BRUSSELS — Belgium on Monday pushed back against the European Commission’s proposed concessions to unblock a €210 billion loan to Ukraine funded by frozen Russian assets — dashing EU hopes of securing a deal in time for Thursday’s leaders’ summit. With two days to go, the Commission is making a last push to convince EU member countries to back the loan so that billions of euros in Russian reserves held at the Euroclear bank in Brussels can be freed up to support Kyiv’s war-battered economy. The EU’s 27 envoys will continue discussions on the scheme later Tuesday, as talks to end Russia’s almost four-year all-out war in Ukraine achieved some progress during a meeting of Western leaders and U.S. envoys in Berlin on Monday. After days of negotiations on the assets, the Commission on Monday suggested legal changes to its proposal to secure political buy-in from Belgium. It gave legal assurances that, under any scenario, Belgium could tap into as much as €210 billion if it faces legal claims or retaliation by Russia, according to the latest text seen by POLITICO. It also stated that no money should be given to Ukraine before EU countries provide financial guarantees covering at least 50 percent of the payout. In a further concession, the Commission instructed all EU countries to end their bilateral investment treaties with Russia to ensure Belgium isn’t left alone to deal with retaliation from Moscow. But Belgium said that the reassurances were not enough during a meeting of EU ambassadors on Monday evening, four EU diplomats told POLITICO. “There will be no deal until EUCO [European Council],” said an EU diplomat who, like others quoted in this article, was granted anonymity to speak freely. The Belgian government is holding out against using the Russian assets over fears that it will be on the hook to repay the full amount if Russia attempts to claw back the money. But in a further complication, four other countries — Italy, Malta, Bulgaria and Czechia — backed Belgium’s demand to explore alternative financing for Ukraine, such as joint debt. While France continues to publicly back the frozen assets plan — the country’s Europe Minister Benjamin Haddad said in Brussels on Tuesday that Paris supports it — a person close to French President Emmanuel Macron said Paris was “neutral” on whether Europe should tap Moscow’s billions, or turn to Eurobonds to keep Ukraine from going bankrupt. Supporters of the scheme — such as Germany — insist there is no real alternative to using the Russian assets. They say that joint debt isn’t feasible because it requires unanimity — meaning that Hungary’s Prime Minister Viktor Orbán, who has long been skeptical of support for Ukraine, could block the initiative. “Let us not deceive ourselves. If we do not succeed in this, the European Union’s ability to act will be severely damaged for years, if not for a longer period,” German Chancellor Friedrich Merz said Monday. But that isn’t convincing for all EU countries. Critics claim that Germany insists on using Russian assets because it is ideologically opposed to EU common debt. “The narrative is that Hungary is against common debt [for Ukraine]. The reality is that the frugals are against common debt,” said an EU diplomat. Clea Caulcutt contributed to this report from Paris.

BRUSSELS — When it comes to support for Ukraine, a split has emerged between the European Union and its English-speaking allies. In France and Germany, the EU’s two biggest democracies, new polling shows that more respondents want their governments to scale back financial aid to Kyiv than to increase it or keep it the same. In the United States, Canada and the United Kingdom, meanwhile, respondents tilt the other way and favor maintaining material support, according to The POLITICO Poll, which surveyed more than 10,000 people across the five countries earlier this month. The findings land as European leaders prepare to meet in Brussels on Thursday for a high-stakes summit where providing financial support to Ukraine is expected to dominate the agenda. They also come as Washington seeks to mediate a peace agreement between Moscow and Kyiv — with German leader Friedrich Merz taking the lead among European nations on negotiating in Kyiv’s favor. Across all five countries, the most frequently cited reason for supporting continued aid to Ukraine was the belief that nations should not be allowed to seize territory by force. The most frequently cited argument against additional assistance was concerns about the cost and the pressure on the national economy.  “Much of our research has shown that the public in Europe feels the current era demands policy trade-offs, and financial support for Ukraine is no exception,” said Seb Wride, head of polling at Public First, an independent polling company headquartered in London that carried out the survey for POLITICO.  “In a time where public finances are seen as finite resources, people’s interests are increasingly domestic,” he added.  