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In a rare outbreak of sanity from the continent that perfected kicking the can, officials on NATO’s eastern front are openly admitting what Brussels and Frankfurt have spent years denying: you can’t fund a permanent war footing with infinite borrowing and hope the bond market never notices.

Estonia’s outgoing ECB rate hawk Madis Muller dropped the red pill in parliament Thursday, bluntly telling lawmakers that jacking up budget deficits to pay for the defense surge is no long-term solution. “These higher defense expenditures are not temporary,” he warned. The message: the party is ending, and the tab is about to get ugly.

Next door in Latvia, Finance Minister Arvils Aseradens echoed the warning, calling for “every possible instrument” to secure sustainable funding. He even threw support behind Canadian PM Mark Carney’s pet idea of a multilateral defense bank, because nothing says fiscal responsibility like creating yet another supranational borrowing vehicle to paper over the cracks.

Both Baltic states, sitting on the razor’s edge with Moscow, not to mention sharing a border with the Russian bear, have massively ramped up military outlays in recent years. Their spending has exploded even as existing social welfare commitments continue to balloon budgets already teetering under the weight of Europe’s sacred model. Welcome to the European conundrum in 2026: you need guns to deter Russia, but the welfare state can’t be touched, and nobody wants to tell voters the truth about taxes.

The broader picture across the continent is grim. European nations are scrambling to square exploding public debt with an unfunded defense boom while somehow still pretending they can keep the lights on for Ukraine’s war effort. The math simply does not add up.

Estonia’s Debt Trajectory: From Poster Child to Problem Child

Estonia, the euro-area’s former fiscal hawk with just 1.3 million people, now finds itself in the crosshairs. Its debt-to-GDP ratio remains a relatively modest 24%, but that’s changing fast. Public debt is projected to more than double: from €10 billion ($11.8 billion) in 2025 to €21 billion by 2030. The IMF has already raised concerns, and Fitch downgraded the country’s sovereign rating back in 2023 as investors began pricing in geopolitical risk and demanding higher yields.

On Thursday, Estonia’s central bank doubled down on its earlier warnings: act now while you still have the luxury of being one of the EU’s least indebted nations. Because that window is closing fast.

Tallinn’s much-touted “defense tax” introduced in 2024? Already watered down and nowhere near enough to cover the actual sums required.

This is the inevitable endpoint of Europe’s post-2022 panic: politicians who spent decades hollowing out defense budgets in favor of green deals, migration costs, and generous entitlements suddenly discover they need actual military capability. Rather than make hard choices — cut elsewhere, raise taxes transparently, or rethink open-ended commitments — the default instinct is to borrow more and hope the ECB or some new “defense bank” magically makes the numbers work.

Spoiler: it won’t.

The Baltics are simply saying out loud what markets have been whispering for months. Permanent defense hikes require permanent revenue, not more creative accounting and supranational debt vehicles. Europe’s eastern flank is learning the hard way that you cannot deter Russia with PowerPoint slides and growing interest payments.

The real question now isn’t whether Europe will boost defense spending, it will and will then quietly shuffle most of the funds into various green (and not so green) grifts under the guise of an “existential threat.” It’s who ultimately pays – and whether the bond vigilantes will wait patiently for the answer. Given the trajectory, the real question is when does the emperor’s nudity finally get confirmed.

Authored by Thomas Brooke via Remix News,

Hungary has returned money and valuables belonging to Ukrainian state-owned bank Oschadbank after authorities seized the shipment earlier this year while it was being transported from Austria to Ukraine.

Ukrainian President Volodymyr Zelensky announced the return on Telegram on Wednesday, saying the assets had been seized by Hungarian special services in March, a move he claimed had been unjustified.

“Today, the funds and valuables of Oschadbank, seized by Hungarian special services in March of this year, were returned,” Zelensky wrote.

“I thank Hungary for the constructive and civilized step,” he added.

The shipment, which reportedly included cash and gold belonging to Oschadbank’s Ukrainian branch, was stopped by Hungarian authorities during a period of high tension between Budapest and Kyiv.

