiations to end the war will rest ultimately on those two states and their leaders”. And at present, nothing has been publicly said about whether Putin and Zelensky have even agreed to meet.




    Read more:
    Ukraine war: why negotiations depend on trust


    Meanwhile, what do we know about Ukraine’s mineral wealth and what sort of return Trump can expect for the US? Dafydd Townley, an expert in international security at the University of Portsmouth, stresses that Trump’s recent decision to impose punitive tariffs against Beijing has closed off China as a source of key minerals on which the US has been reliant up until now.

    It’s a clue, writes Townley, as to why the US president seemed very keen on bringing his deal-making facilities to bear on Greenland, which also has large deposits of desirable minerals.

    Interestingly, as Townley points out, Russia has taken control of about 20% of Ukraine’s mineral deposits under the territory it now controls (which America would be open to exploiting according to an offer made by Vladimir Putin’s aides at the recent talks in Saudi Arabia).

    It’s also worth noting that Ukraine’s extraction sector has suffered over the past decade from chronic under-investment, thanks to the ongoing hostilities between Russia and Ukraine. As a result it could be some years before the US gets what it needs from the deal it has reportedly struck with Kyiv.




    Read more:
    Why Trump really wants Ukraine’s minerals — China has put theirs off limits


    Three long years

    Amid all the shuttle diplomacy and wheeler-dealing taking place around them, at the start of the week the embattled Ukrainian population marked the third anniversary of Russia’s full-scale invasion. They were joined by more than a dozen foreign leaders who gathered in Kyiv to express their continuing support.

    As the conflict moves into its fourth year, Stefan Wolff, an international security expert at the University of Birmingham, takes a look at the broader geopolitical implications of the conflict in the era of Trump.

    He sees worrying parallels with the Munich conference of 1938 which sealed Czechoslovakia’s fate. Not, as you might expect, in terms of Trump’s apparent appeasement of Putin – but because, like Munich, talks on the fate of a sovereign nation are being held without that nation being present. Wolff writes:

    There is every indication that Putin is unlikely to stop in or with Ukraine. And it is worth remembering that the second world war started 11 months after Neville Chamberlain thought he had secured “peace in our time”.

    This, of course, is the prospect that has both terrified and stiffened the resolve of Ukraine’s western allies. But Wolff also points to limitations in this analogy, in that he doesn’t believe that Trump is acting out of fear that he is in a weaker position than Putin, as did Neville Chamberlain and the French prime minister Édouard Daladier.

    It’s rather that Trump sees himself as part of a triumvirate of world leaders, along with Putin and China’s president, Xi Jinping, who have the opportunity to carve out spheres of influence and establish a new world order based on the exercise of raw power.




    Read more:
    Ukraine war: Trump is not trying to appease Putin – he has a vision of a new US-China-Russia order


    Richard Youngs, meanwhile, sees the dawning of what he calls a “no world order”. Youngs, an international relations expert at the University of Warwick, sees an era of flux, where the stability of the past 80 years is disintegrating without anything stable or concrete to replace it.

    Several European leaders, including Keir Starmer who is today visiting Trump in Washington, are due to meet this Sunday ahead of a bigger defence summit in Brussels next week, to continue discussions about how to respond to the changing Ukraine situation. Reports suggest a European defence bank or fund that would include the UK may be on the cards.

    Youngs certainly believes that European powers will need to consider practical measures in order to bind themselves into more cohesive relationship and ensure their continuing autonomy. One of those will be in boosting their defence capabilities – something that is now gathering pace in the face of US pressure.

    But more radical thinking will be needed, writes Youngs, who has coined the term “geoliberalism” as a way of visualising the sort of thinking about the values and certainties that can bind Europe together in the face of global turbulence.




    Read more:
    No world order: Europe needs more radical thinking for the Trump era


    Alex Titov, meanwhile, believes that for all the talk of “deals” to end the violence, both sides have their reasons for wanting to continue, given that their stated positions remain diametrically opposed and irreconcilable.

    Russia’s battlefield progress, while steady, is slow and there’s no real prospect of it forcing a capitulation from Kyiv in the next 12 months. But – particularly with the radically different US position under Donald Trump, neither is there any chance of Russia being forced off the territory it has captured. Ominously, Titov concludes, this could mean that “the bloodiest battles of the war are yet to come”.




    Read more:
    Ukraine war three years on: the bloodiest battles may be still to come


    A new way of governing

    After a whirlwind first month, Trump held his first cabinet meeting this week, with a special appearance from his right-hand man Elon Musk, who reportedly got to speak more than anyone else. Musk, of course, has been responsible for much of the maelstrom of activity that has caused so much disquiet and is providing a lot of work for lawyers who are pushing back against many of the new adminstration’s measures on the grounds they are unconstitutional.

    Musk, Trump and his vice-president J.D. Vance have, in turn, pushed back against judges who have issued injunctions to either halt or delay some of their measures. Musk, in a fit of pique this week when three judges halted three of the administration’s policies, complained bitterly “What is the point of having democratic elections if unelected activist ‘judges’ can override the clear will of the people? Well, that’s no democracy at all!”

    Stephen Lovell, professor of modern history at King’s College London, has been looking at the way that Trump and his team are attempting to bend the US constitution to their will, comparing their approach to that of Vladimir Putin. Putin, as we know, never saw a constitutional loophole he didn’t want to wriggle through or otherwise obliterate.




    Read more:
    Trump, Putin and the authoritarian take on constitutionalism



    World Affairs Briefing from The Conversation UK is available as a weekly email newsletter. Click here to get updates directly in your inbox.


    ref. Trump mineral deal with Ukraine offers hope but little in the way of security – https://theconversation.com/trump-mineral-deal-with-ukraine-offers-hope-but-little-in-the-way-of-security-250962

    MIL OSI – Global Reports

  • MIL-OSI USA: Murkowski Cosponsors Bill to Grant Ukrainians Already in the U.S. Temporary Guest Status

    US Senate News:

    Source: United States Senator for Alaska Lisa Murkowski
    02.27.25
    Washington, DC – Following the third anniversary of Russia’s catastrophic invasion of Ukraine, U.S. Senator Lisa Murkowski (R-AK) announced that she has joined U.S. Senate Democratic Whip Dick Durbin (D-IL) as a cosponsor of his Protecting Our Guests During Hostilities in Ukraine Act, which would provide temporary guest status to Ukrainians and their immediate family members who are already in the United States through the “Uniting for Ukraine” parole process. The bill allows Ukrainians to stay and work in the U.S. until the Secretary of State determines that hostilities in Ukraine have ceased and it is safe for them to return. In addition to Murkowski, U.S. Senators Tammy Duckworth (D-IL), Richard Blumenthal (D-CT), Jacky Rosen (D-NV), Chris Van Hollen (D-MD), Peter Welch (D-VT), Amy Klobuchar (D-MN), Michael Bennet (D-CO), Alex Padilla (D-CA), and Sheldon Whitehouse (D-RI) are cosponsors of the legislation.
    “I have had the opportunity to visit with many Ukrainians who fled Russia’s unprovoked war who have found safety and community in Alaska. These families—and the Alaskans and Alaskan businesses who have supported and employed them—have expressed their strong desire to remain and work here,” said Murkowski. “Granting temporary guest status for Ukrainians already in the United States achieves this goal. As the war enters its fourth year, we must continue to provide the Ukrainians who have taken refuge in the U.S. a safe haven to weather the storm.”
    “Three years ago, Putin began his brutal, criminal, full-scale invasion of Ukraine—which remains on the frontlines of democracy and transatlantic security,” said Durbin. “When the war started, Americans across the country opened their hearts and communities to Ukrainians fleeing Russian aggression. Both Republicans and Democrats petitioned President Biden to protect them from deportation. I’m glad Senator Murkowski joined my legislation to ensure Ukrainians lawfully present in the U.S. have temporary guest status until conditions in Ukraine are safe for return. I hope others will follow her lead.”
    The individuals covered by the bill already underwent rigorous vetting to ensure that they present no criminal or public safety risks. The legislation would also allow the Department of Homeland Security (DHS) to revoke this temporary status if new information raises such concerns about any individual. Bill text can be found here. 
    The following organizations endorsed the Protecting Our Guests During Hostilities in Ukraine Act: Refugee Council USA; Chin Association of Maryland; HIAS; World Relief; Center for Gender & Refugee Studies; Human Rights First; Church World Service; International Refugee Assistance Project; Global Refuge; Boat People SOS; Center for Victims of Torture; Jesuit Refugee Service; and Veterans for American Ideals.

    MIL OSI USA News

  • MIL-OSI Europe: REPORT on the European Semester for economic policy coordination: employment and social priorities for 2025 – A10-0023/2025

    Source: European Parliament

    MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

    on the European Semester for economic policy coordination: employment and social priorities for 2025

    (2024/2084(INI))

    The European Parliament,

     having regard to Article 3 of the Treaty on European Union (TEU),

      having regard to Articles 9, 121, 148 and 149 of the Treaty on the Functioning of the European Union (TFEU),

     having regard to the European Pillar of Social Rights (EPSR) proclaimed and signed by the Council, Parliament and the Commission on 17 November 2017,

     having regard to the Commission communication of 4 March 2021 entitled ‘The European Pillar of Social Rights Action Plan’ (COM(2021)0102) and its proposed 2030 headline targets on employment, skills and poverty reduction,

     having regard to the Commission communication of 17 December 2024 entitled ‘2025 European Semester – Autumn package’ (COM(2024)0700),

     having regard to the Commission communication of 26 November 2024 entitled ‘2025 European Semester: bringing the new economic governance framework to life’ (COM(2024)0705),

      having regard to the Commission proposal of 17 December 2024 for a joint employment report from the Commission and the Council (COM(2024)0701),

     having regard to the Commission recommendation of 17 December 2024 for a Council recommendation on the economic policy of the euro area (COM(2024)0704),

      having regard to the Commission report of 17 December 2024 entitled ‘Alert Mechanism Report 2025’ (COM(2024)0702),

      having regard to the Commission staff working document of 26 November 2024 entitled ‘Fiscal statistical tables providing relevant background data for the assessment of the 2025 draft budgetary plans’ (SWD(2024)0950),

     having regard to the Commission staff working document of 17 December 2024 on the changes in the scoreboard the Macroeconomic Imbalance Procedure Scoreboard in the context of the regular review process (SWD(2024)0702),

     having regard to its resolution of 22 October 2024 on the Council position on Draft amending budget No 4/2024 of the European Union for the financial year 2024 – update of revenue (own resources) and adjustments to some decentralised agencies[1],

     having regard to Mario Draghi’s report of 9 September 2024 entitled ‘The future of European competitiveness’,

     having regard to Enrico Letta’s report of April 2024 on the future of the single market[2],

     having regard to the La Hulpe Declaration on the Future of the European Pillar of Social Rights signed by Parliament, the Commission, the European Economic and Social Committee and the Council on 16 April 2024,

     having regard to the Regulation (EU) 2023/955 of the European Parliament and of the Council of 10 May 2023 establishing a Social Climate Fund and amending Regulation (EU) 2021/1060[3],

     having regard to the Regulation (EU) 2024/1263 of the European Parliament and of the Council of 29 April 2024 on the effective coordination of economic policies and on multilateral budgetary surveillance and repealing Council Regulation (EC) No 1466/97[4], and in particular to Articles 3, 4, 13 and 27 thereof,

     having regard to the Commission communication of 17 January 2023 entitled ‘Harnessing talent in Europe’s regions’ (COM(2023)0032),

     having regard to the Commission communication of 20 March 2023 entitled ‘Labour and skills shortages in the EU: an action plan’ (COM(2024)0131),

     having regard to the 2020 European Skills Agenda,

     having regard to the Commission communication of 7 September 2022 on the European care strategy (COM(2022)0440),

     having regard to the Council Recommendation on access to affordable, high-quality long-term care[5],

     having regard to the EU Social Scoreboard and its headline and secondary indicators,

     having regard to the Commission communication of 3 March 2021 entitled ‘Union of Equality: Strategy for the Rights of Persons with Disabilities 2021-2030’ (COM(2021)0101),

     having regard to the Commission report of 19 September 2024 entitled ‘Employment and Social Developments in Europe (ESDE): upward social convergence in the EU and the role of social investment’,

     having regard to the Council Decision on Employment Guidelines, adopted by the Employment, Social Policy, Health and Consumer Affairs Council on 2 December 2024, which establishes employment and social priorities aligned with the principles of the EPSR,

     having regard to the Tripartite Declaration for a thriving European Social Dialogue and to the forthcoming pact on social dialogue,

     having regard to Directive (EU) 2022/2041 of the European Parliament and of the Council of 19 October 2022 on adequate minimum wages in the European Union[6] (Minimum Wage Directive),

     having regard to the European Social Charter, referred to in the preamble of the EPSR,

     having regard to the EU Roma strategic framework for equality, inclusion and participation for 2020-2030,

     having regard to the United Nations Sustainable Development Goals (SDGs),

     having regard to the Gender Equality Strategy 2020-2025,

     having regard to the EU Anti-Racism Action Plan 2020-2025,

     having regard to the LGBTIQ Equality Strategy 2020-2025,

     having regard to Rule 55 of its Rules of Procedure,

     having regard to the report of the Committee on Employment and Social Affairs (A10-0023/2025),

    A. whereas progress has been made towards achieving the EU’s employment targets, namely that at least 78 % of people aged 20 to 64 should be in employment by 2030, despite the uncertainty created by Russia’s war of aggression against Ukraine and the impact of high inflation; whereas, according to the Commission’s 2025 autumn economic forecast, EU employment has reached a rate of 75.3 %; whereas growth in employment in the EU remained robust in 2023; whereas in two thirds of the Member States, employment growth in 2023 was on track to reach the national 2030 target; whereas significant challenges nevertheless persist, such as high unemployment rates in some Member States, particularly among young people and persons with disabilities, as do significant inequalities between sectors and regions, which can negatively affect social cohesion and the well-being of European citizens in the long term;

    B. whereas the European Semester combines various different instruments in an integrated framework for multilateral coordination and surveillance of economic, employment and social policies within the EU and it must become a key tool for fostering upward social convergence; whereas the Social Convergence Framework is a key tool for assessing social challenges and upward convergence within the European Semester and for monitoring social disparities across Member States, while addressing the challenges identified in the Joint Employment Report (JER);

    C. whereas the Union has adopted the 2030 target of reducing the number of people at risk of poverty and social exclusion by at least 15 million compared to 2019, including at least 5 million children; whereas in nearly half of the Member States the trend is heading in the opposite direction; whereas one child in four in the European Union is still at risk of poverty and social exclusion; and whereas the current trend will not make it possible to meet the 2030 target; whereas public spending on children and youth should not be seen only as social expenditure but as an investment in the future; whereas the promotion of strong, sustainable and inclusive economic growth can succeed only if the next generation can develop their full educational potential in order to be prepared for the changing labour market, whereas to meet the 2030 Barcelona targets for early childhood education and care, the EU should invest an additional EUR 11 billion per year[7];

    D. whereas despite a minimal reduction in the number of people at risk of poverty or social exclusion in the EU in 2023, approximately one in five still faces this challenge, with notable disparities for children, young and older people, persons with disabilities, LGTBI, non-EU born individuals, and Roma communities;

    E. whereas significant disparities are observed among children from ethnic or migrant backgrounds and children with disabilities; whereas 83 % of Roma children live in households at risk of poverty; whereas the EU and national resources currently deployed are in no way sufficient for addressing the challenge of child poverty in the EU and, therefore, a dedicated funding instrument for the European Child Guarantee as well as synergies with other European and national funds are of the utmost importance in both the current multiannual financial framework (MFF) and the next one;

    F. whereas the EPSR must be the compass guiding EU social and economic policies, whereas the Commission should monitor progress on the implementation of the EPSR using the Social Scoreboard and the Social Convergence Framework;

    G. whereas poor quality jobs among the self-employed are disproportionately widespread while the rate of self-employment is declining, including among young people;

    H. whereas there are still 1.4 million people residing in institutions in the EU; whereas residents of institutions are isolated from the broader community and do not have sufficient control over their lives and the decisions that affect them; whereas despite the fact that the European Union has long been committed to the process of deinstitutionalisation, efforts are still needed at both European and national level to enable vulnerable groups to live independently in a community environment;

    I. whereas demographic challenges, including an ageing population, low birth rates and rural depopulation, with young people in particular moving to urban areas, profoundly affect the economic vitality and attractiveness of EU regions, the labour markets, and consequently, the sustainability of welfare systems, and further aggravate the regional disparities in the EU, and hence represent a structural challenge for the EU economy; and whereas, as underlined in the Draghi report, sustainable growth and competitiveness in Europe depend to a large extent on adapting education and training systems to evolving skills needs, prioritising adult learning and vocational education and training, and the inclusion of the active population in the labour market and on a robust welfare system;

    J. whereas, as highlighted in the Draghi report, migrant workers have been an important factor in reducing labour shortages and are more likely to work in occupations with persistent shortages than workers born in the EU;

    K. whereas 70 % of workers in Europe are in good-quality jobs, 30 % are in high-strain jobs where demands are more numerous than resources available to balance them leading to overall poor job quality; whereas in many occupations suffering from persistent labour shortages the share of low-quality jobs is higher than 30 %;

    L. whereas the Letta report states that there is a decline in the birth rate, noting the importance of creating a framework to support all families as part of a strategy of inclusive growth in line with the EPSR; whereas the report notes that the free movement of people remains the least developed of the four freedoms and argues for reducing barriers to intra-EU occupational mobility while addressing the social, economic and political challenges facing the sending Member States and their most disadvantaged regions, as well as safeguarding the right to stay; whereas there is a need to promote family-friendly and work-life balance policies, ensuring accessible and professional care systems as well as public quality education, family-related leave and flexible working arrangements in line with the European Care Strategy;

    M. whereas inflation has increased the economic burden on households, having a particularly negative impact on groups in vulnerable situations, such as single parents, large families, older people or persons with disabilities, whereas housing costs and energy poverty remain major problems; whereas housing is becoming unaffordable for those who live in households where housing costs account for 40 % of total disposable income; whereas investment in social services, housing supply – including social housing – and policies that facilitate the accessibility and affordability of housing play a key role in reducing poverty among vulnerable households;

    N. whereas the EU’s micro, small and medium-sized enterprises face particular challenges such as staying competitive against third-country players, maintaining production levels despite rising energy costs and finding the necessary skills for the green and digital transitions; whereas they need financial and technical support to comply with regulatory requirements and take advantage of the opportunities offered by the twin transitions;

    O. whereas labour and skills shortages remain a problem at all levels, and are reported by companies of all sizes and sectors; whereas these shortages are exacerbated by a lack of candidates to fill critical positions in key sectors such as education, healthcare, transport, science, technology, engineering and construction, especially in areas affected by depopulation; whereas these shortages can result from a number of factors, such as difficult working conditions, unattractive salaries, demand for new skill sets and a shortage of relevant training, the lack of public services, barriers of access to medium and higher education and lack of recognition of skills and education;

    P. whereas the Union has adopted the target that at least 60 % of adults should participate in training every year by 2030; whereas the Member States have committed themselves to national targets in order to achieve this headline goal and whereas the majority of Member States lost ground in the pursuit of these national targets; whereas further efforts are needed to ensure the provision of, and access to, quality training policies that promote lifelong learning; whereas upskilling, reskilling and training programmes must be available for all workers, including those with disabilities, and should also be adapted to workers’ needs and capabilities;

    Q. whereas in 2022, the average Programme for International Student Assessment (PISA) score across the OECD on the measures of basic skills (reading, mathematics and science) of 15-year-olds dropped by 10 points compared to the last wave in 2018; whereas underachievement is prevalent among disadvantaged learners, demonstrating a widening of educational inequalities; whereas this worrying deterioration calls for reforms and investments in education and training;

    R. whereas the EU’s capacity to deal with future shocks, crises and ‘polycrises’ while navigating the demographic, digital and green transitions, will depend greatly on the conditions under which critical workers will be able to perform their work; whereas addressing the shortages and retaining all types of talent requires decent working conditions, access to social protection systems, and opportunities for skills development tailored to the needs; and whereas addressing skills shortages is crucial to achieving the digital and green transitions, ensuring inclusive and sustainable growth and boosting the EU’s competitiveness;

    S. whereas it is essential to promote mobility within the EU and consider attracting skilled workers from third countries, while ensuring respect for and enforcement of labour and social rights and channelling third-country nationals entering the EU through legal migration pathways towards occupations experiencing shortages, supported by an effective integration policy, in full complementarity with harnessing talents from within the Union;

    T. whereas gender pay gaps remain considerable in most EU Member States and whereas care responsibilities are an important factor that continue to constrain women into part-time employment or lead to their exclusion from the labour market, resulting in a wider gender employment gap;

    U. whereas the JER highlights the right to disconnect, in particular in the context of telework, acknowledging the critical role of this right in ensuring a work-life balance in a context of increasing digitalisation and remote working;

    V. whereas challenges to several sectors, such as automotive manufacturing and energy intensive industries, became evident in 2024 and a number of companies announced large-scale restructuring;

    W. whereas there are disparities in the coverage of social services, including long-term care, child protection, domestic violence support, and homelessness aid, that need to be addressed through the European Semester;

    X. whereas there is currently no regular EU-wide collection of data on social services investment and coverage; whereas collecting such data is key for an evidence-based analysis of national social policies in the European Semester analysis; whereas this should be addressed through jointly agreed criteria and data collection standards for social services investment and coverage in the Member States; whereas the European Social Network’s Social Services Index is an example of how such data collection can contribute to the European Semester analysis;

    Y. whereas the crisis in generational renewal, demographic changes, and lack of sufficient investment in public services have led to an increased risk of poverty and social exclusion, particularly affecting children and older people, single-parent households and large families, the working poor, persons with disabilities, and people from marginalised backgrounds; whereas an ambitious EU anti-poverty strategy will be essential to reverse this trend and provide responses to the multidimensional phenomenon of poverty;

    Z. whereas Eurofound research shows that suicide rates have been creeping up since 2021, after decreasing for decades; whereas more needs to be done to address causes of mental health problems in working and living conditions (importantly social inclusion), and access to support for people with poor mental health remains a problem;

    AA. whereas there were still over 3 300 fatal accidents and almost 3 million nonfatal accidents in the EU-27 in 2021; whereas over 200 000 workers die each year from work-related illnesses; whereas these data do not include all accidents caused by undeclared work, making it plausible to assume that the true numbers greatly exceed the official statistics; whereas in 2017, according to Eurofound, 20 % of jobs in Europe were of ‘poor quality’ and put workers at increased risk regarding their physical or mental health; whereas 14 % of workers have been exposed to a high level of psychosocial risks; whereas 23 % of European workers believe that their safety or their health is at risk because of their work;

    AB. whereas the results of the April 2024 Eurobarometer survey on social Europe highlight that 88 % of European citizens consider social Europe to be important to them personally; whereas this was confirmed by the EU Post-Electoral Survey 2024, where European citizens cited rising prices and the cost of living (42 %) and the economic situation (41 %) as the main topics that motivated them to vote in the 2024 European elections;

    AC. whereas according to Article 3 TEU, social progress in the EU is one of the aims of a highly competitive social market economy, together with full employment, a high level of protection and improvement of the quality of the environment; whereas Article 3 TEU also states that the EU ‘shall combat social exclusion and discrimination, and shall promote social justice and protection, equality between women and men, solidarity between generations and protection of the rights of the child’;

    AD. whereas the new EU economic governance framework entered into force in April 2024 and aims to promote sustainable and inclusive growth and to give more space for social investment and achievement of the objectives of the EPSR; whereas, for the first time, the revision includes a social convergence framework as an integrated part of the European Semester;

    AE. whereas under the new EU economic governance framework, all Member States have to include reforms and investments in their medium-term plans addressing common EU priorities and challenges identified in country-specific recommendations in the context of the European Semester; whereas the common EU priorities include social and economic resilience, including the EPSR;

    AF. whereas European social partners, during Macroeconomic Dialogue, have denounced the lack of involvement of social partners in the drafting of the medium-term fiscal structural plans and ETUC, SMEUnited and SGIEurope have signed a joint statement for a material and factual involvement of social partners in the economic governance and the European Semester;

    AG. whereas public investment is expected to increase in 2025 in almost all Member States, with a significant contribution from NextGenerationEU’s Recovery and Resilience Facility (RRF) and EU funds and will contribute to social spending, amounting to around 25 % of the total estimated expenditure under the RRF, securing growth and economic resilience[8]; whereas social investments and reforms in key areas can boost employment, social inclusion, competitiveness and economic growth[9]; whereas social partners are essential for designing and implementing policies that promote sustainable and inclusive growth, decent and quality work, and fair transitions and must be involved at all levels of governance in accordance with the TFEU;

    AH. whereas the Member States should implement the Minimum Wage Directive without delay and prepare action plans that increase collective bargaining coverage in line with the directive, where applicable;

    AI. whereas according to the Organization for Economic Co-operation and Development (OECD), on average across OECD countries, occupations at highest risk of automation account for about 28 % of employment[10]; whereas social dialogue and collective bargaining are crucial in this context to ensure a participatory approach to managing change driven by technological developments, addressing potential concerns, while fostering workers’ adaptation (including via skills provision); whereas digitalisation, robotisation, automation and artificial intelligence (AI) must benefit workers and society by improving working conditions and quality of life, ensuring a good work-life balance, creating better employment opportunities, and contributing to socio-economic convergence; whereas workers and their trade unions will play a critical role in anticipating and tackling risks emerging from those challenges;

     

    AJ. whereas social dialogue and collective bargaining are essential for the EU’s competitiveness, labour productivity and social cohesion;

    1. Considers that the Commission and the Council should strengthen their efforts to implement the EPSR, in line with the action plan of March 2021 and the La Hulpe Declaration, to achieve the 2030 headline targets; calls on the Commission to ensure that the JER 2026 analyses the implementation of all the principles of the EPSR in line with Regulation (EU) 2024/1263 and includes an analysis of the social dimension of the national medium-term fiscal structural plans related to social resilience, including the EPSR; welcomes, in this regard, the announcement of a new Action Plan on the implementation of the EPSR[11] for 2025 to give a new impetus to social progress; welcomes the fact that almost all Member States are expected to increase public investment in 2025, which is necessary to ensure access to quality public services and achieve the aims of the EPSR; recalls that the Member States can mobilise the RRF within the scope defined by the Regulation (EU) 2021/241[12] until 31 December 2026 on policies for sustainable and inclusive growth and the young;

    2. Stresses the importance of using the Social Scoreboard and the Social Convergence Framework to identify risks to, and to track progress in, reducing inequalities, strengthening social protection systems and promoting decent working conditions and supportive measures for workers to manage the transitions; stresses that in this regard, it is necessary to ensure a sustainable, fair and inclusive Europe where social rights are fully protected and safeguarded at the same level as economic freedoms; recalls that EU citizens identify social Europe as one of their priorities;