WESTERN DIVIDE Germans were the most reluctant to ramp up financial assistance, with nearly half of respondents (45 percent) in favor of cutting financial aid to Kyiv while only 20 percent wanted to increase it. In France 37 percent wanted to give less and 24 percent preferred giving more. In contrast to the growing opposition to Ukrainian aid from Europe, support remains strikingly firm in North America. In the U.S., President Donald Trump has expressed skepticism toward Kyiv’s chances of defeating Moscow and has sent interlocutors to bargain with the Russians for peace. And yet the U.S. had the largest share of respondents (37 percent) in favor of increasing financial support, with Canada just behind at 35 percent. Support for Ukraine was driven primarily by those who backed Democratic nominee Kamala Harris in the 2024 election in the U.S. Some 29 percent of Harris voters said one of the top three reasons the U.S. should support Ukraine was to protect democracy, compared with 17 percent of supporters of U.S. President Donald Trump. “The partisan split in the U.S. is now quite extreme,” Wride said. In Germany and France, opposition to assistance was especially pronounced among supporters of far-right parties — such as the Alternative for Germany and France’s National Rally — while centrists were less skeptical. “How Ukraine financing plays out in Germany in particular, as a number of European governments face populist challenges, should be a particular warning sign to other leaders,” Wride said. REFUGEE FATIGUE Support for military assistance tracked a similar divide. Nearly 40 percent of respondents in the U.S., U.K. and Canada backed higher levels of military aid, with about 20 percent opposed. In Germany 26 percent supported increased military aid to Ukraine while 39 percent opposed it. In France opinions were evenly split, with 31 percent favoring an increase and 30 percent favoring cuts. Germany was also the only country where a majority of respondents said their government should accept fewer Ukrainians displaced by the war.  In a country that has taken in more than a million Ukrainian refugees since the beginning of Russia’s full-scale invasion in 2022, 50 percent of Germans said Berlin should admit fewer.  Half of respondents also said Germany should reduce support for Ukrainians already settled in the country — a sign that public fatigue is extending beyond weapons and budgets to the broader social and political pressures of the conflict. The softer support for Ukraine in France and Germany does not appear to reflect warmer feelings toward Moscow, however. Voters in all five countries backed sanctions against Russia, suggesting that even where publics want to pare back aid they remain broadly aligned around punishing the aggressor and limiting Russia’s ability to finance the war. This edition of The POLITICO Poll was conducted from Dec. 5 to Dec. 9 and surveyed 10,510 adults online, with at least 2,000 respondents each from the U.S., Canada, the U.K., France and Germany. The results for each country were weighted to be representative in terms of age, gender and geography, and have an overall margin of sampling error of ±2 percentage points for each country. Smaller subgroups have higher margins of error. The survey is an ongoing project from POLITICO and Public First, an independent polling company headquartered in London, to measure public opinion across a broad range of policy areas. You can find new surveys and analysis each month at politico.com/poll. Have questions or comments? Ideas for future surveys? Email us at poll@politico.com.

BRUSSELS — The European Union faces a critical week as it seeks to shield Ukraine from a humiliating peace deal carved out by the U.S. and Russia while attempting to salvage an agreement to fund a multi-billion euro loan to keep Kyiv afloat. After a series of stinging attacks from Washington ― including Donald Trump telling POLITICO that European leaders are “weak” ― the coming days will be a real test of their mettle. On Monday leaders will attempt to build bridges and use their powers of persuasion over the peace agreement when they meet Ukraine President Volodymyr Zelenskyy and U.S. officials in Berlin. At the same time in Brussels, EU foreign ministers and diplomats will battle to win over a growing number of European governments that oppose the loan plan. By Thursday, when all 27 leaders gather in the Belgian capital for what promises to be one of the most pivotal summits in years, they’ll hope to have more clarity on whether the intense diplomacy has paid off. With Trump’s stinging put-downs ― Europe’s leaders “talk, but they don’t produce” ― and NATO chief Mark Rutte’s stark warnings about the the threat from Russia ringing in their ears, they’re taking nothing for granted. “We are Russia’s next target, and we are already in harm’s way,” Rutte said last week. “Russia has brought war back to Europe and we must be prepared for the scale of war our grandparents and great grandparents endured.” Little wonder then that European officials are casting the next few days as existential. The latest shot of 11th-hour diplomacy will see the leaders of the U.K., Germany and possibly France, potentially with Trump’s son-in-law