Hungarian officials said at the time that the bank workers involved were suspected of money laundering.

The Ukrainians were later released, but the authorities retained the seized assets until now.

The incident occurred during Hungary’s parliamentary election campaign last month, when Prime Minister Viktor Orbán had made criticism of Ukraine a central part of his political messaging.

His government was also locked in a dispute with Kyiv over the interruption of Russian oil supplies through Ukraine to Hungary via the Druzhba pipeline.

Orbán, who had long clashed with Ukraine and its European backers over sanctions, aid, and energy policy, was defeated in April’s election.

Péter Magyar, the leader of the Tisza party, will now succeed him, and the new Hungarian parliament is expected to be sworn in on Saturday.

The return of the Oschadbank assets follows a broader easing of tensions between Budapest and Kyiv.

Despite multiple claims from Ukraine during the election campaign that the Druzhba pipeline could not simply resume due to damage inflicted by Russian shelling, Kyiv promptly resumed the flow of oil to Hungary and Slovakia shortly after Orbán’s election defeat.

At the same time, Budapest stopped blocking final approval of a €90 billion European Union loan to Ukraine.

Read more here…

Russia is seething after its Caucasus regional ally Armenia decided to host Ukrainian President Volodymyr Zelensky for a European summit earlier this week.

Moscow is further warning against Yerevan pursuing closer relations with the European Union as well. The Kremlin slammed Zelensky being hosted there, right in Russia’s own backward, as “incomprehensible”.

“Russian society, with deep indignation and bewilderment, not only saw but remembered that Armenia, which we are used to considering a friendly, brotherly country, served as a platform. For whom? For a terrorist,” Foreign Ministry spokeswoman Maria Zakharova said Thursday.

“The current, illegitimate Kyiv regime has been issuing threats to strike Moscow during the annual parade on May 9, a day sacred to our peoples… And no one in Armenia’s current leadership rebuked Zelensky. So whose side of history are you on?” she posed.

“Such a course by the Armenian authorities will sooner or later lead to Yerevan’s irreversible involvement in Brussels’ anti-Russian line, with all the ensuing political and economic consequences for Armenia,” she said.

However, Armenian Prime Minister Nikol Pashinyan has responded to the pressure, stating: “Back in 2022-2023 I already stated that, on the issue of Ukraine, we are not an ally of Russia.”

He is also reportedly refusing to attend Moscow’s Victory Day parade on Saturday, saying he needs to stay in his country in order to prepare for parliamentary elections scheduled for June 7.

Armenia has long been a key member of the regional Russian-led bloc, the Collective Security Treaty Organization (CSTO). However, Armenia froze its participation since 2024, outraged over Russia’s failure to protect ethnic Armenians during Azerbaijan’s 2023 takeover of Nagorno-Karabakh.

Russia since played a ‘peacekeeping’ role with some limited troop deployments, however, Armenian Christians had already been booted from the ancient enclave.

Russian MFA tells Armenian ambassador: UNACCEPTABLE to provide platform for Zelensky to voice TERRORIST threats against Russia

VIDEO: Zelensky meeting Armenia’s Pashinyan in Yerevan on Monday pic.twitter.com/AfyL0J8bqO

— RT (@RT_com) May 7, 2026

So relations have been fraying, to say the least. PM Pashinyan made clear Thursday: “We have sent humanitarian aid to Ukraine, and I have said that we are not allies of Russia on the issue of Ukraine.”

Authored by Kit Knightly via Off-Guardian.org,

From July of this year, every vehicle registered in the European Union will be required to have driver-monitoring cameras in place. That’s not every new car manufactured, but every car registered.

The “Advanced Driver Distraction Warning” (ADDW) cameras are designed to monitor driver behaviour for signs of potential distraction, and then set off a warning if those signs are detected.

It was first announced in 2024 as part of the EU’s “Vision Zero” plan to eliminate car-related deaths by 2050.

But it’s not really about that.