    3. Regrets the lack of data on and analysis of wealth inequality and wealth concentration in the EU as this is one of the main determinants of poverty; points out that according to Distributional Wealth Accounts, a dataset developed by the European System of Central Banks, the share of wealth held by the top 10 % stood at 56 % in the fourth quarter of 2023, while the bottom half held just 5 %;

    4. Welcomes the inclusion of analysis on the positive contribution of the SDGs and the European equality strategies in the JER 2025 and calls on the Commission to ensure that the JER 2026 includes both a section analysing the progress towards the SDGs related to employment and social policy, and another on progress towards eliminating social and labour discrimination in line with the Gender Equality Strategy 2020-2025, the EU Anti-Racism Action Plan 2020-2025, the EU Roma strategic framework for equality, inclusion and participation 2020-2030, the LGBTIQ Equality Strategy 2020-2025, and the Strategy for the rights of persons with disabilities 2021-2030;

    5. Calls on the Member States to implement the updated employment guidelines, with an emphasis on education and training for all, new technologies such as AI, and recent policy initiatives on platform work, affordable and decent housing and tackling labour and skills shortages, with a view to strengthening democratic decision-making;

    6. Reiterates the importance of investing in workforce skills development and occupational training and of ensuring quality employment, with an emphasis on the individual right to training and lifelong learning; urges the Member States to develop upskilling and reskilling measures in collaboration with local stakeholders, including educational and training bodies and the social partners, in order to reinforce the link between the education and training systems and the labour market and to anticipate labour market needs; welcomes the fact that employment outcomes for recent graduates from vocational education and training (VET) continue to improve across the EU; is concerned about young people’s declining educational performance, particularly in basic skills; welcomes, in this regard, the announcement of an Action Plan on Basic Skills and a STEM Education Strategic Plan; calls on the Member States to invest in programmes to equip learners with the basic, digital and transversal skills needed for the world of work and its digitisation as well as to help them to contribute meaningfully to society; recalls the important role that the European Globalisation Adjustment Fund for displaced workers can play in supporting and reskilling workers who were made redundant as a result of major restructuring events;

    7. Welcomes the announcement of a quality jobs roadmap to ensure a just transition for all; calls on the Commission to include in this roadmap considerations for measures linked to the use of AI and algorithmic management in the world of work so that new technologies are harnessed to improve working conditions and productivity while respecting workers’ rights and work-life balance as recognised in the JER[13]; calls on the Commission to propose a directive on the use of AI in the workplace that ensures that workers’ rights are protected and respected;

    8. Stresses that the response to labour shortages in the European Union also involves improving and facilitating labour mobility within the Union; calls on the Member States to strengthen and facilitate the recognition of skills and qualifications in the Union, including those of third-country nationals; calls on the Commission to analyse the effectiveness of the European Employment Services (EURES) platform with a view to a potential revision of its operation;

    9. Notes that the number of early leavers from education and training, people with lower levels of education, young people not in education, employment or training (NEETs) and among them vulnerable groups, including Roma, women, older people, low- and medium-qualified people, persons with disabilities and people with a migrant or minority background, depending on the country-specific context, remains high in several Member States, despite a downward trend in the European Union; calls on the Member States to reinforce the Youth Guarantee as stated in Principle 4 of the EPSR; in order to support young people in need throughout their personal and professional development; reiterates the pivotal role that VET plays in providing the knowledge, skills and competencies necessary for young people entering the labour market; emphasises the need to invest in the quality and attractiveness of VET through the European Social Fund Plus (ESF+); recalls, therefore, the need to address this situation and develop solutions to keep young people in education, training or employment and the importance of ensuring their access to traineeships and apprenticeships, enabling them to gain their first work experience and facilitating their transition from education to employment as well as to create working conditions that enable an ageing workforce to remain in the labour market;

    10. Considers that, although there has been an improvement, persons with disabilities, especially women with disabilities, still face significant obstacles in the labour market, and that there is therefore a need for vocational and digital training, while promoting the inclusion of persons with disabilities, targeting the inactive labour force and groups with low participation in the labour market, including women, young people, older workers and persons with chronic diseases; calls on the Commission to update the EU Disability Strategy with new flagship initiatives and actions from 2025 onwards, such as a European Disability Employment and Skills Guarantee and the sharing of best practices such as the disability card, in particular to address social inclusion and independent living for people with disabilities, also ensuring their access to quality education, training and employment through guidance on retaining disability allowances;

    11. Expresses concern that Roma continue to face significant barriers to employment, with persistent biases limiting their prospects; notes that the EU Roma strategic framework for equality, inclusion, and participation highlights a lack of progress in employment access and a growing share of Roma youth not in employment, education, or training; emphasises the framework’s goal of halving the employment gap between Roma and the general population and ensuring that at least 60 % of Roma are in paid work by 2030; urges the Member States to adopt an integrated, equality-focused approach and to ensure that public policies and services effectively reach all Roma, including those in remote rural areas;

    12. Stresses the need to pay attention to the social and environmental aspects of competitiveness, emphasising the need for investments in education and training for all to ensure universal access to high-quality public education and professional training programmes, as well as sustainable practices to foster inclusive growth; underlines that social partners should play a key role in identifying and addressing skills needs across the EU;

    13. Calls on the Commission and the Member States to include specific recommendations on housing affordability in the European Semester and to promote housing investment; urges the Member States to ensure that housing investments support long-term quality housing solutions that are actually affordable for low-income and middle-income households, highlighting that investments in social and affordable housing are crucial in order to ensure and improve the quality of life for all; stresses the need for a better use of EU funding, such as through European Investment Bank financial instruments, in particular to support investments to increase the energy efficiency of buildings; calls on the Commission and the Member States to take decisive action to provide an EU regulatory framework for the housing sector, together with an assessment of Union policies, funds and bottlenecks that should facilitate the construction, conversion and renovation of accessible, affordable and energy-efficient housing, including social housing, that meets the needs of young people, people with reduced mobility, low- and middle-income groups, families at risk and people in more vulnerable situations, while protecting homeowners and those seeking access to home ownership from a further reduction in supply;

    14. Welcomes the announced European Affordable Housing Plan to support Member States in addressing the housing crisis and soaring rents; calls on the Commission to assess and publish which potential barriers on State aid rules affect housing accessibility; recalls that the Social Climate Fund aims to provide financial aid to Member States from 2026 to support vulnerable households, in particular with measures and investments intended to increase the energy efficiency of buildings, decarbonisation of heating and cooling of buildings and the integration in buildings of renewable energy generation and storage;

    15. Considers that homelessness is a dramatic social problem in the EU; calls for a single definition of homelessness in the EU, which would enable the systematic comparison and assessment of the extent of homelessness across different EU Member States; calls on the Commission to develop a strategy and work towards ending homelessness in the EU by 2030 by promoting access to affordable and decent housing as well as access to quality social services; urges the Member States to better use the available EU instruments, including the ESF+, in this matter[14];

    16. Calls on the Member States to design national homelessness strategies centred around housing-based solutions; welcomes the intention to deliver a Council recommendation on homelessness[15]; urges the Commission to further increase the ambition of the European Platform on Combating Homelessness, in particular by providing it with a dedicated budget;

    17. Considers that EU action is urgently needed to address the persistently high levels of poverty and social exclusion in the EU, particularly among children, young and older people, persons with disabilities, non-EU born individuals, LGTBI and Roma communities; highlights that access to quality social services should be prioritised, with binding targets to reduce homelessness and ensure energy security for vulnerable households; calls on the Commission to adopt the first-ever EU Anti-Poverty Strategy;

    18. Recalls the Union objective of transitioning from institutional to community or family-based care; calls on the Commission to put forward an action plan on deinstitutionalisation; stresses that this action plan should cover all groups still living in institutions, including children, persons with disabilities, people with mental health issues, people affected by homelessness and older people; calls on the Member States to make full use of the ESF+ funds as well as other relevant European and national funds in order to finalise the deinstitutionalisation process so as to ensure that every EU citizen can live in a family or community environment;

    19. Calls on the Commission to deliver a European action plan for mental health, in line with its recent recommendations[16], and to complement it with a directive on psychosocial risks in the workplace; calls on the Member States to strengthen access to mental health services and emotional support programmes for all, particularly children, young people and older people; requests a better use of the Social Scoreboard indicators to address the impact of precarious living conditions and uncertainty on mental health;

    20. Calls on the Commission to address loneliness by promoting a holistic EU strategy on loneliness and access to professional care; calls also for this EU strategy to address the socio-economic impact of loneliness on productivity and well-being by tackling issues such as rural isolation; urges the Member States to continue implementing the Council recommendation on access to affordable, quality long-term care with a view to ensuring access to quality care while ensuring decent working conditions for workers in the care sector, as well as for informal carers;

    21. Recognises that 44 million Europeans are frequent informal long-term caregivers, the majority of whom are women[17];

    22. Recognises the unique role of carers in society, and while the definition of care workers is not harmonised across the EU, the long-term care sector employs 6.4 million people across the EU;

    23. Is concerned that, in 2023, 94.6 million people in the EU were still at risk of poverty or social exclusion; stresses that without a paradigm shift in the approach to combating poverty, the European Union and its Member States will not achieve their poverty reduction objectives; believes that the announcement of the first-ever EU Anti-Poverty Strategy is a step in the right direction towards reversing the trend, but must provide a comprehensive approach to tackling the multidimensional aspects of poverty and social exclusion with concrete actions, strong implementation and monitoring; calls for this Strategy to encompass everybody experiencing poverty and social exclusion, first and foremost the most disadvantaged, but also specific measures for different groups such as persons experiencing in-work poverty, homeless people, people with disabilities, single-parent families and, above all, children in order to sustainably break the cycle of poverty; stresses that the transposition of the Minimum Wage Directive will be key to preventing and fighting poverty risks among workers, while reinforcing incentives to work, and welcomes the fact that several Member States have amended or plan to amend their minimum wage frameworks; is concerned about the rise of non-standard forms of employment where workers are more likely to face in-work poverty and find themselves without adequate legal protections; stresses that an EU framework directive on adequate minimum income and active inclusion, in compliance with the subsidiarity principle, would contribute to the goals of reducing poverty and fostering the integration of people absent from the labour market;

    24. Reiterates its call on the Commission to carefully monitor implementation of the Child Guarantee in all Member States as part of the European Semester and country-specific recommendations; reiterates its call for an increase in the funding of the European Child Guarantee with a dedicated budget of at least EUR 20 billion and for all Member States to allocate at least 5 % of their allocated ESF+ funds to fighting child poverty and promoting children’s well-being; considers that the country-specific recommendations should reflect Member States’ budgetary compliance with the minimum required allocation for tackling child poverty set out in the ESF+ Regulation[18]; calls on the Commission to provide an ambitious budget for the Child Guarantee in the next MFF in order to respond to the growing challenge of child poverty and social exclusion;

    25. Is concerned about national policies that create gaps in health coverage, increasing inequalities both within and between Member States, such as privatisation of public healthcare systems, co-payments and lack of coverage; highlights that these deepen poverty, erode health and well-being, and increase social inequalities within and across EU countries; warns that this also undermines the implementation of principle 16 of the EPSR and of SDG 3.8 on universal health coverage, as well as the EPSR’s overall objective of promoting upward social convergence in the EU, leaving no one behind; believes that the indicators used in the Social Scoreboard do not provide a comprehensive understanding of healthcare affordability;

    26. Underlines that employers need to foster intergenerational links within companies and intergenerational learning between younger and older workers, and vice versa; underlines that an ageing workforce can help a business develop new products and services to adapt to the needs of an ageing society in a more creative and productive way; calls, furthermore, for the creation of incentives to encourage volunteering and mentoring to induce the transfer of knowledge between generations;

    27. Warns that, according to European Central Bank reports, real wages are still below their pre-pandemic level, while productivity was roughly the same; agrees that this creates some room for a non-inflationary recovery in real wages and warns that if real wages do not recover, this would increase the risk of protracted economic weakness, which could cause scarring effects and would further dent productivity in the euro area relative to other parts of the world; believes that better enforcement of minimum wages and strengthening collective bargaining coverage can have a beneficial effect on levels of wage inequality, especially by helping more vulnerable workers at the bottom of the wage distribution who are increasingly left out;

    28. Calls for the Member States to ensure decent working conditions, comprising among other things decent wages, access to social protection, lifelong learning opportunities, occupational health and safety, a good work-life balance and the right to disconnect, reasonable working time, workers’ representation, democracy at work and collective agreements; urges the Member States to foster democracy at work, social dialogue and collective bargaining and to protect workers’ rights, particularly in the context of the green and digital transitions, and to ensure equal pay for equal work by men and women, enhance pay transparency and address gender-based inequality to close the gender pay gap in the EU;

    29. Recalls the importance of improving access to social protection for the self-employed and calls on the Commission to monitor the Member States’ national plans for the implementation of the Council Recommendation of 8 November 2019 on access to social protection for workers and the self-employed[19] as part of the country-specific recommendations; recalls, in this regard, as the rate of self-employed professionals in the cultural and creative sectors is more than double that in the general population, the 13 initiatives laid down in the Commission’s 21 February 2024 response to the European Parliament resolution of 21 November 2023 on an EU framework for the social and professional situation of artists and workers in the cultural and creative sectors[20] and calls on the Commission to start implementing them in cooperation with the Member States;

    30. Stresses that the role of social dialogue and social partners should be systematically integrated into the design and implementation of employment and social policies, ensuring the involvement of social partners at all levels;

    31. Calls for the implementation of policies that promote work-life balance and the right to disconnect, with the aim of improving the quality of life for all families and workers, for ensuring the implementation of the Work-Life Balance Directive[21] and of the European Care Strategy; calls on the Commission to put forward a legislative proposal to address teleworking and the right to disconnect; as well as a proposal for the creation of a European card for all types of large families and a European action plan for single parents, offering educational and social advantages; calls, ultimately, for initiatives to combat workforce exclusion as a consequence of longer periods of sick leave, to adapt the workplace and to promote flexible working conditions and to develop strategies to support workers’ return after longer periods of absence;

    32. Calls for demographic challenges to be prioritised in the EU’s cohesion policy and for concrete action at EU and national levels; calls on the Commission to prioritise the development of the Commission communication on harnessing talent in Europe’s regions and the ‘Talent Booster Mechanism’ in order to promote social cohesion and to step up funding for rural and outermost areas and regions with a high rate of depopulation, supporting quality job creation, public services, local development projects and basic infrastructure that favour the population’s ‘right to stay’, especially in the case of young people; highlights the importance of introducing specific measures to address regional inequalities in education and training, ensuring equal access to high-quality and affordable education for all;

    33. Is concerned that, despite improvements, several population groups are still significantly under-represented in the EU labour market, including women, older people, low- and medium-qualified people, persons with disabilities and people with a migrant or minority background; warns that  educational inequalities have deepened, further exacerbating the vulnerabilities of students from disadvantaged and migrant backgrounds; points out that, according to the JER, people with migrant or minority backgrounds can significantly benefit from targeted measures in order to address skills mismatches, improve language proficiency, combat discrimination and receive tailored and integrated support services; stresses the importance of strengthening efforts in the implementation of the 2021-27 Action Plan on Integration and Inclusion, which provides a common policy framework to support the Member States in developing national migrant integration policies;

    34. Calls on the Commission and the Council to prioritise reducing administrative burdens with the aim of simplification while respecting labour and social standards; believes that better support for SMEs and actual and potential entrepreneurs will improve the EU’s competitiveness and long-term sustainability, boost innovation and create quality jobs; notes that SMEs and self-employed professionals in all sectors are essential for the EU’s economic growth and thus the financing of social policies; urges the implementation of specific recommendations to improve the single market; takes note of the Commission’s publication of the ‘Competitiveness Compass’ on 29 January 2025[22];

    35. Calls on the Commission to conduct competitiveness checks on every new legislative proposal, taking into account the overall impact of EU legislation on companies, as well as on other EU policies and programmes;

    36. Considers that the social economy is an essential component of the EU’s social market economy and a driver for the implementation of the EPSR and its targets, often providing employment to vulnerable and excluded groups; calls on the Commission and the Member States to strengthen their support for all social economy enterprises but especially non-profit ones, as highlighted in the Social Economy Action Plan 2021 and the Liège Roadmap for the Social Economy, in order to promote quality, decent, inclusive work and the circular economy, to encourage the Member States to facilitate access to funding and to enhance the visibility of social economy actors; calls for the Commission to explore innovative funding mechanisms to support the development of the social economy in Europe[23] and to foster a dynamic and inclusive business environment;

    37. Believes that, in this year of transition, with the implementation of the revised economic governance rules, the Member States should align fiscal responsibility with sustainable and inclusive growth and employment, notes that the involvement of social partners, including in the development of medium-term fiscal structural plans, should be enhanced to contribute to the goals of the new economic governance framework;

    38. Welcomes the fact that the national medium-term fiscal structural plans, under the new economic governance framework, have to include the reforms and investments responding to the main challenges identified in the context of the European Semester and also to ensure debt sustainability while investing strategically in the principles of the EPSR with the aim of fostering upward social convergence;

    39. Is concerned that compliance with the country-specific recommendations (CSRs) remains low; reiterates its call, therefore, for an effective implementation of CSRs by the Member States so as to promote healthcare and sustainable pension systems, in line with principles 15 and 16 of the EPSR, and long-term prosperity for all citizens, taking into account the vulnerability of those workers whose careers are segmented, intermittent and subject to labour transitions; insists that the Commission should reinforce its dialogues with the Member States on the implementation of existing recommendations and of the Employment Guidelines as well as on current or future policy action to address identified challenges;

    40. Welcomes the establishment of a framework to identify risks to social convergence within the European Semester, for which Parliament called strongly; recalls that under this framework, the Commission assesses risks to upward social convergence in Member States and monitors progress on the implementation of the EPSR on the basis of the Social Scoreboard and of the principles of the Social Convergence Framework; welcomes the fact that the 2025 JER delivers country-specific analysis based on the principles of the Social Convergence Framework; calls on the Commission to further develop innovative quantitative and qualitative analysis tools under this new Framework in order to make optimal use of it in the future cycles of the European Semester;

    41. Welcomes the fact that the first analysis based on the principles of the Social Convergence Framework points to upward convergence in the labour market in 2023[24]; notes with concern that employment outcomes of under-represented groups still need to improve and that risks to upward convergence persist at European level in relation to skills development, ranging from early education to lifelong learning, and the social outcomes of at-risk-of-poverty and social exclusion rates; calls on the Commission to further analyse these risks to upward social convergence in the second stage of the analysis and to discuss with the Member States concerned the measures undertaken or envisaged to address these risks;

    42. Recognises the cost of living crisis, which has increased the burden on households, and the rising cost of housing, which, in conjunction with high energy costs, is contributing to high levels of energy poverty across the EU; calls, therefore, on the Commission and Member States to comprehensively address the root causes of this crisis by prioritising policies that promote economic resilience, social cohesion, and sustainable development;

    43. Warns of the social risks stemming from the crisis in the automotive sector, which is facing unprecedented pressure from both external and internal factors; calls on the Commission to pay attention to this sector and enhance social dialogue and the participation of workers in transition processes; stresses the urgent need for a coordinated EU response via an emergency task force of trade unions and employers to respond to the current crisis;

    44. Calls on the Commission to monitor data on restructuring and its impact on employment, such as by using the European Restructuring Monitor, to facilitate measures in support of restructuring and labour market transitions, and to consider highlighting national measures supporting a socially responsible way of restructuring in the European Semester;

    45. Calls on the Commission to monitor the development of minimum wages in the Member States following the transposition of the Minimum Wage Directive to determine whether the goal of ‘adequacy’ of minimum wages is being achieved;

    46. Is concerned about the Commission’s revision of the Macroeconomic Imbalance Procedure (MIP) Scoreboard, particularly the reduction in employment and social indicators, which are crucial for assessing the social and labour market situation in the Member States; regrets the fact that youth unemployment is no longer considered as a headline indicator, despite its relevance in identifying and addressing specific labour market challenges and in adopting adequate public policies; stresses that social standards indicators should be given greater consideration in the decision-making process; regrets the fact that the Commission did not duly consult Parliament and reminds the Commission of its obligation to closely cooperate with Parliament, the Council and social partners before drawing up the MIP scoreboard and the set of macroeconomic and macro-financial indicators for Member States; stresses that the implementation of the principles of the EPSR must be part of the MIP scoreboard;

    47. Considers that territorial and social cohesion are essential components of the competitiveness agenda, and legislation such as the European Instrument for Temporary Support to Mitigate Unemployment Risks in an Emergency (SURE) remain a positive example to inspire future EU initiatives;

    48. Considers that the Commission and the Member States should ensure that fiscal policies under the European Semester support investments aligned with the EPSR, particularly in areas such as decent and affordable housing, quality healthcare, education, and social protection systems, as these are critical for social cohesion and long-term economic sustainability and to address the challenges identified through social indicators;

    49. Stresses the need to address key challenges identified in the Social Scoreboard as ‘critical’ and ‘to watch’, including children at risk of poverty or social exclusion, the gender employment gap, housing cost overburden, childcare, and long-term care the disability employment gap, the impact of social transfers on reducing poverty, and basic digital skills[25];

    50. Stresses the negative impacts that the cost of living crisis has had on persons with disabilities;

    51. Urges the Member States to consider robust policies that ensure fair wages and improve working conditions, particularly for low-income and precarious workers;

    52. Calls on the Member States to strengthen social safety nets to provide adequate support to those whose income from employment is insufficient to meet basic living costs;

    53. Stresses the need for timely and harmonised data on social policies to improve evidence-based policymaking and targeted social investments; calls for improvements to be made to the Social Scoreboard in order to cover the 20 EPSR principles with the introduction of relevant indicators reflecting trends and causes of inequality, such as quality employment, wealth distribution, access to public services, adequate pensions, the homelessness rate, mental health and unemployment; recalls that the at-risk-of-poverty-or-social-exclusion (AROPE) indicator fails to reveal the causes of complex inequality; calls on the Commission and the Member States to develop a European data collection framework on social services to monitor the investment in and coverage of social services;

    54. Instructs its President to forward this resolution to the Council and the Commission.

    MIL OSI Europe News

  • MIL-OSI Europe: Meeting of 29-30 January 2025

    Source: European Central Bank

    Account of the monetary policy meeting of the Governing Council of the European Central Bank held in Frankfurt am Main on Wednesday and Thursday, 29-30 January 2025

    27 February 2025

    1. Review of financial, economic and monetary developments and policy options

    Financial market developments

    Ms Schnabel noted that the financial market developments observed in the euro area after October 2024 had reversed since the Governing Council’s previous monetary policy meeting on 11-12 December 2024. The US presidential election in November had initially led to lower euro area bond yields and equity prices. Since the December monetary policy meeting, however, both risk-free yields and risk asset prices had moved substantially higher and had more than made up their previous declines. A less gloomy domestic macroeconomic outlook and an increase in the market’s outlook for inflation in the euro area on the back of higher energy prices had led investors to expect the ECB to proceed with a more gradual rate easing path.

    A bounce-back of euro area risk appetite had supported equity and corporate bond prices and had contained sovereign bond spreads. While the euro had also rebounded recently against the US dollar, it remained significantly weaker than before the US election.

    In euro money markets the year-end had been smooth. Money market conditions at the turn of the year had turned out to be more benign than anticipated, with a decline in repo rates and counterparties taking only limited recourse to the ECB’s standard refinancing operations.

    In the run-up to the US election and in its immediate aftermath, ten-year overnight index swap (OIS) rates in the euro area and the United States had decoupled, reflecting expectations of increasing macroeconomic divergence. However, since the Governing Council’s December monetary policy meeting, long-term interest rates had increased markedly in both the euro area and the United States. An assessment of the drivers of euro area long-term rates showed that both domestic and US factors had pushed yields up. But domestic factors – expected tighter ECB policy and a less gloomy euro area macroeconomic outlook – had mattered even more than US spillovers. These factors included a reduction in perceived downside risks to economic growth from tariffs and a stronger than anticipated January flash euro area Purchasing Managers’ Index (PMI).

    Taking a longer-term perspective on ten-year rates, since October 2022, when inflation had peaked at 10.6% and policy rates had just returned to positive territory, nominal OIS rates and their real counterparts had been broadly trending sideways. From that perspective, the recent uptick was modest and could be seen as a mean reversion to the new normal.

    A decomposition of the change in ten-year OIS rates since the start of 2022 showed that the dominant driver of persistently higher long-term yields compared with the “low-for-long” interest rate and inflation period had been the sharp rise in real rate expectations. A second major driver had been an increase in real term premia in the context of quantitative tightening. This increase had occurred mainly in 2022. Since 2023, real term premia had broadly trended sideways albeit with some volatility. Hence, the actual reduction of the ECB’s balance sheet had elicited only mild upward pressure on term premia. From a historical perspective, despite their recent increase, term premia in the euro area remained compressed compared with the pre-quantitative easing period.

    Since the December meeting, investors had revised up their expectations for HICP inflation (excluding tobacco) for 2025. Current inflation fixings (swap contracts linked to specific monthly releases in year-on-year euro area HICP inflation excluding tobacco) for this year stood above the 2% target. Higher energy prices had been a key driver of the reassessment of near-term inflation expectations. Evidence from option prices, calculated under the assumption of risk neutrality, suggested that the risk to inflation in financial markets had become broadly balanced, with the indicators across maturities having shifted discernibly upwards. Recent survey evidence suggested that risks of inflation overshooting the ECB’s target of 2% had resurfaced. Respondents generally saw a bigger risk of an inflation overshoot than of an inflation undershoot.

    The combination of a less gloomy macroeconomic outlook and stronger price pressures had led markets to reassess the ECB’s expected monetary policy path. Market pricing suggested expectations of a more gradual easing cycle with a higher terminal rate, pricing out the probability of a cut larger than 25 basis points at any of the next meetings. Overall, the size of expected cuts to the deposit facility rate in 2025 had dropped by around 40 basis points, with the end-year rate currently seen at 2.08%. Market expectations for 2025 stood above median expectations in the Survey of Monetary Analysts. Survey participants continued to expect a faster easing cycle, with cuts of 25 basis points at each of the Governing Council’s next four monetary policy meetings.

    The Federal Funds futures curve had continued to shift upwards, with markets currently expecting between one and two 25 basis point cuts by the end of 2025. The repricing of front-end yields since the Governing Council’s December meeting had been stronger in the euro area than in the United States. This would typically also be reflected in foreign exchange markets. However, the EUR/USD exchange rate had recently decoupled from interest rates, as the euro had initially continued to depreciate despite a narrowing interest rate differential, before recovering more recently. US dollar currency pairs had been affected by the US Administration’s comments, which had put upward pressure on the US dollar relative to trading partners’ currencies.