Jared Kushner and his special envoy Steve Witkoff, meeting with Zelenskyy in Berlin. As if to underscore the significance of the meeting, “numerous European heads of state and government, as well as the leaders of the EU and NATO, will join the talks” after the initial discussion, said Stefan Kornelius, spokesperson for German Chancellor Friedrich Merz. French President Emmanuel Macron hasn’t confirmed his attendance but spoke to Zelenskyy by telephone on Sunday. The discussion will represent Europe’s attempt to influence the final settlement, weeks after a 28-point peace plan drafted by Witkoff  — reportedly with the aid of several Kremlin officials — provoked a furious backlash in both Kyiv and European capitals. They’ve since scrambled to put together an alternative. Further European disunity this week would send a “disastrous signal to Ukraine,” said one EU official. That outcome wouldn’t just be a hammer blow to the war-struck nation, the official added: “It’s also fair to say that Europe will then fail as well.” EMPTYING TERRITORIES This time the focus will be on a 20-point amendment to the plan drafted by Kyiv and its European allies and submitted to Washington for review last week. The contents remain unclear, and nothing is decided, but the fate of the Ukrainian territories under Russian occupation is particularly thorny. Trump has pitched emptying out the territories of Ukrainian and Russian troops and establishing a demilitarized “free economic zone” where U.S. business interests could operate. Ukraine has rejected that proposal, according to a French official, who was granted anonymity because of the sensitivity of the negotiations. The U.S. has insisted on territorial concessions despite fierce European objections, the official added, creating friction with the Trump administration. Leaders will attempt to build bridges and use their powers of persuasion over the peace agreement when they meet Ukraine President Volodymyr Zelenskyy and U.S. officials in Berlin. | Antonio Masiello/Getty Images Europe’s leaders insist there can be no progress on territory before Ukraine is offered security guarantees. In a sign of movement toward some kind of deal, Zelenskyy said over the weekend he was willing to “compromise” and not demand NATO membership for Ukraine. Instead, the country should be afforded an ad-hoc collective defense arrangement, he told journalists in a WhatsApp conversation. “The bilateral security guarantees between Ukraine and the United States … and the security guarantees from our European colleagues for us, as well as from other countries such as Canada and Japan ― these security guarantees for us provide an opportunity to prevent another outbreak of Russian aggression,” he said. REPEATED SETBACKS Europe will have further opportunities to discuss the way forward after Monday. EU affairs ministers will continue on Tuesday in Brussels to thrash out plans for Thursday’s summit. In between, Wednesday will see the leaders of Europe’s “Eastern flank” ― with countries including the Baltics and Poland represented ― huddle in Helsinki. The EU has been trying for months to convince Belgian Prime Minister Bart De Wever to consent to a plan to use the cash value of the €185 billion in Russian state assets held in Brussels-based depository Euroclear to fund and arm Ukraine. (The remainder of the total €210 billion financial package would include €25 billion in frozen Russian assets held across the bloc.) In a sign the chances of a deal at Thursday’s summit are worsening rather than improving, Italy — the EU’s third-largest country — sided with Belgium’s demands to look for alternative options to finance Ukraine in a letter on Friday that was also signed by Malta and Bulgaria. Czechia’s new Prime Minister Andrej Babiš also rejected the plan on Sunday. “The more such cases we have the more likely it is that we will have to find other solutions,” an EU diplomat said. The five countries — even if joined by pro-Kremlin Hungary and Slovakia — would not be able to build a blocking minority, but their public criticism erodes the Commission’s hopes of striking a political deal this week. A meeting of EU ambassadors originally planned for Sunday evening was postponed until Monday. While the last-minute diplomatic effort has left many concerned the money might not be approved before the end of the year, with Ukraine in desperate need of the cash, three diplomats insisted they were sticking to the plan and that no alternatives were yet being considered. Belgium is engaging constructively with the draft measures, actively making suggestions and changes in the document to be considered when ambassadors meet on Monday, one of the diplomats and an EU official said. The decision on the Russian assets is “a decision on the future of Europe and will determine whether the EU is still a relevant actor,” a German official said. “There is no option B.” Bjarke Smith-Meyer, Nick Vinocur, Victor Jack and Zoya Sheftalovich in Brussels, Veronika Melkozerova in Kyiv, Clea Caulcutt and Laura Kayali in Paris and Nette Nöstlinger in Berlin contributed to this report.

