Southern Europe in May 2026: the most important developments in economy
Southern Europe's economy in May 2026 was dominated by Ferrari's first all-electric car. The Luce, a four-door model designed with former Apple designer Jony Ive, was unveiled on 26 May, with its price reported between $640,000 and $900,000. Its design proved divisive and Ferrari's shares fell after the presentation, then regained some ground the following day. The company said orders were still coming in and defended the car against criticism.
Energy costs and EU budget rules shaped the Italian debate. The IMF estimated that the energy shock from the Iran war could cost the average Italian family between EUR 450 and EUR 2,270, and fuel on Italian highways passed 2 euros per litre. Prime Minister Giorgia Meloni asked the European Commission, in a letter to Ursula von der Leyen, to extend Stability Pact exemptions to energy spending. The Commission said it was examining the request, and forecast that Italy's deficit would fall below 3% of GDP this year. ECB President Christine Lagarde rejected Meloni's proposal for national solutions. On 13 May Meloni announced a framework for restarting nuclear power in Italy, with plans due this summer. Italian stocks reached their first record high in 26 years, and the IMF projected growth of 0.5% a year until 2027.
Corporate deals and results filled much of the rest. UniCredit agreed to sell part of its Russia business, while the Kremlin said it would consider the sale, and the bank pursued its bid for Commerzbank, which cut 3,000 jobs. Siemens bought the rail signalling company Mermec. Leonardo reported quarterly profit up 60% to EUR 184 million and agreed a EUR 4.48 million severance package with its former chief executive. Stellantis said it would not cut capacity in Italy.
Elsewhere, Cyprus reported rising construction costs and a record-low ratio of non-performing loans, and Bank of Cyprus approved a record dividend. Greece posted a EUR 5 billion budget surplus and the OECD's largest per capita income increase. Spain presented a multi-billion-euro energy transition plan, and the Spanish government blocked access to Polymarket and Kalshi while it investigates their gambling licences.
by WorldBrief & Maksim Micheliov | AI-generated summary
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