It’s never about what they say it’s about.

Here’s where this goes…

Firstly, kiss successful insurance claims goodbye.

Any accident will be blamed on “sub-optimal driver performance”, and that time you checked your phone while stopped at a light, or your hands moved briefly from the 10-and-2 or your eyeline wasn’t correctly picked up by the mirror sensor, will be used to blame your fender-bender on you.

This will create a change in accident reporting statistics, spiking “driver error” as the cause for anything and everything that goes wrong on the road.

This, in turn, will kick off a big “people drive dangerously” propaganda push.

Headlines like “ADDW data harvesting has shown up 80% of us might be driving more recklessly than we think”, or “most veteran drivers slip in to bad habits, reports show” will appear.

Then comes the new legislation to act on this totally fabricated problem.

What is it? It’s re-certification.

That’s not speculation; it already happened. Under new EU rules, passed just a few months ago, every driver has to be re-certified and issued a new driver’s license after 15 years. It would be the smallest of tweaks to add “or after Y number of distraction warnings are recorded” to that legislation.

The new driver’s licenses will be digital, with biometrics included. It’s possible new cars will be undrivable without a scan of your biometric license.

Your car’s data will be uploaded to a database, of course. That’s going to happen.

…in fact, it already is.

It’s not at all far-fetched to imagine your driver monitoring data getting scanned for errors by an AI, and any detected errors putting points on your license. If you go over a certain number of points, your ability to drive is taken away…pending recertification.

You can appeal, and drive while the appeal takes place. But the appeal fee will be greater than the recertification fee, and if you lose, you have to pay extra legal costs, and you’re subject to an extended driving ban.

This will be covered in the press as a universally Good Thing.

Headlines will celebrate the (almost entirely fictional) decrease in traffic fatalities, whilst baselessly claiming that the smaller number of private vehicles on the road has “improved pollution levels in the inner cities”.

An opinion piece from an anonymous “former driver” will appear in the Guardian, “I lost my driver’s license, and it’s the best thing that ever happened to me”.

It will talk up how much money they’re saving on petrol and road tax, and how much fitter they get walking and cycling everywhere and how they know their neighbours so well now.

Not forgetting all sorts of cozy anecdotes about the charming characters you meet and life-affirming tableaux you witness using public transport.

Meanwhile, American “journalists” will wax poetic about the EU’s “forward-thinking system”, and the UK press and punditry will talk of “lagging behind the EU”, and blame every road accident on Brexit.

Some academics will publish a paper finding that “private car ownership has decreased under EU driver monitoring regulations”, and this “unintended upside” will be widely applauded.

Cue Buzzfeed: “New license rules have taken cars off the road, and it’s a good thing.”

And Vox: “The EU’s driver’s license law has given us a glimpse of what a car-less future could look like, and it’s beautiful”.

While all this is going on, there will be persistent white noise on the safety of “robot drivers” vs human drivers, talking up automatic driving software in Chinese electric cars and so on.

Public transport will be increasingly automated too – whether really automated, or just remotely driven doesn’t matter. The point will be to remove images of people driving from the public sphere.

The important part is you don’t get to decide where you’re going or how you’re getting there.

The end goal will be to inculcate a generally anti-car atmosphere, where even knowing how to drive will be considered somewhat old-fashioned.

Middle-class parents will boast to social media echo chambers that “I never wanted my Jacinda to learn!”, and receive bot-fueled applause as a reward. Implausible self-congratulatory anecdotes detailing how “My eight-year-old just told me he doesn’t want to drive because it’s bad for the planet! Children are so wise!” will go viral.

Because the easiest way to trap people is to make freedom uncool.

That might seem like a lot of speculation based on a little information, and in some ways it is, but pattern recognition is important. It’s much easier to put out a fire that hasn’t started yet, and we know they want to burn it all down.

We know they want to end private vehicle ownership; they have repeatedly said so.

Well, this is how they do that. A little at a time, creating atmospheres and environments. Seemingly arbitrary rules and regulations with “unforeseen consequences”. That’s how they work now, they come at us sideways with slow-developing long-cons, because they can’t afford to work in straight lines, not since Covid.