BRUSSELS — Italy is throwing its weight behind Belgium in opposing the EU’s plan to send €210 billion of Russia’s frozen state assets to Ukraine, according to an internal document seen by POLITICO. The intervention by Rome, the EU’s No.3 in terms of population and voting power — less than a week before a crucial meeting of EU leaders in Brussels — undermines the European Commission’s hopes of finalizing a deal on the plan. The Commission is pushing for EU member countries to reach an agreement in a European Council summit on Dec.18-19 so that the billions of euros in Russian reserves held in the Euroclear bank in Belgium can be freed up to support Kyiv’s war-battered economy.  Belgium’s government is holding out over fears it will be on the hook to repay the full amount if Russia claws back the money, but has so far lacked a heavyweight ally ahead of the December summit. Now Italy has shaken up the diplomatic dynamics by drafting a document with Belgium, Malta and Bulgaria urging the Commission to explore alternative options to using the Russian assets to keep Ukraine afloat over the coming years. The four countries said they “invite the Commission and the Council to continue exploring and discussing alternative options in line with EU and international law, with predictable parameters, presenting significantly less risks, to address Ukraine’s financial needs, based on an EU loan facility or bridge solutions.” The four countries are referring to a Plan B to issue joint EU debt to finance Ukraine over the coming years. However, this idea has its own problems. Critics note it will add to the high debt burdens of Italy and France, and requires unanimity — meaning it can be vetoed by Hungary’s Kremlin-friendly Prime Minister Viktor Orbán. The four countries — even if joined by pro-Kremlin Hungary and Slovakia — would not be able to build a blocking minority but their public criticism erodes the Commission’s hopes of striking a political deal next week. While Italy’s right-wing Prime Minister Giorgia Meloni has always supported sanctions against Russia, the government coalition she leads is divided over supporting Ukraine. Hard-right Deputy Prime Minister Matteo Salvini has embraced a Russia-friendly stance and endorsed U.S. President Donald Trump’s plan to end the war in Ukraine. EMERGENCY RULE Offering a further criticism, the four countries expressed skepticism toward the Commission seizing on emergency powers to overhaul the current sanctions rules and keep Russia’s assets frozen in the long-term. Despite voting in favor of this move to preserve EU unity, they said they were wary of then progressing to use the Russian assets themselves. “This vote does not pre-empt in any circumstances the decision on the possible use of Russian immobilised assets that needs to be taken at Leaders’ level,” the four countries wrote. The legal mechanism for long-term freeze is meant to reduce the chance that pro-Kremlin countries in Europe, such as Hungary and Slovakia, will hand back the frozen funds to Russia. Officials claim this workaround undermines the Kremlin’s chances of liberating its assets as part of a post-war peace settlement — and therefore strengthens the EU’s separate plan to make use of that money.   However, the four countries wrote that the legal clause “implies very far reaching legal, financial, procedural, and institutional consequences that might go well beyond this specific case.”

BRUSSELS — Cheap packages entering the EU will be charged a tax of €3 per item from next July, the bloc’s 27 finance ministers agreed on Friday. The deal effectively ends the tax-free status for packages worth less than €150. The flat tax will apply for each different type of item in a package. If one package contains 10 plushy toys, the duty is applied once. But if the shipment also contains a charging cable, another €3 is added. The flood of untaxed and often unsafe goods prompted the European Commission to propose a temporary solution for the packages under €150 a month ago. This “de minimis” rule allows exporters like Shein and Temu to send products directly to consumers, often bypassing scrutiny. The EU has already received more packages in the first nine months of 2025 than in the entire previous year, when the counter hit 4.6 billion. French Finance Minister Roland Lescure called it “a literal invasion of parcels in Europe last year,” which would have hit “7, 8, 9 billion in the coming years if nothing was done.” An EU official told POLITICO earlier this month that at some airports, up to 80 percent of such packages arriving don’t comply with EU safety rules. This creates a huge workload for customs officials, a growing pile of garbage, and health risks from unsafe toys and kitchen items. EU countries have already agreed to formally abolish the de-minimis loophole, but taxing all items based on their actual value and product type will require more data exchange. That will only be possible once an ambitious reform of the bloc’s Customs Union, currently under negotiation, is completed by 2028. The €3 flat tax is the temporary solution to cover the period until then. The rising popularity of web shops like Shein and Temu, which both operate out of China is fueling this flood. France suspended access to Shein’s online platform this month. This €3 EU-wide tax will be distinct from the so-called handling fee that France has proposed as a part of its national budget to relieve the costs on customs for dealing with the same flood of packages. Klara Durand and Camille Gijs contributed to this report.

Russia’s central bank on Friday filed a lawsuit in Moscow against Brussels-based Euroclear, which houses most of the frozen Russian assets that the EU wants to use to finance aid to Ukraine. The court filing comes just days before a high-stakes European Council summit, where EU leaders are expected to press Belgium to unlock billions of euros in Russian assets to underpin a major loan package for Kyiv.   “Due to the unlawful actions of the Euroclear depository that are causing losses to the Bank of Russia, and in light of mechanisms officially under consideration by the European Commission for the direct or indirect use of the Bank of Russia’s assets without its consent, the Bank of Russia is filing a claim in the Moscow Arbitration Court against the Euroclear depository to recover the losses incurred,” the central bank said in a statement. Belgium has opposed the use of sovereign Russian assets over concerns that the country may eventually be required to pay the money back to Moscow on its own. Some €185 billion in frozen Russian assets are under the stewardship of Euroclear, the Brussels-based financial depository, while another €25 billion is scattered across the EU in private bank accounts. With the future of the prospective loan still hanging in the air, EU ambassadors on Thursday handed emergency powers to the European Commission to keep Russian state assets permanently frozen. Such a solution would mean the assets remain blocked until the Kremlin pays post-war reparations to Ukraine, significantly reducing the possibility that pro-Russian countries like Hungary or Slovakia would hand back the frozen funds to Russia. While Russian courts have little power to force the handover of Euroclear’s euro or dollar assets held in Belgium, they do have the power to take retaliatory action against Euroclear balances held in Russian financial institutions. However, in 2024 the European Commission introduced a legal mechanism to compensate Euroclear for losses incurred in Russia due to its compliance with Western sanctions — effectively neutralizing the economic effects of Russia’s retaliation. Euroclear declined to comment.

