PARIS — One of French President Emmanuel Macron’s top political allies is under fire over respect for the rule of law after he fired a high-ranking official at the country’s most powerful constitutional body. The head of France’s Constitutional Council, Richard Ferrand, one of the president’s closest confidants, dismissed the institution’s secretary general, Aurélie Bretonneau, just a year after she was appointed.  In an internal email sent late on March 23 and seen by POLITICO, Bretonneau said Ferrand had “informed [her] that he has proposed to the President of the Republic that [she] step down from [her] position due to differences of opinion on the conduct of the institution.” The move triggered strong reactions from top French political officials and legal scholars. Aurélien Rousseau, a former health minister in Macron’s government and now a center-left MP, said on X that the move was “worrying” and highlighted the “flippancy with which our institutions are treated.” Green MEP David Cormand posted: “It is a problem that a member of a particular clan has been appointed to head our country’s highest constitutional body,” adding that such actions undermine French democracy and institutions. Ferrand’s appointment by Macron last year was criticized as an attempt to politicize the independent institution, which has the power to rule on whether legislation passed by the National Assembly is in accordance with the constitution. Ferrand, a former president of the National Assembly, has limited legal training and was one of Macron’s earliest supporters. The Constitutional Council rules on legal challenges and oversees elections. Its members don’t need to be trained judges or lawyers.  Four people within the institution confirmed to POLITICO that Ferrand had decided to fire Bretonneau. “Differences of opinion” between Ferrand and Bretonneau had emerged in recent months, particularly “on the role of the law”, said two of the officials, who were granted anonymity to discuss a sensitive issue. According to one of the officials, the disagreements between Ferrand and Bretonneau reached their peak near the end of last year when, amid a spiralling budgetary crisis, the government contemplated the possibility of passing fiscal legislation via executive action. Bretonneau sent out an internal memo arguing that a budget passed by the government through executive action could not include amendments on what had already been drafted, a ruling that would have tied the government’s hands during a period of tense negotiations with opposition parties. She also argued that the Constitutional Council did not have the authority to review the legislation. Her conclusions reportedly upset Ferrand. Ferrand did not respond to POLITICO’s request for comment on Monday. Bretonneau also declined to comment. “Aurélie Bretonneau is not the type of person to compromise on the defense of the rule of law, the rigour of legal reasoning or the independence of the institution,” a senior civil servant told POLITICO. “If that’s what bothered her, it’s a major problem.” Bretonneau’s appointment had been directly approved by Ferrand.

PARIS — C’est un petit séisme rue de Montpensier, siège du Conseil constitutionnel. Sa secrétaire générale, Aurélie Bretonneau, a été remerciée par Richard Ferrand, a appris POLITICO auprès de quatre sources internes. Dans un courriel envoyé en interne lundi 23 mars en fin de journée — et que POLITICO a pu consulter — Aurélie Bretonneau indique : “Le président Ferrand m’a annoncé avoir proposé au président de la République de mettre fin à mes fonctions en raison de divergences de vues sur la conduite de l’institution.” Ce limogeage inattendu doit désormais être officialisé par un décret en Conseil des ministres. Si les relations entre le président et sa secrétaire générale n’étaient pas au beau fixe d’après deux sources internes, aucun signe avant-coureur ne laissait présager une telle décision. Celle-ci surprend d’autant plus que la nomination d’Aurélie Bretonneau, fin mars 2025, avait été validée par Richard Ferrand, tout juste installé à la tête du Conseil constitutionnel. DES TENSIONS SUR LES ORDONNANCES Entre les deux, des “divergences” ont toutefois émergé ces derniers mois, notamment “sur la place du droit”, d’après deux sources internes. Selon l’une d’elles, des tensions sont apparues à la fin de l’année dernière. Le gouvernement envisageait alors de recourir aux ordonnances pour faire adopter son budget. Un débat entre spécialistes a rapidement émergé sur la compétence de la Rue de Montpensier dans pareil cas. La secrétaire générale a détaillé sa position dans une note, estimant d’une part que le contrôle du texte reviendrait au Conseil d’Etat et non au Conseil constitutionnel et d’autre part que ces ordonnances devaient se borner à la copie initiale présentée par le gouvernement, et donc sans la possibilité de conserver des amendements. Deux points dont le sens a déplu à Richard Ferrand. “Aurélie Bretonneau n’est pas du genre à transiger sur la défense de l’Etat de droit, ni sur la rigueur du raisonnement juridique, ni sur l’indépendance de l’institution. Si c’est cela qui a dérangé, c’est un problème majeur”, confie une haute fonctionnaire, qui dit son “immense perplexité”. Après trois années comme numéro deux du Secrétariat général du gouvernement, cette conseillère d’Etat avait succédé à Jean Maïa, qui avait épaulé Laurent Fabius pendant près de huit ans comme secrétaire général. A ce poste stratégique, elle pilotait le travail juridique de l’institution, supervisait l’instruction des dossiers et veillait à la solidité des décisions rendues rue de Montpensier. Contacté lundi soir, Richard Ferrand n’a pas répondu à l’heure où nous publions ces lignes. Aurélie Bretonneau n’a pas non plus souhaité commenter.

