BRUSSELS — The European Union needs to draft in Mario Draghi, the mastermind behind reforms to revive its single market, to ensure that member countries rally behind efforts to boost growth and prosperity, a senior European lawmaker said Tuesday. Member countries should “mandate Draghi” to build political consensus for reform and pierce through national “deep state” resistance to force a radical rethink of the single market project, Pascal Canfin, a French Renew MEP, told POLITICO’s Competitive Europe Summit in Brussels. “We need somebody that could do so at the very top level, with heads of state and government and quite deep state level,” Canfin said, arguing that the bloc has reached a “historical crossroads” where it must choose between deeper integration or economic irrelevance. In 2024, the former Italian Prime Minister and head of the European Central Bank delivered a report on Europe’s competitiveness deficit that one commissioner has referred to as the “bible” for Ursula von der Leyen’s second Commission. EU leaders backed a plan to relaunch the 30-year old single market — with its freedoms in the movement of goods, capital, services and people — at a summit earlier this month. According to Canfin, Draghi’s work is not yet done, and the former Italian leader could build a “coalition of the willing” of member states willing to integrate their economies. Canfin also suggested that the requirement for consensus among all 27 member states has become a challenge.  “It’s not an objective not to do it at 27, but maybe at the end, we will not be able to do it for political reasons,” Canfin said, specifically citing the frequent vetoes and disruptions caused by Hungarian Prime Minister Viktor Orbán.  The move toward a multi-speed Europe is increasingly viewed by proponents of integration as the only way to compete with the massive industrial subsidies and streamlined decision-making of the United States and China. Canfin described a recurring cycle of political failure where national leaders travel to Brussels and make commitments, only to see them disassembled at home. “They go to Brussels … then they go back home, and there are all the people locally, in Paris, in Berlin, in Rome, in Madrid, saying the opposite,” Canfin said. “Including in the deep state, including in some companies that have built the knowledge to manage and navigate complexity.” Canfin identified three obvious candidates for accelerated integration: defense, energy, and finance.  “The political will has always been in the hands of the capitals,” Canfin said. “Technical, yes, but today, would we be politically able?”

Viktor Orbán’s block on a loan for Ukraine is not the United States’ issue, said Washington’s ambassador to the EU, days after Donald Trump endorsed the Hungarian prime minister’s reelection campaign. “This is an internal EU issue, this isn’t a United States issue; they need to resolve the issue of how they’re going to finance Ukraine to the extent to which they’re gonna finance it,” Andrew Puzder told POLITICO in an interview. The U.S. has stepped up pressure on Europe to increase its financial aid to Ukraine since Donald Trump returned to office. All EU countries agreed on a €90 billion loan to Ukraine, but Orbán changed his mind after Russian oil stopped flowing through the Druzhba pipeline. Despite Trump’s close ties to Orbán, Puzder said it’s up to the EU to find a way to finance Kyiv. “Whether that loan goes through and the condition in which it goes through is something for the EU to resolve internally, and I have every confidence that they will resolve it,” Puzder said. He added that the U.S. is “happy” to sell more weapons to Ukraine that Kyiv could pay for with the EU loan. Trump on Saturday endorsed Orbán ahead of the April 12 election, in a video streamed at the Conservative Political Action Conference (CPAC) in Budapest. “He’s a fantastic guy, and it’s such an honor to endorse him. I endorsed him last time he won, and he did a fantastic job for his country,” Trump said. Asked if accusations that Hungary’s foreign minister informed Moscow about internal EU talks would change Washington’s stance toward Orbán, Puzder said that’s “obviously a decision that the president has to make,” but that Trump “likes” the Hungarian prime minister. “They’ve been supportive of each other, and that’s certainly the president’s call.” Puzder declined to comment on the allegations but said he has “very good relationships” with Hungary’s representatives in Brussels. “I think Hungary has been very friendly to the United States, and we do share views on certain issues with Hungary,” he said, citing migration as a key point of convergence. He said the EU is now adopting the Hungarian model by hardening its migration policy.  “I think a lot of the dust that’s been thrown in the air with respect to Hungary and its relationship with the European Union will settle down after the election. No matter which party wins, I think a lot of this will settle once the election’s over,” Puzder added.

