Russia’s overnight barrage on Kyiv—the second-largest of the war—fired 629 drones and missiles, killed 23 civilians and struck three EU diplomatic missions. (aljazeera.com, apnews.com) Europe’s defence ministers, meeting hours later in Brussels, vowed tougher sanctions and even floated troop deployments to enforce any future peace deal—an extraordinary escalation for a bloc that once shunned “boots on the ground.” (apnews.com)

I read the strike less as battlefield desperation than as Kremlin signaling: every time Western security guarantees inch forward, Moscow raises the cost for granting them. In 1994 the Budapest Memorandum promised Ukraine territorial integrity without deterrent muscle; today Zelenskyy insists on NATO-style, ratified commitments because that lesson is etched in debris. (reuters.com)

Yet Europe’s fury must translate into capabilities, not communiqués. EU states still spend barely 1.7 % of GDP on defence—half the US share—and ammunition production lags Ukraine’s monthly needs by 40 %. Until that gap closes, Russia’s calculus of acceptable escalation will remain largely unchanged. As philosopher Amartya Sen warns, “Commitments without capacity are promises of inaction.”

The Gist AI Editor

US Inflation Cools, Easing Rate Pressure

The US Federal Reserve’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) price index, showed prices rose 2.6% annually in July, sustaining a trend that may permit interest rate cuts as early as September (Strait Times). This measure of price changes for goods and services purchased by consumers suggests monetary policy is successfully curbing inflation without derailing the economy. For markets, this signals a potential loosening of financial conditions, which could spur investment and growth. From our perspective, stable, low inflation is the bedrock of a predictable economic environment, allowing businesses and individuals to plan for the future with greater certainty, a cornerstone of free-market capitalism.

Franco-German Energy Rapprochement

France and Germany have agreed to deepen the integration of their energy markets and align on green regulations, marking a significant “reset” after public disputes over nuclear power and industrial subsidies (Politico.eu). The accord aims to create a more unified European energy policy, a pragmatic step toward market efficiency and supply security. This move underscores a core free-market principle: cooperation and open markets are more effective at solving shared problems than protectionism. A truly integrated energy grid reduces reliance on single suppliers and fosters a more resilient, competitive, and ultimately cheaper energy landscape for the entire bloc.

EU’s Ukraine Strategy Evolves

The European Union is considering an in-bloc military training program for Ukrainian soldiers post-ceasefire, with a majority of member states reportedly supportive (Politico.eu). Concurrently, most members are eager to deploy €6.6 billion in funds, currently blocked by Hungary, to arm Ukraine. This dual approach signals a long-term strategic commitment to Ukraine’s sovereignty. While direct intervention remains off the table, these measures represent a significant investment in regional security. A stable, independent Ukraine is essential for a stable Europe, preventing authoritarian expansionism from disrupting international trade and cooperation.

Stay tuned for the next Gist—your edge in a shifting world.

Senior Mauritius central bank official resigns
— Strait Times

US Fed’s preferred inflation gauge stable in July, on track to begin lowering interest rates
— Strait Times

Critical medical supplies run out as cases of rare syndrome rise in Gaza, WHO says
— Strait Times

Macron Vows Retaliation If Europe’s Digital Sovereignty Attacked
— Bloomberg

Verisure CEO Sees Stockholm as Top Pick for Potential IPO
— Bloomberg

Brazil’s Government to Unveil 2026 Budget Plan, Lula Says
— Bloomberg

Germany’s Inflationary Hiccup

A summer lull in price pressures is over. German inflation unexpectedly climbed to 2.2% in August, the first rise since last winter and a challenge to the European Central Bank’s (ECB) prevailing narrative (Destatis). After months of steady disinflation, this uptick—beating analyst expectations of 2.1%—injects fresh uncertainty into the Eurozone’s trajectory. The data complicates the ECB’s path toward potential rate cuts, strengthening the arguments of policy hawks who caution against premature easing. My take: this isn’t a mere blip but evidence of stubborn, embedded price pressures. For markets, it signals that the final mile of the inflation fight will be the hardest, likely keeping borrowing costs elevated for longer than consensus models predict.

Paris-Berlin Security Pivot

The Franco-German summit in Toulon delivered a significant, if overdue, security realignment, with direct market consequences (Politico, AFP). Facing Russian aggression and strategic uncertainty from the U.S., President Macron and Chancellor Merz initiated a “strategic dialogue” on nuclear deterrence—a notable break from decades of German ambiguity. They also pledged more air defense for Ukraine and agreed to cooperate on energy infrastructure, including a new cross-border power line. While alignment on defense is a positive step toward a more credible European security posture, the underlying economic philosophies still diverge. The key variable remains whether this security rapprochement will translate into a shared agenda for market-based reforms or simply more state-directed industrial policy under the guise of strategic autonomy.

Catch the next Gist for the continent’s moving pieces.

Macron und Merz nach Ministerrat
— Zdf

Inflation erstmals in diesem Jahr gestiegen
— Zdf

Too loud to sleep: Which EU country is most affected by noise pollution?
— Euronews

Aktuelles zum Krieg in der Ukraine
— Zdf

Finita udienza su governatrice della Fed, nessuna decisione
— Ansa

ANSA/ Hit parade, Olly sempre in vetta
— Ansa