Listen on * Spotify * Apple Music * Amazon Music Nach dem Wahldebakel der SPD in Rheinland-Pfalz steht die Koalition mit dem Rücken zur Wand. Friedrich Merz, Bärbel Bas und Lars Klingbeil haben sich auf eine Flucht nach vorn verständigt: den Weg der schmerzhaften Reformen. Gordon Repinski präsentiert das inoffizielle „Inspirationspapier“ von POLITICO mit radikalen Vorschlägen für Deutschland – vom Rentenrealismus über eine echte Steuerreform bis hin zur mutigen Zusammenlegung von Ministerien. Ist Schwarz-Rot bereit, den eigenen Funktionären und den Wählern echte Kompromisse abzuverlangen? Während die Sozialdemokratie weiter wankt, blickt SPD-Spitzenkandidat Armin Willingmann in Sachsen-Anhalt auf die nächste Schicksalswahl. Im 200-Sekunden-Interview spricht er über die „bedingt hilfreiche“ Performance aus Berlin, warum er rollende Köpfe an der Parteispitze derzeit für kontraproduktiv hält und wie er die Arbeiter im Osten mit einer Politik für die Mitte zurückgewinnen will. Bei den Liberalen ist die nächste Krisenstufe gezündet: Nach dem Verschwinden aus den Umfragen im Südwesten soll im Mai die komplette Parteispitze neu gewählt werden. Rixa Fürsen analysiert das personelle Vakuum: Kann Christian Dürr seinen Posten halten oder schlägt jetzt die Stunde von Marie-Agnes Strack-Zimmermann und dem NRW-Landeschef Henning Höne? Das Berlin Playbook als Podcast gibt es jeden Morgen ab 5 Uhr. Gordon Repinski und das POLITICO-Team liefern Politik zum Hören – kompakt, international, hintergründig. Für alle Hauptstadt-Profis: Der Berlin Playbook-Newsletter bietet jeden Morgen die wichtigsten Themen und Einordnungen. ⁠Jetzt kostenlos abonnieren.⁠ Mehr von Host und POLITICO Executive Editor Gordon Repinski: Instagram: ⁠@gordon.repinski⁠ | X: ⁠@GordonRepinski⁠. POLITICO Deutschland – ein Angebot der Axel Springer Deutschland GmbH Axel-Springer-Straße 65, 10888 Berlin Tel: +49 (30) 2591 0 ⁠information@axelspringer.de⁠ Sitz: Amtsgericht Berlin-Charlottenburg, HRB 196159 B USt-IdNr: DE 214 852 390 Geschäftsführer: Carolin Hulshoff Pol, Mathias Sanchez Luna **(Anzeige) Eine Nachricht der PKV: Hätten Sie’s gedacht? Vom jährlichen 15,5-Milliarden-Euro-Mehrumsatz der Privatversicherten profitiert das gesamte Gesundheitswesen. Denn neben den Haus- und Fachärzten kommen die höheren Honorare auch den zahnärztlichen Praxen zugute, dem Arzneimittelbereich oder Therapeutinnen. So stützt die PKV die medizinische Versorgung in Deutschland zugunsten aller – auch der gesetzlich Versicherten. Mehr auf pkv.de**

LONDON — Keir Starmer’s keeping Britain out of the war in Iran — but he can’t duck the conflict’s grave economic consequences. In a sign of growing fears about the impact of the war on Britain, the prime minister chaired a rare meeting of the government’s emergency COBRA committee Monday night, joined by senior ministers and Governor of the Bank of England Andrew Bailey. Starmer’s top finance minister, Rachel Reeves, will update the House of Commons on the economic picture Tuesday, as an already-unpopular administration worries that chaos in the Middle East is shredding plans to lower the cost of living and get the British economy growing. For Starmer’s government — headed for potentially brutal local elections in May — the crisis in the Gulf risks a nightmare combination of a rise in energy prices, interest rates, inflation and the cost of government borrowing that threatens to undermine everything he’s done since winning office. Economists are now warning that even if Donald Trump’s promise of a “complete and total resolution of hostilities” with Iran were to bear fruit, the effects on the British economy could still last for months. Already there are signs of a split within Starmer’s party over how to respond. Labour MPs want the government to think seriously about action to protect households — but Starmer and Reeves have long talked up the need for fiscal responsibility, and economics are warning that there’s little room for maneuver. Fuel prices displayed at a Shell garage in Southam, Warwickshire on March 23, 2026. | Jacob King/PA Images via Getty Images Jim O’Neill, a former Treasury minister who served as an adviser to Reeves, told POLITICO the government should “not get sucked into reacting to every external shock” and “concentrate on boosting our underlying growth trend.” WHY THE UK IS SO HARD HIT Just before the outbreak of war, there was reason for Starmer and Reeves to feel quietly optimistic about the long-stagnant British economy. The Bank of England had expected inflation to fall back sustainably toward its two percent target for the first time in five years, giving the central bank the space to carry on cutting interest rates.  With the Iran war in full flow, it was forced to rewrite those forecasts at the Monetary Policy Committee’s meeting last week — and now sees inflation at around 3.5 percent by the summer. The U.K. is a big net importer of energy and also needs constant imports of foreign capital to fund its budget and current account deficits. That’s made it one of first targets in the financial markets’ crosshairs. The government’s cost of borrowing has risen by more than half a percentage point over the last month. That threatens both the real economy and Reeves’ painstakingly-negotiated budget arithmetic. Higher inflation means higher interest rates and a higher bill for servicing the government’s debt: fiscal watchdog the Office for Budget Responsibility estimates a one-point increase in inflation would add £7.3 billion to debt servicing costs in 2026-2027 alone. The effect on businesses and home owners is also likely to be chilling. Britain’s banks are already repricing their most popular mortgages, which are tied to the two-year gilt rate. Hundreds of mortgage products were pulled in a hurry after the MPC meeting last week, something that will hit the housing market and depress Reeves’ intake from both stamp duty and capital gains. Duncan Weldon, an economist and author, said: “Even if this were to stop tomorrow, the inflation numbers and growth numbers are going to look materially worse throughout 2026. “If this continues for longer… it’s an awful lot more challenging and you end up with a much tougher budget this autumn than the government would have been hoping to unveil.” DECISION TIME The U.K.’s economic plight presents an acute political headache for Starmer, as he faces a mismatch between his own party’s expectations about the government’s ability to help people and his own scarce resources. Energy Secretary Ed Miliband has promised to keep looking at different options for some form of assistance to bill-payers hit by an energy price shock. A pain point is looming in July, when a regulated cap on energy costs is due to expire and bills could jump significantly. One left-leaning Labour MP, granted anonymity to speak frankly, said: “They [ministers] need to be treating this like a financial crisis. They need plans for multiple scenarios with clear triggers for government support.” A second MP from the 2024 intake said “it’s right that a Labour government steps in, particularly to help the most vulnerable.” Foreign Secretary Yvette Cooper and Chancellor of the Exchequer Rachel Reeves at the first cabinet meeting of the new year at No. 10 Downing St. on Jan. 6, 2026 in London, England. | Pool photo by Richard Pohle via Getty Images This demand for action is being felt in the upper echelons of the party too, as Culture Secretary Lisa Nandy recently argued Reeves’ fiscal rules — seen as crucial in the Treasury to reassure the markets — may need to be reconsidered if prices continue to rise and a major support package is needed.  One Labour official said there are clear disagreements with Labour over how to go about drawing up help and warned “the fiscal approach is going to be a massive dividing line at any leadership election.” The same official pointed to recent comments by former Starmer deputy — and likely leadership contender — Angela Rayner about the OBR, with Rayner accusing the watchdog of ignoring the “social benefit” of government spending. Despite the pressure, ministers have so far restricted themselves to criticizing petrol retailers for alleged profiteering, and have been flirting with new powers for markets watchdog the Competition and Markets Authority. The government said Reeves would on Tuesday set out steps to “help protect working people from unfair price rises,” including a new “anti-profiteering framework” to “root out price gouging.” But Starmer signaled strongly in an appearance before a Commons committee Monday evening that he was not about to unveil any wide-ranging bailout package, telling MPs he was “acutely aware” of what it had cost when then-Prime Minister Liz Truss launched her own universal energy price guarantee in 2022.  O’Neill backed this approach, saying: “I don’t think they should do much… They can’t afford it anyhow. The nation can’t keep shielding people from external shocks.” Weldon predicted, however, that as the May elections approach and the energy cap deadline draws nearer, the pressure will prove too much and ministers could be forced to step in. The furlough scheme rolled out during the pandemic to project jobs and Truss’s 2022 intervention helped create “the expectation that the government should be helping households,” he said. “But it’s incredibly difficult. Britain’s growth has been blown off-course an awful lot in the last 15 years by these sorts of shocks.” Geoffrey Smith, Dan Bloom, Andrew McDonald and Sam Francis contributed to this report.

BERLIN — German Defense Minister Boris Pistorus will spend next week touring the Indo-Pacific with a passel of corporate chiefs in tow to make deals across the region. It’s part of an effort to mark a greater impact in an area where Berlin’s presence has been minor, but whose importance is growing as Germany looks to build up access to natural resources, technology and allies in a fracturing world. “If you look at the Indo-Pacific, Germany is essentially starting from scratch,” said Bastian Ernst, a defense lawmaker from Chancellor Friedrich Merz’s Christian Democrats. “We don’t have an established role yet, we’re only just beginning to figure out what that should be.” Pistorius leaves Friday on an eight-day tour to Japan, Singapore and Australia where he’ll be aiming to build relations with other like-minded middle powers — mirroring countries from France to Canada as they scramble to figure out new relationships in a world destabilized by Russia, China and a United States led by Donald Trump. “Germany recognizes this principle of interconnected theaters,” said Elli-Katharina Pohlkamp, visiting fellow of the Asia Programme at the European Council on Foreign Relations. Berlin, she said, “increasingly sees Europe’s focus on Russia and Asia’s focus on China and North Korea as security issues that are linked.” The military and defense emphasis of next week’s trip marks a departure from Berlin’s 2020 Indo-Pacific guidelines, which laid a much heavier focus on trade and diplomacy. Pistorius’ outreach will be especially important as Germany rapidly ramps up military spending at home. Berlin is on track to boost its defense budget to around €150 billion a year by the end of the decade and is preparing tens of billions in new procurement contracts. But not everything Germany needs can be sourced in Europe. Australia is one of the few alternatives to China in critical minerals essential to the defense industry. It’s a leading supplier of lithium and one of the only significant producers of separated rare earth materials outside China. Australia also looms over a key German defense contract. Berlin is considering whether to stick with a naval laser weapon being developed by homegrown firms Rheinmetall and MBDA, or team up with Australia’s EOS instead. That has become a more sensitive political question in Berlin. WELT, owned by POLITICO’s parent company Axel Springer, reported that lawmakers had stopped the planned contract for the German option, reflecting wider concern over whether Berlin should back a domestic system or move faster with a foreign one. That means what Pistorius sees in Australia could end up shaping a decision back in Germany. TALKING TO TOKYO Japan offers something different — not raw materials but military integration, logistics and technology.  