Stuff like this might seem a small – a throwaway issue vs war or the price of oil – but the powers-that-shouldn’t-be have an eye on the far horizon when they take small steps, and we should pay attention to where they want to take us.

Just another day in private credit paradise… er, hell. 

One day after Gundlach repeated his warning that the private credit crisis will end in tears for bagholders, Blackrock cut the value of its publicly-traded private credit fund by about 5%, as it – like most of its peers – struggled under the weight of troubled loans, markdowns and lower returns.

BlackRock TCP Capital Corp., a publicly traded middle-market lending fund, said markdowns totaled $35 million in the quarter ended March 31, according to a statement on Thursday. Amusingly, and in hopes of redirecting attention, the $1.5 billion fund highlighted “improving credit quality,” and said it invested more in senior debt and strengthened its balance sheet. The fund said its dividend, which was cut to 17 cents a share last quarter, would remain flat.

The fund has been a challenge for BlackRock, the world’s largest asset manager with about $14 trillion in assets, which is expanding aggressively into private credit. BlackRock acquired specialist manager HPS Investment Partners last year for about $12 billion, aiming to significantly expand its existing capabilities and legacy funds, including TCPC.

The TCPC fund said in January that it cut the net asset value of its assets by 19%, which sent shares tumbling. The fund has struggled in part due to exposure to e-commerce aggregators – companies that buy and manage Amazon.com Inc. sellers – as well as troubled home improvement company Renovo Home Partners, which filed for bankruptcy. Back in March, we reported that Blackrock slashed the value of one of its private loans from par to 0 in just months, Infinite Commerce Holdings, sparking a selloff in the shares as the market was stunned by how quickly a loan from the world’s most iconic asset manager can go from par to 0 in just days.

“While we have made meaningful progress, we recognize there is more work to do and we remain focused on disciplined execution,” Chief Executive Officer Phil Tseng said on a call with analysts.

Loans on non-accrual status – typically meaning borrowers have missed their debt payments – declined to 7.6% on a cost basis, compared with 9.7% in the prior quarter. That’s because one of its portfolio loans was sold, and two were restructured. Investments in 13 portfolio companies were on non-accrual status.

Tseng said the largest driver of the markdowns was an investment in Job and Talent, a staffing and recruitment company that suffered from weak performance in the quarter. Almost a third of the markdowns came from software-related investments, he said.

Lenders in the $1.8 trillion private credit market have been under scrutiny as advancements in artificial intelligence threaten to upend their bets on software, an industry that makes up a significant portion of lenders’ portfolios. 

Elsewhere, the last big private credit fund we were waiting to report its redemption gates, did just that: Golub Capital announced it was capping withdrawals from its private credit fund after investors sought to pull 8.5% of shares, the latest instance of a money manager restricting outflows amid a wave of redemption requests.

Golub Capital Private Credit Fund, or GCRED, plans to enforce the quarterly withdrawal limit of 5% of common shares outstanding, according to a letter to shareholders on Thursday. The roughly $9.9 billion fund intends to fulfill repurchase requests for 8,891,200 shares.

The credit manager told investors that the redemption requests “were concentrated in a small subset representing approximately 5% of GCRED’s more than 12,000 shareholders.” Golub also cited roughly 14 million in new share subscriptions this year through the end of April. 

GCRED has a liquidity cushion of approximately $4.1 billion and its portfolio consists of nearly $10 billion in total investments at fair value, the firm said. As of the end of the first quarter, less than 0.1% of GCRED’s investment portfolio was on non-accrual status. 

None of that mattered in the, and Golub has now joined every single one of its BDC peers in gating its investors. The silver lining, unlike such disasters as the two big Blue Owl BDCs (OTIC and OCIC), which saw investors try to pull 41% and 22% of their capital respectively – and were obviously gated – Golub’s tally was only 8.5%, which in this age where double digit redemptions requests are the normal, is downright respectable.