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.

U.S. regulators this week proposed easing capital rules on big U.S. banks in a package of proposals that departs from globally agreed-upon standards. Now, it’s sparking calls from European trade groups to loosen the EU’s own version of the rules. On Thursday, U.S. bank regulators released a number of potential rule changes intended to align U.S. policy with a 2017 global agreement known as Basel III. Its provisions imply a 2.4 percent decrease in capital held by the largest U.S. banks and bigger cuts for smaller banks. European regulators, anticipating the U.S. move, had already been discussing loosening their own requirements, which currently call for raising the capital that banks must have on hand by around 8 percent by 2033. But the breadth of the U.S. proposal has prompted trade groups in Europe to push officials to move faster. Taken together, the moves could weaken the global regulatory framework instituted on both sides of the Atlantic after the 2008 financial crisis. “The U.S. proposal appears to mark a clear shift toward easing capital constraints to support lending and growth, while Europe seems to continue moving in a different direction,” said Sébastien de Brouwer, deputy CEO of the European Banking Federation, a trade group. The United States’ pullback is “making it more urgent than ever to review the EU framework to preserve competitiveness and financing capacity of European banks,” he said. Over the past few months, European regulators had started to reevaluate the competitiveness of the bloc’s banking sector, especially as major European economies have struggled to keep pace with U.S. growth. EU heads of government called Thursday night, in a statement agreed upon before the release of the U.S. proposal, for the European Commission “to propose targeted amendments to the prudential framework in order to enhance the capacity of the banking sector to finance the European economy.” The Commission is also authoring a report on the competitiveness of its banking sector, due after the summer, which will pave the way for legislative proposals. This is set to be a wide-ranging report that could relate to bank capital requirements or other policies. The European Central Bank has already made recommendations for simplifying the bloc’s banking rules ahead of the report, including calling for lighter Basel rules for small banks and for capital buffers to be merged. None of its recommendations were as sweeping as what the U.S. has proposed, however. The U.S. proposal departs from the intent of the original Basel accords, a long process in which global regulators worked to address the root causes of the global financial crisis, critics say. Regulators in 2017 reached an agreement around the framework for jurisdictions to mitigate risks. “This definitely goes against not just the ethos but the intent, spirit and goal of Basel III,” said Dennis Kelleher, CEO of Better Markets, an advocacy group that supports stronger financial regulation. “This proposal when finalized will inevitably ignite another global race to the regulatory bottom” One of the biggest departures relates to the unwinding of the “output floor,” which sets a minimum capital threshold for banks’ trading activities. The new proposal uses a new risk-weighting approach that would do away with the threshold. “This will encourage other jurisdictions to do the same, undermining a key reform and cornerstone of the Basel III agreement,” Federal Reserve board member Michael Barr said Thursday. In the 2017 international talks, the U.S. had argued in favor of a restrictive output floor. Major European banks argued that would hike their capital requirements above and beyond those of the U.S., given the makeup of European banks’ trading books, stymieing lending to the real economy. The threshold was ultimately set at a lower rate than what American negotiators wanted. European regulators had recently moved to delay implementation of the Fundamental Review of the Trading Book, the portion of Basel focused specifically on so-called market risk, or rules governing how to capitalize banks’ trading activities. “Removing the output floor for market risk is a divergence from international standards, and we will carefully assess the impact on internationally active banks, in particular, with respect to the ongoing discussions on EU FRTB implementation and banking competitiveness in Europe,” said Caroline Liesegang, head of prudential regulation and research at the Association for Financial Markets in Europe, which represents large banks. In the past, U.S. regulators had tended to “gold plate” the country’s rules for big banks, meaning they put in provisions above and beyond what Basel requires in order to acknowledge the United State’s central role in the global financial system and push for stricter global standards. In 2023, U.S. regulators failed to pass a capital proposal that would have raised aggregate capital by 16 percent and would have adhered more strictly to the international framework. On Thursday, U.S. regulators said the international standards should not be an unnecessary barrier to the needs of the U.S. financial system. “We should not seek to punish U.S. consumers and businesses by imposing higher costs of credit, or forcing credit availability outside of the banking system, particularly if this is done only to show greater alignment with Basel or any other international standard,” said Federal Reserve Vice Chair for Supervision Michelle Bowman, who led the U.S. central bank’s crafting of the proposal. The dilution of the agreement and its pullback on capital “will make it more challenging for the U.S. to use Basel, as it so often has, to further its own agenda,” said Kathryn Judge, professor at Columbia Law School. In the U.K., which has since left the bloc, the capital rules are expected to have less of an impact on banks than EU peers. A spokesperson for the Prudential Regulation Authority, the U.K.’s main banking regulator, said that the thinking remains the same as in its final rules, which will see the market risk rules apply from 2028. The European Commission declined to comment. The Basel Committee said it doesn’t comment on individual jurisdictions. The Federal Reserve declined to comment. Bjarke Smith-Meyer and Elliot Gulliver-Needham contributed to this report.