    Euro area equity markets had outperformed their US counterparts in recent weeks. A model decomposition using a standard dividend discount model for the euro area showed that rising risk-free yields had weighed significantly on euro area equity prices. However, this had been more than offset by higher dividends, and especially a compression of the risk premium, indicating improved investor risk sentiment towards the euro area, as also reflected in other risk asset prices. Corporate bond spreads had fallen across market segments, including high-yield bonds. Sovereign spreads relative to the ten-year German Bund had remained broadly stable or had even declined slightly. Relative to OIS rates, the spreads had also remained broadly stable. The Bund-OIS spread had returned to levels observed before the Eurosystem had started large-scale asset purchases in 2015, suggesting that the scarcity premium in the German government bond market had, by and large, normalised.

    Standard financial condition indices for the euro area had remained broadly stable since the December meeting. The easing impulse from higher equity prices had counterbalanced the tightening impulse stemming from higher short and long-term rates. In spite of the bounce-back in euro area real risk-free interest rates, the yield curve remained broadly within neutral territory.

    The global environment and economic and monetary developments in the euro area

    Starting with inflation in the euro area, Mr Lane noted that headline inflation, as expected, had increased to 2.4% in December, up from 2.2% in November. The increase primarily reflected a rise in energy inflation from -2.0% in November to 0.1% in December, due mainly to upward base effects. Food inflation had edged down to 2.6%. Core inflation was unchanged at 2.7% in December, with a slight decline in goods inflation, which had eased to 0.5%, offset by services inflation rising marginally to 4.0%.

    Developments in most indicators of underlying inflation had been consistent with a sustained return of inflation to the medium-term inflation target. The Persistent and Common Component of Inflation (PCCI), which had the best predictive power of any underlying inflation indicator for future headline inflation, had continued to hover around 2% in December, indicating that headline inflation was set to stabilise around the ECB’s inflation target. Domestic inflation, which closely tracked services inflation, stood at 4.2%, staying well above all the other indicators in December. However, the PCCI for services, which should act as an attractor for services and domestic inflation, had fallen to 2.3%.

    The anticipation of a downward shift in services inflation in the coming months also related to an expected deceleration in wage growth this year. Wages had been adjusting to the past inflation surge with a substantial delay, but the ECB wage tracker and the latest surveys pointed to moderation in wage pressures. According to the latest results of the Survey on the Access to Finance of Enterprises, firms expected wages to grow by 3.3% on average over the next 12 months, down from 3.5% in the previous survey round and 4.5% in the equivalent survey this time last year. This assessment was shared broadly across the forecasting community. Consensus Economics, for example, foresaw a decline in wage growth of about 1 percentage point between 2024 and 2025.

    Most measures of longer-term inflation expectations continued to stand at around 2%, despite an uptick over shorter horizons. Although, according to the Survey on the Access to Finance of Enterprises, the inflation expectations of firms had stabilised at 3% across horizons, the expectations of larger firms that were aware of the ECB’s inflation target showed convergence towards 2%. Consumer inflation expectations had edged up recently, especially for the near term. This could be explained at least partly by their higher sensitivity to actual inflation. There had also been an uptick in the near-term inflation expectations of professionals – as captured by the latest vintages of the Survey of Professional Forecasters and the Survey of Monetary Analysts, as well as market-based measures of inflation compensation. Over longer horizons, though, the inflation expectations of professional forecasters remained stable at levels consistent with the medium-term target of 2%.

    Headline inflation should fluctuate around its current level in the near term and then settle sustainably around the target. Easing labour cost pressures and the continuing impact of past monetary policy tightening should support the convergence to the inflation target.

    Turning to the international environment, global economic activity had remained robust around the turn of the year. The global composite PMI had held steady at 53.0 in the fourth quarter of 2024, owing mainly to the continued strength in the services sector that had counterbalanced weak manufacturing activity.

    Since the Governing Council’s previous meeting, the euro had remained broadly stable in nominal effective terms (+0.5%) and against the US dollar (+0.2%). Oil prices had seen a lot of volatility, but the latest price, at USD 78 per barrel, was only around 3½% above the spot oil price at the cut-off date for the December Eurosystem staff projections and 2.6% above the spot price at the time of the last meeting. With respect to gas prices, the spot price stood at €48 per MWh, 2.7% above the level at the cut-off date for the December projections and 6.8% higher than at the time of the last meeting.

    Following a comparatively robust third quarter, euro area GDP growth had likely moderated again in the last quarter of 2024 – confirmed by Eurostat’s preliminary flash estimate released on 30 January at 11:00 CET, with a growth rate of 0% for that quarter, later revised to 0.1%. Based on currently available information, private consumption growth had probably slowed in the fourth quarter amid subdued consumer confidence and heightened uncertainty. Housing investment had not yet picked up and there were no signs of an imminent expansion in business investment. Across sectors, industrial activity had been weak in the summer and had softened further in the last few months of 2024, with average industrial production excluding construction in October and November standing 0.4% below its third quarter level. The persistent weakness in manufacturing partly reflected structural factors, such as sectoral trends, losses in competitiveness and relatively high energy prices. However, manufacturing firms were also especially exposed to heightened uncertainty about global trade policies, regulatory costs and tight financing conditions. Service production had grown in the third quarter, but the expansion had likely moderated in the fourth quarter.

    The labour market was robust, with the unemployment rate falling to a historical low of 6.3% in November – with the figure for December (6.3%) and a revised figure for November (6.2%) released later on the morning of 30 January. However, survey evidence and model estimates suggested that euro area employment growth had probably softened in the fourth quarter.

    The fiscal stance for the euro area was now expected to be balanced in 2025, as opposed to the slight tightening foreseen in the December projections. Nevertheless, the current outlook for the fiscal stance was subject to considerable uncertainty.

    The euro area economy was set to remain subdued in the near term. The flash composite output PMI for January had ticked up to 50.2 driven by an improvement in manufacturing output, as the rate of contraction had eased compared with December. The January release had been 1.7 points above the average for the fourth quarter, but it still meant that the manufacturing sector had been in contractionary territory for nearly two years. The services business activity index had decelerated slightly to 51.4 in January, staying above the average of 50.9 in the fourth quarter of 2024 but still below the figure of 52.1 for the third quarter.

    Even with a subdued near-term outlook, the conditions for a recovery remained in place. Higher incomes should allow spending to rise. More affordable credit should also boost consumption and investment over time. And if trade tensions did not escalate, exports should also support the recovery as global demand rose.

    Turning to the monetary and financial analysis, bond yields, in both the euro area and globally, had increased significantly since the last meeting. At the same time, the ECB’s past interest rate cuts were gradually making it less expensive for firms and households to borrow. Lending rates on bank loans to firms and households for new business had continued to decline in November. In the same period, the cost of borrowing for firms had decreased by 15 basis points to 4.52% and stood 76 basis points below the cyclical peak observed in October 2023. The cost of issuing market-based debt had remained at 3.6% in November 2024. Mortgage rates had fallen by 8 basis points to 3.47% since October, 56 basis points lower than their peak in November 2023. However, the interest rates on existing corporate and household loan books remained high.

    Financing conditions remained tight. Although credit was expanding, lending to firms and households was subdued relative to historical averages. Annual growth in bank lending to firms had risen to 1.5% in December, up from 1% in November, as a result of strong monthly flows. But it remained well below the 4.3% historical average since January 1999. By contrast, growth in corporate debt securities issuance had moderated to 3.2% in annual terms, from 3.6% in November. This suggested that firms had substituted market-based long-term financing for bank-based borrowing amid tightening market conditions and in advance of increasing redemptions of long-term corporate bonds. Mortgage lending had continued to rise gradually but remained muted overall, with an annual growth rate of 1.1% in December after 0.9% in November. This was markedly below the long-term average of 5.1%.

    According to the latest euro area bank lending survey, the demand for loans by firms had increased slightly in the last quarter. At the same time, credit standards for loans to firms had tightened again, having broadly stabilised over the previous four quarters. This renewed tightening of credit standards for firms had been motivated by banks seeing higher risks to the economic outlook and their lower tolerance for taking on credit risk. This finding was consistent with the results of the Survey on the Access to Finance of Enterprises, in which firms had reported a small decline in the availability of bank loans and tougher non-rate lending conditions. Turning to households, the demand for mortgages had increased strongly as interest rates became more attractive and prospects for the property market improved. Credit standards for housing loans remained unchanged overall.

    Monetary policy considerations and policy options

    In summary, the disinflation process remained well on track. Inflation had continued to develop broadly in line with the staff projections and was set to return to the 2% medium-term target in the course of 2025. Most measures of underlying inflation suggested that inflation would settle around the target on a sustained basis. Domestic inflation remained high, mostly because wages and prices in certain sectors were still adjusting to the past inflation surge with a substantial delay. However, wage growth was expected to moderate and lower profit margins were partially buffering the impact of higher wage costs on inflation. The ECB’s recent interest rate cuts were gradually making new borrowing less expensive for firms and households. At the same time, financing conditions continued to be tight, also because monetary policy remained restrictive and past interest rate hikes were still being transmitted to the stock of credit, with some maturing loans being rolled over at higher rates. The economy was still facing headwinds, but rising real incomes and the gradually fading effects of restrictive monetary policy should support a pick-up in demand over time.

    Concerning the monetary policy decision at this meeting, it was proposed to lower the three key ECB interest rates by 25 basis points. In particular, lowering the deposit facility rate – the rate through which the ECB steered the monetary policy stance – was justified by the updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission. The alternative – maintaining the deposit facility rate at the current level of 3.00% – would excessively dampen demand and therefore be inconsistent with the set of rate paths that best ensured inflation stabilised sustainably at the 2% medium-term target.

    Looking to the future, it was prudent to maintain agility, so as to be able to adjust the stance as appropriate on a meeting-by-meeting basis, and not to pre-commit to any particular rate path. In particular, monetary easing might proceed more slowly in the event of upside shocks to the inflation outlook and/or to economic momentum. Equally, in the event of downside shocks to the inflation outlook and/or to economic momentum, monetary easing might proceed more quickly.

    2. Governing Council’s discussion and monetary policy decisions

    Economic, monetary and financial analyses

    As regards the external environment, incoming data since the Governing Council’s previous monetary policy meeting had signalled robust global activity in the fourth quarter of 2024, with divergent paths across economies and an uncertain outlook for global trade. The euro had been broadly stable and energy commodity prices had increased. It was underlined that gas prices were currently over 60% higher than in 2024 because the average temperature during the previous winter had been very mild, whereas this winter was turning out to be considerably colder. This suggested that demand for gas would remain strong, as reserves needed to be replenished ahead of the next heating season, keeping gas prices high for the remainder of the year. In other commodity markets, metal prices were stable – subdued by weak activity in China and the potential negative impact of US tariffs – while food prices had increased.

    Members concurred that the outlook for the international economy remained highly uncertain. The United States was the only advanced economy that was showing sustained growth dynamics. Global trade might be hit hard if the new US Administration were to implement the measures it had announced. The challenges faced by the Chinese economy also remained visible in prices. Chinese inflation had declined further on the back of weak domestic demand. In this context, it was pointed out that, no matter how severe the new US trade measures turned out to be, the euro area would be affected either indirectly by disinflationary pressures or directly, in the event of retaliation, by higher inflation. In particular, if China were to redirect trade away from the United States and towards the euro area, this would make it easier to achieve lower inflation in the euro area but would have a negative impact on domestic activity, owing to greater international competition.

    With regard to economic activity in the euro area, it was widely recognised that incoming data since the last Governing Council meeting had been limited and, ahead of Eurostat’s indicator of GDP for the fourth quarter of 2024, had not brought any major surprises. Accordingly, it was argued that the December staff projections remained the most likely scenario, with the downside risks to growth that had been identified not yet materialising. The euro area economy had seen some encouraging signs in the January flash PMIs, although it had to be recognised that, in these uncertain times, hard data seemed more important than survey results. The outcome for the third quarter had surprised on the upside, showing tentative signs of a pick-up in consumption. Indications from the few national data already available for the fourth quarter pointed to a positive contribution from consumption. Despite all the prevailing uncertainties, it was still seen as plausible that, within a few quarters, there would be a consumption-driven recovery, with inflation back at target, policy rates broadly at neutral levels and continued full employment. Moreover, the latest information on credit flows and lending rates suggested that the gradual removal of monetary restrictiveness was already being transmitted to the economy, although the past tightening measures were still exerting lagged effects.

    The view was also expressed that the economic outlook in the December staff projections had likely been too optimistic and that there were signs of downside risks materialising. The ECB’s mechanical estimates pointed to very weak growth around the turn of the year and, compared with other institutions, the Eurosystem’s December staff projections had been among the most optimistic. Attention was drawn to the dichotomy between the performance of the two largest euro area economies and that of the rest of the euro area, which was largely due to country-specific factors.

    Recent forecasts from the Survey of Professional Forecasters, the Survey of Monetary Analysts and the International Monetary Fund once again suggested a downward revision of euro area economic growth for 2025 and 2026. Given this trend of downward revisions, doubts were expressed about the narrative of a consumption-driven economic recovery in 2025. Moreover, the December staff projections had not directly included the economic impact of possible US tariffs in the baseline, so it was hard to be optimistic about the economic outlook. The outlook for domestic demand had deteriorated, as consumer confidence remained weak and investment was not showing any convincing signs of a pick-up. The contribution from foreign demand, which had been the main driver of growth over the past two years, had also been declining since last spring. Moreover, uncertainty about potential tariffs to be imposed by the new US Administration was weighing further on the outlook. In the meantime, labour demand was losing momentum. The slowdown in economic activity had started to affect temporary employment: these jobs were always the first to disappear as the labour market weakened. At the same time, while the labour market had softened over recent months, it continued to be robust, with the unemployment rate staying low, at 6.3% in December. A solid job market and higher incomes should strengthen consumer confidence and allow spending to rise.

    There continued to be a strong dichotomy between a more dynamic services sector and a weak manufacturing sector. The services sector had remained robust thus far, with the PMI in expansionary territory and firms reporting solid demand. The extent to which the weakness in manufacturing was structural or cyclical was still open to debate, but there was a growing consensus that there was a large structural element, as high energy costs and strict regulation weighed on firms’ competitiveness. This was also reflected in weak export demand, despite the robust growth in global trade. All these factors also had an adverse impact on business investment in the industrial sector. This was seen as important to monitor, as a sustainable economic recovery also depended on a recovery in investment, especially in light of the vast longer-term investment needs of the euro area. Labour markets showed a dichotomy similar to the one observed in the economy more generally. While companies in the manufacturing sector were starting to lay off workers, employment in the services sector was growing. At the same time, concerns were expressed about the number of new vacancies, which had continued to fall. This two-speed economy, with manufacturing struggling and services resilient, was seen as indicating only weak growth ahead, especially in conjunction with the impending geopolitical tensions.

    Against this background, geopolitical and trade policy uncertainty was likely to continue to weigh on the euro area economy and was not expected to recede anytime soon. The point was made that if uncertainty were to remain high for a prolonged period, this would be very different from a shorter spell of uncertainty – and even more detrimental to investment. Therefore the economic recovery was unlikely to receive much support from investment for some time. Indeed, excluding Ireland, euro area business investment had been contracting recently and there were no signs of a turnaround. This would limit investment in physical and human capital further, dragging down potential output in the medium term. However, reference was also made to evidence from psychological studies, which suggested that the impact of higher uncertainty might diminish over time as agents’ perceptions and behaviour adapted.

    In this context, a remark was made on the importance of monetary and fiscal policies for enabling the economy to return to its previous growth path. Economic policies were meant to stabilise the economy and this stabilisation sometimes required a long time. After the pandemic, many economic indicators had returned to their pre-crisis levels, but this had not yet implied a return to pre-crisis growth paths, even though the output gap had closed in the meantime. A question was raised on bankruptcies, which were increasing in the euro area. To the extent that production capacity was being destroyed, the output gap might be closing because potential output growth was declining, and not because actual growth was increasing. However, it was also noted that bankruptcies were rising from an exceptionally low level and developments remained in line with historical regularities.

    Members reiterated that fiscal and structural policies should make the economy more productive, competitive and resilient. They welcomed the European Commission’s Competitiveness Compass, which provided a concrete roadmap for action. It was seen as crucial to follow up, with further concrete and ambitious structural policies, on Mario Draghi’s proposals for enhancing European competitiveness and on Enrico Letta’s proposals for empowering the Single Market. Governments should implement their commitments under the EU’s economic governance framework fully and without delay. This would help bring down budget deficits and debt ratios on a sustained basis, while prioritising growth-enhancing reforms and investment.

    Against this background, members assessed that the risks to economic growth remained tilted to the downside. Greater friction in global trade could weigh on euro area growth by dampening exports and weakening the global economy. Lower confidence could prevent consumption and investment from recovering as fast as expected. This could be amplified by geopolitical risks, such as Russia’s unjustified war against Ukraine and the tragic conflict in the Middle East, which could disrupt energy supplies and further weigh on global trade. Growth could also be lower if the lagged effects of monetary policy tightening lasted longer than expected. It could be higher if easier financing conditions and falling inflation allowed domestic consumption and investment to rebound faster.

    On price developments, members concurred with Mr Lane’s assessment that the incoming data confirmed disinflation was on track and that a return to the target in the course of 2025 was within reach. On the nominal side, there had been no major data surprises since the December Governing Council meeting and inflation expectations remained well anchored. Recent inflation data had been slightly below the December staff projections, but energy prices were on the rise. These two elements by and large offset one another. The inflation baseline from the December staff projections was therefore still a realistic scenario, indicating that inflation was on track to converge towards target in the course of 2025. Nevertheless, it was recalled that, for 2027, the contribution from the new Emissions Trading System (ETS2) assumptions was mechanically pushing the Eurosystem staff inflation projections above 2%. Furthermore, the market fixings for longer horizons suggested that there was a risk of undershooting the inflation target in 2026 and 2027. It was remarked that further downside revisions to the economic outlook would tend to imply a negative impact on the inflation outlook and an undershooting of inflation could not be ruled out.

    At the same time, the view was expressed that the risks to the December inflation projections were now tilted to the upside, so that the return to the 2% inflation target might take longer than previously expected. Although it was acknowledged that the momentum in services inflation had eased in recent months, the outlook for inflation remained heavily dependent on the evolution of services inflation, which accounted for around 75% of headline inflation. Services inflation was therefore widely seen as the key inflation component to monitor during the coming months. Services inflation had been stuck at roughly 4% for more than a year, while core inflation had also proven sluggish after an initial decline, remaining at around 2.7% for nearly a year. This raised the question as to where core inflation would eventually settle: in the past, services inflation and core inflation had typically been closely connected. It was also highlighted that, somewhat worryingly, the inflation rate for “early movers” in services had been trending up since its trough in April 2024 and was now standing well above the “followers” and the “late movers” at around 4.6%. This partly called into question the narrative behind the expected deceleration in services inflation. Moreover, the January flash PMI suggested that non-labour input costs, including energy and shipping costs, had increased significantly. The increase in the services sector had been particularly sharp, which was reflected in rising PMI selling prices for services – probably also fuelled by the tight labour market. As labour hoarding was a more widespread phenomenon in manufacturing, this implied that a potential pick-up in demand and the associated cyclical recovery in labour productivity would not necessarily dampen unit labour costs in the services sector to the same extent as in manufacturing.

    One main driver of the stickiness in services inflation was wage growth. Although wage growth was expected to decelerate in 2025, it would still stand at 4.5% in the second quarter of 2025 according to the ECB wage tracker. The pass-through of wages tended to be particularly strong in the services sector and occurred over an extended period of time, suggesting that the deceleration in wages might take some time to be reflected in lower services inflation. The forward-looking wage tracker was seen as fairly reliable, as it was based on existing contracts, whereas focusing too much on lagging wage data posed the risk of monetary policy falling behind the curve. This was particularly likely if negative growth risks eventually affected the labour market. Furthermore, a question was raised as to the potential implications for wage pressures of more restrictive labour migration policies.

    Overall, looking ahead there seemed reasons to believe that both services inflation and wage growth would slow down in line with the baseline scenario in the December staff projections. From the current quarter onwards, services inflation was expected to decline. However, in the early months of the year a number of services were set to be repriced, for instance in the insurance and tourism sectors, and there were many uncertainties surrounding this repricing. It was therefore seen as important to wait until March, when two more inflation releases and the new projections would be available, to reassess the inflation baseline as contained in the December staff projections.

    As regards longer-term inflation expectations, members took note of the latest developments in market-based measures of inflation compensation and survey-based indicators. The December Consumer Expectations Survey showed another increase in near-term inflation expectations, with inflation expectations 12 months ahead having already gradually picked up from 2.4% in September to 2.8% in December. Density-based expectations were even higher at 3%, with risks tilted to the upside. According to the Survey on the Access to Finance of Enterprises, firms’ median inflation expectations had also risen to 3%. However it was regarded as important to focus more on the change in inflation expectations than on the level of expectations when interpreting these surveys.

    As regards risks to the inflation outlook, with respect to the market-based measures, the view was expressed that there had been a shift in the balance of risks, pointing to upside risks to the December inflation outlook. In financial markets, inflation fixings for 2025 had shifted above the December short-term projections and inflation expectations had picked up across all tenors. In market surveys, risks of overshooting had resurfaced, with a larger share of respondents in the surveys seeing risks of an overshooting in 2025. Moreover, it was argued that tariffs, their implications for the exchange rate, and energy and food prices posed upside risks to inflation.

    Against this background, members considered that inflation could turn out higher if wages or profits increased by more than expected. Upside risks to inflation also stemmed from the heightened geopolitical tensions, which could push energy prices and freight costs higher in the near term and disrupt global trade. Moreover, extreme weather events, and the unfolding climate crisis more broadly, could drive up food prices by more than expected. By contrast, inflation might surprise on the downside if low confidence and concerns about geopolitical events prevented consumption and investment from recovering as fast as expected, if monetary policy dampened demand by more than expected, or if the economic environment in the rest of the world worsened unexpectedly. Greater friction in global trade would make the euro area inflation outlook more uncertain.

    Turning to the monetary and financial analysis, members broadly agreed with the assessment presented by Ms Schnabel and Mr Lane. It was noted that market interest rates in the euro area had risen since the Governing Council’s December monetary policy meeting, partly mirroring higher rates in global financial markets. Overall, financial conditions had been broadly stable, with higher short and long-term interest rates being counterbalanced by strong risk asset markets and a somewhat weaker exchange rate.

    Long-term interest rates had been rising more substantially than short-term ones, resulting in a steepening of the yield curve globally since last autumn. At the same time, it was underlined that the recent rise in long-term bond yields did not appear to be particularly striking when looking at developments over a longer time period. Over the past two years long-term rates had remained remarkably stable, especially when taking into account the pronounced variation in policy rates.

    The dynamics of market rates since the December Governing Council meeting had been similar on both sides of the Atlantic. This reflected higher term premia as well as a repricing of rate expectations. However, the relative contributions of the underlying drivers differed. In the United States, one factor driving up market interest rates had been an increase in inflation expectations, combined with the persistent strength of the US economy as well as concerns over prospects of higher budget deficits. This had led markets to price out some of the rate cuts that had been factored into the rate expectations prevailing before the Federal Open Market Committee meeting in December 2024. Uncertainty regarding the policies implemented by the new US Administration had also contributed to the sell-off in US government bonds. In Europe, term premia accounted for a significant part of the increase in long-term rates, which could be explained by a combination of factors. These included spillovers from the United States, concerns over the outlook for fiscal policy, and domestic and global policy uncertainty more broadly. Attention was also drawn to the potential impact of tighter monetary policy in Japan, the world’s largest creditor nation, with Japanese investors likely to start shifting their funds away from overseas investments towards domestic bond markets in response to rising yields.

    The passive reduction in the Eurosystem’s balance sheet, as maturing bonds were no longer reinvested, was also seen as exerting gradual upward pressure on term premia over longer horizons, although this had not been playing a significant role – especially not in developments since the last meeting. The reduction had been indicated well in advance and had already been priced in, to a significant extent, at the time the phasing out of reinvestment had been announced. The residual Eurosystem portfolios were still seen to be exerting substantial downside pressure on longer-term sovereign yields as compared with a situation in which asset holdings were absent. It was underlined that, while declining central bank holdings did affect financial conditions, quantitative tightening was operating gradually and smoothly in the background.

    In the context of the discussion on long-term yields, attention was drawn to the possibility that rising yields might also lead to financial stability risks, especially in view of the high level of valuations and leverage in the world economy. A further financial stability risk related to the prospect of a more deregulated financial system in the United States, including in the realm of crypto-assets. This could allow risks to build up in the years to come and sow the seeds of a future financial crisis.

    Turning to financing conditions, past interest rate cuts were gradually making it less expensive for firms and households to borrow. For new business, rates on bank loans to firms and households had continued to decline in November. However, the interest rates on existing loans remained high, and financing conditions remained tight.

    Although credit was expanding, lending to firms and households was subdued relative to historical averages. Growth in bank lending to firms had risen to 1.5% in December in annual terms, up from 1.0% in November. Mortgage lending had continued to rise gradually but remained muted overall, with an annual growth rate of 1.1% in December following 0.9% in November. Nevertheless, the increasing pace of loan growth was encouraging and suggested monetary easing was starting to be transmitted through the bank lending channel. Some comfort could also be taken from the lack of evidence of any negative impact on bank lending conditions from the decline in excess liquidity in the banking system.

    The bank lending survey was providing mixed signals, however. Credit standards for mortgages had been broadly unchanged in the fourth quarter, after easing for a while, and banks expected to tighten them in the next quarter. Banks had reported the third strongest increase in demand for mortgages since the start of the survey in 2003, driven primarily by more attractive interest rates. This indicated a turnaround in the housing market as property prices picked up. At the same time, credit standards for consumer credit had tightened in the fourth quarter, with standards for firms also tightening unexpectedly. The tightening had largely been driven by heightened perceptions of economic risk and reduced risk tolerance among banks.

    Caution was advised on overinterpreting the tightening in credit standards for firms reported in the latest bank lending survey. The vast majority of banks had reported unchanged credit standards, with only a small share tightening standards somewhat and an even smaller share easing them slightly. However, it was recalled that the survey methodology for calculating net percentages, which typically involved subtracting a small percentage of easing banks from a small percentage of tightening banks, was an established feature of the survey. Also, that methodology had not detracted from the good predictive power of the net percentage statistic for future lending developments. Moreover, the information from the bank lending survey had also been corroborated by the Survey on the Access to Finance of Enterprises, which had pointed to a slight decrease in the availability of funds to firms. The latter survey was now carried out at a quarterly frequency and provided an important cross-check, based on the perspective of firms, of the information received from banks.

