LONDON — Emergency support to help Brits grappling with rising bills should go to “those who need it most,” Chancellor Rachel Reeves said Tuesday — all-but ruling out a Liz Truss-style universal bailout in response to the Iran war. Pledging to “learn the mistakes of the past,” Reeves told MPs Tuesday that, while “contingency planning” is underway for “every eventuality,” the government will be “responsible” with public finances in any new state intervention. Oil and gas prices have soared since the conflict began, leading to higher fuel prices in the U.K. and sparking fears of a sharp increase in family and business energy bills when a regulated price cap period ends in July. Reeves said that, while the full impact of the crisis is not yet known, “the challenges may be significant.” In response to the 2022 energy crisis sparked by Russia’s invasion of Ukraine, the government of then-Prime Minister Liz Truss subsidized the bill of every household in the country — a policy backed by the Labour Party at the time. But Reeves today criticized the “unfunded, untargeted” 2022 package, saying it had pushed up borrowing, interest rates and inflation. Between 2022 and 2024, households in the top income decile received an average £1,350 of direct energy bill support, Reeves said, contributing to national debt “still being paid today.” However, the chancellor stopped short of explicitly ruling out a similar approach. She said: “Contingency planning is taking place for every eventuality so that we can keep costs down for everyone and provide support for those who need it most, acting within our ironclad fiscal rules to keep inflation and interest rates as low as possible.” The government has already announced a £53 million package of support for households that use heating oil, which are not protected by the energy price cap. The majority of households that use gas and electricity will not see prices rise until July, when the next price cap period ends. The latest expert projections suggest the average annual bill could rise by more than £200 from current levels. On fuel pricing, Reeves said the government would give an update “within the next month,” amid pressure from opposition parties to extend a longstanding five pence tax relief on gasoline and diesel — the fuel duty cut — beyond its expiry date in September. U.K. gasoline prices have have risen by nearly 16 pence per liter since the war began, while diesel has risen by more than 31 pence.

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.

French far-right leader Marine Le Pen hailed Hungary’s Viktor Orbán for blocking a €90 billion EU loan for Ukraine. “I’d prefer it if we didn’t have to wait for other countries to take good decisions,” Le Pen told reporters on a trip to Budapest for a meeting of the Patriots for Europe group, of which her National Rally and Orbán’s Fidesz are members. Le Pen argued that France could no longer afford to support Ukraine’s war effort due to its high deficit and debt levels. “France is ruined, our public finances don’t allow us today to make loans we know won’t be reimbursed,” she said. “France has to become reasonable … and keep the money for French citizens.” Also in Hungary for the meeting are Dutch far-right leader Geert Wilders and Italy’s Deputy Prime Minister Matteo Salvini. Hungary goes to the polls on April 12, and the National Rally leader lent Orbán her firm backing on Monday on X, saying she was “very honored” to support him. On Saturday, Hungary held a European edition of the Conservative Political Action Committee (CPAC), which included a video message from U.S. President Donald Trump, who reiterated his “complete and total” backing for Orbán. Le Pen was not present at the CPAC gathering and said she wanted France to stay at a “distance” from the world’s great powers. “It doesn’t mean we don’t respect them, it just means we defend our interests and they defend theirs,” she said, adding that Trump’s tariff war against Europe proved why she needed to take this stance.