BRUSSELS — European banks and other finance firms should decrease their reliance on American tech companies for digital services, a top national supervisor has said. In an interview with POLITICO, Steven Maijoor, the Dutch central bank’s chair of supervision, said the “small number of suppliers” providing digital services to many European finance companies can pose a “concentration risk.” “If one of those suppliers is not able to supply, you can have major operational problems,” Maijoor said. The intervention comes as Europe’s politicians and industries grapple with the continent’s near-total dependence on U.S. technology for digital services ranging from cloud computing to software. The dominance of American companies has come into sharp focus following a decline in transatlantic relations under U.S. President Donald Trump. While the market for European tech services isn’t nearly as developed as in the U.S. — making it difficult for banks to switch — the continent “should start to try to develop this European environment” for financial stability and the sake of its economic success, Maijoor said. European banks being locked in to contracts with U.S. providers “will ultimately also affect their competitiveness,” Maijoor said. Dutch supervisors recently authored a report on the systemic risks posed by tech dependence in finance. Dutch lender Amsterdam Trade Bank collapsed in 2023 after its parent company was placed on the U.S. sanctions list and its American IT provider withdrew online data storage services, in one of the sharpest examples of the impact on companies that see their tech withdrawn. Similarly a 2024 outage of American cybersecurity company CrowdStrike highlighted the European finance sector’s vulnerabilities to operational risks from tech providers, the EU’s banking watchdog said in a post-mortem on the outage. In his intervention, Maijoor pointed to an EU law governing the operational reliability of banks — the Digital Operational Resilience Act (DORA) — as one factor that may be worsening the problem. Those rules govern finance firms’ outsourcing of IT functions such as cloud provision, and designate a list of “critical” tech service providers subject to extra oversight, including Amazon Web Services, Google Cloud, Microsoft and Oracle. DORA, and other EU financial regulation, may be “inadvertently nudging financial institutions towards the largest digital service suppliers,” which wouldn’t be European, Maijoor said. “If you simply look at quality, reliability, security … there’s a very big chance that you will end up with the largest digital service suppliers from outside Europe,” he said. The bloc could reassess the regulatory approach to beat the risks, Maijoor said. “DORA currently is an oversight approach, which is not as strong in terms of requirements and enforcement options as regular supervision,” he said. The Dutch supervisors are pushing for changes, writing that they are examining whether financial regulation and supervision in the EU creates barriers to choosing European IT providers, and that identified issues “may prompt policy initiatives in the European context.” They are asking EU governments and supervisors “to evaluate whether DORA sufficiently enhances resilience to geopolitical risks and, if not, to consider issuing further guidance,” adding they “see opportunities to strengthen DORA as needed,” including through more enforcement and more explicit requirements around managing geopolitical risks. Europe could also set up a cloud watchdog across industries to mitigate the risks of dependence on U.S. tech service providers, which are “also very important for other parts of the economy like energy and telecoms,” Maijoor said. “Wouldn’t there be a case for supervision more generally of these hyperscalers, cloud service providers, as they are so important for major parts of the economy?” The European Commission declined to respond.