    Turning to the demand for loans by firms, although the bank lending survey had shown a slight increase in the fourth quarter it had remained weak overall, in line with subdued investment. It was remarked that the limited increase in firms’ demand for loans might mean they were expecting rates to be cut further and were waiting to borrow at lower rates. This suggested that the transmission of policy rate cuts was likely to be stronger as the end of the rate-cutting cycle approached. At the same time, it was argued that demand for loans to euro area firms was mainly being held back by economic and geopolitical uncertainty rather than the level of interest rates.

    Monetary policy stance and policy considerations

    Turning to the monetary policy stance, members assessed the data that had become available since the last monetary policy meeting in accordance with the three main elements the Governing Council had communicated in 2023 as shaping its reaction function. These comprised (i) the implications of the incoming economic and financial data for the inflation outlook, (ii) the dynamics of underlying inflation, and (iii) the strength of monetary policy transmission.

    Starting with the inflation outlook, members widely agreed that the incoming data were broadly in line with the medium-term inflation trajectory embedded in the December staff projections. Inflation had been slightly lower than expected in both November and December. The outlook remained heavily dependent on the evolution of services inflation, which had remained close to 4% for more than a year. However, the momentum of services inflation had eased in recent months and a further decrease in wage pressures was anticipated, especially in the second half of 2025. Oil and gas prices had been higher than embodied in the December projections and needed to be closely monitored, but up to now they did not suggest a major change to the baseline in the staff projections.

    Risks to the inflation outlook were seen as two-sided: upside risks were posed by the outlook for energy and food prices, a stronger US dollar and the still sticky services inflation, while a downside risk related to the possibility of growth being lower than expected. There was considerable uncertainty about the effect of possible US tariffs, but the estimated impact on euro area inflation was small and its sign was ambiguous, whereas the implications for economic growth were clearly negative. Further uncertainty stemmed from the possible downside pressures emanating from falling Chinese export prices.

    There was some evidence suggesting a shift in the balance of risks to the upside since December, as reflected, for example, in market surveys showing that the risk of inflation overshooting the target outweighed the risk of an undershooting. Although some of the survey-based inflation expectations as well as market-derived inflation compensation had been revised up slightly, members took comfort from the fact that longer-term measures of inflation expectations remained well anchored at 2%.

    Turning to underlying inflation, members concurred that developments in most measures of underlying inflation suggested that inflation would settle at around the target on a sustained basis. Core inflation had been sticky at around 2.7% for nearly a year but had also turned out lower than projected. A number of measures continued to show a certain degree of persistence, with domestic inflation remaining high and exclusion-based measures proving sticky at levels above 2%. In addition, the translation of wage moderation into a slower rise in domestic prices and unit labour costs was subject to lags and predicated on profit margins continuing their buffering role as well as a cyclical rebound in labour productivity. However, a main cause of stickiness in domestic inflation was services inflation, which was strongly influenced by wage growth, and this was expected to decelerate in the course of 2025.

    As regards the transmission of monetary policy, recent credit dynamics showed that monetary policy transmission was working. Both the past tightening and the subsequent gradual removal of restriction were feeding through to financing conditions, including lending rates and credit flows. It was highlighted that not all demand components had been equally responsive, with, in particular, business investment held back by high uncertainty and structural weaknesses. Companies widely cited having their own funds as a reason for not making loan applications, and the reason for not investing these funds was likely linked to the high levels of uncertainty, rather than to the level of interest rates. Hence low investment was not necessarily a sign of a restrictive monetary policy. At the same time, it was unclear how much of the past tightening was still in the pipeline. Similarly, it would take time for the full effect of recent monetary policy easing to reach the economy, with even variable rate loans typically adjusting with a lag, and the same being true for deposits.

    Monetary policy decisions and communication

    Against this background, all members agreed with the proposal by Mr Lane to lower the three key ECB interest rates by 25 basis points. Lowering the deposit facility rate – the rate through which the monetary policy stance was steered – was justified by the updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission.

    There was a clear case for a further 25 basis point rate cut at the current meeting, and such a step was supported by the incoming data. Members concurred that the disinflationary process was well on track, while the growth outlook continued to be weak. Although the goal had not yet been achieved and inflation was still expected to remain above target in the near term, confidence in a timely and sustained convergence had increased, as both headline and core inflation had recently come in below the ECB projections. In particular, a return of inflation to the 2% target in the course of 2025 was in line with the December staff baseline projections, which were constructed on the basis of an interest rate path that stood significantly below the present level of the forward curve.

    At the same time, it was underlined that high levels of uncertainty, lingering upside risks to energy and food prices, a strong labour market and high negotiated wage increases, as well as sticky services inflation, called for caution. Upside risks could delay a sustainable return to target, while inflation expectations might be more fragile after a long period of high inflation. Firms had also learned to raise their prices more quickly in response to new inflationary shocks. Moreover, the financial market reactions to heightened geopolitical uncertainty or risk aversion often led to an appreciation of the US dollar and might involve spikes in energy prices, which could be detrimental to the inflation outlook.

    Risks to the growth outlook remained tilted to the downside, which typically also implied downside risks to inflation over longer horizons. The outlook for economic activity was clouded by elevated uncertainty stemming from geopolitical tensions, fiscal policy concerns in the euro area and recent global trade frictions associated with potential future actions by the US Administration that might lead to a global economic slowdown. As long as the disinflation process remained on track, policy rates could be brought further towards a neutral level to avoid unnecessarily holding back the economy. Nevertheless, growth risks had not shifted to a degree that would call for an acceleration in the move towards a neutral stance. Moreover, it was argued that greater caution was needed on the size and pace of further rate cuts when policy rates were approaching neutral territory, in view of prevailing uncertainties.

    Lowering the deposit facility rate to 2.75% at the current meeting was also seen as appropriate from a risk-management perspective. On the one hand, it left sufficient optionality to react to the possible emergence of new price pressures. On the other hand, it addressed the risk of falling behind the curve in dialling back restriction and guarded against inflation falling below target.

    Looking ahead, it was regarded as premature for the Governing Council to discuss a possible landing zone for the key ECB interest rates as inflation converged sustainably to target. It was widely felt that even with the current deposit facility rate, it was relatively safe to make the assessment that monetary policy was still restrictive. This was also consistent with the fact that the economy was relatively weak. At the same time, the view was expressed that the natural or neutral rate was likely to be higher than before the pandemic, as the balance between the global demand for and supply of savings had changed over recent years. The main reasons for this were the high and rising global need for investment to deal with the green and digital transitions, the surge in public debt and increasing geopolitical fragmentation, which was reversing the global savings glut and reducing the supply of savings. A higher neutral rate implied that, with a further reduction in policy rates at the present meeting, rates would plausibly be getting close to neutral rate territory. This meant that the point was approaching where monetary policy might no longer be characterised as restrictive.

    In this context, the remark was made that the public debate about the natural or neutral rate among market analysts and observers was becoming more intense, with markets trying to gauge the Governing Council’s assessment of it as a proxy for the terminal rate in the current rate cycle. This debate was seen as misleading, however. The considerable uncertainty as to the level of the natural or neutral interest rate was recalled. While the natural rate could in theory be a longer-term reference point for assessing the monetary policy stance, it was an unobservable variable. Its practical usefulness in steering policy on a meeting-by-meeting basis was questionable, as estimates were subject to significant model and parameter uncertainty, so confidence bands were too large to give any clear guidance. Moreover, the natural rate was a steady state concept, which was hardly applicable in a rapidly changing environment – as at present – with continuous new shocks.

    Moreover, it was mentioned that a box describing the latest Eurosystem staff estimates of the natural rate would be published in the Economic Bulletin and pre-released on 7 February 2025. The box would emphasise the wide range of point estimates, the properties of the underlying models and the considerable statistical uncertainty surrounding each single point estimate. The view was expressed that there was no alternative to the Governing Council identifying, meeting by meeting, an appropriate policy rate path which was consistent with reaching the target over the medium term. Such an appropriate path could only be identified in real time, taking into account a sufficiently broad set of information.

    Turning to communication aspects, it was widely stressed that maintaining a data-dependent approach with full optionality at every meeting was prudent and continued to be warranted. The present environment of elevated uncertainty further strengthened the case for taking decisions meeting by meeting, with no room for forward guidance. The meeting-by-meeting approach, guided by the three-criteria framework, was serving the Governing Council well and members were comfortable with the way markets were interpreting the ECB’s reaction function. It was also remarked that data-dependence did not imply being backward-looking in calibrating policy. Monetary policy was, by definition, forward-looking, as it affected inflation in the future and the primary objective was defined over the medium term. Data took many forms, and all relevant information had to be considered in a timely manner.

    Taking into account the foregoing discussion among the members, upon a proposal by the President, the Governing Council took the monetary policy decisions as set out in the monetary policy press release. The members of the Governing Council subsequently finalised the monetary policy statement, which the President and the Vice-President would, as usual, deliver at the press conference following the Governing Council meeting.

    Monetary policy statement

    Monetary policy statement for the press conference of 30 January 2025

    Press release

    Monetary policy decisions

    Meeting of the ECB’s Governing Council, 29-30 January 2025

    Members

    • Ms Lagarde, President
    • Mr de Guindos, Vice-President
    • Mr Centeno
    • Mr Cipollone
    • Mr Demarco, temporarily replacing Mr Scicluna
    • Mr Dolenc, Deputy Governor of Banka Slovenije
    • Mr Elderson
    • Mr Escrivá*
    • Mr Holzmann
    • Mr Kālis, Acting Governor of Latvijas Banka
    • Mr Kažimír
    • Mr Knot
    • Mr Lane
    • Mr Makhlouf*
    • Mr Müller
    • Mr Nagel
    • Mr Panetta
    • Mr Patsalides*
    • Mr Rehn
    • Mr Reinesch
    • Ms Schnabel
    • Mr Šimkus
    • Mr Stournaras*
    • Mr Villeroy de Galhau
    • Mr Vujčić*
    • Mr Wunsch

    * Members not holding a voting right in January 2025 under Article 10.2 of the ESCB Statute.

    Other attendees

    • Mr Dombrovskis, Commissioner**
    • Ms Senkovic, Secretary, Director General Secretariat
    • Mr Rostagno, Secretary for monetary policy, Director General Monetary Policy
    • Mr Winkler, Deputy Secretary for monetary policy, Senior Adviser, DG Monetary Policy

    ** In accordance with Article 284 of the Treaty on the Functioning of the European Union.

    Accompanying persons

    • Mr Arpa
    • Ms Bénassy-Quéré
    • Mr Debrun
    • Mr Gavilán
    • Mr Gilbert
    • Mr Kaasik
    • Mr Koukoularides
    • Mr Lünnemann
    • Mr Madouros
    • Mr Martin
    • Mr Nicoletti Altimari
    • Mr Novo
    • Mr Rutkaste
    • Ms Schembri
    • Mr Šiaudinis
    • Mr Šošić
    • Mr Tavlas
    • Mr Ulbrich
    • Mr Välimäki
    • Ms Žumer Šujica

    Other ECB staff

    • Mr Proissl, Director General Communications
    • Mr Straub, Counsellor to the President
    • Ms Rahmouni-Rousseau, Director General Market Operations
    • Mr Arce, Director General Economics
    • Mr Sousa, Deputy Director General Economics

    Release of the next monetary policy account foreseen on 3 April 2025.

    MIL OSI Europe News

  • MIL-OSI Europe: Written question – Does the Commission intend to give priority to the EU’s external commitments in the next multiannual financial framework? – E-000691/2025

    Source: European Parliament

    Question for written answer  E-000691/2025
    to the Commission
    Rule 144
    Mathilde Androuët (PfE)

    Some months ago, the Commission announced an overhaul of the multiannual financial framework 2028-2034, a copy of which has already been published[1]. It appears that the document contains an unsolvable ‘budgetary trilemma’. The EU is expected to provide considerable financing to cover the increase in strategic spending – the green transition, digital challenge and defence of and support for Ukraine, but also ensure that NextGenerationEU debt is being paid off from 2028 onwards, at an estimated EUR 25 and 30 billion per year, and come to terms with the absence of a rise in national contributions. Those three simultaneous constraints clearly cannot be resolved without new financial resources, which have yet to be found.

    Against that backdrop, does the Commission plan to give priority to its external commitments that will have to be extended or to redirect EU funds towards Member States’ own needs?

    Submitted: 13.2.2025

    • [1] https://www.contexte.com/actualite/pouvoirs/budget-post-2027-la-commission-pose-les-premieres-pierres-dun-chantier-titanesque_218085.html
    Last updated: 27 February 2025

    MIL OSI Europe News

  • MIL-OSI Europe: Press release – The EU-US partnership matters

    Source: European Parliament 3

    President Metsola in the US, addresses Johns Hopkins University in Washington

    The President of the European Parliament, Roberta Metsola said that the EU and the US have stood on the same side of history “not because we are homogenous, but because our greatest victories come from our shared conviction to doing what is right. This partnership matters.”

    Speaking at the Johns Hopkins University in Washington DC, President Metsola said that the world relies on the strength of the transatlantic relationship which goes beyond shared trade, commerce and industry. President Metsola listed common values that the two sides have championed throughout the decades, including dignity of every human being, equal opportunity for everyone to reach their full potential, justice, the right to feel safe and live in safety and the belief in freedom – “individual liberty, free trade, freedom to disagree and the cornerstone of everything: freedom of speech.”

    Simplification, rather than complicating systems, is on top of Europe’s agenda, she said, addressing the sense of frustration that voters expressed during June’s elections. The President added that solutions can be found to make it easier for companies to do business with and within Europe. Meeting with European industry leaders in DC that have massive operations in the US, she told them that Europe has their back. President Metsola also met with US companies to explain Europe’s future-driven approach, underlining that it is open for business.

    The President of the European Parliament said that the EU and the US “can find a way for us all to win. That is why I think we should be talking about trade agreements rather than tariffs. We are not out to screw anyone”. On the latest US administration’s announcements on tariffs, President Metsola said that the EU will react firmly and immediately against unjustified barriers to free and fair trade, including when tariffs are used to challenge legal and non-discriminatory policies.

    On defence, she called for an increase in defence spending. “We will put our money where our mouth is. We know that our commitment needs to match the level of threat we are facing. That threat is very high.”

    Underlining that “peace is the essence of the European Union,” she remarked that the EU always wanted peace in Ukraine, acknowledging the cost and the devastation of war that many generations of people from across Europe had to endure. “At the same time, we also need to be honest with ourselves: peace without freedom, peace without dignity, peace without justice, peace not based on the principle of ‘anything about Ukraine without Ukraine,’ is no real peace at all,” stated President Metsola. “Europe is ready to play our part in guaranteeing peace and stability in Ukraine because we know that this means peace and stability in Europe and that is a win-win for all.”

    Find the full speech here.

    MIL OSI Europe News

  • MIL-OSI Security: Update 278 – IAEA Director General Statement on Situation in Ukraine

    Source: International Atomic Energy Agency – IAEA

    Two weeks after it was hit by a drone, Ukrainian firefighters are still trying to extinguish smouldering fires within the large structure built over the reactor destroyed in the 1986 Chornobyl nuclear accident, Director General Rafael Mariano Grossi of the International Atomic Energy Agency (IAEA) said today.

    With unrestricted access, the IAEA team based at the site has been closely monitoring the situation following the strike early in the morning on 14 February that pierced a big hole in the New Safe Confinement (NSC), designed to prevent any potential release into the atmosphere of radioactive material from the Shelter Object covering the damaged reactor, and to protect it from external hazards.

    Frequent radiation monitoring carried out by Ukraine and independent measurements conducted by the IAEA continue to show normal levels within the NSC as well as elsewhere at the site of the Chornobyl plant.

    Aided by thermal imaging including the use of surveillance drones, Ukrainian experts have located smouldering fires in the insulation between the layers of the arch-shaped NSC structure, injecting water to put them out.

    Working in shifts, more than 400 emergency response personnel have been participating in the site’s efforts to manage the aftermath of the drone strike.

    “The firefighters and other responders are working very hard in difficult circumstances to manage the impact and consequences of the drone strike. It was clearly a serious incident in terms of nuclear safety, even though it could have been much worse. As I have stated repeatedly during this devastating war, attacking a nuclear facility must never happen,” Director General Grossi said.

    Further underlining persistent nuclear safety challenges during the military conflict, the IAEA team at the Chornobyl site has reported multiple air raid alarms during the past week, at times forcing the suspension of the activities to extinguish the fires in the NSC roof.  The IAEA was also informed of the presence of drones within five kilometers of the site, including two above one of the intermediate spent fuel storage facilities.

    Separately in Kyiv today, an IAEA expert team observed the remains of a drone that Ukraine said were collected following the strike on the NSC. The team observed drone parts that they assessed are consistent with a Shahed-type unmanned aerial vehicle. However, the team did not make any further assessment regarding the origin of the drone.

    Also this week, an IAEA team has been in Ukraine to conduct further visits to assess the status of electrical substations that are critical for the safety of Ukraine’s nuclear power plants (NPPs), but which suffered damage during widespread attacks on the country’s energy infrastructure in recent months.

    NPPs rely on such facilities both to receive the electricity they need for reactor cooling and other nuclear safety functions and to distribute the power they generate themselves.

    The IAEA team monitored the current condition of the substations and collected information to identify any further action that could be taken or technical assistance the Agency could provide to strengthen nuclear safety.

    At Ukraine’s Zaporizhzhya Nuclear Power Plant (ZNPP), the IAEA team reported that the site’s only remaining back-up 330 kilovolt (kV) power line was once again available after it was lost for around a week earlier in February due to unspecified military activities. However, the off-site power situation remains highly challenging at the site.  

    The IAEA team has continued to hear explosions on a daily basis, including some near the ZNPP site. On the evening of 24 February, the team heard multiple bursts of machine gun fire. No damage to the site was reported.

    Elsewhere in Ukraine, the IAEA teams at the three operating NPPs – Khmelnytskyy, Rivne and South Ukraine – have continued to hear air raid alarms on most days, with the team at the Khmelnytskyy site having to shelter at their hotel on one occasion this week.

    The team at the South Ukraine NPP was informed of drones observed three kilometers east of the site early on 25 February. The same morning the team heard anti-aircraft fire followed by an explosion some distance away.

    MIL Security OSI

  • MIL-OSI Security: Press Arrangements for IAEA Board of Governors Meeting, 3-7 March 2025

    Source: International Atomic Energy Agency – IAEA

    The International Atomic Energy Agency (IAEA) Board of Governors will convene its regular March meeting at the Agency’s headquarters starting at 10:30 CET on Monday, 3 March, in Board Room C, Building C, 4th floor, in the Vienna International Centre (VIC). 

    Board discussions are expected to include, among others: Nuclear Safety Review 2025; Nuclear Security Review 2025; Nuclear Technology Review 2025; verification and monitoring in the Islamic Republic of Iran in light of United Nations Security Council resolution 2231 (2015); the conclusion of safeguards agreements and of additional protocols; application of safeguards in the Democratic People’s Republic of Korea; implementation of the NPT safeguards agreement in the Syrian Arab Republic; NPT safeguards agreement with the Islamic Republic of Iran; nuclear safety, security and safeguards in Ukraine; transfer of the nuclear materials in the context of AUKUS and its safeguards in all aspects under the NPT; the restoration of the sovereign equality of Member States in the IAEA; and personnel matters. 

    The Board of Governors meeting is closed to the press. 

    IAEA Director General Rafael Mariano Grossi will open the meeting with an introductory statement, which will be released to journalists after delivery and posted on the IAEA website.  

    Press Conference 

    Director General Grossi is expected to hold a press conference at 13:00 CET on Monday, 3 March, in the Press Room of the M building. 

    A live video stream of the press conference will be available. The IAEA will provide video footage of the press conference and the Director General’s opening statement here and will make photos available on Flickr.  

    Photo Opportunity 

    There will be a photo opportunity with the IAEA Director General and the Chair of the Board, Ambassador Matilda Aku Alomatu Osei-Agyeman of Ghana, before the start of the Board meeting, on 3 March at 10:30 CET in Board Room C, in the C building in the VIC. 

    Press Working Area 

    Conference room M7 on the M-Building’s ground floor will be available as a press working area, starting from 09:00 CET on 3 March. Please note the change of room.

    Accreditation

    All journalists interested in covering the meeting in person – including those with permanent accreditation – are requested to inform the IAEA Press Office of their plans. Journalists without permanent accreditation must send copies of their passport and press ID to the IAEA Press Office by 14:00 CET on Friday, 28 February. 

    We encourage those journalists who do not yet have permanent accreditation to request it at UNIS Vienna

    Please plan your arrival to allow sufficient time to pass through the VIC security check. 

    MIL Security OSI

  • MIL-OSI Video: Crises beneath the Headlines | World Economic Forum Annual Meeting 2025

    Source: World Economic Forum (video statements)

    With international attention focused on two conflicts, in Gaza and Ukraine, other crises of diverse nature, from Sudan to Myanmar and DRC to Venezuela, are creating, instability, disruptions and challenges that the international system is struggling to cope with. In 2025, over 300 million people around the world will need humanitarian assistance and protection.

    This session draws attention to unreported crises and the scale of the response required.

    Speakers: Catherine Russell, Comfort Ero, Ishaan Tharoor, Ricardo Hausmann

    The 55th Annual Meeting of the World Economic Forum will provide a crucial space to focus on the fundamental principles driving trust, including transparency, consistency and accountability.

    This Annual Meeting will welcome over 100 governments, all major international organizations, 1000 Forum’s Partners, as well as civil society leaders, experts, youth representatives, social entrepreneurs, and news outlets.

    The World Economic Forum is the International Organization for Public-Private Cooperation. The Forum engages the foremost political, business, cultural and other leaders of society to shape global, regional and industry agendas. We believe that progress happens by bringing together people from all walks of life who have the drive and the influence to make positive change.

    World Economic Forum Website ► http://www.weforum.org/
    Facebook ► https://www.facebook.com/worldeconomicforum/
    YouTube ► https://www.youtube.com/wef
    Instagram ► https://www.instagram.com/worldeconomicforum/
    X ► https://twitter.com/wef
    LinkedIn ► https://www.linkedin.com/company/world-economic-forum
    TikTok ► https://www.tiktok.com/@worldeconomicforum
    Flipboard ► https://flipboard.com/@WEF

    #Davos2025 #WorldEconomicForum #wef25

    https://www.youtube.com/watch?v=z9r2fnzEUxM

    MIL OSI Video

  • MIL-OSI USA: ICYMI: Mullin Breaks Down President Trump’s First Month’s Performance on Meet the Press

    US Senate News:

    Source: United States Senator MarkWayne Mullin (R-Oklahoma)

    ICYMI: Mullin Breaks Down President Trump’s First Month’s Performance on Meet the Press

    “What Oklahomans want is to make sure that we get rid of the waste and fraud inside the federal government.”
    Washington, D.C. – On Sunday, U.S. Senator Markwayne Mullin (R-OK) joined NBC’s Kristen Welker on Meet the Press to discuss the Trump administration’s ongoing efforts to end the Russia-Ukraine War, bolster our national defense, and reform the federal workforce to best serve the American people.

    Sen. Mullin’s full interview can be found here.
    On the war that never would have happened if President Trump was in office:
    “President Trump is absolutely correct. If he was in office, this war would have never, ever taken place. What we’re trying to do and what President Trump is trying to do is end the killing. It’s been going on for three years. The Biden administration turned a blind eye to it, and President Trump is the president that can end the war. There, fact – fact and simple…
    “What we’re trying to do here is put President Trump in a good position to negotiate the end of the war. It’s the same way that Reagan worked with Gorbachev by trying to end the Cold War. Trump is the president that’s going to be able to end the killings that should have never taken place and would have never taken place if he would have been in office instead of Joe Biden. The reason why is because President Trump leads peace through strength. What Biden led through is appeasement.”
    On the president’s right to pick his team of U.S. military advisors:
    “We’re a civilian force, and the president gets to choose his closest advisors. And the chairman of the Joint Chiefs of Staff is [one of] his closest advisors.”
    On Elon Musk’s efforts to cut waste, fraud, and abuse:
    “What Oklahomans want is to make sure that get rid of the waste and fraud inside the federal government…
    “I would tell you that the majority of the American people want to make sure that their taxpayers are being used correctly. I don’t want anybody to lose their job. That’s the last thing we want. But at the same time, anytime you’re trying to secure this country, which a national security risk we have right now is our national debt, we have to make changes, and we have to make it quickly.”

    MIL OSI USA News

  • MIL-OSI: Lloyds Bank plc: 2024 Form 20-F Filed

    Source: GlobeNewswire (MIL-OSI)

    LONDON, Feb. 27, 2025 (GLOBE NEWSWIRE) — Lloyds Bank plc announces that on 27 February 2025 it filed its Annual Report on Form 20-F for the year ended 31 December 2024 with the Securities and Exchange Commission.