When Italy’s Prime Minister Giorgia Meloni attended her first European leaders’ summit in Brussels in December 2022, few would have expected her to become one of the most effective politicians sitting around the table four years later.   In fact, few would have expected that she’d still be there at all, as Italian leaders are famously short-lived. Remarkably, her right-wing Brothers of Italy party looks as rock solid in polls as it did four years ago, and she now has her eye on the record longest term for an Italian premier — a feat she is due to accomplish in September. A loss in what is set to be a nail-biting referendum on the bitter and complex issue of judicial reform on March 22 and 23 would be her first major set back — and would puncture the air of political invincibility that she exudes not only in Rome but also in Brussels. Meloni has thrived on the European stage, and has become adept at using the EU machinery to her advantage. Only in recent months, she has made decisive interventions on the EU’s biggest dossiers, such as Russian assets, the Mercosur trade deal and carbon markets, leveraging Italy’s heavyweight status to win concessions in areas like farm subsidies. Profiting from France’s weakness, Meloni is also establishing a strong partnership with German Chancellor Friedrich Merz — a double act between the EU’s No. 1 and No. 3 economies — to mold the bloc’s policies to favor manufacturing and free trade. CRASHING DOWN TO EARTH For a few more days, at least, Meloni looks like a uniquely stable and influential Italian leader. Nicola Procaccini, a Brothers of Italy MEP very close to Meloni and co-chair of the European Conservatives and Reformists (ECR) group, called the government’s longevity a “real novelty” in the European political landscape. “Until recently, Italy couldn’t insert itself into the dynamics of those that shape the European Union — essentially the Franco-German axis — because it lacked governments capable of lasting even a year,” said the MEP. “Giorgia Meloni is not just a leader who endures; she is a leader who shapes decisions and influences the direction to be taken.” But critics of the prime minister said a failure in the referendum would mark a critical turning point. Her rivals would finally detect a chink in her armor and move to attack her record, particularly on economic weaknesses at home. The unexpected, new message to other EU leaders would be clear: She won’t be here for ever. Brando Benifei, an MEP in Italy’s center-left opposition Democratic Party, conceded that other EU leaders saw her as the leader of a “ultra-stable government.” But, if she were to lose the referendum, he argued “she would inevitably lose that aura.” “Everyone remembers how it ended for Renzi’s coalition after he lost his referendum,” Benifei added, in reference to former Democratic Party Prime Minister Matteo Renzi who resigned after his own failed referendum in 2016. MACHIAVELLIAN MELONI Meloni owes much of her success on the EU stage to canny opportunism. At the beginning of the year, she slyly spotted an opportunity — suddenly wavering on the Mercosur trade deal, which Rome has long supported — to win extra cash for farmers that would please her powerful farm unions at home. She held off from actually killing the agreement, something that would have lost her friends among other capitals. German Chancellor Friedrich Merz and Italy’s Prime Minister Giorgia Meloni at a signing ceremony during an Italy-Germany Intergovernmental Summit in Rome on Jan. 23, 2026. | Pool photo by Michael Kappeler/AFP via Getty Images The Italian leader “knows how to read the room very well,” said one European diplomat, who was granted anonymity to discuss European Council dynamics.   Teresa Coratella, deputy head of the Rome office at the think tank European Council on Foreign Relations, said Meloni had  “a political cunning” that allowed her to build “variable geometries,” allying with different European leaders by turn based on the subject under discussion. One of her first victories came on migration in 2023. She was able to elevate the issue to the top level of the European Council, and even managed to secure a visit by European Commission President Ursula von der Leyen to Tunisia, eventually resulting in the signing of a pact on the issue. Others wins followed.  