 

 

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After the close on Thursday, the Court of International Trade (CIT) ruled to invalidate Trump’s latest set of universal 10% tariff imposed two months ago under Sec. 122. The administration will quickly appeal this decision before it takes effect May 12. If the case follows the same pattern as the challenge to the IEEPA tariffs last year, a higher court might soon stay this ruling and leave the tariffs in place pending a longer review.  

As the tariffs are due to expire July 24, even if the Supreme Court (SCOTUS) eventually rules against these tariffs, there is a good chance a full judicial review will take long enough that the tariffs will remain in effect until the administration replaces them with new tariffs under Sec. 301 (unfair trade practices) and Sec. 232 (national security).

As a reminder, Section 122 tariffs were always a stopgap: by statute, they can only be in place for 150 days, so they’ll expire on July 24, 2026. Investigations by the US Trade Representative under Section 301 are widely expected to wrap up before then, clearing the way for permanent replacement tariffs.

That said, if the ruling survives appeal, the government will likely have to refund unlawfully collected duties, adding to the nearly $170 billion already owed as a result of the Feb. 20 decision.

Key Points: 

1. The CIT ruling was a split decision, with two Democratic-appointed judges granting summary judgment against the administration’s position and one Republican-appointed judge dissenting, favoring a full review of the case instead. This is in contrast to the CIT’s earlier ruling last year, in which a panel of one Democratic- and two Republican-appointed judges unanimously granted summary judgment against the IEEPA tariffs. 

2. The CIT ruling gives the administration 5 days to rescind the tariffs, and requires that importers be paid refunds plus interest. We expect the administration to immediately appeal the ruling to the Court of Appeals for the Federal Circuit (CAFC), as it did following the CIT’s IEEPA ruling. In that instance, the CAFC stayed the CIT ruling within a day, leaving the tariffs in effect, and then took 3 months to rule on the case. That ruling was then appealed to SCOTUS, which took another 6 months to rule. As the Sec. 122 tariffs expire July 24 and cannot be extended without an act of Congress, an eventual SCOTUS ruling against these tariffs looks unlikely to come before expiration. That said, if courts ultimately rule against the use of Sec. 122 to impose these tariffs after they have expired, importers could collect refunds beyond IEEPA refunds they will start to receive in coming days.

3. The Sec. 122 tariffs are worth slightly more than 4% on the effective tariff rate (this is lower than the 10% headline rate due to exemptions for products and most imports from Canada and Mexico), and account for slightly less than half of the new tariffs since the start of 2025 that remain in effect. They are likely generating customs duty collections of around $11-12bn per month (not annualized), or around $55-60bn total if they remain in effect for the full 5 months. 

4. Regardless of how courts ultimately decide this case, the ruling should have no bearing on the administration’s longer-term ability to impose tariffs under Sec. 232 (national security) or Sec. 301 (unfair trade practices), which the White House has signaled will replace the Sec. 122 tariffs. The authority to impose tariffs under those laws is well-tested, unlike the IEEPA and Sec. 122 tariffs, and customs duties have been collected continuously under both authorities since the first Trump administration. 

5. The US Trade Representative is currently conducting investigations under the Section 301 trade enforcement authority. These investigations are widely seen as setting the stage for permanent replacement levies that will largely replicate the tariff rates in place before the Feb. 20 court ruling.

6. The court limited relief to three plaintiffs representing a small fraction of total US imports. Other importers may now bring suit, but we expect the administration to quickly appeal and seek a stay of the ruling. The split decision invalidating the tariffs is relatively narrow.

• If the ruling stands, relief is limited to the importers who brought suit — two private firms and Washington State. The court dismissed claims from other non-importer parties for lack of standing. Additional importers could — and likely will — seek relief with their own lawsuits.
• The court also sidestepped the broader question of whether the US currently faces a “fundamental international payments problem”, the authorized purpose of Section 122. Instead, it found the administration’s stated justification — trade and current account deficits — was not an appropriate stand-in.