Many describe our geopolitical moment as one of instability, but that word feels too weak for what we are living through. Some, like Mark Carney, argue that we are facing a rupture: a break with assumptions that anchored the global economic and political order for decades. Others, like Christine Lagarde, see a profound transition, a shift toward a new configuration of power, technology and societal expectations. Whichever perception we adopt, the implication is clear: leaders can no longer rely on yesterday’s mental models, institutional routines or governance templates. Johanna Mair is the Director of the Florence School of Transnational Governance at the European University Institute in Florence, where she leads education, training and research on governance beyond the nation state. Security, for example, is no longer a discrete policy field. It now reaches deeply into energy systems, artificial intelligence, cyber governance, financial stability and democratic resilience, all under conditions of strategic competition and mistrust. At the same time, competitiveness cannot be reduced to productivity metrics or short-term growth rates. It is about a society’s capacity to innovate, regulate effectively and mobilize investment toward long-term objectives — from the green and digital transitions to social cohesion. This dense web of interdependence is where transnational governance is practiced every day. The European Union illustrates this reality vividly. No single member state can build the capacity to manage these transformations on its own. EU institutions and other regional bodies shape regulatory frameworks and collective responses; corporations influence infrastructure and supply chains; financial institutions direct capital flows; and civic actors respond to social fragmentation and governance gaps. Effective leadership has become a systemic endeavour: it requires coordination across these levels, while sustaining public legitimacy and defending liberal democratic principles. > Our mission is to teach and train current and future leaders, equipping them > with the knowledge, skills and networks to tackle global challenges in ways > that are both innovative and grounded in democratic values. The Florence School of Transnational Governance (STG) at the European University Institute was created precisely to respond to this need. Located in Florence and embedded in a European institution founded by EU member states, the STG is a hub where policymakers, business leaders, civil society, media and academia meet to work on governance beyond national borders. Our mission is to teach and train current and future leaders, equipping them with the knowledge, skills and networks to tackle global challenges in ways that are both innovative and grounded in democratic values. What makes this mission distinctive is not only the topics we address, but also how and with whom we address them. We see leadership development as a practice embedded in real institutions, not a purely classroom-based exercise. People do not come to Florence to observe transnational governance from a distance; they come to practice it, test hypotheses and co-create solutions with peers who work on the frontlines of policy and politics. This philosophy underpins our portfolio of programs, from degree offerings to executive education. With early career professionals, we focus on helping them understand and shape governance beyond the state, whether in international organizations, national administrations, the private sector or civil society. We encourage them to see institutions not as static structures, but as arrangements that can and must be strengthened and reformed to support a liberal, rules-based order under stress. At the same time, we devote significant attention to practitioners already in positions of responsibility. Our Global Executive Master (GEM) is designed for experienced professionals who cannot pause their careers, but recognize that the governance landscape in which they operate has changed fundamentally. Developed by the STG, the GEM convenes participants from EU institutions, national administrations, international organizations, business and civil society — professionals from a wide range of nationalities and institutional backgrounds, reflecting the coalitions required to address complex problems. The program is structured to fit the reality of leadership today. Delivered part time over two years, it combines online learning with residential periods in Florence and executive study visits in key policy centres. This blended format allows participants to remain in full-time roles while advancing their qualifications and networks, and it ensures that learning is continuously tested against institutional realities rather than remaining an abstract exercise. Participants specialize in tracks such as geopolitics and security, tech and governance, economy and finance, or energy and climate. Alongside this subject depth, they build capabilities more commonly associated with top executive programs than traditional public policy degrees: change management, negotiations, strategic communication, foresight and leadership under uncertainty. These skills