LONDON — The British government is working to give its trade chief new powers to move faster in imposing higher tariffs on imports, as it faces pressure from Brussels and Washington to combat Chinese industrial overcapacity. Under new rules drawn up by British officials, Trade Secretary Peter Kyle will have the power to direct the Trade Remedies Authority (TRA) to launch investigations and give ministers options to set higher duty levels to protect domestic businesses. The trade watchdog will be required to set out the results of anti-dumping and anti-subsidy investigations within a year, better monitor trade distortions and streamline processes for businesses to prompt trade probes. The U.K. is in negotiations with the U.S. and the EU to forge a steel alliance to counter Chinese overcapacity as the bloc works to introduce its own updated safeguards regime. The EU is the U.K.’s largest market and Brussels is creating a new steel protection regime that is set to slash Britain’s tariff-free export quotas and place 50 percent duties on any in excess. The government said its directive to the TRA will align the U.K. with similar powers in the EU and Australia, and follow World Trade Organization rules. It is set out in a Strategic Steer to the watchdog and will be introduced as part of the finance bill due to be wrapped up in the spring. “We are strengthening the U.K.’s system for tackling unfair trade to give our producers and manufacturers — especially SMEs who have less capacity and capability — the backing they need to grow and compete,” Business and Trade Secretary Peter Kyle said in a statement. “By streamlining processes and aligning our framework with international peers, we are ensuring U.K. industry has the tools to protect jobs, attract investment and thrive in a changing global economy,” Kyle added. These moves come after the government said on Wednesday that its Steel Strategy, which plots the future of the industry in Britain and new trade protections for the sector, will be delayed until next year. The Trump administration has been concerned about the U.K.’s steps to counter China’s steel overcapacity and refused to lower further a 25 percent tariff carve-out for Britain’s steel and aluminum exports from the White House’s 50 percent global duties on the metals. Trade Secretary Kyle discussed lowering the Trump administration’s tariffs on U.K. steel with senior U.S. Cabinet members in Washington on Wednesday.  “We are very much on the case of trying to sort out precisely where we land with the EU safeguard,” Trade Minister Chris Bryant told parliament Thursday, after meeting with EU Trade Commissioner Maroš Šefčovič on Wednesday for negotiations. “We will do everything we can to make sure that we have a strong and prosperous steel sector across the whole of the U.K.,” Bryant said. The TRA has also launched a new public-facing Import Trends Monitor tool to help firms detect surges in imports that could harm their business and provide evidence that could prompt an investigation by the watchdog. “We welcome the government’s strategic steer, which marks a significant milestone in our shared goal to make the U.K.’s trade remedies regime more agile, accessible and assertive, as well as providing greater accountability,” said the TRA’s Co-Chief Executives Jessica Blakely and Carmen Suarez. Sophie Inge and Jon Stone contributed reporting.

The discussion surrounding the digital euro is strategically important to Europe. On Dec. 12, the EU finance ministers are aiming to agree on a general approach regarding the dossier. This sets out the European Council’s official position and thus represents a major political milestone for the European Council ahead of the trilogue negotiations. We want to be sure that, in this process, the project will be subject to critical analysis that is objective and nuanced and takes account of the long-term interests of Europe and its people. > We do not want the debate to fundamentally call the digital euro into question > but rather to refine the specific details in such a way that opportunities can > be seized. We regard the following points as particularly important: * maintaining European sovereignty at the customer interface; * avoiding a parallel infrastructure that inhibits innovation; and * safeguarding the stability of the financial markets by imposing clear holding limits. We do not want the debate to fundamentally call the digital euro into question but rather to refine the specific details in such a way that opportunities can be seized and, at the same time, risks can be avoided. Opportunities of the digital euro:  1. European resilience and sovereignty in payments processing: as a public-sector means of payment that is accepted across Europe, the digital euro can reduce reliance on non-European card systems and big-tech wallets, provided that a firmly European design is adopted and it is embedded in the existing structures of banks and savings banks and can thus be directly linked to customers’ existing accounts. 2. Supplement to cash and private-sector digital payments: as a central bank digital currency, the digital euro can offer an additional, state-backed payment option, especially when it is held in a digital wallet and can also be used for e-commerce use cases (a compromise proposed by the European Parliament’s main rapporteur for the digital euro, Fernando Navarrete). This would further strengthen people’s freedom of choice in the payment sphere. 3. Catalyst for innovation in the European market: if integrated into banking apps and designed in accordance with the compromises proposed by Navarrete (see point 2), the digital euro can promote innovation in retail payments, support new European payment ecosystems, and simplify cross-border payments. > The burden of investment and the risk resulting from introducing the digital > euro will be disproportionately borne by banks and savings banks. Risks of the current configuration: 1. Risk of creating a gateway for US providers: in the configuration currently planned, the digital euro provides US and other non-European tech and payment companies with access to the customer interface, customer data and payment infrastructure without any of the regulatory obligations and costs that only European providers face. This goes against the objective of digital sovereignty. 2. State parallel infrastructures weaken the market and innovation: the European Central Bank (ECB) is planning not just two new sets of infrastructure but also its own product for end customers (through an app). An administrative body has neither the market experience nor the customer access that banks and payment providers do. At the same time, the ECB is removing the tried-and-tested allocation of roles between the central bank and private sector. Furthermore, the Eurosystem’s digital euro project will tie up urgently required development capacity for many years and thereby further exacerbate Europe’s competitive disadvantage. The burden of investment and the risk resulting from introducing the digital euro will be disproportionately borne by banks and savings banks. In any case, the banks and savings banks have already developed a European market solution, Wero, which is currently coming onto the market. The digital euro needs to strengthen rather than weaken this European-led payment method. 3. Risks for financial stability and lending: without clear holding limits, there is a risk of uncontrolled transfers of deposits from banks and savings banks into holdings of digital euros. Deposits are the backbone of lending; large-scale outflows would weaken both the funding of the real economy – especially small and medium-sized enterprises – and the stability of the system. Holding limits must therefore be based on usual payment needs and be subject to binding regulations. -------------------------------------------------------------------------------- Disclaimer POLITICAL ADVERTISEMENT * The sponsor is Bundesverband der Deutschen Volksbanken und Raiffeisenbanken e.V. , Schellingstraße 4, 10785 Berlin, Germany * The ultimate controlling entity is Bundesverband der Deutschen Volksbanken und Raiffeisenbanken e.V. , Schellingstraße 4, 10785 Berlin, Germany More information here.