    A copy of the Form 20-F is available through the ‘Investors’ section of our website at www.lloydsbankinggroup.com and also online at www.sec.gov

    Shareholders can receive hard copies of the complete audited financial statements free of charge upon request. Printed copies of the 2024 Lloyds Bank plc Annual Report on Form 20-F can be requested from Investor Relations by email to investor.relations@lloydsbanking.com

    -END-

    For further information:  
       
    Investor Relations  
    Douglas Radcliffe  +44 (0)20 7356 1571
    Group Investor Relations Director  
    douglas.radcliffe@lloydsbanking.com  
       
    Corporate Affairs  
    Matt Smith +44 (0)20 7356 3522
    Head of Media Relations  
    matt.smith@lloydsbanking.com  
       

    FORWARD LOOKING STATEMENTS

    This document contains certain forward-looking statements within the meaning of Section 21E of the US Securities Exchange Act of 1934, as amended, and section 27A of the US Securities Act of 1933, as amended, with respect to the business, strategy, plans and/or results of Lloyds Bank plc together with its subsidiaries (the Lloyds Bank Group) and its current goals and expectations. Statements that are not historical or current facts, including statements about the Lloyds Bank Group’s or its directors’ and/or management’s beliefs and expectations, are forward looking statements. Words such as, without limitation, ‘believes’, ‘achieves’, ‘anticipates’, ‘estimates’, ‘expects’, ‘targets’, ‘should’, ‘intends’, ‘aims’, ‘projects’, ‘plans’, ‘potential’, ‘will’, ‘would’, ‘could’, ‘considered’, ‘likely’, ‘may’, ‘seek’, ‘estimate’, ‘probability’, ‘goal’, ‘objective’, ‘deliver’, ‘endeavour’, ‘prospects’, ‘optimistic’ and similar expressions or variations on these expressions are intended to identify forward-looking statements. These statements concern or may affect future matters, including but not limited to: projections or expectations of the Lloyds Bank Group’s future financial position, including profit attributable to shareholders, provisions, economic profit, dividends, capital structure, portfolios, net interest margin, capital ratios, liquidity, risk-weighted assets (RWAs), expenditures or any other financial items or ratios; litigation, regulatory and governmental investigations; the Lloyds Bank Group’s future financial performance; the level and extent of future impairments and write-downs; the Lloyds Bank Group’s ESG targets and/or commitments; statements of plans, objectives or goals of the Lloyds Bank Group or its management and other statements that are not historical fact and statements of assumptions underlying such statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend upon circumstances that will or may occur in the future. Factors that could cause actual business, strategy, targets, plans and/or results (including but not limited to the payment of dividends) to differ materially from forward-looking statements include, but are not limited to: general economic and business conditions in the UK and internationally (including in relation to tariffs); acts of hostility or terrorism and responses to those acts, or other such events; geopolitical unpredictability; the war between Russia and Ukraine; the conflicts in the Middle East; the tensions between China and Taiwan; political instability including as a result of any UK general election; market related risks, trends and developments; changes in client and consumer behaviour and demand; exposure to counterparty risk; the ability to access sufficient sources of capital, liquidity and funding when required; changes to the Lloyds Bank Group’s or Lloyds Banking Group plc’s credit ratings; fluctuations in interest rates, inflation, exchange rates, stock markets and currencies; volatility in credit markets; volatility in the price of the Lloyds Bank Group’s securities; natural pandemic and other disasters; risks concerning borrower and counterparty credit quality; risks affecting defined benefit pension schemes; changes in laws, regulations, practices and accounting standards or taxation; changes to regulatory capital or liquidity requirements and similar contingencies; the policies and actions of governmental or regulatory authorities or courts together with any resulting impact on the future structure of the Lloyds Bank Group; risks associated with the Lloyds Bank Group’s compliance with a wide range of laws and regulations; assessment related to resolution planning requirements; risks related to regulatory actions which may be taken in the event of a bank or Lloyds Bank Group or Lloyds Banking Group failure; exposure to legal, regulatory or competition proceedings, investigations or complaints; failure to comply with anti-money laundering, counter terrorist financing, anti-bribery and sanctions regulations; failure to prevent or detect any illegal or improper activities; operational risks including risks as a result of the failure of third party suppliers; conduct risk; technological changes and risks to the security of IT and operational infrastructure, systems, data and information resulting from increased threat of cyber and other attacks; technological failure; inadequate or failed internal or external processes or systems; risks relating to ESG matters, such as climate change (and achieving climate change ambitions) and decarbonisation, including the Lloyds Bank Group’s or the Lloyds Banking Group’s ability along with the government and other stakeholders to measure, manage and mitigate the impacts of climate change effectively, and human rights issues; the impact of competitive conditions; failure to attract, retain and develop high calibre talent; the ability to achieve strategic objectives; the ability to derive cost savings and other benefits including, but without limitation, as a result of any acquisitions, disposals and other strategic transactions; inability to capture accurately the expected value from acquisitions; and assumptions and estimates that form the basis of the Lloyds Bank Group’s financial statements. A number of these influences and factors are beyond the Lloyds Bank Group’s control. Please refer to the latest Annual Report on Form 20-F filed by Lloyds Bank plc with the US Securities and Exchange Commission (the SEC), which is available on the SEC’s website at www.sec.gov, for a discussion of certain factors and risks. Lloyds Bank plc may also make or disclose written and/or oral forward-looking statements in other written materials and in oral statements made by the directors, officers or employees of Lloyds Bank plc to third parties, including financial analysts. Except as required by any applicable law or regulation, the forward-looking statements contained in this document are made as of today’s date, and the Lloyds Bank Group expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this document whether as a result of new information, future events or otherwise. The information, statements and opinions contained in this document do not constitute a public offer under any applicable law or an offer to sell any securities or financial instruments or any advice or recommendation with respect to such securities or financial instruments.

    This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

    The MIL Network

  • MIL-OSI: Lloyds Bank plc: 2024 Annual Report and Accounts

    Source: GlobeNewswire (MIL-OSI)

    LLOYDS BANK PLC ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2024

    LONDON, Feb. 27, 2025 (GLOBE NEWSWIRE) — Lloyds Bank plc announces that the following document will be submitted today to the National Storage Mechanism and will shortly be available for inspection in unedited full text at https://data.fca.org.uk/#/nsm/nationalstoragemechanism

    • Annual Report and Accounts 2024

    A copy of the document is also available through the ‘Investors’ section of our website www.lloydsbankinggroup.com

    This announcement is made in accordance with DTR 4.1.

    For further information:

    Investor Relations  
    Douglas Radcliffe  +44 (0)20 7356 1571
    Group Investor Relations Director  
    douglas.radcliffe@lloydsbanking.com  
       
    Corporate Affairs  
    Matt Smith +44 (0)20 7356 3522
    Head of Media Relations  
    matt.smith@lloydsbanking.com  

    FORWARD LOOKING STATEMENTS

    This document contains certain forward-looking statements within the meaning of Section 21E of the US Securities Exchange Act of 1934, as amended, and section 27A of the US Securities Act of 1933, as amended, with respect to the business, strategy, plans and/or results of Lloyds Bank plc together with its subsidiaries (the Lloyds Bank Group) and its current goals and expectations. Statements that are not historical or current facts, including statements about the Lloyds Bank Group’s or its directors’ and/or management’s beliefs and expectations, are forward-looking statements. Words such as, without limitation, ‘believes’, ‘achieves’, ‘anticipates’, ‘estimates’, ‘expects’, ‘targets’, ‘should’, ‘intends’, ‘aims’, ‘projects’, ‘plans’, ‘potential’, ‘will’, ‘would’, ‘could’, ‘considered’, ‘likely’, ‘may’, ‘seek’, ‘estimate’, ‘probability’, ‘goal’, ‘objective’, ‘deliver’, ‘endeavour’, ‘prospects’, ‘optimistic’ and similar expressions or variations on these expressions are intended to identify forward-looking statements. These statements concern or may affect future matters, including but not limited to: projections or expectations of the Lloyds Bank Group’s future financial position, including profit attributable to shareholders, provisions, economic profit, dividends, capital structure, portfolios, net interest margin, capital ratios, liquidity, risk-weighted assets (RWAs), expenditures or any other financial items or ratios; litigation, regulatory and governmental investigations; the Lloyds Bank Group’s future financial performance; the level and extent of future impairments and write-downs; the Lloyds Bank Group’s ESG targets and/or commitments; statements of plans, objectives or goals of the Lloyds Bank Group or its management and other statements that are not historical fact and statements of assumptions underlying such statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend upon circumstances that will or may occur in the future. Factors that could cause actual business, strategy, targets, plans and/or results (including but not limited to the payment of dividends) to differ materially from forward-looking statements include, but are not limited to: general economic and business conditions in the UK and internationally (including in relation to tariffs); acts of hostility or terrorism and responses to those acts, or other such events; geopolitical unpredictability; the war between Russia and Ukraine; the conflicts in the Middle East; the tensions between China and Taiwan; political instability including as a result of any UK general election; market related risks, trends and developments; changes in client and consumer behaviour and demand; exposure to counterparty risk; the ability to access sufficient sources of capital, liquidity and funding when required; changes to the Lloyds Bank Group’s or Lloyds Banking Group plc’s credit ratings; fluctuations in interest rates, inflation, exchange rates, stock markets and currencies; volatility in credit markets; volatility in the price of the Lloyds Bank Group’s securities; natural pandemic and other disasters; risks concerning borrower and counterparty credit quality; risks affecting defined benefit pension schemes; changes in laws, regulations, practices and accounting standards or taxation; changes to regulatory capital or liquidity requirements and similar contingencies; the policies and actions of governmental or regulatory authorities or courts together with any resulting impact on the future structure of the Lloyds Bank Group; risks associated with the Lloyds Bank Group’s compliance with a wide range of laws and regulations; assessment related to resolution planning requirements; risks related to regulatory actions which may be taken in the event of a bank or Lloyds Bank Group or Lloyds Banking Group failure; exposure to legal, regulatory or competition proceedings, investigations or complaints; failure to comply with anti-money laundering, counter terrorist financing, anti-bribery and sanctions regulations; failure to prevent or detect any illegal or improper activities; operational risks including risks as a result of the failure of third party suppliers; conduct risk; technological changes and risks to the security of IT and operational infrastructure, systems, data and information resulting from increased threat of cyber and other attacks; technological failure; inadequate or failed internal or external processes or systems; risks relating to ESG matters, such as climate change (and achieving climate change ambitions) and decarbonisation, including the Lloyds Bank Group’s or the Lloyds Banking Group’s ability along with the government and other stakeholders to measure, manage and mitigate the impacts of climate change effectively, and human rights issues; the impact of competitive conditions; failure to attract, retain and develop high calibre talent; the ability to achieve strategic objectives; the ability to derive cost savings and other benefits including, but without limitation, as a result of any acquisitions, disposals and other strategic transactions; inability to capture accurately the expected value from acquisitions; and assumptions and estimates that form the basis of the Lloyds Bank Group’s financial statements. A number of these influences and factors are beyond the Lloyds Bank Group’s control. Please refer to the latest Annual Report on Form 20-F filed by Lloyds Bank plc with the US Securities and Exchange Commission (the SEC), which is available on the SEC’s website at www.sec.gov, for a discussion of certain factors and risks. Lloyds Bank plc may also make or disclose written and/or oral forward-looking statements in other written materials and in oral statements made by the directors, officers or employees of Lloyds Bank plc to third parties, including financial analysts. Except as required by any applicable law or regulation, the forward-looking statements contained in this document are made as of today’s date, and the Lloyds Bank Group expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this document whether as a result of new information, future events or otherwise. The information, statements and opinions contained in this document do not constitute a public offer under any applicable law or an offer to sell any securities or financial instruments or any advice or recommendation with respect to such securities or financial instruments.

    This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

    The MIL Network

  • MIL-OSI Global: Trump, Putin and the authoritarian take on constitutionalism

    Source: The Conversation – UK – By Stephen Lovell, Professor of Modern History, King’s College London

    When Donald Trump called Volodymyr Zelensky a “dictator” for his failure to hold elections, it was a shocking moment. Even by the topsy-turvy standards of the current US administration, this looked like deliberate ignorance of the facts. Ukrainian law and the electoral code state that elections cannot be held while martial law is in place. That leaves aside the practical impossibility of ensuring fair, free and secure elections during war on the scale Russia is inflicting on Ukraine.

    In making this dangerous intervention, the US president was simply repeating a well-established trope of Russian propaganda. For some time, the Kremlin has been casting aspersions on the legitimacy of Zelensky. Vladimir Putin has been using this as a pretext to allow him to sidestep any direct contact with the (legitimately elected) Ukrainian president.

    It is not the first time that Russia has cited a concern for constitutional propriety in its Ukraine policy. The Kremlin condemned both the orange revolution of 2004 (which forced a rerun of a rigged presidential election) and the Euromaidan protests of 2013-14 (which chased out the Russia-friendly president Viktor Yanukovych) as cases of anti-constitutional mob rule ousting a legitimately elected leader.

    Russia’s defence of constitutional legitimacy has been selective and self-interested. For two decades, it has energetically – and often unconstitutionally – meddled in the political processes of Ukraine and other neighbouring states. Electoral outcomes are sacrosanct only when they confirm pro-Russian candidates in power. No matter if these results were secured by massive fraud and intimidation.

    Meanwhile, when Putin found his own constitution an inconvenience, he had it changed in a referendum which handed him the opportunity to retain power until 2036.

    Making things ‘legal’

    But there is more than pure cynicism to the Russian government’s embrace of constitutional rhetoric. This belief in the need for power to have a legal framework has a long tradition behind it. Russia imposed rapid-fire referendums in Crimea in 2014 and then in four regions of occupied Ukraine in 2022 in an attempt to give a legal basis to its military occupation of these territories.

    There were echoes of the shotgun plebiscites conducted in 1939-41 in eastern Poland, Bessarabia and the Baltic states. Almost immediately after it annexed these territories, the Soviet state forced the population into participating in the Stalinist version of democracy. These were votes with only one candidate on the ballot paper. The Soviet Union was desperately poor, its state apparatus was overstretched and underresourced – but money and personnel were found for these choreographed elections.

    The same logic applied in the Soviet Union “proper”. In 1918, at the very start of the civil war that followed the October revolution, the Bolsheviks adopted a constitution for the Russian Soviet Federative Socialist Republic. This was amplified by a Soviet constitution in 1924 that established the elected Congress of Soviets as the supreme organ of state power (even if the Communist Party really pulled the strings).

    Just over a decade later, Stalin found it necessary to update the constitution. He wanted it reflect what he saw as the progress made towards socialism in the first two decades after the revolution. The result, after extensive if largely orchestrated public discussion, was the 1936 constitution. This, among other things, enshrined universal suffrage elections to a national representative body: the Supreme Soviet.

    This was not to be the end of the Soviet constitutional road. A generation later, in the early 1960s, the post-Stalin leadership felt the need to refresh and amplify the 1936 document. It took until 1977 for a new constitution finally to be agreed and adopted, but it was clear that this authoritarian state took “socialist legality” very seriously indeed. Constitutional law might have been considered malleable by the Communist party, but it was important for it to exist and to withstand challenge, whether from internal dissidents or from cold war adversaries.

    Why have a constitution?

    To understand the significance of constitutions and political institutions in the USSR and post-Soviet Russia, it’s worth considering what function constitutions actually perform. Western nations tend to think of them as documents setting out the relationship between different branches of government: executive, legislative, judicial. They contain some limitation on the powers of the executive. Certainly, this is how the US constitution – which is often seen as the archetype of a western state constitution – is most commonly viewed.

    Defining a new country: the US constitution.
    https://pixy.org/1262083/

    But there has long been another way of viewing constitutions: as a symbol of the integrity and robustness of the state. As British historian Linda Colley has shown, between the mid-18th and the early 20th centuries, constitutions became perhaps the main currency of legitimacy for a nation state. To have a constitution was, above all, a way to stake a claim to exist in a dangerous world inhabited by predatory empires.

    For some of those empires, constitutions served as a way of holding together their own large and disparate territories. This tended to work by, for example, conceding a degree of representation to minority groups in the hope of preempting separatist movements. On close inspection, this was also true of the US constitution. It was a document designed to bring and hold the original 13 states together and establish the US as an international power.

    Constitutions and elections have always been as much about power, legitimacy and state integrity as about representation – democratic or otherwise – or limitations on government. For states that are not major powers, the legitimacy needs to be projected externally as much as internally.

    Ukraine now finds the legitimacy of its constitution under threat from both the dominant regional power – Russia – and the world power of the US. It falls on Europe – a region almost defined by its commitment to constitutional democracy – to articulate and defend an alternative vision.

    European leaders – and their electorates – need to act on the belief that democracy and sovereignty are not on separate tracks but belong together. Ukraine deserves to retain its free elections, but it also deserves a state.

    Stephen Lovell is currently at work on a project on the history of voting in the Russian Empire and USSR funded by a Major Research Fellowship from the Leverhulme Trust.

    ref. Trump, Putin and the authoritarian take on constitutionalism – https://theconversation.com/trump-putin-and-the-authoritarian-take-on-constitutionalism-250662

    MIL OSI – Global Reports

  • MIL-OSI: Drone Technology Advancement for Performing Growing Number of Tasks and Usage Leading to Revenue Growth

    Source: GlobeNewswire (MIL-OSI)

    PALM BEACH, Fla., Feb. 27, 2025 (GLOBE NEWSWIRE) — FN Media Group News Commentary – According to a recent article issued by Fact.MR, the global drone surveying market is expected to grow at a CAGR of 19.3% during the forecast period of 2023 to 2033. The report said: “The drone surveying market is witnessing increased demand for its services across different industries. The survey done by drones has multiple benefits in comparison to the traditional way of surveys such as lower cost, reduced time, and improved end results. The drone covers a larger area within less amount of time and money for a survey if compared with the traditional or conventional way of surveys. Since the data is captured and generated with actual imagery, it also brings better transparency in the end result. All these benefits have resulted in increased demand from governments and real estate development companies for drone surveying services. The drone surveying service providers are entering into partnerships with companies and the government to carry out surveys on their behalf for the planning and development of urban areas and townships. The image and data collected from the drone surveys are more accurate and can be converted into meaningful output as per the requirements. This helps governments and infrastructure development companies in different stages of planning in township development, urban planning, and land surveys. The continuous advancement of technology in the drone market has led to increased demand for their products and services. The services or task performed by a drone has significantly improved in the last few years which has ultimately resulted in improved demand.”   Active Companies in the Drone Industry today include ZenaTech, Inc. (NASDAQ: ZENA), Safe Pro Group Inc. (NASDAQ: SPAI), ParaZero Technologies Ltd. (NASDAQ: PRZO), New Horizon Aircraft (NASDAQ: HOVR), Unusual Machines (NYSE: UMAC).

    Fact.MR added: “The industries catered to by drones have also increased significantly. Earlier most of the demand for drones was from agriculture and public administration, now it has increased to infrastructure development, mining, energy, education, and transportation among others. Now a mining company can easily calculate/measure the area covered for the mining, or the stockpile volume with the help of drone surveys. It is expected that in the coming years, the drone surveying industry will witness continuous technological advancement, resulting in the expansion of service offerings. The US drone surveying market and construction and mining industry is expected to be the market leader in the demand for drone surveying services. Increased spending from governments and rising demand for residential and commercial spaces would add a significantly high pace to the overall drone surveying demand in the US.”

    ZenaTech (NASDAQ:ZENA) ZenaDrone Advances IQ Square Drone to Manufacturing Stage for Outdoor Applications Including Inspections, Surveys, and the Fast-Growth Power Washing Sector – ZenaTech, Inc. (FSE: 49Q) (BMV: ZENA) (“ZenaTech”), a technology company specializing in AI (Artificial Intelligence) drones, Drone as a Service (DaaS), enterprise SaaS and Quantum Computing solutions, announces that its subsidiary ZenaDrone has moved its first batch of IQ Square multifunction drones from prototype to manufacturing stage. This drone was designed for outdoor applications for operator line-of-site inspections such as for building and construction inspections, short-range land surveys, power washing and other business and government applications. The IQ Square is also expected to be a key part of ZenaDrone’s multifunction drone inventory for its Drone as a Service or DaaS business, which enables business and government users to hire a turnkey drone service and drone pilot through a local store for easy subscription-based or pay-as-you-go access to drones for various uses.

    “The IQ Square’s rapid progression from the prototype stage, initiated in 2022, to the manufacturing and assembly stage is a testament to our hardware and engineering team’s dedication and hard work. We see many commercial and government applications for the IQ Square, which we also envision will be central to powering our future DaaS operations as a versatile multifunction drone for multiple outdoor uses requiring line-of-site including fast growth uses like power washing,” said CEO Shaun Passley, Ph.D.

    The IQ Square will be equipped with a power wash system for use in larger-scale cleaning jobs such as stadium seating, building exteriors, and public spaces; drones eliminate the need for scaffolding, lifts, or manual labor by providing a more efficient, safe, and cost-effective solution. Tethered to a ground-based water and a power source, it is designed to maintain a continuous supply of high-pressure water needed to clean large areas without the weight limitations of onboard tanks.

    The mold and drone body frames of the first batch of IQ Square drones are currently being completed, after which they will be assembled, integrated, and tested at the company’s Sharjah, UAE production facility. The Company will oversee the integration and quality inspection of electronics, battery and propulsion systems, software, and sensor installation and calibration, concluding with final flight testing.

    According to QYResearch, the global market for drone cleaning services, including applications such as water hose-tethered power washing for stadium seats and public areas, is projected to reach approximately $53.89 billion by 2030, growing at a CAGR of 19.3%.

    ZenaTech’s Drone as a Service or DaaS business model enables government agencies, building developers, entertainment facilities, farmers, environmental firms, etc. to conveniently access a turnkey drone solution via a local store on a pay-as-you-go or subscription basis rather than having to buy the entire drone hardware and software solution. Like Amazon Web Services, where Amazon owns computer equipment platforms and hires the personnel, with the DaaS model, ZenaDrone owns the drones, hires the pilots and ensures regulatory compliance to enable the cost savings, precision and efficiency of drones over existing legacy methods.   Continued… Read this full release by visiting: https://www.financialnewsmedia.com/news-zena/

    Other recent developments in the drone industry include:

    Safe Pro Group Inc. (NASDAQ: SPAI) recently announced that its Safe Pro AI subsidiary reached its latest milestone having processed over 1,000,000 real-world images and 20,000 explosive threat detections in Ukraine utilizing its patented AI-powered small object threat detection and drone image analysis and mapping technology.

    Sourced from real-world aerial imagery collected in Ukraine by organizations utilizing commercially available drones over the past two years, SafePro’s latest generation of small object detection models include one of the largest and widest arrays of labeled imagery of landmines, unexploded ordnance (UXO) and explosive remnants of war (ERW) in existence today. Supported by the hyper scale of the Amazon Web Services (AWS) cloud, this robust dataset enables the patented SpotlightAI™ ecosystem to rapidly detect over 150 types of surface-level explosive hazards, enabling government and humanitarian organizations to quickly assess threats on the ground with sub-centimeter precision. The Company intends to utilize its newly enhanced models to power new threat detection solutions designed for expanded domestic and international applications in defense, public safety and commercial markets.

    ParaZero Technologies Ltd. (NASDAQ: PRZO) recently announced that it has successfully achieved regulatory compliance with the European Union Aviation Safety Agency (EASA) for its SafeAir systems. This milestone marks a step forward for the company, solidifying its position as a trusted provider of safety solutions in the rapidly expanding drone market.

    ParaZero secured EASA compliance for its SafeAir systems. The Company announced last week that its system is integrated with the DJI Matrice 350, DJI Mavic 3T, and DJI Mavic 3E, and has successfully achieved CE Class C5 compliance. This achievement marks a significant advancement in drone safety and regulatory readiness, particularly within the European market.

    New Horizon Aircraft (NASDAQ: HOVR) announces that John Wyzykowski has been appointed as a Technical Expert.   Horizon Aircraft recently announced that John Wyzykowski has joined the company as a Technical Expert to support the development of its propulsion systems. John is the latest in a series of new hires as Horizon Aircraft continues to bolster its engineering team with people who have proven track records in the aerospace sector. John joins from Lilium, a leading eVTOL developer, where he held the position of Head of Propulsion. With decades of experience in advanced aerospace propulsion, John will play a key role in supporting the ongoing development and optimization of the Cavorite X7, Horizon’s revolutionary hybrid-electric eVTOL.

    John is a recognized expert in propulsion system design, integration, and performance optimization for next-generation aerospace platforms. His extensive background includes work on gas turbine and fully electric propulsion architectures, with a deep understanding of the unique challenges associated with eVTOL applications, including power density, thermal management, and system redundancy. His insights will be instrumental as Horizon Aircraft continues its rigorous testing and refinement of the Cavorite X7’s propulsion system.

    Unusual Machines (NYSE:UMAC) announced it has recently secured Red Cat Holdings (RCAT) as a customer for motors. This marks the company’s first partnership to develop motors built to a U.S. drone producer’s specific requirements. Red Cat will use three motor variants from Unusual Machines for one of its platforms designed for government and commercial applications.

    Red Cat has placed its initial order, marking a significant milestone in Unusual Machines’ efforts to become a Tier 1 supplier of drone motors for American manufacturers. The motors will be among the first produced in Unusual Machines’ U.S.-based manufacturing facility, which is currently under development. In the interim, production will take place in a partnered facility, that we believe will result in a seamless supply chain transition. Unusual Machines expects to begin delivering on Red Cat’s first order by the end of March.

    This order further strengthens the relationship between Unusual Machines and Red Cat, as the companies continue their collaborative work on the FANG™, a high-performance FPV drone designed for defense applications.

    About FN Media Group:

    At FN Media Group, via our top-rated online news portal at www.financialnewsmedia.com, we are one of the very few select firms providing top tier one syndicated news distribution, targeted ticker tag press releases and stock market news coverage for today’s emerging companies. #tickertagpressreleases #pressreleases

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    DISCLAIMER: FN Media Group LLC (FNM), which owns and operates FinancialNewsMedia.com and MarketNewsUpdates.com, is a third party publisher and news dissemination service provider, which disseminates electronic information through multiple online media channels.  FNM is NOT affiliated in any manner with any company mentioned herein.  FNM and its affiliated companies are a news dissemination solutions provider and are NOT a registered broker/dealer/analyst/adviser, holds no investment licenses and may NOT sell, offer to sell or offer to buy any security.  FNM’s market updates, news alerts and corporate profiles are NOT a solicitation or recommendation to buy, sell or hold securities.  The material in this release is intended to be strictly informational and is NEVER to be construed or interpreted as research material.  All readers are strongly urged to perform research and due diligence on their own and consult a licensed financial professional before considering any level of investing in stocks.  All material included herein is republished content and details which were previously disseminated by the companies mentioned in this release.  FNM is not liable for any investment decisions by its readers or subscribers.  Investors are cautioned that they may lose all or a portion of their investment when investing in stocks.  For current services performed FNM has been compensated fifty four hundred dollars for news coverage of the current press releases issued by ZenaTech, Inc. by the Company.  FNM HOLDS NO SHARES OF ANY COMPANY NAMED IN THIS RELEASE.

    This release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. “Forward-looking statements” describe future expectations, plans, results, or strategies and are generally preceded by words such as “may”, “future”, “plan” or “planned”, “will” or “should”, “expected,” “anticipates”, “draft”, “eventually” or “projected”. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in a company’s annual report on Form 10-K or 10-KSB and other filings made by such company with the Securities and Exchange Commission. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. The forward-looking statements in this release are made as of the date hereof and FNM undertakes no obligation to update such statements.

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    SOURCE: FN Media Group

    The MIL Network

  • MIL-OSI Global: Is a united European voice possible in the age of Trump, Putin and far-right politics? Germany’s new leader intends to find out

    Source: The Conversation – USA – By Julia Khrebtan-Hörhager, Associate Professor of Critical Cultural & International Studies, Colorado State University

    Could Friedrich Merz be the man to speak for Europe? Sean Gallup/Getty Images

    “Who do I call if I want to speak to Europe?”

    The question was famously attributed to former U.S. Secretary of State Henry Kissinger and refers to the historical inability of the political entity of Europe to coordinate on a united front in the global arena.

    And despite decades of integration under the European Union, who speaks for Europe – or what the bloc desires to be – is perhaps less clear now than at any point in recent years. Internal cleavages over immigration, right-wing nationalism, Russia’s invasion of Ukraine and Donald Trump’s return to the White House all challenge the notion of what Europe is and should stand for.

