Having to defend Gotland against a foreign invasion seemed such a far-fetched notion to Swedish decision-makers at the start of the century that they demilitarized the Baltic Sea island.

Now, the Swedish Armed Forces are back, and they are practicing with U.S. troops not just how to defend the island with a population of 58,000, but how to take it back from a foreign aggressor.

U.S. Marines have conducted air drops and amphibious landings on Gotland as part of a NATO exercise in the Baltic Sea.

Norway has announced it will mandate place-of-origin labelling on products from the illegal settlements in the occupied West Bank, a move that has provoked fury from Israel.

The country's social democrat government announced its new policy on Friday, saying it was not enough to label products coming from the occupied territories as Israeli. 

As European countries have sent fast growing quantities of armour and artillery to the Ukrainian Military as aid, amid growing concerns of further Russian breakthroughs on the frontlines in the Donbas regions, Spain is reported to be planning the provision of  40 Leopard 2A4 tanks to bolster Kiev’s

Serbia and Kosovo must recognize each other in order to join the European Union, German Chancellor Olaf Scholz said Friday said as he expressed support for quicker integration of the Western Balkans into the bloc amid the war in Ukraine.

Scholz, on a visit to the Western Balkans, also pressed Serbia to join Western sanctions against Russia despite its historic and current ties to Moscow, which supplies most of Serbia's energy needs.

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The US Senate Foreign Relations Committee has approved a bill calling on the North Atlantic Treaty Organization (NATO) to quickly admit Finland and Sweden, in a move designed to further increase tensions with Russia. 

The Senate panel on Thursday easily passed the resolution supporting the two Nordic states’ entrance into the US-led military alliance and urged other NATO members to do the same.

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Following The ECB's statement, traders have moved rate-hike expectations up to around 150bps by December 2022...

 

All eyes will now be on what Lagarde says at the press conference as she tries to thread a needle of a fragmenting European bond market, ending bond-buying, and hiking rates into her own stagflationary forecast (lower growth and higher inflation). As Bloomberg Economics' Geoff King points out:

  • End of QE? Check!

  • Interest-rate hikes? Check!

  • Peripheral spread-narrowing tools? Check!

ECB President Christine Lagarde started with the pre-approved hawkish comments, blaming Putin for both weaker growth forecasts and higher inflation outlooks, promising to end the bond-buying and start hiking rates in July.

Lithium producer Albemarle could be forced to close its plant in Germany if the European Union classifies the key mineral lithium as a hazardous substance that would change the way lithium is processed and stored, the company’s chief financial officer has told Reuters.

The NATO military alliance will not offer Russia any guarantees regarding the deployment of nuclear weapons to prospective member states Sweden and Finland, with a senior official in the bloc stressing that such decisions must be left to individual nations.

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