UK Unveils £45 Billion Rail Plan for Northern England

Top diplomats from Denmark and Greenland are preparing for a critical showdown in Washington to persuade the Trump administration to drop its demands for the Arctic territory, a move that threatens to fracture the NATO alliance.

Danish Foreign Minister Lars Lokke Rasmussen and Greenland's Foreign Minister Vivian Motzfeldt are scheduled to meet with U.S. Vice President JD Vance and Secretary of State Marco Rubio at the White House on Wednesday. The meeting comes just hours after Greenland's prime minister affirmed that, if forced to choose, the island would remain with Denmark.

The core objective for the Danish and Greenlandic delegation is to understand Washington's true intentions and argue that a U.S. takeover of the island is unnecessary.

President Donald Trump has refused to rule out using military force to acquire Greenland, which he has framed as a national defense imperative. While Rubio has suggested the goal is to purchase the territory, Denmark insists it is not for sale, and Greenlanders maintain their "national soul" cannot be bought at any price.

Denmark's Counter-Play and Diplomatic Paths

Copenhagen’s central argument rests on a comprehensive 1951 defense agreement that already grants the United States broad access to Greenland for military purposes, making a formal takeover redundant.

To counter Trump's claim that Denmark has failed to secure Greenland adequately, Copenhagen has several potential responses:

• Increase its military presence and investment on the island.

• Deepen defense coordination with the U.S. and other NATO allies.

• Offer Washington expanded access under the existing treaty.

While a sale is firmly off the table, another proposed "off-ramp" involves a minerals-for-security deal. In this scenario, Greenland could offer the U.S. access to its vast rare earth deposits in exchange for security guarantees. Such an agreement could allow President Trump to claim a commercial victory without pursuing annexation.

How a US Takeover Could Unfold

If diplomatic efforts fail and the U.S. insists on acquiring Greenland, two primary scenarios emerge.

The 'Soft' Occupation

The United States could leverage the 1951 defense agreement to deploy additional troops to Greenland. The treaty places few formal limits on expanding its military presence, requiring only notification to Copenhagen and Nuuk.

Once these forces are in place, they could shift from routine military activities to seizing control of key institutions and government functions. This change in mission, rather than the number of troops, would constitute a de facto occupation, allowing the U.S. to establish control with less friction than a conventional invasion.

Direct Military Force

In what is still considered the least likely scenario, the U.S. could invade Greenland and seize its key infrastructure. President Trump has previously authorized a bombing in Nigeria and a raid to extract Nicolás Maduro from Caracas, demonstrating a willingness to use such options.

While a U.S. military victory would be almost certain, Danish forces would be legally obligated to resist, creating a high risk of casualties and severe political fallout.

White House Dynamics and International Stakes

For European allies, the involvement of Vice President Vance is a major source of concern. He and Secretary Rubio are known for their different diplomatic styles; Rubio pairs Trump's aggressive stance with a willingness to negotiate privately, whereas Vance mirrors Trump's penchant for unpredictable and disruptive tactics.

Vance has a history of clashing with European leaders, notably lambasting the continent at last year's Munich Security Conference. He has also criticized Denmark for "not having done a good job by the people of Greenland" and played a role in a tense White House exchange with Ukrainian President Volodymyr Zelenskiy.

On Tuesday, President Trump bluntly dismissed comments from Greenland's Prime Minister Jens-Frederik Nielsen, who had ruled out joining the U.S.

"That's their problem. I disagree with them," Trump told reporters. "I don't know who he is. Don't know anything about him, but that's going to be a big problem for him."

Facing this pressure, Danish Prime Minister Mette Frederiksen is working to frame the U.S. approach as a threat to global stability, hoping to rally support from NATO and the European Union.

"We are standing up not only for ourselves, but for the world order that generations before us have built — our democracy," she stated at a press conference. "This is not just about Greenland or about the Kingdom. It is about the principle that borders must not be changed by force, that peoples cannot be bought. It is about ensuring that small countries do not have to fear the big ones."

Romania's inflation rate remained stubbornly high in December, clocking in at 9.7% and holding at nearly three times the central bank's target. The persistent price pressure follows government actions designed to shrink the budget deficit, which have inadvertently helped fuel consumer price growth.

December Inflation Aligns with Forecasts

The year-over-year consumer price increase of 9.7%, reported by the statistics office in Bucharest on Wednesday, was just slightly below the November reading. This figure was in line with the median estimate from a Bloomberg survey of economists but edged past the central bank's own forecast of 9.6%.

Month-over-month, prices saw a modest increase of 0.2%.

Fiscal Policy's Impact on Consumer Prices

The country’s pro-European government recently pushed through a series of tax increases as part of a plan to cut its budget shortfall from over 9% of gross domestic product to below 8.4% by 2025.

According to central bank Governor Mugur Isarescu, these fiscal measures, combined with the elimination of an energy price cap, had a greater-than-expected impact on consumer prices. The fiscal push came after the administration overcame the most severe political crisis since the end of communism.

Central Bank Holds Steady on Interest Rates

While the December inflation figure is far above the central bank's upper target band of 3.5%, policymakers have maintained a steady monetary policy. The key interest rate has been held at 6.5% since mid-2024.

Officials have repeatedly said they expect price growth to slow sharply in the second half of 2026.

Analysts Predict Rate Cuts Later This Year

Some economists see a path toward monetary easing. Nicolae Covrig, an economist at Raiffeisen Bank SA, projects that inflation will cool "significantly" to 4% by the end of the year, which could allow the central bank to begin cutting rates.

"With inflation decreasing and fiscal consolidation progressing, we expect the central bank to resume its key rate cutting cycle this year in May at the earliest," Covrig wrote in a report before the data release. He forecasts that the benchmark rate could be lowered to 5.25%.

