Southern Europe in March 2026: the most important developments in economy
In March 2026 the economy of Southern Europe was dominated by a trade threat from the United States against Spain. On 3 March Donald Trump said he would cut off all trade with Spain, citing its refusal to support a possible war with Iran and its stance on NATO, and he repeated the threat on 4 and 12 March. The European Union issued a statement defending Spain, Spain's government said it had the resources to counter an embargo, and analysts said the dispute could stall Santander's planned banking deal. On 30 March Spain closed its airspace to aircraft involved in the Iran war.
The Middle East conflict and energy prices ran through the rest of the month. The Milan stock exchange closed 1.97% lower on 2 March and 3.92% lower on 3 March, rose sharply on 10 March after Trump said the war could be nearing its end, and on 23 March closed 0.81% higher after heavy losses earlier in the day. Italy's 10-year bond yield rose above 4%. More than 30 countries agreed the largest coordinated release of strategic oil reserves, of which Italy's share was nearly 10 million barrels. Italy cut fuel prices by 25 cents per litre, Greece capped fuel profit margins for three months, and Spain announced tax cuts on fuel and electricity; its Congress approved a 5 billion euro aid package on 26 March without the People's Party. QatarEnergy declared force majeure on several LNG contracts, including those supplying Italy, and Prime Minister Meloni travelled to Algeria for new gas supplies.
Cyprus faced flight cancellations, and its fiscal council warned of significant economic pressure and an electricity price rise of about 20% by summer. Its public debt fell to the lowest level since 2008.
Company deals continued. UniCredit bid for Germany's Commerzbank, and the SPD rejected the proposal. Poste Italiane bid $12.5 billion for Telecom Italia, Zurich agreed to buy Generali's Irish insurance business for 337 million euros, and Leonardo won EU approval to acquire Iveco's defence vehicle business. Amazon announced plans to invest up to $40 billion in Spain.
by WorldBrief & Maksim Micheliov | AI-generated summary
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