President Donald Trump’s latest round of Europe-bashing has the U.S.’s allies across the Atlantic revisiting a perennial question: Why does Trump hate Europe so much? Trump’s disdain for America’s one-time partners has been on prominent display in the past week — first in Trump’s newly released national security strategy, which suggested that Europe was suffering from civilizational decline, and then in Trump’s exclusive interview with POLITICO, where he chided the “decaying” continent’s leaders as “weak.” In Europe, Trump’s criticisms were met with more familiar consternation — and calls to speed up plans for a future where the continent cannot rely on American security support. But where does Trump’s animosity for Europe actually come from? To find out, I reached out to a scholar who’d been recommended to me by sources in MAGA world as someone who actually understands their foreign policy thinking (even if he doesn’t agree with it). “He does seem to divide the world into strength and weakness, and he pays attention to strength, and he kind of ignores weakness,” said Jeremy Shapiro, the research director at the European Council on Foreign Relations and an expert on Trump’s strained relations with the continent. “And he has long characterized the Europeans as weak.” Shapiro explained that Trump has long blamed Europe’s weakness on its low levels of military spending and its dependence on American security might. But his critique seems to have taken on a new vehemence during his second term thanks to input from new advisers like Vice President JD Vance, who have successfully cast Europe as a liberal bulwark in a global culture war between MAGA-style “nationalists” and so-called globalists. Like many young conservatives, Shapiro explained, Vance has come to believe that “it was these bastions of liberal power in the culture and in the government that stymied the first Trump term, so you needed to attack the universities, the think tanks, the foundations, the finance industry, and, of course, the deep state.” In the eyes of MAGA, he said, “Europe is one of these liberal bastions.” This conversation was edited for length and clarity. Trump’s recent posture toward Europe brings to mind the old adage that the opposite of love isn’t hate, it’s indifference. Do you think Trump hates Europe, or does he just think it’s irrelevant? My main impression is that he’s pretty indifferent toward it. There are moments when specific European countries or the EU really pisses him off and he expresses something that seems close to hatred, but mostly he doesn’t seem very focused on it. Why do you think that is? He does seem to divide the world into strength and weakness, and he pays attention to strength, and he kind of ignores weakness. And he has long characterized the Europeans as weak for a bunch of different reasons having to do with what seems to him to be a decadence in their society, their immigration, their social welfare states, their lack of apparent military vigor. All of those things seem to put them in the weak category, and in Trump’s world, if you’re in the weak category, he doesn’t pay much attention to you. What about more prosaic things like the trade imbalance and NATO spending? Do those contribute to his disdain, or does it originate from a more guttural place? I get the impression that it is more at a guttural level. It always seemed to me that the NATO spending debate was just a stick with which to beat the NATO allies. He has long understood that that’s something that they felt a little bit guilty about, and that’s something that American presidents had beat them about for a while, so he just sort of took it to an 11. The trade deficit is something that’s more serious for him. He’s paid quite a bit of attention to that in every country, so it’s in the trade area where he takes Europeans most seriously. But because they’re so weak and so dependent on the United States for security, he hasn’t had to deal with their trade problems in the same way. He’s able to threaten them on security, and they have folded pretty quickly. Does some of his animosity originate from his pre-presidency when he did business in Europe? He likes to blame Europeans for nixing some of his business transactions, like a golf course in Ireland. How serious do you think that is? I think that’s been important in forming his opinion of the EU rather than of Europe as a whole. He never seems to refer to the EU without referring to the fact that they blocked his golf course in Ireland. It wasn’t even the EU that blocked it, actually — it was an Irish local government authority — but it conforms to the general MAGA view of the EU as overly bureaucratic, anti-development and basically as an extension of the American liberal approach to development and regulation, which Trump certainly does hate. That’s part of what led Trump and his movement more generally to put the EU in the category of supporters of liberal America. In that sense, the fight against the EU in particular — but also against the other liberal regimes in Europe — became an extension of their domestic political battle with liberals in America. That effort to pull Europe as a whole into the American culture war by positioning it as a repository of all the liberal pieties that MAGA has come to hate — that seems kind of new. That is new for the second term, yeah. Where do you think that’s coming from? It definitely seems to be coming from [Vice President] JD Vance and the sort of philosophers who support him — the Patrick Deneens and Yoram Hazonys. Those types of people see liberal Europe as quite decadent and as part of the overall liberal problem in the world. You can also trace some of it back to Steve Bannon, who has definitely been talking about