Pohlkamp said the military side of the relationship with Japan is now “very much about interoperability and compatibility, built through joint exercises, mutual visits, closer staff work, expanded information exchange and mutual learning.” She described Japan as “a kind of yardstick for Germany,” a country that lives with “an enormous threat perception” not only militarily but also economically, because it is surrounded by pressure from China, North Korea and Russia.  The Japan-Germany Acquisition and Cross-Servicing Agreement took effect in July 2024, giving the two militaries a framework for reciprocal supplies and services and making future port calls for naval vessels, exercises and recurring cooperation easier to sustain.  Pohlkamp said what matters most to Tokyo are not headline-grabbing deployments but “plannable, recurring contributions, which are more valuable than big, one-off shows of force.” But that ambition only goes so far if Germany’s presence remains sporadic. Bundeswehr recruits march on the market square to take their ceremonial oath in Altenburg on March 19, 2026. | Bodo Schackow/picture alliance via Getty Images Berlin has sent military assets to the region for training exercises in recent years — a frigate in 2021, combat aircraft in 2022, army participation in 2023, and a larger naval mission in 2024. But as pressure grows on Germany to beef up its military to hold off Russia, along with its growing presence in Lithuania and its effort to keep supplying Ukraine with weapons, the attention given to Asia is shrinking. The government told parliament last year it sent no frigate in 2025, plans none in 2026 and has not yet decided on 2027. Germany’s current military engagement in the Indo-Pacific consists of a single P-8A Poseidon maritime patrol aircraft, sent to India in February as part of the Indo-Pacific Deployment 2026 exercises.  Germany, according to Ernst, is still “relatively blank” in the region. What it can contribute militarily remains narrow: “A bit of maritime patrol, a frigate, mine clearance.” Pohlkamp said Germany’s role in Asia is still being built “in small doses” and is largely symbolic. But what matters is whether Berlin can turn occasional visits and deployments into something steadier and more predictable. The defense ministry insists that is the point of Pistorius’s trip. Ministry spokesperson Mitko Müller said Wednesday that Europe and the Indo-Pacific are “inseparably linked,” citing the rules-based order, sea lanes, international law and the role of the two regions in global supply and value chains.  The new P-8A Poseidon reconnaissance aircraft stands in front of a technical hangar at Nordholz airbase on Nov. 20, 2025. | Christian Butt/picture alliance via Getty Images The trip is meant to focus on the regional security situation, expanding strategic dialogue, current and possible military cooperation, joint exercises including future Indo-Pacific deployments, and industrial cooperation. That explains why industry is traveling with Pistorius.  Müller said executives from Airbus, TKMS, MBDA, Quantum Systems, Diehl and Rohde & Schwarz are coming along, suggesting Berlin sees the trip as a chance to widen defense ties on the ground. But any larger German role in Asia would have to careful calibrated to avoid angering China — a key trading partner that is very wary of European powers expanding their regional presence. “That leaves Germany trying to do two things at once,” Pohlkamp said. “First, show up often enough to matter, but not so forcefully that it gets dragged into a confrontation it is neither politically nor militarily prepared to sustain.”

BRUSSELS ― Two wars on Europe’s doorstep loomed over a 12-hour summit of EU leaders ― and for very different reasons they found themselves paralyzed rather than able to do much about either. Rarely has the bloc’s inability to take a lead on international affairs been so obvious. Between Germany’s Friedrich Merz, France’s Emmanuel Macron and Italy’s Giorgia Meloni ― heads of three of the world’s top 10 economies ― and the other 24 in attendance, they could only look the other way, squabble with each other, or offer little but words as the bombing, missile-firing and killing continued. “In these very troubled moments in which we are living, more than ever it’s decisive to uphold the international rules-based order,” European Council President  António Costa, who chaired the gathering in Brussels, told reporters. “The alternative is chaos. The alternative is the war in Ukraine. The alternative is the war in the Middle East.” And that speech was about as far as it went. As Tehran pounded its neighbors, disrupting Europe’s energy supplies, Kyiv attacked Russian factories repairing military planes, and Donald Trump in Washington joked about the Pearl Harbor attack alongside the Japanese prime minister, European leaders used their talks to tinker with the bloc’s carbon permit scheme, the Emissions Trading System. It’s not a wholly unrelated matter to the global energy shock, but hardly an issue where the continent could demonstrate its geopolitical might. On Iran, leaders found they had little leverage or will to make any significant intervention. On Ukraine, more than four years after Russia’s full-scale invasion ― a conflict where they do have leverage and they do have will ― they were unable to overcome internal divisions to approve sending €90 billion Kyiv’s way. There was “no willingness to get involved across the table” on the Iran conflict, said a senior European government official, granted