Last December, with impeccable timing, Meloni unexpectedly threw her lot in with Belgium’s Prime Minister Bart De Wever at the last minute, scuppering a plan to fund Ukraine’s defenses with Russian frozen assets, instead pushing for more EU joint debt. Italian diplomats said that Meloni is a careful student, showing up to summits always having read the relevant documents, and having asking the apposite questions. That wasn’t always the case with former Italian prime ministers.  They said her choice of functionaries — rewarding competence over and above political affiliation — also helps. These include her chief diplomatic consigliere Fabrizio Saggio and Vincenzo Celeste, ambassador to the EU. Neither is considered close politically to Meloni.   Her biggest coup, though, has been shunting aside France as Germany’s main European partner on key files, with her partnership with Merz even being dubbed “Merzoni.” ROLLING THE DICE Meloni’s strength partly explains why she dared call the referendum. Italy’s right has for decades complained that the judiciary is biased to the left. It’s a feud that goes back to the Mani Pulite (Clean Hands) anti-corruption drive in the 1990s that pulverized the political elite of that time, and the constant court cases against playboy premier and media tycoon Silvio Berlusconi, father of the modern center-right. The proposal in the plebiscite is to restructure the judiciary. But it’s a high-stakes gamble, and why she called it seems something of a puzzle. The reforms themselves are highly technical — and by the government’s own admission won’t actually speed up Italy’s notoriously long court cases.    Prime Minister of Italy, Giorgia Meloni attends the European Council meeting on June 26, 2025 in Brussels. | Pier Marco Tacca/Getty Images Instead, the vote has turned into a more general vote of confidence in Meloni and her government. The timing is tough as Italians widely dislike her ally U.S. President Donald Trump and fear the war in Iran will drive up their already high power prices. Still, she is determined not to suffer Renzi’s fate and insists she will not step down even if she loses the referendum.  Asked at a conference on Thursday whether a loss would make Rome appear less stable in its dealings with other European capitals, Foreign Minister Antonio Tajani was adamant that the referendum has “absolutely nothing to do with the stability of the government.” “This government will last until the day of the next national elections,” he added. A victory on Monday will put the wind in her sails before the next general elections, which have to be held by the end of 2027. It would also set the stage for other reforms that Meloni wants to enact: a move to a more presidential system, with a direct election of the prime minister, making the role more like the French presidency.  But a loss would galvanize the opposition — split between the populist 5Star Movement, and the traditional center-left Democratic Party. The danger is her rivals would round on her particularly over the economy. Even counting for the fact Italy has benefitted from the largest tranche of the Covid-era recovery package — growth has been sluggish, consistently below 1 percent, falling to 0.5 percent in 2025.  “We have a situation in which the country is increasingly heading toward stagnation and we have to ask ourselves what would have happened if we had not had the boost of the Recovery Fund,” said Enrico Borghi, a senator from Italia Viva, Renzi’s party. Procaccini, however, defended her, both on employment and growth. “It could be better,” he conceded. “But we are still talking about growth, unlike countries that in this historical phase are recording a decline, as in the case of Germany.”

Listen on * Spotify * Apple Music * Amazon Music Vier Tage vor der Landtagswahl in Rheinland-Pfalz steht für die SPD weit mehr als nur eine Staatskanzlei auf dem Spiel. Nach dem Desaster im Ländle droht Ministerpräsident Alexander Schweitzer im Duell gegen Herausforderer Gordon Schnieder (CDU) der „Baden-Württemberg-Effekt“. Gordon Repinski analysiert, warum ein Verlust der Bastion Mainz die Bundes-SPD in eine existenzielle Depression stürzen würde und weshalb der Kurs der Parteispitze am Kernwähler vorbeigeht. Ausgerechnet zum zehnten Todestag von Guido Westerwelle kämpft die FDP um ihre nackte Relevanz. In Rheinland-Pfalz wird die Partei in Umfragen nicht einmal mehr ausgewiesen. Im 200-Sekunden-Interview spricht FDP-Chef Christian Dürr über den harten Reformkurs, die Irrelevanz-Urteile von Friedrich Merz und die Frage, warum seine Partei trotz des drohenden Landtags-Aus an ihren Überzeugungen festhalten muss. Neue Studien des Ifo-Instituts und des IW Köln belasten die Bundesregierung schwer. Ein Großteil des versprochenen Sondervermögens für Infrastruktur soll zweckentfremdet worden sein, um Haushaltslöcher zu stopfen. Rasmus Buchsteiner ordnet das ein und erklärt, wo das Finanzministerium mit seiner Entgegnung richtig liegt und was durch eine mögliche Verfassungsklage der Grünen droht. 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