this stuff for a while. There does seem to be a real preoccupation with the idea that Europe is suffering from some sort of civilizational decline or civilization collapse. For instance, in both the new national security strategy and in his remarks to POLITICO this week, Trump has suggested that Europe is “decaying.” What do you make of that? This is a bit of a projection, right? If you look at the numbers in terms of immigration and diversity, the United States is further ahead in that decay — if you want to call it that — than Europe. There was this view that emerged among MAGA elites in the interregnum that it wasn’t enough to win the presidency in order to successfully change America. You had to attack all of the bastions of liberal power. It was these bastions of liberal power in the culture and in the government that stymied the first Trump term, so you needed to attack the universities, the think tanks, the foundations, the finance industry and, of course, the deep state, which is the first target. It was only through attacking these liberal bastions and conquering them to your cause that you could have a truly transformative effect. One of the things that they seem to have picked up while contemplating this theory is that Europe is one of these liberal bastions. Europe is a support for liberals in the United States, in part because Europe is the place where Americans get their sense of how the world views them. It’s ironic that that image of a decadent Europe coexists with the rise of far-right parties across the continent. Obviously, the Trump administration has supported those parties and allied with them, but at least in France and Germany, the momentum seems to be behind these parties at the moment. That presents them with an avenue to destroy liberal Europe’s support for liberal America by essentially transforming Europe into an illiberal regime. That is the vector of attack on liberal Europe. There has been this idea that’s developed amongst the populist parties in Europe since Brexit that they’re not really trying to leave the EU or destroy the EU; they’re trying to remake the EU in their nationalist and sovereigntist image. That’s perfect for what the Trump people are trying to do, which is not destroy the EU fully, but destroy the EU as a support for liberal ideas in the world and the United States. You mentioned the vice president, who has become a very prominent mouthpiece for this adversarial approach to Europe — most obviously in his speech at Munich earlier this year. Do you think he’s just following Trump’s guttural dislike of Europe or is he advancing his own independent anti-European agenda? A little of both. I think that Vance, like any good vice president, is very careful not to get crosswise with his boss and not contradict him in any way. So the fact that Trump isn’t opposed to this and that he can support it to a degree is very, very important. But I think that a lot of these ideas come from Vance independently, at least in detail. What he’s doing is nudging Trump along this road. He’s thinking about what will appeal to Trump, and he’s mostly been getting it right. But I think that especially when it comes to this sort of culture war stuff with Europe, he’s more of a source than a follower. During this latest round of Trump’s Euro-bashing, did anything stand out to you as new or novel? Or was it all of a piece with what you had heard before? It was novel relative to a year ago, but not relative to February and since then. But it’s a new mechanism of describing it — through a national security strategy document and through interviews with the president. The same arguments have achieved a sort of higher status, I would say, in the last week or so. You could sit around in Europe — as I did — and argue about the degree to which this really was what the Trump administration was doing, or whether this was just a faction — and you can still have that argument, because the Trump administration is generally quite inconsistent and incoherent when it comes to this kind of thing — but I think it’s undoubtedly achieved a greater status in the last week or two. How do you think Europe should deal with Trump’s recurring animosity towards the continent? It seems they’ve settled on a strategy of flattery, but do you think that’s effective in the long run? No, I think that’s the exact opposite of effective. If you recall what I said at the beginning, Trump abhors weakness, and flattery is the sort of ultimate manifestation of weakness. Every time the Europeans show up and flatter Trump, it enables them to have a good meeting with him, but it conveys the impression to him that they are weak, and so it increases his policy demands against them. We’ve seen that over and over again. The Europeans showed up and thought they had changed his Ukraine position, they had a great meeting, he said good things about them, they went home and a few weeks later, he had a totally different Ukraine position that they’re now having to deal with. The flattery has achieved the sense in the Trump administration that they can do anything they want to the Europeans, and they’ll basically swallow it. They haven’t done what some other countries have done, like the Chinese or the Brazilians, or even the Canadians to some degree, which is to stand up to Trump and show him that he has to deal with them as strong actors. And that’s a shame, because the Europeans — while they obviously have an asymmetric dependence on the United States, and they have some weaknesses — are a lot stronger than a lot of other countries, especially if they were working together. I think they have some capacity to do that, but they haven’t really managed it as of yet. Maybe this will be a wake-up call to do that.