anonymity like others quoted in this article to discuss the talks behind closed doors. German Chancellor Merz even complained that focusing on Iran risked shifting attention away from measures to boost Europe’s flagging economy — the summit’s original raison d’être before would affairs got in the way — according to three officials. “The world looked very different at Alden Biesen,” an EU official said, referring to last month’s competitiveness-focused meeting in a Belgian castle that was meant to set the stage for this summit. That was before Iran’s war and Ukraine’s funding dilemma, brought about by Hungarian Prime Minister Viktor Orbán going back on his promise to approve the loan, radically reshaped the agenda. NOT OUR WAR That’s not to say Iran was ignored completely. There was some renewed discussion about sending French warships to protect the Strait of Hormuz, the vital oil transit point that Tehran has effectively shut down by threatening to strike ships, potentially with backing from the U.N. Security Council. “We have begun an exploratory process, and we will see in the coming days if it has a chance of succeeding,” Macron said. But the summit’s final statement stopped short of pledging any new mission, referring only to strengthening existing EU naval operations in the region. Italian Prime Minister Giorgia Meloni at a press conference at the end of the European Council summit on March 19, 2026 in Brussels. | Pier Marco Tacca/Getty Images By the end of the talks, the EU’s leaders reached a sobering conclusion: Europe has little power or inclination to shape events. “Middle East impacts us a lot — but are we a player in the game?” an EU official who was party to the leaders’ discussions asked. “They’re trying to find a place in this debate and we have a lot of statements and positions [but] is there a role for Europeans for solving this process?” Evidently not, according to Kaja Kallas, the EU’s foreign policy chief, who warned leaders that “starting war is like a love affair — it’s easy to get in and difficult to get out,” according to two diplomats briefed on her remarks. Translation: This is not Europe’s war — and it’s not going to be. The EU was left with doing “what we always do,” an EU official said, writing “nice statements.” BURNING GAS FIELDS Europe already angered U.S. President Trump earlier this week when its top envoys rejected his call to secure the Strait of Hormuz. The summit’s final conclusions leaned heavily on familiar calls for “de-escalation” and “restraint,” without proposing concrete action, sticking to that earlier position. That’s despite Qatar warning Thursday it would not be able to fulfill its liquefied natural gas contracts with Belgium and Italy after Iran directed its wrath — and its ballistic missiles — over U.S.-Israeli strikes at the Gulf country, knocking out almost a fifth of its LNG export capacity. Yet rather than grapple head-on with the rapidly expanding energy shock, Europe’s leaders spent hours debating the bloc’s climate policy, including its ETS, which a group of countries are eager to reform. “To say ETS is the biggest issue when big gas fields are burning is a bit weird,” an EU official said. European Commission President Ursula von der Leyen said the consequences of the war extended far beyond the Middle East, adding its most “immediate impact” was on energy supply and prices. She announced a slate of emergency measures to lower costs, from lowering taxes to boosting investment in ETS. ‘JUST CRAZY’ If anything, the summit exposed where the wars in Iran and Ukraine overlap. In what could be his final EU gathering after 16 years if he loses next month’s election, Hungary’s Orbán slammed Europe’s approach to the unfolding energy crisis. “The behavior and the strategy that the Europeans have here is just crazy,” he said — adding the EU needed to buy Russian oil to “survive.” Orbán has blocked a €90 billion EU loan to Kyiv because of a dispute about a damaged pipeline carrying Russian oil through Ukraine to Hungary and other central European countries. For that reason, the bloc was similarly unable to offer much more than assurances on the Ukraine war either. Orbán maintained his opposition on Thursday and even won the sympathy of Meloni, who told leaders she understood his position. As frustration inside the room boiled over, many leaders sharply criticized the Hungarian premier, according to Swedish Prime Minister Ulf Kristersson. “I have never heard such hard-hitting criticism of anyone, ever,” he told reporters during a break in the talks. Merz concurred that leaders were “deeply upset” at Orbán. “I am firmly convinced that this will leave a lasting mark,” he said. But the pressure from his peers failed to sway Orbán and questions of the EU loan will roll on to another summit next month ― by which time Hungary could have a new leader, or at least an old one not desperate for votes. On Iran and on Ukraine, the EU didn’t get anywhere. Earlier predictions by diplomats that leaders might continue discussions through the night or even reconvene for a second day as the urgency of a world in turmoil forced them to face up to the challenges before them failed to materialize. Things were done and dusted before midnight. After 12 hours of few decisions, leaders were left with little new to tell people back home. “There are many things worrying about this war” in the Middle East, while Orban’s veto of the loan to Kyiv “is still there and we are extremely unhappy about this, and so of course is Ukraine,” Sweden’s Kristersson told reporters upon leaving the summit. And that was that. Zoya Sheftalovich, Nette Nöstlinger, Nicholas Vinocur, Gerardo Fortuna, Gabriel Gavin, Hans von der Burchard, Sonja Rijnen, Zia Weise, Seb Starcevic, Giorgio Leali, Hanne Cokelaere, Ferdinand Knapp, Milena Wälde, Aude van den Hove, Gregorio Sorgi, Koen Verhelst, Victor Jack, Ben Munster, Jacopo Barigazzi and Bartosz Brzezińksi contributed reporting.