    Friedrich Merz, the expected next chancellor of Germany, offered one continental vision shortly after his conservative party triumphed in the country’s national elections. “My absolute priority will be to strengthen Europe as quickly as possible so that, step by step, we can really achieve independence from the USA,” he said.

    Merz’s apparent desire for a stronger German role could portend a balance shift back to Germany’s preeminent place in the EU, a position it has pulled back from in recent years. But it remains an open question as to what extent Europe can be unified given the continent’s political landmines – or even what kind of Europe it would be.

    Filling Merkel’s shoes

    A German leader has, in living memory, succeeded in providing something approaching a singular European voice that the White House could deal with. Europe was long synonymous with Angela Merkel, Germany’s long-lasting – and only female – chancellor, who was known by affectionate nicknames like “Mutti Merkel,” or “Mommy Merkel,” and, during Trump’s first time in office, was even referred to by some as the de facto leader of the free world.

    Her legacy – Merkel served from 2005 to 2021 – was defined in part by strong commitments to clean energy, welcoming hundreds of thousands of refugees during the 2015 European migrant crisis and championing German leadership of the European Union. In the process, she became something of “Europe’s engine.”

    Merkel collaborated especially well with France’s Emmanuel Macron, a passionate fellow Europeanist, communicating a vision of a united Europe and its core values to the rest of the world. Dubbed “Merkron” by commentators, the pair were seen as the EU’s power couple.

    President Emmanuel Macron of France and German Chancellor Angela Merkel presented a formidable European double act.
    Emmanuele Contini/NurPhoto via Getty Images

    Meanwhile, former U.S. President Barack Obama often described Merkel as his closest ally, praising her humanitarian vision of refugee politics and even decorating her with the Medal of Freedom, the highest honor that the U.S. can award to a foreign national.

    Merkel was visionary, too, especially regarding the former superpowers of the Cold War and their controversial leaders. A child of East Germany, she never trusted Russia’s Vladimir Putin. She also experienced great difficulties collaborating with Trump during his first presidency. Somewhat anticipating Merz’s recent comments, Merkel in 2017 warned that neither Germany nor the EU could rely on the U.S. the way they used to, urging her fellow Europeans to take their fate and their interests in their own hands.

    A déjà vu of ‘the German question’

    But in some ways Merkel was more popular abroad than at home.

    The so-called “German question” – or the inability of the Germans to unify as a nation in its leadership and “Leitkultur,” or “guiding culture” – has been tormenting the country since the 19th century and gained renewed relevance during the years of German reunification following the fall of the Berlin Wall in 1989.

    Years on from the so-called “Miracle of Merkel,” Germany’s increasing internal political divisions – especially pronounced between the country’s West and East – mirror the broader divisions facing the EU at large, including over who should claim the mantle of political leadership and around what vision.

    To regain the gravitas within Europe it had under Merkel, Germany now would need a similar kind of strong and visionary program that resonates with the continent. The country’s political, economic and social challenges in 2025 demand clear national leadership, something that in my opinion neither the unemotional and uncharismatic outgoing Chancellor Olaf Scholz nor the opposition right-wing leader and soon-to-be successor Merz has demonstrated in public over the past couple of years.

    Although Merkel and Merz represent the same political party, the CDU, their visions for Germany and the EU are strikingly different. A wealthy former business lawyer, Merz’s signature book, “Dare More Capitalism,” is a blueprint for a policy agenda that prioritizes reduction of government intervention, less bureaucracy, lower taxes and pro-market reforms. Merz also wants to strengthen German borders with restrictionist immigration politics, a reflection of how the country has moved far to the right on the issue amid the rise of the far-right Alternative for Germany (AfD), with whom Merz has at times flirted.

    Yet in Merz’s relatively different agenda, he similarly advocates for both Europe and NATO, and wishes to refashion Germany into the powerhouse it was in the Merkel years and make it again the envy of Europe.

    German Chancellor Angela Merkel confers with President Donald Trump in 2018.
    Ian Langsdon/AFP via Getty Images

    A changing conception of Europe?

    Given the current “America First” attitude of the Trump administration and the rise of far-right populism across the EU and the world, it is thought-provoking – some would say alarming – that Trump declared the results of an election that saw strong gains for the far right – propelling it into second place – as a “great day for Germany.”

    Whether it is great for Europe depends on what vision of the continent one has in mind. Merz, although more right wing than Merkel, nonetheless has advocated for a strong Europe, led by Germany, that could promote a Europe independent of U.S. influence, appearing to follow in the steps of former French President Charles de Gaulle, who sought to cleave Europe from American dominance.

    During his recent speech at the Munich Security Conference, U.S. Vice President JD Vance warned of a European “threat from within,” disparaging continental governments for their retreat from “fundamental values, values shared with the United States of America,” while defending far-right populism and policies on the continent. Elon Musk subsequently posted on his social platform X: “Make Europe Great Again! MEGA, MEGA, MEGA!”

    Despite the bewilderment and dismay expressed by the European leaders at such statements, today’s tormented and divided Europe can hardly claim it is a problem-free environment, nor that many of the continent’s leaders don’t likewise support such politics.

    The rise of populism and nationalism across Europe poses a huge problem for what could unceremoniously be described as “Old Europe,” especially now, when it is seemingly drifting apart from its former ally and protector, the United States.

    With Russian influence and authoritarian politics growing in Central Europe – especially in Hungary and Slovakia – and ultra-nationalist and far-right ideas likewise strong in Austria, Germany, France and elsewhere, today’s Europe is hardly a unified political, economic and cultural totality.

    In Italy, Prime Minister Giorgia Meloni’s right-wing political chameleonism, combined with her defense and praise of both Musk and Trump, is also a problem for those searching for a Europe unified more toward the political center.

    Don’t keep me hanging, s’ils vous plaît!

    Less than a year ago, France’s Macron, the still-passionate Europeanist, marked a somber note in suggesting: “We must be clear on the fact that our Europe, today, is mortal. … It can die, and that depends entirely on our choices.”

    ‘Would Henry Kissinger bother to even pick up the phone today?’
    Jack Robinson/Condé Nast via Getty Images

    Among other things, what Macron’s warning points to is the unresolved question of what the European bloc desires to be. So long as the answer to that question remains unclear, Kissinger’s question could be rephrased to, “Is there even a Europe to call?”

    And, given the Trump administration’s emerging hostility to a host of EU policies, including on the war in Ukraine, foreign aid, regulation and trade, there is a further worrying interpretation for EU leaders, even if there were “a Europe to call”: Would Washington bother picking up the phone?

    Julia Khrebtan-Hörhager does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

    ref. Is a united European voice possible in the age of Trump, Putin and far-right politics? Germany’s new leader intends to find out – https://theconversation.com/is-a-united-european-voice-possible-in-the-age-of-trump-putin-and-far-right-politics-germanys-new-leader-intends-to-find-out-249241

    MIL OSI – Global Reports

  • MIL-OSI: Wix Announces Board Authorization of $200 Million Share Repurchase Program

    Source: GlobeNewswire (MIL-OSI)

    NEW YORKWix.com Ltd. (NASDAQ: WIX) (“Wix,” the “Company,” “we” or “our”), today announced that its Board of Directors (the “Board”) authorized a program to repurchase the Company’s securities (ordinary shares and/or convertible notes) in an amount up to $200 million.

    This repurchase program demonstrates the Board’s continued confidence in the Company’s ability to drive strong cash flow generation and ongoing commitment to increasing shareholder value.

    Under the Board authorized repurchase program, Company securities may be repurchased from time to time using a variety of methods, which may include open market purchases, privately negotiated transactions or otherwise, all in accordance with U.S. securities laws and regulations, including Rule 10b-18 under the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act“).  The Company may also, from time to time, enter into plans that are compliant with Rule 10b5-1 of the Exchange Act to facilitate repurchases of its securities under this authorization.  The repurchase program does not obligate the Company to acquire any particular amount of securities, and the repurchase program may be suspended or discontinued at any time at the Company’s discretion.  Repurchases under the repurchase program may begin after conclusion of the 30-day period for creditors of the Company to object to the Company’s intent to perform the distribution by way of repurchase in accordance with the Israeli Companies Regulations (Relief for Public Companies Whose Securities are Traded on Stock Exchanges Outside of Israel), 5760-2000 and the Israeli Regulations (Approval of Distribution), 5761–2001.  The actual timing, number and value of securities repurchased depend on a number of factors, including the market price of the Company’s ordinary shares, general market and economic conditions, any objections received by the Company from its creditors, the Company’s financial results and liquidity, and other considerations.  The Company expects to fund repurchases with cash on hand and future cash generated from its operations.

    About Wix.com Ltd.

    Wix is the leading SaaS website builder platform1 to create, manage and grow a digital presence. Founded  in 2006, Wix is a comprehensive platform providing users – self-creators, agencies, enterprises, and more – with industry-leading performance, security, AI capabilities and a reliable infrastructure. Offering a wide range of commerce and business solutions, advanced SEO and marketing tools, the platform enables users to take full ownership of their brand, their data and their relationships with their customers. With a focus on continuous innovation and delivery of new features and products, users can seamlessly build a powerful and high-end digital presence for themselves or their clients. 

    For more about Wix, please visit our Press Room
    Media Relations Contact:  PR@wix.com  

    1 Based on number of active live sites as reported by competitors’ figures, independent third-party data and internal data as of H1 2024.

    Forward-Looking Statements

    This document contains forward-looking statements, within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. Such forward-looking statements may be identified by words like “anticipate,” “assume,” “believe,” “aim,” “forecast,” “indication,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “outlook,” “future,” “will,” “seek,” “confidence,” and similar terms or phrases. The forward-looking statements contained in this document, are based on management’s current expectations, which are subject to uncertainty, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Important factors that could cause our actual results to differ materially from those indicated in the forward-looking statements include, among others, our expectation that we will be able to attract and retain registered users and partners, and generate new premium subscriptions, in particular as we continuously adjust our marketing strategy and as the macro-economic environment continues to be turbulent; our expectation that we will be able to increase the average revenue we derive per premium subscription, including through our partners; our expectation that new products and developments, as well as third-party products we will offer in the future within our platform, will receive customer acceptance and satisfaction, including the growth in market adoption of our online commerce solutions and our Wix Studio product; our expectations regarding our ability to develop relevant and required products using artificial intelligence (“AI”), the regulatory environment impacting AI and AI-related activities, including privacy and intellectual property, and potential competitive impacts from AI tools; our assumption that historical user behavior can be extrapolated to predict future user behavior, in particular during turbulent macro-economic environments; our prediction of the future revenues and/or bookings generated by our user cohorts and our ability to maintain and increase such revenue growth, as well as our ability to generate and maintain elevated levels of free cash flow and profitability; our expectation to maintain and enhance our brand and reputation; our expectation that we will effectively execute our initiatives to improve our user support function through our Customer Care team, and continue attracting registered users and partners, and increase user retention, user engagement and sales; our ability to successfully localize our products, including by making our product, support and communication channels available in additional languages and to expand our payment infrastructure to transact in additional local currencies and accept additional payment methods; our expectation regarding the impact of fluctuations in foreign currency exchange rates, interest rates, potential illiquidity of banking systems, and other recessionary trends on our business; our expectations relating to the repurchase of our ordinary shares and/or Convertible Notes pursuant to our repurchase program; our expectation that we will effectively manage our infrastructure; our expectation to comply with AI, privacy, and data protection laws and regulations as well as contractual privacy and data protection obligations; our expectations regarding the outcome of any regulatory investigation or litigation, including class actions; our expectations regarding future changes in our cost of revenues and our operating expenses on an absolute basis and as a percentage of our revenues, as well as our ability to achieve and maintain profitability; our expectations regarding changes in the global, national, regional or local economic, business, competitive, market, and regulatory landscape, including as a result of Israel-Hamas war and/or the Israel-Hezbollah hostilities and/or the Ukraine-Russia war and any escalations thereof and potential for wider regional instability and conflict; our planned level of capital expenditures and our belief that our existing cash and cash from operations will be sufficient to fund our operations for at least the next 12 months and for the foreseeable future; our expectations with respect to the integration and performance of acquisitions; our ability to attract and retain qualified employees and key personnel; and our expectations about entering into new markets and attracting new customer demographics, including our ability to successfully attract new partners large enterprise-level users and to grow our activities, including through the adoption of our Wix Studio product, with these customer types as anticipated and other factors discussed under the heading “Risk Factors” in the Company’s annual report on Form 20-F for the year ended December 31, 2023, filed with the Securities and Exchange Commission on March 22, 2024. The preceding list is not intended to be an exhaustive list of all of our forward-looking statements. Any forward-looking statement made by us in this press release speaks only as of the date hereof. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future developments or otherwise.

    The MIL Network

  • MIL-OSI Global: Israel’s bombing of Gaza caused untold environmental damage − recovery will take effort and time

    Source: The Conversation – USA – By Lesley Joseph, Research Assistant Professor of Environmental Engineering, University of South Carolina

    Vast areas in Gaza have been reduced to rubble. Majdi Fathi/NurPhoto via Getty Images

    The war in Gaza has come with an awful cost. Tens of thousands of Palestinian civilians have been killed, and thousands more are missing. And while a temporary ceasefire has allowed for increased aid delivery, easing the plight of those facing disease and hunger, experts predict malnutrition and health issues to persist for months or even years.

    Much of the territory’s infrastructure – its schools, hospitals and homes – has been damaged or destroyed. And yet, the tremendous human and societal loss has been augmented by a lesser reported but potentially catastrophic, consequence: environmental devastation.

    In June 2024, the United Nations Environment Programme conducted an environmental impact assessment to evaluate the damage resulting from Israeli military actions in Gaza. It found “unprecedented levels of destruction” from the intensive bombing campaign, along with the complete collapse of water and solid waste systems, and widespread contamination of the soil, water and air. And that was before another six months of bombing caused further damage to Gaza.

    As a scholar of environmental justice, I have thought carefully about the impact that a lack of clean water, access to sanitation facilities, and the absence of basic infrastructure can have on a community, particularly vulnerable and marginalized populations. The current pause in fighting is providing respite for the 2.2 million people in Gaza who have endured more than a year of war. It also provides an opportunity to evaluate the environmental damage to the densely populated enclave in three crucial areas: the water, sanitation and hygiene sector, or WASH; air quality; and waste management.

    Here is what we know so far:

    WASH sector

    According to an interim damage assessment released by the World Bank, U.N. and E.U. in March 2024, an estimated US$502.7 million of damage was inflicted on the WASH sector in Gaza in the initial months of bombing, including damage to approximately 57% of the water infrastructure.

    The United Nations reported that water desalination plants in Gaza, 162 water wells and two of the three water connections with Israel’s national water provider had been severely damaged.

    As a result, the amount of available water in Gaza was at that point reduced to roughly 2-8 liters per person per day – below the World Health Organization emergency daily minimum of 15 liters and far below its standard recommendation of 50-100 liters per day.

    In November 2024, meanwhile, the charity Oxfam reported that all five wastewater treatment plants in Gaza had been forced to shut down, along with the majority of its 65 wastewater pumping stations. This resulted in ongoing discharges of raw, untreated sewage into the environment. As of June 2024, an estimated 15.8 million gallons of wastewater has been discharged into the environment in and around Gaza, according to the U.N. environmental report.

    Meanwhile, sanitation facilities for Palestinians in Gaza are practically nonexistent. Reporting from U.N. Women states that people in Gaza routinely walk long distances and then wait for hours just to use a toilet, and due to the lack of water, these toilets cannot be flushed or cleaned.

    Air quality

    The air quality in Gaza has been drastically impacted by this war. NASA satellite imagery from the first few months of the war found that approximately 165 fires were recorded in Gaza from October 2023 to January 2024.

    With a shortage of electricity, residents have been forced to burn various materials, including plastics and household waste, for cooking and heating. And this has contributed to a dangerous decline in air quality.

    Meanwhile, large amounts of dust, debris and chemical releases have been produced from explosions and the destruction of infrastructure, leading to significant air pollution. In February 2024, the U.N. Mine Action Service estimated that, in the first few months of the war alone, more than 25,000 tons of explosives had been used, equivalent to “two nuclear bombs.”

    Waste management

    In the first six months of bombardment, more than 39 million tons of debris were generated, much of it likely to contain harmful contaminants, including asbestos, residue from explosives and toxic medical waste.

    Human remains are also mixed in with this debris, with estimates that over 10,000 bodies remain under the rubble. Moreover, the three main landfills in the Gaza Strip have been closed and are unable to receive waste or conflict-related debris.

    Substantial damage has been done to five out of six solid waste management facilities, and solid waste continues to accumulate at camps and shelters, with an estimate of 1,100 to 1,200 tons being generated daily.

    The charge of ‘ecocide’

    With such environmental destruction, claims of “ecocide” have been made against the Israeli government by international rights groups.

    Although not presently incorporated into the framework of international law, there have been recent efforts for ecocide to be added as a crime under the Rome Statute, the treaty that established the International Criminal Court. Indeed, a panel of experts in 2021 proposed a working definition of ecocide as “unlawful or wanton acts committed with knowledge that there is a substantial likelihood of severe and either widespread or long-term damage to the environment caused by those acts.”

    To date, 15 countries have criminalized ecocide, and Ukraine is investigating Russia for ecocide for its destruction of the Kakhovka Dam in 2023.

    Various organizations, including the Al Mezan Center for Human Rights, the University of California Global Health Institute and the Women’s International League for Peace and Freedom, have stated that the level of environmental devastation in Gaza reaches the proposed legal definition of “ecocide.”

    Although the Israeli government has not responded to these accusations, it has consistently stated that it has a right to defend itself and that it seeks to protect civilians as it conducts its military operations.

    Health impacts of environmental harm

    Regardless of whether the charge of ecocide applies to Israel’s bombardment of Gaza, the environmental impact, the spread of disease, and other harmful health impairments will be felt for years to come.

    The United Nations Relief and Works Agency reported an increase in hepatitis A in the enclave, from 85 cases before the current war to 107,000 cases in October 2024. The WHO has reported 500,000 cases of diarrhea and 100,000 cases of lice and scabies, along with the reemergence of polio.

    Polio virus has been found in wastewater, threatening the lives of Palestinian children in Gaza.
    Dawoud Abo Alkas/Anadolu via Getty Images

    The lack of adequate WASH facilities has also disproportionately affected women and girls by interfering with basic menstrual hygiene, harming their mental and physical health.

    Meanwhile, the increased presence of dangerous air pollutants has led to increases in respiratory issues, including nearly 1 million acute respiratory illnesses. Presently, the most common respiratory ailments in Gaza are asthma, chronic obstructive pulmonary disease, bronchitis, pneumonia and lung cancer.

    Next steps

    As a licensed environmental engineer, I have never seen the scale of environmental destruction that has occurred in Gaza.

    While the situation is unprecedented, there are concrete steps that the international community can take to help Gaza’s environment recover. The three-stage ceasefire agreement between Israel and Hamas, which went into effect on Jan. 19, 2025, is a promising first step. This agreement has allowed some Israeli hostages to be released and Palestinian detainees to return to their homes. It also allows for more humanitarian aid to enter Gaza to deal with the current food crisis and health emergency.

    Nevertheless, there are significant challenges ahead for the people of Gaza. First, the ceasefire agreement will need to hold – and already there are signs of difficulty in implementing the agreement in full. Should fighting resume, that will close or delay the opportunity for engineers and surveyors to perform detailed, comprehensive field assessments.

    Meanwhile, the need for a post-conflict plan for Gaza has never been starker.

    Recovering from Gaza’s environmental devastation will require Israel and neighboring countries, as well as influential world powers such as the United States and the European Union, to work together to rebuild critical infrastructure, such as water and wastewater treatment plants and solid waste infrastructure. Moreover, to succeed, any long-term plan for the reconstruction of Gaza will need to prioritize the needs and perspectives of Palestinians themselves.

    Lesley Joseph does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

    ref. Israel’s bombing of Gaza caused untold environmental damage − recovery will take effort and time – https://theconversation.com/israels-bombing-of-gaza-caused-untold-environmental-damage-recovery-will-take-effort-and-time-245311

    MIL OSI – Global Reports

  • MIL-OSI United Kingdom: Fianna Fail TD displays Putin like attitude on anniversary of the invasion of the Ukraine

    Source: Traditional Unionist Voice – Northern Ireland

    Statement by TUV vice chairman Councillor Allister Kyle:

    “The remarks by Fianna Fail TD Cathal Crowe in which he described the existence of Northern Ireland as “a source of hurt” were deeply ironic, particularly in the context of a debate on the anniversary of the Russian invasion of Ukraine.

    “The mindset displayed by Mr Crowe is strikingly similar to that of President Putin who has attacked the right of Ukraine to exist.

    “To talk about respecting “territorial boundaries” in a speech in which he attacks the existence of the Irish Republic’s nearest neighbour shows an irony bypass which is hard to fathom.

    “His remarks should act as a wake up call to Unionists who have bought into the Protocol implementing process. Far from regarding the Belfast Agreement as a settlement, Mr Crowe described it as “only a stepping-stone” to an all-Ireland.

    “It is time that he, his party and indeed the EU showed a little bit of respect for “territorial boundaries”. Perhaps then they could be taken seriously when it comes to Ukraine. Unionism too would do well to reflect on the fact that that the constitutional ambitions of Dublin remain unchanged.”

    MIL OSI United Kingdom

  • MIL-OSI Video: Ukraine: The Road Ahead | World Economic Forum Annual Meeting 2025

    Source: World Economic Forum (video statements)

    The war against Ukraine has taken new directions including the surprise offensive in Kursk and permission to use ally-supplied weapons on Russian territory. Yet, Western support for Ukraine continues to come under greater pressure, accelerating the prospect of negotiations on a peace deal.

    As the full-scale invasion enters its fourth year, what does the future hold for Ukraine in 2025?

    This session was developed in collaboration with Bloomberg News.

    Speakers: Jean-Noël Barrot, Radoslaw Tomasz Sikorski, Roberta Metsola, Andrii Sybiha, Yuliia Svyrydenko, Edgars Rinkēvičs, Stephanie Flanders

    The 55th Annual Meeting of the World Economic Forum will provide a crucial space to focus on the fundamental principles driving trust, including transparency, consistency and accountability.

    This Annual Meeting will welcome over 100 governments, all major international organizations, 1000 Forum’s Partners, as well as civil society leaders, experts, youth representatives, social entrepreneurs, and news outlets.

    The World Economic Forum is the International Organization for Public-Private Cooperation. The Forum engages the foremost political, business, cultural and other leaders of society to shape global, regional and industry agendas. We believe that progress happens by bringing together people from all walks of life who have the drive and the influence to make positive change.

    World Economic Forum Website ► http://www.weforum.org/
    Facebook ► https://www.facebook.com/worldeconomicforum/
    YouTube ► https://www.youtube.com/wef
    Instagram ► https://www.instagram.com/worldeconomicforum/
    X ► https://twitter.com/wef
    LinkedIn ► https://www.linkedin.com/company/world-economic-forum
    TikTok ► https://www.tiktok.com/@worldeconomicforum
    Flipboard ► https://flipboard.com/@WEF

    #Davos2025 #WorldEconomicForum #wef25

    https://www.youtube.com/watch?v=b0hh4WEcAlY

    MIL OSI Video

  • MIL-OSI United Kingdom: Human Rights in Russia and the deaths of Alexei Navalny and Boris Nemtsov: Joint Statement to the OSCE, February 2025

    Source: United Kingdom – Executive Government & Departments

    Speech

    Human Rights in Russia and the deaths of Alexei Navalny and Boris Nemtsov: Joint Statement to the OSCE, February 2025

    UK and others commemorate Alexei Navalny and Boris Nemtsov and call on Russia to release political prisoners immediately and unconditionally.

    Thank you  Mr Chair.  I am making this statement on behalf of Albania, Canada, Iceland, Liechtenstein, Norway, Switzerland, Ukraine and my own country the United Kingdom.   

    Following the anniversary of Alexei Navalny’s death, which followed years of arbitrary detention in poor conditions, we extend our condolences to his family and reiterate that the ultimate responsibility for his death lies with the Russian authorities. Today we also commemorate Boris Nemtsov, ten years after his brutal murder.   

    We regret that Russia’s dire human rights record continues to deteriorate. The Russian government crushes peaceful dissent, maintains a climate of fear and undermines the rule of law. This stands in direct contradiction to shared OSCE principles and commitments on inter alia the right to a fair trial, freedom from arbitrary detention, the right to freedom of assembly and association and the prohibition on torture and other cruel, inhuman or degrading treatment.  

    As we reflect on Navalny and Nemtsov’s enduring legacy, our countries continue to stand with civil society and human rights defenders working tirelessly to build a better future for Russia in the face of immense personal risk. 

    In July 2022, 38 participating States invoked the Moscow Mechanism on threats to the fulfilment of the provisions of the Human Dimension posed by human rights violations and abuses in the Russian Federation.  That Moscow Mechanism report determined that:  “a decade of reform legislation in Russia has completely changed the scope of action of Russian civil society, cutting it off from foreign and international partners, suppressing independent initiatives, stifling critical attitudes towards the authorities, silencing the media and suppressing political opposition”.  

    Such internal clampdowns on human rights and fundamental freedoms helped the Russian Federation prepare the ground for its war of aggression against Ukraine. Since February 2022 the Russian authorities have further tightened internal repression in an apparent attempt to silence all opposition voices.  There are now over 800 political prisoners in Russia, including many imprisoned for speaking out against Russia’s illegal invasion of Ukraine and the brutality shown towards the Ukrainian people.  

    In this context we regret Russia’s lack of response to the Vienna Mechanism of March 2024 on treatment of prisoners.   We also recall the 11 October 2024 report by the UN Special Rapporteur on the situation of human rights in the Russian Federation which inter alia examined the widespread and systematic use of torture and ill treatment in the Russian Federation.  

    We reiterate our call to the Russian authorities to immediately and unconditionally release all political opposition activists, human rights defenders, journalists and other media actors.   

    We will continue to hold Russia to account against its international obligations and commitments on human rights and fundamental freedoms, including OSCE principles and commitments to which it signed up willingly. 

    For as we all agreed in Moscow in 1990, respect for human rights, fundamental freedoms, democracy and the rule of law constitutes one of the foundations of the international order.  And as we also agreed in Moscow, commitments undertaken in the field of the human dimension are matters of direct and legitimate concern to all participating States and do not belong exclusively to the internal affairs of the State concerned.  

    Thank you, Mr Chair.