are essential for bridging policy design and implementation — a gap that is increasingly visible as governments struggle to deliver on ambitious agendas. Executive study visits are a core element of this practice-oriented approach. In a recent Brussels visit, GEM participants engaged with high-level speakers from the European Commission, the European External Action Service, the Council, the European Parliament, NATO, Business Europe, Fleishman Hillard and POLITICO itself. Over several days, they discussed foreign and security policy, industrial strategy, strategic foresight and the governance of emerging technologies. These encounters do more than illustrate theory; they give participants a chance to stress-test their assumptions, understand the constraints facing decision-makers and build relationships across institutional boundaries. via EUI Throughout the program, each participant develops a capstone project that addresses a strategic challenge connected to a policy organization, often their own employer. This ensures that executive education translates into institutional impact: projects range from new regulatory approaches and partnership models to internal reforms aimed at making organizations more agile and resilient. At the same time, they help weave a durable transnational network of practitioners who can work together beyond the programme. Across our activities at the STG, a common thread runs through our work: a commitment to defending and renewing the liberal order through concrete practice. Addressing the rupture or transition we are living through requires more than technical fixes. It demands leaders who can think systemically, act across borders and design governance solutions that are both unconventional and democratically legitimate. > Across our activities at the STG, a common thread runs through our work: a > commitment to defending and renewing the liberal order through concrete > practice. In a period defined by systemic risk and strategic competition, leadership development cannot remain sectoral or reactive. It must be interdisciplinary, practice-oriented and anchored in real policy environments. At the Florence School of Transnational Governance, we aim to create precisely this kind of learning community — one where students, fellows and executives work side by side to reimagine how institutions can respond to global challenges. For policymakers and professionals who recognize themselves in this moment of rupture, our programs — including the GEM — offer a space to step back, learn with peers and return to their institutions better equipped to lead change. The task is urgent, but it is also an opportunity: by investing in transnational governance education today, we can help lay the foundations for a more resilient and inclusive order tomorrow.

LONDON — Britain’s Labour Party is paying a communications agency to find influencers who can promote struggling Prime Minister Keir Starmer’s cost-of-living message. The governing party has tapped up digital communications agency 411 to reach out to influencers, with the comms shop asking them to be part of a campaign “sharing the steps that this Labour Government is taking to ease the cost of living,” according to a message to influencers seen by POLITICO. The creators are hand-picked “micro-influencers” with less than 20,000 followers, which 411 believes have a more engaged and targeted audience, according to a person working on the strategy but not authorized to speak publicly about it. The influencers do not get paid by Labour or 411, with the same person describing the outreach as akin to a targeted press release. The quest for new messengers comes as Starmer’s government tries to convince Brits it can reduce costs and fights to turn around dire poll ratings. At the beginning of the year, Starmer announced that cutting the cost of living was his “number one priority.”  His government has, however, repeatedly struggled with its communications, with tanking poll ratings partially blamed by his own MPs on a failure to tell the story of his administration. Starmer’s Downing Street has cycled through multiple communications chiefs since taking office in July 2024. Mark McVitie, who works on social media strategy as director of the Labour Growth Group — though is not involved with the influencer outreach — described the latest move as “tactically fine and what a government should be doing in 2026.” But he warned it is “insufficient to the level of the challenge facing this particular government.” The Labour Party did not respond to a request for comment. The move is the latest by the British government to tap into the world of influencers as it tries to push its message. At the end of February, Starmer hosted a press conference solely for content creators, while Chancellor Rachel Reeves booked out seats at a pre-budget press conference for hand-picked online finance influencers. Starmer has started posting podcast-style videos in recent weeks in a bid to more directly connect with voters. A Labour MP, discussing the bid to reach influencers and granted anonymity to speak freely, said they were “delighted to discover we have a comms strategy of any kind.”