BRUSSELS — EU leaders were supposed to spend Thursday mapping out how to boost Europe’s economy. Instead, they were left scrambling to deal with two wars, a deepening transatlantic rift and a standoff over Ukraine. Twelve hours of talks, a few showdowns and many, many coffees later, here’s POLITICO’s rapid round-up of what we learned at the European Council. 1) Viktor Orbán’s not a man for moving … The most pressing question ahead of this summit was whether Hungary’s prime minister could be convinced to drop his veto to the EU’s €90 billion loan for Ukraine. He wasn’t. The European Commission had attempted to appease Orbán in the days running up to the summit by sending a mission of experts to Ukraine to inspect the damaged Druzhba pipeline, which supplies Russian oil to Hungary and Slovakia. Orbán has argued that Ukraine is deliberately not addressing the issue, and tied that to his blocking of the cash. Asked whether he saw any chance for progress on the loan going into the summit, Orbán’s response was simple: “No.” Twelve hours later, that answer was much the same. 2) … But he does like to stretch his legs. In one of the most striking images to have come out of Thursday’s summit, the Hungarian prime minister stands on the sidelines of the outer circle of the room while the rest of the leaders are in their usual spots listening to a virtual address from Ukrainian leader Volodymyr Zelenskyy. Ukraine’s President Volodymyr Zelenskyy (on screen) speaks to EU leaders via video at the European Council summit in Brussels, March 19, 2026. | Pool photo by Geert Vanden Wijngaert/OL / AFP via Getty Images The relationship between the two has descended into outright acrimony after the Hungarian leader refused to back the EU loan and the Ukrainian leader made veiled threats — which even drew the (rare) rebuke of the Commission. Faced with Zelenskyy’s address, the Hungarian decided to vote with his feet. 3) The new kid on the block is happy to be a part of this European family, dysfunctional as it may be. This was the first leaders’ summit for Rob Jetten, the Netherland’s newly-installed prime minister. Ahead of the meeting, he said he was “very much looking forward to being part of this family.” His verdict after the talks? That leaders differ greatly in their speaking style, with some quite efficient while others take longer to get to the point — but he welcomed the jokes of Belgian’s Bart De Wever, “especially when the meeting has been going on for hours.” 5) Though not everyone was so charitable. Broadly speaking, Orbán digging in his heels did not go down well. Sweden’s prime minister told reporters after the summit that leaders’ criticism of the Hungarian in the room was “very, very harsh,” and like nothing he’d ever heard at an EU summit. Jetten said the vibe in the room with EU leaders was “icy” at points, with “awkward silences.”  6) The EU’s not giving up on the loan. Despite murmurs ahead of the talks of a plan B in the works, multiple EU leaders as well as Costa and Commission chief Ursula von der Leyen were adamant that the loan was the only way to go — and that it will happen, eventually. “We will deliver one way or the other … Today, we have strengthened our resolve,” von der Leyen. Costa added: “Nobody can blackmail the European Council, no one can blackmail the European Union.” Top EU diplomat Kaja Kallas arrives at the European Council summit on March 19, 2026. | Pier Marco Tacca/Getty Images 7) Kaja Kallas wants to avoid a messy entanglement. In her address to the bloc’s leaders, Kallas, the EU’s top diplomat, stressed the importance of not getting caught up in the conflict in the Middle East. “Starting war is like a love affair — it’s easy to get in and difficult to get out,” she said, according to two diplomats briefed by leaders on the closed-door talks. At the same time, Kallas reiterated the importance of the EU’s defending its interests in the region but said there was little appetite for expanding the remit of its Aspides naval mission, currently operating in the Red Sea. 8) But it was all roses with the U.N. U.N. Secretary-General António Guterres joined the Council for lunch, thanking them for their “strong support for multilateralism and international law.” In an an exclusive interview with POLITICO on the sidelines of the summit, Guterres applauded the restraint shown by the Europeans, despite Donald Trump’s anger at their refusal to actively support the war or help reopen the Strait of Hormuz, a critical maritime artery that Iran has largely sealed off, driving up global energy prices. 9) Kinda. One senior EU official told POLITICO that the lunch meeting was “unnecessary.” “With all appreciation for multilateralism and its importance … considering the role the U.N. is not playing in international crises right now, it is unnecessary,” said the official, granted anonymity to speak freely. 10) Celery is a very versatile vegetable. Also on the table while they picked over the future of the multilateral world order was a pâté en croûte with spring vegetables and fillet of veal with celery three ways. Three ways! And for dessert? A mandarin tartlet with cinnamon. 11) Cyprus and Greece want the EU to get serious about mutual defense. Cypriot President Nikos Christodoulides and Greek Prime Minister Kyriakos Mitsotakis asked the EU to think about a roadmap for acting on the bloc’s mutual defense clause, according to two EU diplomats and one senior European government official. The clause, Article 42.7, is the EU’s equivalent of NATO’s Article 5. Its existence and potential use has recently come into focus since British bases in Cyprus were attacked by drones. 12) And the Commission hopes it’s already got serious enough about migration. Von der Leyen said that while the EU has not yet experienced an increase in migrants as a result of the conflict in Iran, the bloc should be prepared. “There is absolutely no appetite … to repeat the situation of 2015 in the event of large migration flows resulting from the conflict in the Middle East,” said one national official. The Commission chief emphasized that the mistakes of the 2015 refugee crisis won’t happen again. 13) Von der Leyen likes to cross her Ts.   Speaking of emphasis — “temporary, tailored and targeted” was how von der Leyen described the EU’s short-term actions to minimize the impact on Europe of the recent energy price spikes after the U.S.-Israeli strikes on Iran. The moves will impact four components that affect energy prices: energy costs, grid charges, taxes and levies and carbon pricing, she said. 14) The ETS is here to stay — with some modifications. While EU leaders agreed to make some adjustments to the Emissions Trading System — the bloc’s carbon market — most forcefully backed the continuation of the system itself. “This ETS is a great success. It has been in place for 20 years and is a market-based and technology-neutral system. So we are not calling the ETS into question,” German Chancellor Friedrich Merz told reporters after the talks had concluded. While the Commission will propose some adjustments to the ETS by July, these are merely adjustments, not fundamental changes, the German leader said. In the run-up to the summit, some EU countries, including Italy, floated the idea of weakening the ETS to help weather soaring energy prices. 15) No matter what, EU leaders want to get home — ASAP. While Costa has so far ensured every European Council under his watch lasts only one day instead of the once-customary two, this time around, that goal was looking optimistic. However, at the end of the day, leaders’ dogged determination to get out of there prevailed (even if that meant kicking a discussion on the long-term budget to April). À bientôt!