    Updates to this page

    Published 27 February 2025

    MIL OSI United Kingdom

  • MIL-OSI: MWC 2025: AI solutions that change business and improve customer experience

    Source: GlobeNewswire (MIL-OSI)

    MWC 2025: AI solutions that change business and improve customer experience

    Imagine your business operating at peak efficiency. Data is processed instantly, customer queries are resolved in seconds, and routine processes are automated. This is not a fantasy, but a reality that QazCode creates. At the Mobile World Congress in Barcelona, March 3-6, the company will demonstrate how advanced AI solutions are helping businesses and organizations achieve leadership in their industries.

    How Kazakhstan is leading the AI race: Breakthrough technologies at MWC 2025

    In recent years, Kazakhstan has been actively developing its technology infrastructure, which has contributed to the growth of innovative companies and attracted investment in AI and other advanced technologies. The International Monetary Fund ranked Kazakhstan in the top 50 countries for AI readiness in 2023, ahead of all Central Asian countries.

    Kazakhstan’s high position in the rating was the result of comprehensive efforts to develop the digital ecosystem, and QazCode‘s participation at MWC was another confirmation of the country’s success.

    “Kazakhstan strives to be on par with the world leaders in digitalization by actively developing infrastructure, IT and human capital. We are pleased to present our achievements on the international platform of MWC, where we have the opportunity to demonstrate how our technologies help businesses optimize processes and reach new heights. It is also a great chance to build partnerships with industry leaders and share experiences to further develop the technology ecosystem in the regions,” – said Oleksii Sharavar, CEO at QazCode.

    The KAZ-LLM Big Language Model: a breakthrough in localized technology

    One of the company’s significant projects was the development of the first national language model KAZ-LLM. The model was created in partnership with the Institute of Smart Systems and AI (ISSAI NU) and Astana Hub, under the coordination of the Ministry of Digital Development, Innovation and Aerospace Industry of Kazakhstan. The project aims to bridge the gap for underrepresented language groups, making technology accessible to all.

    Moreover, KAZ-LLM has already gained international recognition—it won the GSMA Foundry Excellence Award 2025 in the Artificial Intelligence category, confirming its high quality and importance for technological advancement.

    The model, based on 150 billion tokens, covers Kazakh, Russian, English and Turkish and is considered a local version of GPT. The support of the computing power of 8 DGX H100 volume allowed to accelerate the learning process and analyze massive data sets in seconds.

    The national model enables businesses to develop chatbots, customer support systems, automate document flow, and analyze data. For example, local banks will be able to speed up the processing of requests in the local language, and retailers will be able to improve the user experience by incorporating the model into their processes. Educational and scientific institutions will be able to create applications for teaching the local language.

    QazCode collaborates with leading international organizations such as GSMA Foundry and Barcelona Supercomputing Center to share experiences and implement global best practices in AI.

    Also in the summer of 2024, QazCode announced the creation of Central Asia’s first GPU cloud for the development of AI products based on NVIDIA technology.  

    AI as a tool for transformation

    According to recent data, 98.4% of companies worldwide have increased their investment in AI, and 90.5% consider it a key element of their strategies. This emphasizes the importance of AI for business goals and competitiveness. MWC 2025 will display solutions that help solve business challenges and simplify people’s daily lives using advanced technologies:

    • AI RAG Powered Chatbots and intelligent agents: These solutions combine a powerful search model with generative GPT and instantly analyze text and visual data, helping companies process large volumes of information with precision. For example, customer queries that previously took hours to resolve are now resolved in seconds. Query time is reduced by 85%, which can directly affect ROI.
    • AI Tutor is a system that helps students and pupils improve their knowledge by automatically generating lessons and tests on specific subjects. Support for multiple languages, including Kazakh, Turkish, English, and Russian, allows the solution to be customized to meet the needs of different users. AI Tutor will be showcased at MWC 2025, demonstrating how AI can make learning more accessible, efficient and open new horizons for the educational process.

    In addition, QazCode solutions are designed to meet the needs of businesses of all sizes and cultural sensitivities in every region of the world. They are suitable for both SMEs and large corporations, providing flexibility and scalability.

    MWC 2025 (booth 6F12) will display how AI solutions can transform your business.

    About QazCode

    QazCode is an IT company and exclusive digital partner of Beeline Kazakhstan. The company is part of the VEON group listed on the NASDAQ and Euronext stock exchanges.
    The company has over 750 employees with 8 years of experience in software development for the telecom and IT markets with a deep understanding of business and technology. The solution portfolio includes the development of private Large Language Models (LLM) with a focus on data security, process optimization through Agile methodologies, full-cycle implementation of Business Support Systems (BSS), and IT outsourcing for effective product development, team expansion, and project management to help accelerate time to market. The company already operates in Central Asia, Europe, and the Middle East, and is actively expanding its presence in new markets.

     About VEON
    VEON is a digital operator providing converged communications and digital services to nearly 160 million customers. Operating in six countries with over 7% of the world’s population – Pakistan, Ukraine, Bangladesh, Kazakhstan, Uzbekistan and Kyrgyzstan – VEON transforms people’s lives through technology services that empower people and drive economic growth. VEON is headquartered in Dubai.

    The MIL Network

  • MIL-OSI Economics: Meeting of 29-30 January 2025

    Source: European Central Bank

    Account of the monetary policy meeting of the Governing Council of the European Central Bank held in Frankfurt am Main on Wednesday and Thursday, 29-30 January 2025

    27 February 2025

    1. Review of financial, economic and monetary developments and policy options

    Financial market developments

    Ms Schnabel noted that the financial market developments observed in the euro area after October 2024 had reversed since the Governing Council’s previous monetary policy meeting on 11-12 December 2024. The US presidential election in November had initially led to lower euro area bond yields and equity prices. Since the December monetary policy meeting, however, both risk-free yields and risk asset prices had moved substantially higher and had more than made up their previous declines. A less gloomy domestic macroeconomic outlook and an increase in the market’s outlook for inflation in the euro area on the back of higher energy prices had led investors to expect the ECB to proceed with a more gradual rate easing path.

    A bounce-back of euro area risk appetite had supported equity and corporate bond prices and had contained sovereign bond spreads. While the euro had also rebounded recently against the US dollar, it remained significantly weaker than before the US election.

    In euro money markets the year-end had been smooth. Money market conditions at the turn of the year had turned out to be more benign than anticipated, with a decline in repo rates and counterparties taking only limited recourse to the ECB’s standard refinancing operations.

    In the run-up to the US election and in its immediate aftermath, ten-year overnight index swap (OIS) rates in the euro area and the United States had decoupled, reflecting expectations of increasing macroeconomic divergence. However, since the Governing Council’s December monetary policy meeting, long-term interest rates had increased markedly in both the euro area and the United States. An assessment of the drivers of euro area long-term rates showed that both domestic and US factors had pushed yields up. But domestic factors – expected tighter ECB policy and a less gloomy euro area macroeconomic outlook – had mattered even more than US spillovers. These factors included a reduction in perceived downside risks to economic growth from tariffs and a stronger than anticipated January flash euro area Purchasing Managers’ Index (PMI).

    Taking a longer-term perspective on ten-year rates, since October 2022, when inflation had peaked at 10.6% and policy rates had just returned to positive territory, nominal OIS rates and their real counterparts had been broadly trending sideways. From that perspective, the recent uptick was modest and could be seen as a mean reversion to the new normal.

    A decomposition of the change in ten-year OIS rates since the start of 2022 showed that the dominant driver of persistently higher long-term yields compared with the “low-for-long” interest rate and inflation period had been the sharp rise in real rate expectations. A second major driver had been an increase in real term premia in the context of quantitative tightening. This increase had occurred mainly in 2022. Since 2023, real term premia had broadly trended sideways albeit with some volatility. Hence, the actual reduction of the ECB’s balance sheet had elicited only mild upward pressure on term premia. From a historical perspective, despite their recent increase, term premia in the euro area remained compressed compared with the pre-quantitative easing period.

    Since the December meeting, investors had revised up their expectations for HICP inflation (excluding tobacco) for 2025. Current inflation fixings (swap contracts linked to specific monthly releases in year-on-year euro area HICP inflation excluding tobacco) for this year stood above the 2% target. Higher energy prices had been a key driver of the reassessment of near-term inflation expectations. Evidence from option prices, calculated under the assumption of risk neutrality, suggested that the risk to inflation in financial markets had become broadly balanced, with the indicators across maturities having shifted discernibly upwards. Recent survey evidence suggested that risks of inflation overshooting the ECB’s target of 2% had resurfaced. Respondents generally saw a bigger risk of an inflation overshoot than of an inflation undershoot.

    The combination of a less gloomy macroeconomic outlook and stronger price pressures had led markets to reassess the ECB’s expected monetary policy path. Market pricing suggested expectations of a more gradual easing cycle with a higher terminal rate, pricing out the probability of a cut larger than 25 basis points at any of the next meetings. Overall, the size of expected cuts to the deposit facility rate in 2025 had dropped by around 40 basis points, with the end-year rate currently seen at 2.08%. Market expectations for 2025 stood above median expectations in the Survey of Monetary Analysts. Survey participants continued to expect a faster easing cycle, with cuts of 25 basis points at each of the Governing Council’s next four monetary policy meetings.

    The Federal Funds futures curve had continued to shift upwards, with markets currently expecting between one and two 25 basis point cuts by the end of 2025. The repricing of front-end yields since the Governing Council’s December meeting had been stronger in the euro area than in the United States. This would typically also be reflected in foreign exchange markets. However, the EUR/USD exchange rate had recently decoupled from interest rates, as the euro had initially continued to depreciate despite a narrowing interest rate differential, before recovering more recently. US dollar currency pairs had been affected by the US Administration’s comments, which had put upward pressure on the US dollar relative to trading partners’ currencies.

    Euro area equity markets had outperformed their US counterparts in recent weeks. A model decomposition using a standard dividend discount model for the euro area showed that rising risk-free yields had weighed significantly on euro area equity prices. However, this had been more than offset by higher dividends, and especially a compression of the risk premium, indicating improved investor risk sentiment towards the euro area, as also reflected in other risk asset prices. Corporate bond spreads had fallen across market segments, including high-yield bonds. Sovereign spreads relative to the ten-year German Bund had remained broadly stable or had even declined slightly. Relative to OIS rates, the spreads had also remained broadly stable. The Bund-OIS spread had returned to levels observed before the Eurosystem had started large-scale asset purchases in 2015, suggesting that the scarcity premium in the German government bond market had, by and large, normalised.

    Standard financial condition indices for the euro area had remained broadly stable since the December meeting. The easing impulse from higher equity prices had counterbalanced the tightening impulse stemming from higher short and long-term rates. In spite of the bounce-back in euro area real risk-free interest rates, the yield curve remained broadly within neutral territory.

    The global environment and economic and monetary developments in the euro area

    Starting with inflation in the euro area, Mr Lane noted that headline inflation, as expected, had increased to 2.4% in December, up from 2.2% in November. The increase primarily reflected a rise in energy inflation from -2.0% in November to 0.1% in December, due mainly to upward base effects. Food inflation had edged down to 2.6%. Core inflation was unchanged at 2.7% in December, with a slight decline in goods inflation, which had eased to 0.5%, offset by services inflation rising marginally to 4.0%.

    Developments in most indicators of underlying inflation had been consistent with a sustained return of inflation to the medium-term inflation target. The Persistent and Common Component of Inflation (PCCI), which had the best predictive power of any underlying inflation indicator for future headline inflation, had continued to hover around 2% in December, indicating that headline inflation was set to stabilise around the ECB’s inflation target. Domestic inflation, which closely tracked services inflation, stood at 4.2%, staying well above all the other indicators in December. However, the PCCI for services, which should act as an attractor for services and domestic inflation, had fallen to 2.3%.

    The anticipation of a downward shift in services inflation in the coming months also related to an expected deceleration in wage growth this year. Wages had been adjusting to the past inflation surge with a substantial delay, but the ECB wage tracker and the latest surveys pointed to moderation in wage pressures. According to the latest results of the Survey on the Access to Finance of Enterprises, firms expected wages to grow by 3.3% on average over the next 12 months, down from 3.5% in the previous survey round and 4.5% in the equivalent survey this time last year. This assessment was shared broadly across the forecasting community. Consensus Economics, for example, foresaw a decline in wage growth of about 1 percentage point between 2024 and 2025.

    Most measures of longer-term inflation expectations continued to stand at around 2%, despite an uptick over shorter horizons. Although, according to the Survey on the Access to Finance of Enterprises, the inflation expectations of firms had stabilised at 3% across horizons, the expectations of larger firms that were aware of the ECB’s inflation target showed convergence towards 2%. Consumer inflation expectations had edged up recently, especially for the near term. This could be explained at least partly by their higher sensitivity to actual inflation. There had also been an uptick in the near-term inflation expectations of professionals – as captured by the latest vintages of the Survey of Professional Forecasters and the Survey of Monetary Analysts, as well as market-based measures of inflation compensation. Over longer horizons, though, the inflation expectations of professional forecasters remained stable at levels consistent with the medium-term target of 2%.

    Headline inflation should fluctuate around its current level in the near term and then settle sustainably around the target. Easing labour cost pressures and the continuing impact of past monetary policy tightening should support the convergence to the inflation target.

    Turning to the international environment, global economic activity had remained robust around the turn of the year. The global composite PMI had held steady at 53.0 in the fourth quarter of 2024, owing mainly to the continued strength in the services sector that had counterbalanced weak manufacturing activity.

    Since the Governing Council’s previous meeting, the euro had remained broadly stable in nominal effective terms (+0.5%) and against the US dollar (+0.2%). Oil prices had seen a lot of volatility, but the latest price, at USD 78 per barrel, was only around 3½% above the spot oil price at the cut-off date for the December Eurosystem staff projections and 2.6% above the spot price at the time of the last meeting. With respect to gas prices, the spot price stood at €48 per MWh, 2.7% above the level at the cut-off date for the December projections and 6.8% higher than at the time of the last meeting.

    Following a comparatively robust third quarter, euro area GDP growth had likely moderated again in the last quarter of 2024 – confirmed by Eurostat’s preliminary flash estimate released on 30 January at 11:00 CET, with a growth rate of 0% for that quarter, later revised to 0.1%. Based on currently available information, private consumption growth had probably slowed in the fourth quarter amid subdued consumer confidence and heightened uncertainty. Housing investment had not yet picked up and there were no signs of an imminent expansion in business investment. Across sectors, industrial activity had been weak in the summer and had softened further in the last few months of 2024, with average industrial production excluding construction in October and November standing 0.4% below its third quarter level. The persistent weakness in manufacturing partly reflected structural factors, such as sectoral trends, losses in competitiveness and relatively high energy prices. However, manufacturing firms were also especially exposed to heightened uncertainty about global trade policies, regulatory costs and tight financing conditions. Service production had grown in the third quarter, but the expansion had likely moderated in the fourth quarter.

    The labour market was robust, with the unemployment rate falling to a historical low of 6.3% in November – with the figure for December (6.3%) and a revised figure for November (6.2%) released later on the morning of 30 January. However, survey evidence and model estimates suggested that euro area employment growth had probably softened in the fourth quarter.

    The fiscal stance for the euro area was now expected to be balanced in 2025, as opposed to the slight tightening foreseen in the December projections. Nevertheless, the current outlook for the fiscal stance was subject to considerable uncertainty.

    The euro area economy was set to remain subdued in the near term. The flash composite output PMI for January had ticked up to 50.2 driven by an improvement in manufacturing output, as the rate of contraction had eased compared with December. The January release had been 1.7 points above the average for the fourth quarter, but it still meant that the manufacturing sector had been in contractionary territory for nearly two years. The services business activity index had decelerated slightly to 51.4 in January, staying above the average of 50.9 in the fourth quarter of 2024 but still below the figure of 52.1 for the third quarter.

    Even with a subdued near-term outlook, the conditions for a recovery remained in place. Higher incomes should allow spending to rise. More affordable credit should also boost consumption and investment over time. And if trade tensions did not escalate, exports should also support the recovery as global demand rose.

    Turning to the monetary and financial analysis, bond yields, in both the euro area and globally, had increased significantly since the last meeting. At the same time, the ECB’s past interest rate cuts were gradually making it less expensive for firms and households to borrow. Lending rates on bank loans to firms and households for new business had continued to decline in November. In the same period, the cost of borrowing for firms had decreased by 15 basis points to 4.52% and stood 76 basis points below the cyclical peak observed in October 2023. The cost of issuing market-based debt had remained at 3.6% in November 2024. Mortgage rates had fallen by 8 basis points to 3.47% since October, 56 basis points lower than their peak in November 2023. However, the interest rates on existing corporate and household loan books remained high.

    Financing conditions remained tight. Although credit was expanding, lending to firms and households was subdued relative to historical averages. Annual growth in bank lending to firms had risen to 1.5% in December, up from 1% in November, as a result of strong monthly flows. But it remained well below the 4.3% historical average since January 1999. By contrast, growth in corporate debt securities issuance had moderated to 3.2% in annual terms, from 3.6% in November. This suggested that firms had substituted market-based long-term financing for bank-based borrowing amid tightening market conditions and in advance of increasing redemptions of long-term corporate bonds. Mortgage lending had continued to rise gradually but remained muted overall, with an annual growth rate of 1.1% in December after 0.9% in November. This was markedly below the long-term average of 5.1%.

    According to the latest euro area bank lending survey, the demand for loans by firms had increased slightly in the last quarter. At the same time, credit standards for loans to firms had tightened again, having broadly stabilised over the previous four quarters. This renewed tightening of credit standards for firms had been motivated by banks seeing higher risks to the economic outlook and their lower tolerance for taking on credit risk. This finding was consistent with the results of the Survey on the Access to Finance of Enterprises, in which firms had reported a small decline in the availability of bank loans and tougher non-rate lending conditions. Turning to households, the demand for mortgages had increased strongly as interest rates became more attractive and prospects for the property market improved. Credit standards for housing loans remained unchanged overall.

    Monetary policy considerations and policy options

    In summary, the disinflation process remained well on track. Inflation had continued to develop broadly in line with the staff projections and was set to return to the 2% medium-term target in the course of 2025. Most measures of underlying inflation suggested that inflation would settle around the target on a sustained basis. Domestic inflation remained high, mostly because wages and prices in certain sectors were still adjusting to the past inflation surge with a substantial delay. However, wage growth was expected to moderate and lower profit margins were partially buffering the impact of higher wage costs on inflation. The ECB’s recent interest rate cuts were gradually making new borrowing less expensive for firms and households. At the same time, financing conditions continued to be tight, also because monetary policy remained restrictive and past interest rate hikes were still being transmitted to the stock of credit, with some maturing loans being rolled over at higher rates. The economy was still facing headwinds, but rising real incomes and the gradually fading effects of restrictive monetary policy should support a pick-up in demand over time.

    Concerning the monetary policy decision at this meeting, it was proposed to lower the three key ECB interest rates by 25 basis points. In particular, lowering the deposit facility rate – the rate through which the ECB steered the monetary policy stance – was justified by the updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission. The alternative – maintaining the deposit facility rate at the current level of 3.00% – would excessively dampen demand and therefore be inconsistent with the set of rate paths that best ensured inflation stabilised sustainably at the 2% medium-term target.

    Looking to the future, it was prudent to maintain agility, so as to be able to adjust the stance as appropriate on a meeting-by-meeting basis, and not to pre-commit to any particular rate path. In particular, monetary easing might proceed more slowly in the event of upside shocks to the inflation outlook and/or to economic momentum. Equally, in the event of downside shocks to the inflation outlook and/or to economic momentum, monetary easing might proceed more quickly.

    2. Governing Council’s discussion and monetary policy decisions

    Economic, monetary and financial analyses

    As regards the external environment, incoming data since the Governing Council’s previous monetary policy meeting had signalled robust global activity in the fourth quarter of 2024, with divergent paths across economies and an uncertain outlook for global trade. The euro had been broadly stable and energy commodity prices had increased. It was underlined that gas prices were currently over 60% higher than in 2024 because the average temperature during the previous winter had been very mild, whereas this winter was turning out to be considerably colder. This suggested that demand for gas would remain strong, as reserves needed to be replenished ahead of the next heating season, keeping gas prices high for the remainder of the year. In other commodity markets, metal prices were stable – subdued by weak activity in China and the potential negative impact of US tariffs – while food prices had increased.

    Members concurred that the outlook for the international economy remained highly uncertain. The United States was the only advanced economy that was showing sustained growth dynamics. Global trade might be hit hard if the new US Administration were to implement the measures it had announced. The challenges faced by the Chinese economy also remained visible in prices. Chinese inflation had declined further on the back of weak domestic demand. In this context, it was pointed out that, no matter how severe the new US trade measures turned out to be, the euro area would be affected either indirectly by disinflationary pressures or directly, in the event of retaliation, by higher inflation. In particular, if China were to redirect trade away from the United States and towards the euro area, this would make it easier to achieve lower inflation in the euro area but would have a negative impact on domestic activity, owing to greater international competition.

    With regard to economic activity in the euro area, it was widely recognised that incoming data since the last Governing Council meeting had been limited and, ahead of Eurostat’s indicator of GDP for the fourth quarter of 2024, had not brought any major surprises. Accordingly, it was argued that the December staff projections remained the most likely scenario, with the downside risks to growth that had been identified not yet materialising. The euro area economy had seen some encouraging signs in the January flash PMIs, although it had to be recognised that, in these uncertain times, hard data seemed more important than survey results. The outcome for the third quarter had surprised on the upside, showing tentative signs of a pick-up in consumption. Indications from the few national data already available for the fourth quarter pointed to a positive contribution from consumption. Despite all the prevailing uncertainties, it was still seen as plausible that, within a few quarters, there would be a consumption-driven recovery, with inflation back at target, policy rates broadly at neutral levels and continued full employment. Moreover, the latest information on credit flows and lending rates suggested that the gradual removal of monetary restrictiveness was already being transmitted to the economy, although the past tightening measures were still exerting lagged effects.

    The view was also expressed that the economic outlook in the December staff projections had likely been too optimistic and that there were signs of downside risks materialising. The ECB’s mechanical estimates pointed to very weak growth around the turn of the year and, compared with other institutions, the Eurosystem’s December staff projections had been among the most optimistic. Attention was drawn to the dichotomy between the performance of the two largest euro area economies and that of the rest of the euro area, which was largely due to country-specific factors.

    Recent forecasts from the Survey of Professional Forecasters, the Survey of Monetary Analysts and the International Monetary Fund once again suggested a downward revision of euro area economic growth for 2025 and 2026. Given this trend of downward revisions, doubts were expressed about the narrative of a consumption-driven economic recovery in 2025. Moreover, the December staff projections had not directly included the economic impact of possible US tariffs in the baseline, so it was hard to be optimistic about the economic outlook. The outlook for domestic demand had deteriorated, as consumer confidence remained weak and investment was not showing any convincing signs of a pick-up. The contribution from foreign demand, which had been the main driver of growth over the past two years, had also been declining since last spring. Moreover, uncertainty about potential tariffs to be imposed by the new US Administration was weighing further on the outlook. In the meantime, labour demand was losing momentum. The slowdown in economic activity had started to affect temporary employment: these jobs were always the first to disappear as the labour market weakened. At the same time, while the labour market had softened over recent months, it continued to be robust, with the unemployment rate staying low, at 6.3% in December. A solid job market and higher incomes should strengthen consumer confidence and allow spending to rise.

    There continued to be a strong dichotomy between a more dynamic services sector and a weak manufacturing sector. The services sector had remained robust thus far, with the PMI in expansionary territory and firms reporting solid demand. The extent to which the weakness in manufacturing was structural or cyclical was still open to debate, but there was a growing consensus that there was a large structural element, as high energy costs and strict regulation weighed on firms’ competitiveness. This was also reflected in weak export demand, despite the robust growth in global trade. All these factors also had an adverse impact on business investment in the industrial sector. This was seen as important to monitor, as a sustainable economic recovery also depended on a recovery in investment, especially in light of the vast longer-term investment needs of the euro area. Labour markets showed a dichotomy similar to the one observed in the economy more generally. While companies in the manufacturing sector were starting to lay off workers, employment in the services sector was growing. At the same time, concerns were expressed about the number of new vacancies, which had continued to fall. This two-speed economy, with manufacturing struggling and services resilient, was seen as indicating only weak growth ahead, especially in conjunction with the impending geopolitical tensions.

    Against this background, geopolitical and trade policy uncertainty was likely to continue to weigh on the euro area economy and was not expected to recede anytime soon. The point was made that if uncertainty were to remain high for a prolonged period, this would be very different from a shorter spell of uncertainty – and even more detrimental to investment. Therefore the economic recovery was unlikely to receive much support from investment for some time. Indeed, excluding Ireland, euro area business investment had been contracting recently and there were no signs of a turnaround. This would limit investment in physical and human capital further, dragging down potential output in the medium term. However, reference was also made to evidence from psychological studies, which suggested that the impact of higher uncertainty might diminish over time as agents’ perceptions and behaviour adapted.

    In this context, a remark was made on the importance of monetary and fiscal policies for enabling the economy to return to its previous growth path. Economic policies were meant to stabilise the economy and this stabilisation sometimes required a long time. After the pandemic, many economic indicators had returned to their pre-crisis levels, but this had not yet implied a return to pre-crisis growth paths, even though the output gap had closed in the meantime. A question was raised on bankruptcies, which were increasing in the euro area. To the extent that production capacity was being destroyed, the output gap might be closing because potential output growth was declining, and not because actual growth was increasing. However, it was also noted that bankruptcies were rising from an exceptionally low level and developments remained in line with historical regularities.

    Members reiterated that fiscal and structural policies should make the economy more productive, competitive and resilient. They welcomed the European Commission’s Competitiveness Compass, which provided a concrete roadmap for action. It was seen as crucial to follow up, with further concrete and ambitious structural policies, on Mario Draghi’s proposals for enhancing European competitiveness and on Enrico Letta’s proposals for empowering the Single Market. Governments should implement their commitments under the EU’s economic governance framework fully and without delay. This would help bring down budget deficits and debt ratios on a sustained basis, while prioritising growth-enhancing reforms and investment.

    Against this background, members assessed that the risks to economic growth remained tilted to the downside. Greater friction in global trade could weigh on euro area growth by dampening exports and weakening the global economy. Lower confidence could prevent consumption and investment from recovering as fast as expected. This could be amplified by geopolitical risks, such as Russia’s unjustified war against Ukraine and the tragic conflict in the Middle East, which could disrupt energy supplies and further weigh on global trade. Growth could also be lower if the lagged effects of monetary policy tightening lasted longer than expected. It could be higher if easier financing conditions and falling inflation allowed domestic consumption and investment to rebound faster.