FRANKFURT —  Germany’s government has redirected the bulk of funds originally earmarked for infrastructure into covering budget gaps, according to new reports from two leading research institutes — raising fresh doubts about Berlin’s ability to deliver on its long-promised investment drive. The findings — coming a year after German lawmakers approved historic constitutional reforms to unlock hundreds of billions of euros in borrowing — could expose Chancellor Friedrich Merz to fresh criticism that his government has failed to harness a €500 billion infrastructure and climate fund to revive Germany’s stagnating economy. The scale of the misallocation is striking, according to the reports. The Cologne-based German Economic Institute (IW) calculates that 86 percent of the funds were diverted, while the Ifo Institute puts the figure at an even more damning 95 percent. “We have found that policymakers have used almost all of the debt-financed funds for other purposes, namely, to cover budget shortfalls. This is a major problem,” said Ifo President Clemens Fuest. After two consecutive years of recession, Germany’s economy barely grew in 2025. It was widely expected to pick up speed in 2026, helped by public investment. But a rebound appears to have failed to materialize thus far.  New headwinds from the conflict in the Middle East will make any recovery even more contingent on effective government spending, analysts warn. The IW report calculated that, last year, the governing coalition of the Christian Democratic Union (CDU) and Social Democratic Party (SPD) in Berlin tapped just 42 percent of funds originally earmarked. The conservatives and SPD “had the chance to clear the investment backlog. So far, they have not taken it,” said Tobias Hentze of the German Economic Institute. According to Ifo, borrowing from the €500 billion fund increased by €24.3 billion in 2025. Actual federal investments, however, rose by only €1.3 billion overall from 2024. The reason, says Ifo, is that Berlin shifted investment commitments from the current budget into the special fund — known as the Special Fund for Infrastructure and Climate Neutrality, or SVIK — in order to make room for higher day-to-day spending. As such, the net increase in actual overall investment has been minuscule. “There were shifts of individual items from the core budget into the debt-financed [special fund] SVIK, particularly grants in the transport sector, which meant that less was invested in the core budget than in previous years,” said Ifo researcher Emilie Höslinger. “A large part of the special fund’s investments is therefore not truly additional.” Germany’s Bundesbank has previously called on the government to use the SVIK’s borrowing capacity “more purposefully” to ensure that the borrowed money actually creates the potential for faster growth in future, which will in turn make it easier to service the debt that has been taken on. Before the fund was launched, critics including the Federation of German Industries (BDI) warned that the potentially beneficial effects of the SVIK risked being diluted unless the money was put to use properly.

WARSAW — President Karol Nawrocki said Thursday evening he intends to veto government legislation that lays out the how Poland should spend its €43.7 billion allocation under the EU’s loans-for-weapons scheme known as SAFE. Prime Minister Donald Tusk’s government lacks the necessary votes in the country’s parliament to override the veto. The standoff will inevitably escalate the political feud between Tusk and the president over Poland’s political orientation. Nawrocki, like the nationalist-populist opposition Law and Justice (PiS) party that supports him, views Brussels with skepticism, unlike the pro-EU Tusk administration. Poland is the only country where SAFE has become a political issue. European Commission President Ursula von der Leyen said in December that EU countries had already gobbled up the whole €150 billion from SAFE and were clamoring for more. “The President has lost the chance to act like a patriot. Shame!” Tusk posted on