LONDON — Britain will reduce its aid sent to Africa by more than half, as the government unveils the impact of steep cuts to development assistance for countries across the world. On Thursday the Foreign Office revealed the next three years of its overseas development spending, giving MPs and the public the first look at the impact of Labour’s decision to gut Britain’s aid budget in order to fund an increase in defense spending. Government figures show that the value of Britain’s programs in Africa will fall by 56 percent from the £1.5 billion in 2024/25 when Labour took office to £677 million in 2028/9. It follows the move to reduce aid spending from 0.5 to 0.3 percent of gross national income. However, the government did not release the details of the funding for specific countries, giving Britain’s ambassadors and diplomats time to deliver the news personally to their counterparts across the world ahead of any potential backlash from allies. Foreign Secretary Yvette Cooper told MPs that affected countries want Britain “to be an investor, not just a donor” and “want to attract finance, not be dependent on aid,” as she pointed to money her department had committed to development banks and funds which will help Africa raise money. The decision shows a substantial shift in the government’s focus, moving away from direct assistance for countries, and funneling much of the remaining money into international organizations and private finance initiatives. Chi Onwurah, chair of the All Party Parliamentary Group for Africa, told POLITICO that she was “dismayed at the level and extent of the cuts to investment in Africa and the impact it will have particularly on health and economic development.” She added: “I hope the government recognizes that security of the British people is not increased by insecurity in Africa and increased migration from Africa, quite the opposite.” Ian Mitchell from the Center for Global Development think tank noted the move was “a remarkable step back from Africa by the U.K.” NEW PRIORITIES Announcing the cuts in the House of Commons, Cooper stressed that the decision to reduce the aid budget had been “hugely difficult,” pointing to similar moves by allies such as France and Germany following the U.S. President Donald Trump’s decision to dramatically shrink America’s aid programs after taking office in January 2025. She insisted that it was still “part of our moral purpose” to tackle global disease and hunger, reiterating Labour’s ambition to work towards “a world free from extreme poverty on a livable planet.” Cooper set out three new priorities for Britain’s remaining budget: funding for unstable countries with conflict and humanitarian disasters, funneling money into “proven” global partnerships such as vaccine organizations, and a focus on women and girls, pledging that these will be at the core of 90 percent of Britain’s bilateral aid programs by 2030. A box with the Ukrainian flag on it awaits collection in Peterborough, U.K. on March 10, 2022. | Martin Pope/Getty Images Only three recipients will see their aid spending fully protected: Ukraine, the Palestinian territories and Sudan. Lebanon will also see its funding protected for another year. All bilateral funding for G20 countries will end. Despite the government’s stated priorities, the scale of the cuts mean that even the areas it is seeking to protect will not be protected fully. An impact assessment — which was so stark that ministers claimed they had to rethink some of the cuts in order to better protect focus areas such as contraception — published alongside the announcement found that there will likely be an end to programs in Malawi where 250,000 young people will lose access to family planning, and 20,000 children risk dropping out of school. “These steep cuts will impact the most marginalized and left behind communities,” said Romilly Greenhill, CEO of Bond, the U.K. network for NGOs, adding: “The U.K. is turning its back on the communities that need support the most.” Last-minute negotiations did see some areas protected from more severe cuts, with the BBC World Service seeing a funding boost, the British Council set to receive an uplift amid its financial struggles, and the Independent Commission for Aid Impact (ICAI) — the aid spending watchdog that had been at risk of being axed — continuing to operate with a 40 percent budget cut. GREEN THREAT Though the move will not require legislation to be confirmed — after Prime Minister Keir Starmer successfully got the move past his MPs last year — MPs inside his party and out have lamented the impact of the cuts, amid the ongoing threat to Labour’s left from a resurgent Green Party under new leader Zack Polanski. Labour MP Becky Cooper, chair of the APPG on global health and security said that her party “is, and always has been, a party of internationalism” but today’s plans would “put Britain and the world at risk.” Sarah Champion, another Labour MP who chairs the House of Commons international development committee said that the announcement confirmed that there “will be no winners from unrelenting U.K. aid cuts, just different degrees of losers,” creating a “desperately bleak” picture for the world’s most vulnerable. “These cuts do not aid our defense, they make the whole world more vulnerable,” she added. Her Labour colleague Gareth Thomas, a former development minister, added: “In an already unsafe world, cutting aid risks alienating key allies and will make improving children’s health and education in Commonwealth countries more difficult.” The announcement may give fresh ammunition to the Greens ahead of May’s local elections, where the party is eyeing up one of its best nights in local government amid a collapse in support for Labour among Britain’s young, progressive, and Muslim voters. Reacting to the news that Britain will cut its aid to developing countries aimed at combatting climate change, Polanski said: “Appalling and just unbelievably short-sighted. Our security here in the U.K. relies on action around the world to tackle the climate crisis.”