    On price developments, members concurred with Mr Lane’s assessment that the incoming data confirmed disinflation was on track and that a return to the target in the course of 2025 was within reach. On the nominal side, there had been no major data surprises since the December Governing Council meeting and inflation expectations remained well anchored. Recent inflation data had been slightly below the December staff projections, but energy prices were on the rise. These two elements by and large offset one another. The inflation baseline from the December staff projections was therefore still a realistic scenario, indicating that inflation was on track to converge towards target in the course of 2025. Nevertheless, it was recalled that, for 2027, the contribution from the new Emissions Trading System (ETS2) assumptions was mechanically pushing the Eurosystem staff inflation projections above 2%. Furthermore, the market fixings for longer horizons suggested that there was a risk of undershooting the inflation target in 2026 and 2027. It was remarked that further downside revisions to the economic outlook would tend to imply a negative impact on the inflation outlook and an undershooting of inflation could not be ruled out.

    At the same time, the view was expressed that the risks to the December inflation projections were now tilted to the upside, so that the return to the 2% inflation target might take longer than previously expected. Although it was acknowledged that the momentum in services inflation had eased in recent months, the outlook for inflation remained heavily dependent on the evolution of services inflation, which accounted for around 75% of headline inflation. Services inflation was therefore widely seen as the key inflation component to monitor during the coming months. Services inflation had been stuck at roughly 4% for more than a year, while core inflation had also proven sluggish after an initial decline, remaining at around 2.7% for nearly a year. This raised the question as to where core inflation would eventually settle: in the past, services inflation and core inflation had typically been closely connected. It was also highlighted that, somewhat worryingly, the inflation rate for “early movers” in services had been trending up since its trough in April 2024 and was now standing well above the “followers” and the “late movers” at around 4.6%. This partly called into question the narrative behind the expected deceleration in services inflation. Moreover, the January flash PMI suggested that non-labour input costs, including energy and shipping costs, had increased significantly. The increase in the services sector had been particularly sharp, which was reflected in rising PMI selling prices for services – probably also fuelled by the tight labour market. As labour hoarding was a more widespread phenomenon in manufacturing, this implied that a potential pick-up in demand and the associated cyclical recovery in labour productivity would not necessarily dampen unit labour costs in the services sector to the same extent as in manufacturing.

    One main driver of the stickiness in services inflation was wage growth. Although wage growth was expected to decelerate in 2025, it would still stand at 4.5% in the second quarter of 2025 according to the ECB wage tracker. The pass-through of wages tended to be particularly strong in the services sector and occurred over an extended period of time, suggesting that the deceleration in wages might take some time to be reflected in lower services inflation. The forward-looking wage tracker was seen as fairly reliable, as it was based on existing contracts, whereas focusing too much on lagging wage data posed the risk of monetary policy falling behind the curve. This was particularly likely if negative growth risks eventually affected the labour market. Furthermore, a question was raised as to the potential implications for wage pressures of more restrictive labour migration policies.

    Overall, looking ahead there seemed reasons to believe that both services inflation and wage growth would slow down in line with the baseline scenario in the December staff projections. From the current quarter onwards, services inflation was expected to decline. However, in the early months of the year a number of services were set to be repriced, for instance in the insurance and tourism sectors, and there were many uncertainties surrounding this repricing. It was therefore seen as important to wait until March, when two more inflation releases and the new projections would be available, to reassess the inflation baseline as contained in the December staff projections.

    As regards longer-term inflation expectations, members took note of the latest developments in market-based measures of inflation compensation and survey-based indicators. The December Consumer Expectations Survey showed another increase in near-term inflation expectations, with inflation expectations 12 months ahead having already gradually picked up from 2.4% in September to 2.8% in December. Density-based expectations were even higher at 3%, with risks tilted to the upside. According to the Survey on the Access to Finance of Enterprises, firms’ median inflation expectations had also risen to 3%. However it was regarded as important to focus more on the change in inflation expectations than on the level of expectations when interpreting these surveys.

    As regards risks to the inflation outlook, with respect to the market-based measures, the view was expressed that there had been a shift in the balance of risks, pointing to upside risks to the December inflation outlook. In financial markets, inflation fixings for 2025 had shifted above the December short-term projections and inflation expectations had picked up across all tenors. In market surveys, risks of overshooting had resurfaced, with a larger share of respondents in the surveys seeing risks of an overshooting in 2025. Moreover, it was argued that tariffs, their implications for the exchange rate, and energy and food prices posed upside risks to inflation.

    Against this background, members considered that inflation could turn out higher if wages or profits increased by more than expected. Upside risks to inflation also stemmed from the heightened geopolitical tensions, which could push energy prices and freight costs higher in the near term and disrupt global trade. Moreover, extreme weather events, and the unfolding climate crisis more broadly, could drive up food prices by more than expected. By contrast, inflation might surprise on the downside if low confidence and concerns about geopolitical events prevented consumption and investment from recovering as fast as expected, if monetary policy dampened demand by more than expected, or if the economic environment in the rest of the world worsened unexpectedly. Greater friction in global trade would make the euro area inflation outlook more uncertain.

    Turning to the monetary and financial analysis, members broadly agreed with the assessment presented by Ms Schnabel and Mr Lane. It was noted that market interest rates in the euro area had risen since the Governing Council’s December monetary policy meeting, partly mirroring higher rates in global financial markets. Overall, financial conditions had been broadly stable, with higher short and long-term interest rates being counterbalanced by strong risk asset markets and a somewhat weaker exchange rate.

    Long-term interest rates had been rising more substantially than short-term ones, resulting in a steepening of the yield curve globally since last autumn. At the same time, it was underlined that the recent rise in long-term bond yields did not appear to be particularly striking when looking at developments over a longer time period. Over the past two years long-term rates had remained remarkably stable, especially when taking into account the pronounced variation in policy rates.

    The dynamics of market rates since the December Governing Council meeting had been similar on both sides of the Atlantic. This reflected higher term premia as well as a repricing of rate expectations. However, the relative contributions of the underlying drivers differed. In the United States, one factor driving up market interest rates had been an increase in inflation expectations, combined with the persistent strength of the US economy as well as concerns over prospects of higher budget deficits. This had led markets to price out some of the rate cuts that had been factored into the rate expectations prevailing before the Federal Open Market Committee meeting in December 2024. Uncertainty regarding the policies implemented by the new US Administration had also contributed to the sell-off in US government bonds. In Europe, term premia accounted for a significant part of the increase in long-term rates, which could be explained by a combination of factors. These included spillovers from the United States, concerns over the outlook for fiscal policy, and domestic and global policy uncertainty more broadly. Attention was also drawn to the potential impact of tighter monetary policy in Japan, the world’s largest creditor nation, with Japanese investors likely to start shifting their funds away from overseas investments towards domestic bond markets in response to rising yields.

    The passive reduction in the Eurosystem’s balance sheet, as maturing bonds were no longer reinvested, was also seen as exerting gradual upward pressure on term premia over longer horizons, although this had not been playing a significant role – especially not in developments since the last meeting. The reduction had been indicated well in advance and had already been priced in, to a significant extent, at the time the phasing out of reinvestment had been announced. The residual Eurosystem portfolios were still seen to be exerting substantial downside pressure on longer-term sovereign yields as compared with a situation in which asset holdings were absent. It was underlined that, while declining central bank holdings did affect financial conditions, quantitative tightening was operating gradually and smoothly in the background.

    In the context of the discussion on long-term yields, attention was drawn to the possibility that rising yields might also lead to financial stability risks, especially in view of the high level of valuations and leverage in the world economy. A further financial stability risk related to the prospect of a more deregulated financial system in the United States, including in the realm of crypto-assets. This could allow risks to build up in the years to come and sow the seeds of a future financial crisis.

    Turning to financing conditions, past interest rate cuts were gradually making it less expensive for firms and households to borrow. For new business, rates on bank loans to firms and households had continued to decline in November. However, the interest rates on existing loans remained high, and financing conditions remained tight.

    Although credit was expanding, lending to firms and households was subdued relative to historical averages. Growth in bank lending to firms had risen to 1.5% in December in annual terms, up from 1.0% in November. Mortgage lending had continued to rise gradually but remained muted overall, with an annual growth rate of 1.1% in December following 0.9% in November. Nevertheless, the increasing pace of loan growth was encouraging and suggested monetary easing was starting to be transmitted through the bank lending channel. Some comfort could also be taken from the lack of evidence of any negative impact on bank lending conditions from the decline in excess liquidity in the banking system.

    The bank lending survey was providing mixed signals, however. Credit standards for mortgages had been broadly unchanged in the fourth quarter, after easing for a while, and banks expected to tighten them in the next quarter. Banks had reported the third strongest increase in demand for mortgages since the start of the survey in 2003, driven primarily by more attractive interest rates. This indicated a turnaround in the housing market as property prices picked up. At the same time, credit standards for consumer credit had tightened in the fourth quarter, with standards for firms also tightening unexpectedly. The tightening had largely been driven by heightened perceptions of economic risk and reduced risk tolerance among banks.

    Caution was advised on overinterpreting the tightening in credit standards for firms reported in the latest bank lending survey. The vast majority of banks had reported unchanged credit standards, with only a small share tightening standards somewhat and an even smaller share easing them slightly. However, it was recalled that the survey methodology for calculating net percentages, which typically involved subtracting a small percentage of easing banks from a small percentage of tightening banks, was an established feature of the survey. Also, that methodology had not detracted from the good predictive power of the net percentage statistic for future lending developments. Moreover, the information from the bank lending survey had also been corroborated by the Survey on the Access to Finance of Enterprises, which had pointed to a slight decrease in the availability of funds to firms. The latter survey was now carried out at a quarterly frequency and provided an important cross-check, based on the perspective of firms, of the information received from banks.

    Turning to the demand for loans by firms, although the bank lending survey had shown a slight increase in the fourth quarter it had remained weak overall, in line with subdued investment. It was remarked that the limited increase in firms’ demand for loans might mean they were expecting rates to be cut further and were waiting to borrow at lower rates. This suggested that the transmission of policy rate cuts was likely to be stronger as the end of the rate-cutting cycle approached. At the same time, it was argued that demand for loans to euro area firms was mainly being held back by economic and geopolitical uncertainty rather than the level of interest rates.

    Monetary policy stance and policy considerations

    Turning to the monetary policy stance, members assessed the data that had become available since the last monetary policy meeting in accordance with the three main elements the Governing Council had communicated in 2023 as shaping its reaction function. These comprised (i) the implications of the incoming economic and financial data for the inflation outlook, (ii) the dynamics of underlying inflation, and (iii) the strength of monetary policy transmission.

    Starting with the inflation outlook, members widely agreed that the incoming data were broadly in line with the medium-term inflation trajectory embedded in the December staff projections. Inflation had been slightly lower than expected in both November and December. The outlook remained heavily dependent on the evolution of services inflation, which had remained close to 4% for more than a year. However, the momentum of services inflation had eased in recent months and a further decrease in wage pressures was anticipated, especially in the second half of 2025. Oil and gas prices had been higher than embodied in the December projections and needed to be closely monitored, but up to now they did not suggest a major change to the baseline in the staff projections.

    Risks to the inflation outlook were seen as two-sided: upside risks were posed by the outlook for energy and food prices, a stronger US dollar and the still sticky services inflation, while a downside risk related to the possibility of growth being lower than expected. There was considerable uncertainty about the effect of possible US tariffs, but the estimated impact on euro area inflation was small and its sign was ambiguous, whereas the implications for economic growth were clearly negative. Further uncertainty stemmed from the possible downside pressures emanating from falling Chinese export prices.

    There was some evidence suggesting a shift in the balance of risks to the upside since December, as reflected, for example, in market surveys showing that the risk of inflation overshooting the target outweighed the risk of an undershooting. Although some of the survey-based inflation expectations as well as market-derived inflation compensation had been revised up slightly, members took comfort from the fact that longer-term measures of inflation expectations remained well anchored at 2%.

    Turning to underlying inflation, members concurred that developments in most measures of underlying inflation suggested that inflation would settle at around the target on a sustained basis. Core inflation had been sticky at around 2.7% for nearly a year but had also turned out lower than projected. A number of measures continued to show a certain degree of persistence, with domestic inflation remaining high and exclusion-based measures proving sticky at levels above 2%. In addition, the translation of wage moderation into a slower rise in domestic prices and unit labour costs was subject to lags and predicated on profit margins continuing their buffering role as well as a cyclical rebound in labour productivity. However, a main cause of stickiness in domestic inflation was services inflation, which was strongly influenced by wage growth, and this was expected to decelerate in the course of 2025.

    As regards the transmission of monetary policy, recent credit dynamics showed that monetary policy transmission was working. Both the past tightening and the subsequent gradual removal of restriction were feeding through to financing conditions, including lending rates and credit flows. It was highlighted that not all demand components had been equally responsive, with, in particular, business investment held back by high uncertainty and structural weaknesses. Companies widely cited having their own funds as a reason for not making loan applications, and the reason for not investing these funds was likely linked to the high levels of uncertainty, rather than to the level of interest rates. Hence low investment was not necessarily a sign of a restrictive monetary policy. At the same time, it was unclear how much of the past tightening was still in the pipeline. Similarly, it would take time for the full effect of recent monetary policy easing to reach the economy, with even variable rate loans typically adjusting with a lag, and the same being true for deposits.

    Monetary policy decisions and communication

    Against this background, all members agreed with the proposal by Mr Lane to lower the three key ECB interest rates by 25 basis points. Lowering the deposit facility rate – the rate through which the monetary policy stance was steered – was justified by the updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission.

    There was a clear case for a further 25 basis point rate cut at the current meeting, and such a step was supported by the incoming data. Members concurred that the disinflationary process was well on track, while the growth outlook continued to be weak. Although the goal had not yet been achieved and inflation was still expected to remain above target in the near term, confidence in a timely and sustained convergence had increased, as both headline and core inflation had recently come in below the ECB projections. In particular, a return of inflation to the 2% target in the course of 2025 was in line with the December staff baseline projections, which were constructed on the basis of an interest rate path that stood significantly below the present level of the forward curve.

    At the same time, it was underlined that high levels of uncertainty, lingering upside risks to energy and food prices, a strong labour market and high negotiated wage increases, as well as sticky services inflation, called for caution. Upside risks could delay a sustainable return to target, while inflation expectations might be more fragile after a long period of high inflation. Firms had also learned to raise their prices more quickly in response to new inflationary shocks. Moreover, the financial market reactions to heightened geopolitical uncertainty or risk aversion often led to an appreciation of the US dollar and might involve spikes in energy prices, which could be detrimental to the inflation outlook.

    Risks to the growth outlook remained tilted to the downside, which typically also implied downside risks to inflation over longer horizons. The outlook for economic activity was clouded by elevated uncertainty stemming from geopolitical tensions, fiscal policy concerns in the euro area and recent global trade frictions associated with potential future actions by the US Administration that might lead to a global economic slowdown. As long as the disinflation process remained on track, policy rates could be brought further towards a neutral level to avoid unnecessarily holding back the economy. Nevertheless, growth risks had not shifted to a degree that would call for an acceleration in the move towards a neutral stance. Moreover, it was argued that greater caution was needed on the size and pace of further rate cuts when policy rates were approaching neutral territory, in view of prevailing uncertainties.

    Lowering the deposit facility rate to 2.75% at the current meeting was also seen as appropriate from a risk-management perspective. On the one hand, it left sufficient optionality to react to the possible emergence of new price pressures. On the other hand, it addressed the risk of falling behind the curve in dialling back restriction and guarded against inflation falling below target.

    Looking ahead, it was regarded as premature for the Governing Council to discuss a possible landing zone for the key ECB interest rates as inflation converged sustainably to target. It was widely felt that even with the current deposit facility rate, it was relatively safe to make the assessment that monetary policy was still restrictive. This was also consistent with the fact that the economy was relatively weak. At the same time, the view was expressed that the natural or neutral rate was likely to be higher than before the pandemic, as the balance between the global demand for and supply of savings had changed over recent years. The main reasons for this were the high and rising global need for investment to deal with the green and digital transitions, the surge in public debt and increasing geopolitical fragmentation, which was reversing the global savings glut and reducing the supply of savings. A higher neutral rate implied that, with a further reduction in policy rates at the present meeting, rates would plausibly be getting close to neutral rate territory. This meant that the point was approaching where monetary policy might no longer be characterised as restrictive.

    In this context, the remark was made that the public debate about the natural or neutral rate among market analysts and observers was becoming more intense, with markets trying to gauge the Governing Council’s assessment of it as a proxy for the terminal rate in the current rate cycle. This debate was seen as misleading, however. The considerable uncertainty as to the level of the natural or neutral interest rate was recalled. While the natural rate could in theory be a longer-term reference point for assessing the monetary policy stance, it was an unobservable variable. Its practical usefulness in steering policy on a meeting-by-meeting basis was questionable, as estimates were subject to significant model and parameter uncertainty, so confidence bands were too large to give any clear guidance. Moreover, the natural rate was a steady state concept, which was hardly applicable in a rapidly changing environment – as at present – with continuous new shocks.

    Moreover, it was mentioned that a box describing the latest Eurosystem staff estimates of the natural rate would be published in the Economic Bulletin and pre-released on 7 February 2025. The box would emphasise the wide range of point estimates, the properties of the underlying models and the considerable statistical uncertainty surrounding each single point estimate. The view was expressed that there was no alternative to the Governing Council identifying, meeting by meeting, an appropriate policy rate path which was consistent with reaching the target over the medium term. Such an appropriate path could only be identified in real time, taking into account a sufficiently broad set of information.

    Turning to communication aspects, it was widely stressed that maintaining a data-dependent approach with full optionality at every meeting was prudent and continued to be warranted. The present environment of elevated uncertainty further strengthened the case for taking decisions meeting by meeting, with no room for forward guidance. The meeting-by-meeting approach, guided by the three-criteria framework, was serving the Governing Council well and members were comfortable with the way markets were interpreting the ECB’s reaction function. It was also remarked that data-dependence did not imply being backward-looking in calibrating policy. Monetary policy was, by definition, forward-looking, as it affected inflation in the future and the primary objective was defined over the medium term. Data took many forms, and all relevant information had to be considered in a timely manner.

    Taking into account the foregoing discussion among the members, upon a proposal by the President, the Governing Council took the monetary policy decisions as set out in the monetary policy press release. The members of the Governing Council subsequently finalised the monetary policy statement, which the President and the Vice-President would, as usual, deliver at the press conference following the Governing Council meeting.

    Monetary policy statement

    Members

    • Ms Lagarde, President
    • Mr de Guindos, Vice-President
    • Mr Centeno
    • Mr Cipollone
    • Mr Demarco, temporarily replacing Mr Scicluna
    • Mr Dolenc, Deputy Governor of Banka Slovenije
    • Mr Elderson
    • Mr Escrivá*
    • Mr Holzmann
    • Mr Kālis, Acting Governor of Latvijas Banka
    • Mr Kažimír
    • Mr Knot
    • Mr Lane
    • Mr Makhlouf*
    • Mr Müller
    • Mr Nagel
    • Mr Panetta
    • Mr Patsalides*
    • Mr Rehn
    • Mr Reinesch
    • Ms Schnabel
    • Mr Šimkus
    • Mr Stournaras*
    • Mr Villeroy de Galhau
    • Mr Vujčić*
    • Mr Wunsch

    * Members not holding a voting right in January 2025 under Article 10.2 of the ESCB Statute.

    Other attendees

    • Mr Dombrovskis, Commissioner**
    • Ms Senkovic, Secretary, Director General Secretariat
    • Mr Rostagno, Secretary for monetary policy, Director General Monetary Policy
    • Mr Winkler, Deputy Secretary for monetary policy, Senior Adviser, DG Monetary Policy

    ** In accordance with Article 284 of the Treaty on the Functioning of the European Union.

    Accompanying persons

    • Mr Arpa
    • Ms Bénassy-Quéré
    • Mr Debrun
    • Mr Gavilán
    • Mr Gilbert
    • Mr Kaasik
    • Mr Koukoularides
    • Mr Lünnemann
    • Mr Madouros
    • Mr Martin
    • Mr Nicoletti Altimari
    • Mr Novo
    • Mr Rutkaste
    • Ms Schembri
    • Mr Šiaudinis
    • Mr Šošić
    • Mr Tavlas
    • Mr Ulbrich
    • Mr Välimäki
    • Ms Žumer Šujica

    Other ECB staff

    • Mr Proissl, Director General Communications
    • Mr Straub, Counsellor to the President
    • Ms Rahmouni-Rousseau, Director General Market Operations
    • Mr Arce, Director General Economics
    • Mr Sousa, Deputy Director General Economics

    Release of the next monetary policy account foreseen on 3 April 2025.

    MIL OSI Economics

  • MIL-OSI Europe: Ukraine: Renovated hospital and preschool open in Lviv Oblast with EU bank support

    Source: European Investment Bank

    EIB

    • Lviv’s St Luke’s Hospital has been upgraded to provide better medical care and a more resilient environment for patients, visitors and healthcare workers amid wartime challenges.
    • Preschool No.7 in Truskavets has been renovated to improve energy efficiency to provide a stable learning space for children and educators, including those displaced by the war.
    • These projects are part of the Ukraine Early Recovery Programme, aimed at rebuilding essential social infrastructure in Ukrainian communities.

    As Ukraine marks three years of Russia’s full-scale war, the European Union continues to support the reconstruction of the country’s vital infrastructure. Two public buildings in Lviv Oblast – St Luke’s Hospital in Lviv and preschool No.7 “Dzvinochok” in Truskavets – have officially opened after renovations. Supported by the European Union and its financial arm, the European Investment Bank (EIB), these projects are part of the broader Ukraine Early Recovery Programme that funds the restoration of essential social infrastructure, including schools, hospitals, water and heating systems and social housing. As war-affected communities continue to face immense challenges, these investments help ensure access to critical services and create more resilient spaces.

    Lviv’s St Luke’s Hospital, a key emergency and specialised care centre, has undergone a €940 000 renovation to improve services for its 50 000 annual patients. Home to western Ukraine’s largest burn unit, it plays a crucial role in treating severe injuries. The upgrades, in particular facade insulation and energy efficiency improvements, enhance the hospital’s resilience while creating a more comfortable space for patients, including internally displaced persons.

    A €330 000 renovation of preschool No.7 “Dzvinochok” in Truskavets, Lviv Oblast, has created a more energy-efficient and welcoming learning space for pupils including for children displaced by the war and for staff. The project significantly increased the appeal of the building, while increasing its energy efficiency and reducing energy costs. With improved insulation the preschool is now more resilient and sustainable.

    In Lviv Oblast, two facilities have already been renovated and six are undergoing reconstruction under the EIB recovery programmes, with a total investment of over €15 million. This includes six educational institutions and two medical facilities, improving access to education and healthcare in the region. 

    EIB Vice-President Teresa Czerwińska, who is responsible for the Bank’s operations in Ukraine, said: “From day one of Russia’s full-scale war and throughout these three difficult years, the EIB has stood by Ukraine, providing vital support to help the country withstand, recover and rebuild. The reopening of renovated hospital and school in Lviv Oblast is a testament to this ongoing effort, bringing tangible improvements to people’s daily lives.”

    EU Ambassador to Ukraine Katarína Mathernová said: “Every rebuilt hospital, school, and kindergarten sends a clear message: the EU stands firmly with Ukraine. Together with the EIB, we are not only helping to repair what has been damaged but also laying the foundations for a stronger, safer Ukraine that is ready to thrive as part of the EU.”

    Deputy Prime Minister for Restoration of Ukraine – Minister for Development of Communities and Territories of Ukraine Oleksii Kuleba said: “Together with the EIB, EU Delegation and UNDP, we are modernising outdated and war-damaged infrastructure across Ukraine. Millions of Ukrainians already benefit from renovated schools, hospitals and kindergartens. We have recently launched the first phase of the Ukraine Recovery III programme, paving the way for additional impactful initiatives that will enhance communities and improve the lives of Ukrainians thanks to the EU support.”

    Minister of Finance of Ukraine Sergii Marchenko said: “Rebuilding Ukraine’s infrastructure is crucial for strengthening resilience and improving living conditions for our people. With the support of the EU, we are delivering critical projects that enhance healthcare, education and public services. The three EIB-backed recovery programmes, worth €640 million, play a key role in this effort, helping communities rebuild and move forward despite ongoing challenges.”

    Head of the Lviv Oblast Military Administration Maksym Kozytskyi said: “The EU bank’s investment in Lviv Oblast is strengthening our region’s infrastructure at a critical time. With many communities hosting large numbers of displaced people, improving healthcare, education and essential services is more important than ever. These projects help ensure that our cities and towns remain functional, resilient and able to meet the needs of all who live here.”

    Mayor of Lviv Andriy Sadovyi said: “Restoring and strengthening our city’s infrastructure is essential to supporting both our residents and those who have found refuge here due to the war. With the support of the EU, we are rebuilding vital facilities to ensure Lviv remains a city of resilience, opportunity and hope. Today, we inaugurated a renovated hospital, with many other projects underway to improve daily life and build a stronger future for our community.”

    Mayor of Truskavets Andriy Kulchynsky said: “We are grateful to the EU for this investment in our community. The renovation of Preschool No.7 creates a warm, modern and energy-efficient space where our children can learn and grow.”

    UNDP Resident Representative to Ukraine Jaco Cilliers said: “Behind every rebuilt hospital and renovated school, we see renewed hope for Ukrainian families and communities. UNDP’s partnership with local authorities isn’t just about infrastructure – it’s about restoring essential services that affect people’s daily lives. Working alongside the EU and EIB, we’re helping transform technical recovery projects into tangible improvements for children seeking education, patients needing care and citizens rebuilding their futures.”

    Background information

    EIB in Ukraine 

    The EIB Group has been supporting Ukraine’s resilience, economy and efforts to rebuild since the very first day of Russia’s full-scale invasion. In 2024, the Bank supported projects aimed at securing Ukraine’s energy supply, repairing critical infrastructure that has been damaged, and ensuring that essential services continue to be delivered across the country. This brings the total amount of aid the EIB has disbursed since the start of the war to over €2.2 billion.

    EIB recovery programmes in Ukraine

    Renovations of a hospital and kindergarten in Lviv Oblast were carried out under the Ukraine Early Recovery Programme (UERP), a €200 million multisectoral framework loan from the EIB. Overall, the Bank finances three recovery programmes, totalling €640 million, which are provided as framework loans to the government of Ukraine. Through these programmes, Ukrainian communities gain access to financial resources to restore essential social infrastructure, including schools, kindergartens, hospitals, housing, heating, and water systems. These EIB-backed programmes are further supported by €15 million in EU grants to facilitate implementation. The Ministry for Development of Communities and Territories of Ukraine, in cooperation with the Ministry of Finance, coordinates and oversees the programme implementation, while local authorities and self-governments are responsible for managing recovery sub-projects. The United Nations Development Programme (UNDP) in Ukraine provides technical assistance to local communities, supporting project implementation and ensuring independent monitoring for transparency and accountability. More information about the programmes is available here.

    MIL OSI Europe News