X shortly after Nawrocki announced his decision. The PM said the government will convene for an extraordinary session Friday morning to prepare a response. GOVERNMENT ALLEGES “NATIONAL TREASON” The EU program provides low-interest, long-term loans with a 10-year grace period for principal repayments. The funds are raised by Brussels on capital markets and offer significant savings compared to national borrowing — a crucial issue for Poland, which plans to devote 4.8 percent of its GDP to defense this year. Following Nawrocki’s veto decision, Poland’s SAFE allocation will remain guaranteed, but the rules for spending it will likely be less flexible than they would have been under the legislation Nawrocki blocked. The government had planned to use the money to boost financing for the Border Guard and the police or to upgrade infrastructure. Foreign Minister Radosław Sikorski said before the decision: “If the President vetoes SAFE and we still implement it … I will propose that a plaque with the inscription be placed on every rifle, tank, gun, drone, and anti-drone: ‘Dear soldier of the Polish Army, [President] Nawrocki did not want to give you this.’” Key figures in the Tusk government hammered Nawrocki in the media and online following the decision, calling it “national treason.” The veto also defies the military, whose top brass have spoken out in favor of the SAFE loans. Chief of the General Staff Wiesław Kukuła in February described SAFE as a “game changer” for the military. PRESIDENT RAISES SPECTER OF “MASSIVE FOREIGN LOANS” In his speech, Nawrocki reiterated the arguments he has been rolling out against SAFE for weeks now, claiming the Security Action for Europe loans would saddle Poland with long-term debt and expose the country to exchange-rate risks.  “The SAFE mechanism is a massive foreign loan taken out for 45 years in a foreign currency, with interest costs that could reach as much as PLN180 billion [€42 billion]. Poland would therefore have to repay an amount roughly equal to the value of the loan itself in interest, with Western banks and financial institutions standing to profit from it,” Nawrocki said. The president also argued the scheme could allow Brussels to attach political conditions to Poland’s defense financing and would benefit foreign arms-makers disproportionately.  “SAFE is a mechanism under which Brussels, through the so-called conditionality principle, could arbitrarily suspend financing while Poland would still have to continue repaying the debt. That’s why it must be said clearly: Security subject to conditions is not security. Poland’s security cannot depend on decisions taken elsewhere,” Nawrocki declared. “I have decided that I will not sign the law that would allow Poland to take out a SAFE loan. I will never sign legislation that strikes at our sovereignty, independence, and economic and military security.” Instead, Nawrocki renewed his proposal for a domestic alternative to SAFE that would mobilize money to finance arms purchases without loans or interest payments — by involving the National Bank of Poland’s vast gold reserves. With 550 tons of gold stored in domestic and foreign vaults, the NBP is one of Europe’s top gold hoarders. Central bank chief Adam Glapiński said last week that the NBP holds around 197 billion złoty in “unrealized gains resulting from the increase in the value of the bank’s gold reserves,” and is considering using part of that to support defense spending. The operations would involve transferring the profits generated by the NBP to a dedicated vehicle, the Polish Defense Investment Fund. Glapiński also said the gains would be realized by transactions reducing the share of gold in the bank’s portfolio. 2027 ELECTIONS ON HORIZON Tusk and his ministers have lambasted the gold idea as highly speculative and said it was inconsistent with the central bank’s role as the guardian of Poland’s financial stability. The government has also said that nearly all of Poland’s SAFE money will go to domestic manufacturers, creating jobs and stimulating economic growth. The clash over SAFE comes as Poland prepares for a parliamentary election next year in which PiS hopes to defeat Tusk’s pro-EU coalition. Polls suggest that Tusk’s party, the liberal Civic Coalition, might come first but could lack the votes to form a majority.  The PiS, meanwhile, could secure a majority if it allies with the far-right Confederation party and with the even-more-extreme, antisemitic Confederation of the Polish Crown.