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.”

LONDON — The House of Lords has struck down the government’s controversial proposal to direct where pension schemes invest, handing Rachel Reeves’ Treasury a significant defeat. The government had sought to give itself a controversial “reserve power” in the Pension Schemes Bill, which would allow it to direct where pension schemes invest, in a bid to boost U.K. and private assets. That provision was met with fury by the pensions industry, and Thursday’s amendment shows enough peers feel the same way. An amendment to the Pension Schemes Bill — tabled by Liberal Democrat peer Sharon Bowles, Conservative peers Deborah Stedman-Scott and Thérèse Coffey, and independent peer Ros Altmann — won a vote in the upper chamber Thursday by 217 to 113. It removes the provision on the asset allocation condition in the legislation. The defeat is a blow to Pensions Minister Torsten Bell, who only last week tried to reassure industry and peers by telling POLITICO that he would table “clarifications” to the bill outlining that the power would only align to Mansion House Accord signatories and targets. It means ministers will now be required to reconsider the proposed law. “This power must be removed,” said Stedman-Scott. “It is a massive overstep from the government, and despite the assurances of the minister, no one is yet convinced that this can remai.” The amendment removing the threat of a mandate will now go back to the House of Commons, where Bell will need to decide whether to include new changes to reinstate the power.  Altmann got another victory in the report stage debate on Thursday by winning a vote on her amendment to extend the time limit defining an unused pension pot as “dormant” from 12 months to two years.  Under government plans, all “dormant” small pots worth under £1,000 will be consolidated into larger schemes.

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

A federal judge has quashed the Justice Department’s criminal probe into Federal Reserve Chair Jerome Powell’s Senate testimony regarding the central bank’s headquarters renovation, writing that the grand jury subpoenas were a “mere pretext” to pressure the Fed. “There is abundant evidence that the subpoenas’ dominant (if not sole) purpose is to harass and pressure Powell either to yield to the President or to resign and make way for a Fed Chair who will,” Chief U.S. District Judge James Boasberg wrote. “The Government has offered no evidence whatsoever that Powell committed any crime other than displeasing the President.” U.S. Attorney for D.C. Jeanine Pirro, whose office led the investigation, said in a press conference afterward that she would appeal the decision. She sharply criticized Boasberg, saying he “put himself at the entrance door to the grand jury, slamming that door shut, irrespective of the legal process, and thus preventing the grand jury from doing the work that it does.” “This process has been arbitrarily undermined by an activist judge,” she said. Pirro’s plan to appeal the decision could further delay the confirmation process of President Donald Trump’s pick to replace Powell, former Fed Gov. Kevin Warsh. Warsh’s nomination has been blocked by outgoing Sen. Thom Tillis until the investigation into Powell is resolved. The North Carolina Republican warned the administration on Friday afternoon against appealing the decision. “We all know how this is going to end, and the D.C. U.S. Attorney’s Office should save itself further embarrassment and move on,” Tillis posted on X. “Appealing the ruling will only delay the confirmation of Kevin Warsh as the next Fed Chair.” The White House did not immediately respond to a request for comment. Trump has severely criticized Powell for more than a year for his reluctance to lower interest rates, with the president accusing him of holding back the economy. Powell has said the subpoenas were part of Trump’s pressure campaign to force him to cut borrowing costs. The investigation into Powell’s testimony on the status of a costly renovation of the central bank’s headquarters kicked off a firestorm that threatens Trump’s aims to stack the Fed board with appointees who share his views on lowering short-term borrowing costs. Powell’s term as chair expires in May, and Pirro’s vow to appeal the decision could prolong a legal clash that will keep the Fed’s future leadership up in the air. Tillis, who has vowed to block any Fed picks