Listen on * Spotify * Apple Music * Amazon Music Der EU-Handelsausschuss hat für den Zolldeal mit den USA gestimmt, doch das Tauziehen ist noch nicht vorbei: Zwei Abgeordnete kämpfen als Delegation aus Brüssel in Washington um letzte Garantien. Joana Lehner und Jürgen Klöckner sprechen über das Finale und beleuchten zusammen mit einem US-Kollegen, ob Donald Trump den Deal als politischen Sieg im Inland verkaufen kann oder ob die deutsche Industrie weiterhin Milliarden an Zöllen verliert. Im Policy Talk begrüßen die beiden VDA-Präsidentin Hildegard Müller. Sie spricht über das „weinende und lachende Auge“ der Branche, die aktuelle Milliardenbelastung durch US-Zölle und die schwindende Wettbewerbsfähigkeit des Standorts Deutschland. Müller warnt: Wenn Europa wirtschaftlich schwach wird, verliert es im Spiel der Großmächte an Relevanz. In Berlin tobt derweil ein Ökonomen-Streit: Neue Studien vom ifo-Institut und dem IW Köln werfen der Regierung vor, große Teile des bisher eingesetzten Sondervermögens für Haushaltslöcher statt für neue Investitionen zu nutzen. Rasmus Buchsteiner berichtet Off the Record über das anfängliche Kommunikationsdebakel im Finanzministerium und die Frage, warum die versprochenen Bagger in den Kommunen noch immer nicht rollen. „Power & Policy“ zeigt jede Woche, wo und wie die Entscheidungen in der Wirtschaftspolitik fallen. ⁠Jürgen Klöckner⁠ und ⁠Joana Lehner⁠ von POLITICO sprechen mit Top-Entscheidern und liefern Off-the-Record-Einblicke aus der Redaktion und Machtzentren. Präzise Analysen, lange bevor Gesetze beschlossen sind. Der Podcast für alle in Wirtschaft und Politik, die einen Wissensvorsprung brauchen — immer donnerstags. Für Policy-Profis: Abonnieren und die Pro-Newsletter ⁠Industrie & Handel⁠, ⁠Energie & Klima ⁠und ⁠Gesundheit⁠. Jetzt kostenlos testen. Fragen und Feedback gern an ⁠powerandpolicy@politico.eu⁠ POLITICO Deutschland – ein Angebot der Axel Springer Deutschland GmbH Axel-Springer-Straße 65, 10888 Berlin Tel: +49 (30) 2591 0 ⁠information@axelspringer.de⁠ Sitz: Amtsgericht Berlin-Charlottenburg, HRB 196159 B USt-IdNr: DE 214 852 390 Geschäftsführer: Carolin Hulshoff Pol, Mathias Sanchez Luna

The Bank of England warned it may have to take a tougher line on interest rates as the spike in energy prices caused by the U.S.-Israeli war on Iran pushes inflation higher. “Monetary policy cannot reverse this shock” to world energy supply, Governor Andrew Bailey said in a statement on Thursday, after the Monetary Policy Committee voted unanimously to leave the Bank rate unchanged at 3.75 percent. “Monetary policy must, however, respond to the risk of a more persistent effect on U.K. consumer price inflation,” Bailey added. The Bank had only last month declared victory over inflation, which has been above its 2 percent target for over four years. However, its latest analysis suggests headline inflation will rebound back above 3 percent in the next three months and could add as much as 0.75 percentage points to the consumer price index over the summer, as higher fuel bills percolate through the economy. “The MPC is alert to the increased risk of domestic inflationary pressures through second-round effects in wage and price-setting, the risk of which will be greater the longer higher energy prices persist,” the Bank stressed. However, it also acknowledged that the energy price spike is likely to hurt economic growth, and that it is “assessing the implications for inflation of the weakening in economic activity that is likely to result from higher energy costs.” Until the U.S. and Israel attacked Iran, most analysts had predicted that a slowing economy and growing prospects of easing inflation would allow the MPC to cut rates at Thursday’s meeting. However, the invasion and the ensuing turmoil in world commodity markets have turned the situation on its head, by closing a vital chokepoint at the mouth of the Persian Gulf, through which irreplaceable volumes of oil, gas and fertilizer pass every day. As a result, the Bank warned that there is now a real threat of higher energy prices causing a broader rise in prices across the economy. Food prices face a similar risk. ALREADY OUT OF DATE? The situation is changing so fast that the Bank’s latest forecasts could already be out of date. The Bank said they were based on the situation as of March 16, when Brent oil futures were only at $100 a barrel. But a succession of strikes on key energy installations around the Persian Gulf since then has already pushed prices up by another 12 percent. “The news flow around the war in Iran looks more worrying for global markets with each passing day,” Deutsche Bank strategist Jim Reid said in a note on Thursday. Analysts argued ahead of the meeting that the Bank would prefer to err on the side of keeping policy tight in the face of the new risks, given lingering concerns about its credibility due to its slow response to the inflation shock in 2022. Inflation peaked at 11.1 percent back then, the highest rate posted by any major economy. The Bank’s change in outlook will make life doubly uncomfortable for the Labour government, which had hoped that its efforts to close the U.K. budget deficit would be rewarded with lower inflation and lower interest rates. Instead, the government’s key 10-year borrowing costs have risen by nearly half a percentage point since the war started, and they leaped again on Thursday, first in response to Iranian attacks on a Qatari gas field, then to the BoE’s statement. At 4.89 percent, the 10-year gilt yield is now at its highest in 15 months. The pound, by contrast, was steady against the dollar and euro after the decision. The Office for Budget Responsibility earlier this month already cut its forecasts for U.K. growth this year. That implies lower tax receipts which, combined with higher borrowing costs, threaten a new two-way squeeze on Chancellor Rachel Reeves’ fiscal arithmetic, less than six months after she had to raise taxes sharply at her latest budget.