BRUSSELS — The EU’s six largest economies have thrown their weight behind plans to centralize oversight of some of Europe’s biggest financial companies under a single supervisor, according to a document obtained by POLITICO. The finance ministers of France, Germany, Italy, the Netherlands, Poland and Spain — the so-called “E6” group — backed the idea in a six-page letter addressed to the European Commission, the Eurogroup and the Council of the European Union. The letter outlined multiple initiatives and deadlines that Brussels should pursue this year. The goal is to create a deeper financial market to “strengthen Europe’s growth potential, enhance its economic sovereignty and provide a stronger foundation for financing common priorities,” the letter said. Among the most contentious initiatives is introducing EU supervision of “the most systemic, relevant, cross-border financial market infrastructures” amid firm resistance from a group of small countries, led by Ireland and Luxembourg, which rely on their outsized finance sectors and are reluctant to cede control to the EU level. EU leaders are set to discuss how best to speed up Brussels’ decade-long plans to create a U.S-style financial market next week after years of lackluster results amid vying national interests. Ireland has already sounded the alarm of the E6 group, as smaller countries fret that their views will be sidelined if countries club together to integrate their financial markets. In the letter, the E6 ministers said creating a “savings and investments union … has become an urgent strategic necessity” and that they commit to “taking action at European as well as at national level.” Other targets in the letter include reviving the bloc’s market for resold debt, or securitization, minting virtual euro banknotes, and introducing an EU-wide one-stop shop for founding companies, dubbed the 28th regime. There are also calls for greater transparency in stock markets and a push for a legislative package this year to streamline the EU’s financial rules. SEEKING A MAJORITY The idea of a single market watchdog, which would play a role similar to the European Central Bank’s supervisory arm for banking, has long been blocked at EU level due to the opposition of small countries and the lack of Germany’s backing. The support of the major economies is a breakthrough in the likelihood of agreeing to the plan, which the European Commission officially proposed in December but has been informally discussed since the financial crisis. The E6 countries wouldn’t be able to do it alone. They would first have to seek a “qualified majority” across the bloc to pass the proposal. That threshold requires the support of 15 countries that represent at least 65 percent of the EU. Should that fail, nine countries can pursue “enhanced cooperation” together to achieve their aims. The supervision plan would centralize oversight of large, cross-border financial plumbing firms, such as stock exchanges and clearinghouses, under the Paris-based European Securities and Markets Authority. The six countries stop short of fully endorsing the Commission’s December proposal, instead saying it “provides a solid basis for further discussion and allows us to work out the best possible solutions in the coming weeks.” The ministers call for EU countries to reach a political deal on the Commission’s plan by this summer.

LONDON — The U.K.’s leading energy retail companies will meet with Energy Secretary Ed Miliband Thursday to discuss the risk of higher bills for consumers amid the ongoing crisis in the Middle East. The Department for Energy Security and Net Zero has invited the country’s biggest retailers to a roundtable Thursday afternoon with Miliband and Martin McCluskey, the minister responsible for energy consumers, four industry figures said. “This roundtable will discuss the ongoing situation in the Middle East and its implications for energy markets and consumers,” the government’s invite says, seen by POLITICO. “We are keen to hear directly from suppliers about the real-world impact of global energy developments, and to ensure that the voices of those most affected by price and supply volatility are central to our policy thinking,” according to the email. DESNZ is hoping companies will “share reflections on impacts on consumers” including consumer debt. “This is an opportunity for open and candid dialogue, and your organisation’s perspective would be of considerable value,” the email said. The meeting will last an hour. One of the industry figures referenced above confirmed this would be a discussion involving the most senior company executives. Chancellor Rachel Reeves confirmed to parliament Wednesday morning that the government was “looking at a whole range of different scenarios” to help consumers hit by higher bills, including planning for “any future [energy support] package, if it were necessary.”  The government has been approached for comment.