until the Powell probe is publicly dropped, sits on the Senate Banking Committee, which has jurisdiction over Fed nominations. Republicans have a 13-11 majority on the committee, meaning that Tillis’s vote is needed to advance any nominee to the Senate floor if every Banking Committee Democrat votes against them. In a hearing before the committee last June, the panel’s chair, Tim Scott (R-SC), asked Powell about the status of the Fed’s renovations after a New York Post article characterized them as akin to the “Palace of Versailles.” Powell told senators that “there’s no new marble. There are no special elevators. There are no new water features. There’s no beehives, and there’s no roof terrace gardens.” That caught the eye of Federal Housing Finance Agency Director Bill Pulte, who urged lawmakers to look into the matter, and the White House launched its own probe into the project last summer. Several Senate Banking Republicans — including Scott — have said they do not believe Powell committed a crime with his testimony. Sen. Cynthia Lummis (R-Wyo.), a Powell critic, said in a statement that the Fed chief “was wildly underprepared for his testimony, but, as I have said before, I’m not sure it rose to the criminal level.” Wall Street executives and top lawmakers have repeatedly cautioned Trump against actions that might undermine the central bank’s ability to independently set interest rates, which bolsters its credibility and is viewed as a stabilizing force for global markets. Trump has also tried to fire Fed Gov. Lisa Cook over unsubstantiated allegations of mortgage fraud — her fate will be determined by the Supreme Court — and the president has flirted numerous times with attempting to dismiss Powell. In January, Powell posted an extraordinary two-minute video to the central bank’s website claiming that the DOJ’s subpoenas represented a politically motivated attempt to pressure the central bank into lowering interest rates. The threat of criminal charges was a “consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president,” he said. The move was unusual because Powell has steadfastly refused to respond to Trump’s blizzard of insults since he returned to the White House. The president has publicly questioned Powell’s intelligence and competence, and has said his monetary policy decisions are driven by politics. In her combative press conference, Pirro called the judge’s decision on Friday “outrageous.” She cited a Supreme Court precedent that grand juries can investigate mere rumors. And she dismissed suggestions that she should look skeptically at allegations that may be politically motivated. “I’ll take a case from the devil if you can give me information that will lead me to possibly find a crime,” she said. “It doesn’t matter where the case comes from.” While Pirro suggested it is exceptional for a judge to block a grand jury subpoena, federal court rules allow them to do so if they believe a subpoena is “unreasonable or oppressive.” In his ruling, issued Wednesday and unsealed on Friday, Boasberg noted that numerous court precedents authorize judges to quash a subpoena when its “sole or dominant” purpose is improper. Boasberg, an appointee of President Barack Obama, conceded that the subpoenas issued to the Fed were relevant to a criminal investigation. But he said their obvious connection to attempts to exert unlawful pressure on Powell and other members of the Fed’s Board of Governors rendered the subpoenas unenforceable. “The President spent years essentially asking if no one will rid him of this troublesome Fed Chair. He then suggested a specific line of investigation into him,” the judge wrote. “The President’s appointed prosecutor promptly complied.” Boasberg’s rejection of the subpoenas to the Fed is just the latest clash between the chief judge of the federal district court in the capital and the Trump administration. The judge’s earlier rulings in a dispute over Trump’s drive to rapidly deport alleged gang members under a two-century-old wartime authority led Trump to call for Boasberg’s impeachment. Some House members embarked on that effort last year, but it has not progressed. Pirro said that in addition to an appeal, which would go to the D.C. Circuit Court of Appeals, prosecutors intend to ask Boasberg to reconsider his ruling because it included some inaccurate dates. That could delay any appeal because judges typically cannot alter rulings while they are under appeal.