Iranians gather while blocking a street during a protest in Tehran

Source: CNBC

China's imports from Canada fell in 2025 for the first time since 2020, according to official data released just hours before Canadian Prime Minister Mark Carney’s scheduled arrival in Beijing. The figures underscore the economic leverage China holds as the two nations navigate a period of tense relations.

The high-stakes visit, the first by a Canadian prime minister since 2017, aims to mend a diplomatic rift that has strained economic ties.

Canadian Prime Minister Mark Carney travels to China for a high-stakes diplomatic visit aimed at stabilizing trade relations.

A Look at the Sharp Downturn in Trade

According to China's customs authority, Chinese imports from Canada dropped by 10.4% in 2025, falling to $41.7 billion. This marks a notable decline from the all-time high of $46.6 billion recorded in 2024.

The last time inbound shipments from Canada decreased was during the pandemic in 2020, when they fell by 22.3%. The trend isn't isolated to Canada; Chinese imports from the United States also slumped by 14.6% in 2025.

Carney's Mission to Repair Strained Relations

Prime Minister Mark Carney is expected to arrive in Beijing on Wednesday with a focus on narrowing the diplomatic divide. Relations soured significantly in 2024 after former Prime Minister Justin Trudeau mirrored the Biden administration's policy by imposing 100% tariffs on Chinese electric vehicles.

"I'm headed to Beijing," Carney announced on social media as he departed. "China is our second-largest trading partner, and the world's second largest economy. A pragmatic and constructive relationship between our nations will create greater stability, security, and prosperity on both sides of the Pacific."

The trip follows a positive meeting between Carney and Chinese leader Xi Jinping in South Korea in October. While that encounter did not result in major breakthroughs—Chinese tariffs continue to block Canadian canola from its largest market—both leaders agreed to move bilateral ties forward, leading to Xi's invitation.

The US Factor: Seeking 'Strategic Autonomy'

Canada's renewed engagement with China is also driven by a need to diversify its export markets. This comes after U.S. President Donald Trump imposed tariffs on Canada last year and made inflammatory remarks about the country's sovereignty.

Ahead of the visit, Chinese state media advised Carney to maintain "strategic autonomy" from the United States. An editorial in the state-run China Daily on Monday argued that Ottawa could better serve its interests by working directly with Beijing to manage differences.

The outlet suggested that previous setbacks in the relationship were caused by the Trudeau government's policy of aligning with Washington's efforts to contain China, and that upholding strategic independence would help avoid similar outcomes.

Germany’s corporate landscape faced a severe downturn in 2025, as business bankruptcies surged to their highest level in two decades. The wave of insolvencies accelerated late in the year, casting a shadow over the economy despite government promises of a turnaround.

Figure 1: Germany's economy faced a historic wave of corporate insolvencies in 2025, reaching a 20-year peak and signaling significant financial distress.

The Scale of the Insolvency Wave

Data from the Leibniz Institute for Economic Research Halle (IWH) reveals a total of 17,604 corporate bankruptcies for the year. This figure translates to an average of 48 partnerships and corporations failing every day.

The institute noted that this total is approximately 5% higher than the number recorded during the 2009 financial crisis, highlighting the severity of the current situation.

The problem worsened significantly in the final month of the year. December saw 1,519 insolvency applications, a figure 75% higher than the monthly average for December between 2016 and 2019.

Jonas Eckhardt, an economic expert at the transformation consultancy Falkensteg, described the situation bluntly: "The German economy is no longer just struggling with headaches. She's got a fever. That won't change anytime soon."

Key Sectors Under Pressure

According to Professor Dr. Steffen Müller, Head of IWH Insolvency Research, the rise in bankruptcies was a broad-based phenomenon affecting the entire economy. However, certain sectors were hit particularly hard.

• Hospitality

• Construction

• Real Estate

Müller identified the interest rate increases at the end of 2022 as a primary factor, noting that higher borrowing costs stalled investment and expansion plans across these industries.

From Local Businesses to Large Corporations

The financial distress has impacted companies of all sizes. In Saxony, a sausage company was forced to dismiss its entire staff. In Lower Saxony, the Leifert bakery chain’s insolvency affected 220 employees, while the failure of another large bakery, Hansen Mürwik, impacted 145 workers.

Large corporations have not been immune. A survey by Falkensteg found that 471 companies with annual sales over €10 million filed for insolvency in 2025, marking a 25% increase from the previous year. The number of these major insolvencies has nearly tripled since 2021.

National Concerns and Broader European Woes

The escalating crisis has captured the attention of Germany’s leadership. Chancellor Friedrich Merz recently stated that parts of the German economy are in a "very critical state." While he did not specify which sectors, the automotive industry is widely seen as being under intense pressure, largely due to rising competition from Chinese manufacturers.

This economic strain is not unique to Germany. French President Emmanuel Macron recently traveled to China, telling leaders there that "European industry is facing a 'life or death' moment." Macron argued that China's trade surplus is "untenable" and warned that Europe may resort to tariffs if China does not adjust its trade practices to allow for more European imports.

The trip, however, concluded without any major business deals, and analysts widely viewed it as unsuccessful in achieving its primary objectives. In a notable observation, China has achieved its economic status with very low levels of immigration, with the total number of foreigners in the country comparable to the foreign population of the city of Berlin alone.

Outlook for 2026 Remains Grim

While some experts, like Professor Müller, suggest that insolvencies can serve as a market adjustment mechanism to make way for more resilient companies, the immediate outlook is negative.

Jonas Eckhardt emphasized that for many medium-sized businesses, the current climate is no longer a simple downturn but a "question of survival." Experts do not foresee a recovery in 2026 and instead predict a further increase in bankruptcies, particularly among large companies.