BRUSSELS — Ukraine will get money from EU countries to fund its war effort even if Hungary and Slovakia continue to block a promised €90 billion loan, two EU diplomats told POLITICO. EU leaders will meet for a summit in Brussels next week, hoping to convince Hungarian Prime Minister Viktor Orbán and his Slovak counterpart Robert Fico to stick to their promise to approve the loan, which is supposed to provide two-thirds of the money Ukraine needs to continue fighting the Russian invasion until the end of 2027. But if the pair refuse to back down, Baltic and Nordic countries have a plan to give Ukraine enough money to keep it afloat through the first half of this year, said the two EU diplomats familiar with the discussions. They were granted anonymity to speak freely about the sensitive negotiations, as were others in this story. The total amount being considered is €30 billion, another person with knowledge of the talks said. As these would be bilateral loans, they would not require EU approval. Separately, Dutch Finance Minister Eelco Heinen told his peers on Tuesday that his government has made provisions to send Kyiv €3.5 billion a year in bilateral support until 2029, two other diplomats told POLITICO. Budapest, or any other EU capital, can block the €90 billion loan despite already agreeing to it in December because one of the bills that needs approval before the cash can be disbursed requires the approval of all member countries. “It’s not the first time we are facing a similar kind of difficulties with Hungary,” the EU’s Economy Commissioner Valdis Dombrovskis said in response to a question from POLITICO on Tuesday. “We will deliver on this loan one way or another.” The idea of providing individual funding to Ukraine was already discussed before the December summit, at which all member countries’ leaders agreed to press ahead with one EU loan. The individual loans option was seen as unpalatable at the time because it undermined the EU’s solidarity with Ukraine and exposed deep splits in the bloc. But if Orbán refuses to drop his opposition, that might be the only way forward. UKRAINE HAS MONEY UNTIL MAY Kyiv’s funding needs have eased after the International Monetary Fund approved an $8.1 billion loan late last month, disbursing $1.5 billion straight away. The country should have enough money to stay solvent until early May, four people familiar with Kyiv’s finances told POLITICO. Previous EU estimates had indicated Kyiv would go broke at the end of March, putting it at a major disadvantage against Russian forces and amid ongoing U.S.-led peace talks, and therefore increasing the urgency of the €90 billion EU lifeline. The loan seemed locked in until late January, when a Russian drone attack damaged the Druzhba pipeline, which transports Russian oil across Ukraine to Hungary and Slovakia. Budapest and Bratislava are exempt from EU sanctions on Russian oil. Orbán accused Ukraine of intentionally delaying repairs to the pipeline for political reasons, and reneged on the commitment he made at the December summit to wave the Ukraine loan through. The Hungarian leader also blocked the EU’s 20th sanctions package against Russia, which requires unanimous support from all 27 leaders to pass. Orbán, who faces a crucial national election on April 12, has been campaigning on an anti-Ukraine platform. His political party, Fidesz, is behind the opposition Tisza in the polls by a wide margin. Ukrainian President Volodymyr Zelenskyy, who has denied the accusation that Kyiv is refusing to fix the pipeline for political reasons, last week told reporters that while he did not want to do so, he could get oil flowing through the Druzhba “in a month or a month and a half” — which would be just after the Hungarian election. Zelenskyy last month told reporters including POLITICO that Ukraine wasn’t fixing the pipeline because Russia had targeted it repeatedly, including while maintenance workers were on-site repairing it. WAITING FOR THE HUNGARIAN ELECTION The calculation in both Kyiv and Brussels is that if Orbán loses the election, opposition leader Péter Magyar may be more amenable to approving the loan to Ukraine, particularly if the Druzhba pipeline is fixed or if Hungary receives some other carrot from the EU, according to three of the diplomats. While Magyar has made critical statements about Ukraine during the election campaign and — like Orbán — has ruled out troops or weapons deliveries, he has also recognized Russia as the aggressor in the war. The diplomats said they hoped he could be motivated by the desire to have frozen EU funds for Hungary released. Another potential carrot: Hungary has applied for €16 billion in loans from the EU’s SAFE program, which provides cheap money to countries buying weapons in bulk. The European Commission has yet to approve its application. If Orbán defies the polls and wins the election, the EU is hoping that he will step out of the way because he will no longer need to whip up anti-Ukrainian sentiment to win over voters, three of the diplomats said. Brussels views Slovakia’s Fico, who has teamed up with Orbán to block the loan, as less of an obstacle, two other EU officials said. Fico on Sunday vowed to block the loan unless the Druzhba pipeline is repaired, even if Orbán loses the election. Fico met with European Commission President Ursula von der Leyen in Paris on Tuesday on the sidelines of a Nuclear Energy Summit, and appeared to backtrack from his combative position. In a video on social media, he said the two had “discussed the need to restore the transit of Russian oil through Ukrainian territory to Slovakia,” adding: “I am glad that on this issue, we share the same view with the European Commission.” An EU official said when it comes to convincing Fico to play ball, “we’re getting there.” Gabriel Gavin and Esther Webber contributed reporting.