PARIS — The French Senate laid the groundwork for a dramatic, consequential week of fiscal planning for 2026 on Monday by passing its own version of next year’s state budget rife with spending cuts.   The Senate and France’s more powerful lower house, the National Assembly, must now find a compromise in a process akin to a U.S.-style conference committee set to take place Friday. If that process fails it will considerably diminish the chances of France getting a new budget wrapped by the end of the year. One National Assembly official told POLITICO the meeting will be “make or break.” Political paralysis also prevented France from getting its 2025 state budget passed before the end of last year; Prime Minister Sébastien Lecornu warned in November that a repeat failure was a “danger that weighs on the French economy.” The country is highly unlikely to face a government shutdown similar to what happened in the United States earlier this year, however, as lawmakers can approve a measure carrying the 2025 budget over into next year. But such a stopgap would exacerbate the worrying financial outlook in the European Union’s second-largest economy.   Lecornu managed to secure a consensus on next year’s social security budget, but the state budget is proving more difficult. The National Assembly’s first attempt ended with all but one MP voting against a bill saddled with untenable and sometimes conflicting amendments. The opposition Socialist Party, which backed the social security bill and is in somewhat of a kingmaker position, is leaning toward voting against this version of the state budget because its members feel France’s wealthiest households won’t be subject to sufficient tax hikes, party leader Olivier Faure said last week. 

BRUSSELS — The EU aims to seal a free-trade agreement with India by late January instead of the end of the year as initially envisaged, Trade Commissioner Maroš Šefčovič told POLITICO. “The plan is that, most probably in the second week of January, that [Indian Commerce Minister] Piyush Goyal would come here” for another round of negotiations, Šefčovič said in an interview on Monday. “There is a common determination that we should do our utmost to get to the [free-trade agreement] and use every possible day until the Indian national day,” he added. India celebrates its annual Republic Day on Jan. 26, and both Commission President Ursula von der Leyen and Council President António Costa have been invited as guests of honor. Von der Leyen and Indian Prime Minister Narendra Modi pledged in February to clinch the free-trade agreement (FTA) by the end of the year — something even they recognized would be a steep target. But a number of issues keep gumming up the works, Šefčovič said, including that India is linking its objections to the EU’s planned carbon border tax and its steel safeguard measures with the EU’s own demand to reduce its tariffs on cars. Šefčovič traveled again to New Delhi last week in an effort to clear major hurdles to conclude the EU’s negotiations with the world’s most populous country. “The ideal scenario would be — like we announced with Indonesia — that we completed the political negotiations on the FTA,” Šefčovič said. “That would be my ideal scenario, but we are not there yet.” The EU and Indonesia concluded their agreement in September. “It’s extremely, extremely challenging,” he said, adding: “The political ambition of our president and the prime minister to get this done this year was absolutely crucial for us to make progress.”

Europe’s chemical industry has reached a breaking point. The warning lights are no longer blinking — they are blazing. Unless Europe changes course immediately, we risk watching an entire industrial backbone, with the countless jobs it supports, slowly hollow out before our eyes. Consider the energy situation: this year European gas prices have stood at 2.9 times higher than in the United States. What began as a temporary shock is now a structural disadvantage. High energy costs are becoming Europe’s new normal, with no sign of relief. This is not sustainable for an energy-intensive sector that competes globally every day. Without effective infrastructure and targeted energy-cost relief — including direct support, tax credits and compensation for indirect costs from the EU Emissions Trading System (ETS) — we are effectively asking European companies and their workers to compete with their hands tied behind their backs. > Unless Europe changes course immediately, we risk watching an entire > industrial backbone, with the countless jobs it supports, slowly hollow out > before our eyes. The impact is already visible. This year, EU27 chemical production fell by a further 2.5 percent, and the sector is now operating 9.5 percent below pre-crisis capacity. These are not just numbers, they are factories scaling down, investments postponed and skilled workers leaving sites. This is what industrial decline looks like in real time. We are losing track of the number of closures and job losses across Europe, and this is accelerating at an alarming pace. And the world is not standing still. In the first eight months of 2025, EU27 chemicals exports dropped by €3.5 billion, while imports rose by €3.2 billion. The volume trends mirror this: exports are down, imports are up. Our trade surplus shrank to €25 billion, losing €6.6 billion in just one year. Meanwhile, global distortions are intensifying. Imports, especially from China, continue to increase, and new tariff policies from the United States are likely to divert even more products toward Europe, while making EU exports less competitive. Yet again, in 2025, most EU trade defense cases involved chemical products. In this challenging environment, EU trade policy needs to step up: we need fast, decisive action against unfair practices to protect European production against international trade distortions. And we need more free trade agreements to access growth market and secure input materials. “Open but not naïve” must become more than a slogan. It must shape policy. > Our producers comply with the strictest safety and environmental standards in > the world. Yet resource-constrained authorities cannot ensure that imported > products meet those same standards. Europe is also struggling to enforce its own rules at the borders and online. Our producers comply with the strictest safety and environmental standards in the world. Yet resource-constrained authorities cannot ensure that imported products meet those same standards. This weak enforcement undermines competitiveness and safety, while allowing products that would fail EU scrutiny to enter the single market unchecked. If Europe wants global leadership on climate, biodiversity and international chemicals management, credibility starts at home. Regulatory uncertainty adds to the pressure. The Chemical Industry Action Plan recognizes what industry has long stressed: clarity, coherence and predictability are essential for investment. Clear, harmonized rules are not a luxury — they are prerequisites for maintaining any industrial presence in Europe. This is where REACH must be seen for what it is: the world’s most comprehensive piece of legislation governing chemicals. Yet the real issues lie in implementation. We therefore call on policymakers to focus on smarter, more efficient implementation without reopening the legal text. Industry is facing too many headwinds already. Simplification can be achieved without weakening standards, but this requires a clear political choice. We call on European policymakers to restore the investment and profitability of our industry for Europe. Only then will the transition to climate neutrality, circularity, and safe and sustainable chemicals be possible, while keeping our industrial base in Europe. > Our industry is an enabler of the transition to a climate-neutral and circular > future, but we need support for technologies that will define that future. In this context, the ETS must urgently evolve. With enabling conditions still missing, like a market for low-carbon products, energy and carbon infrastructures, access to cost-competitive low-carbon energy sources, ETS costs risk incentivizing closures rather than investment in decarbonization. This may reduce emissions inside the EU, but it does not decarbonize European consumption because production shifts abroad. This is what is known as carbon leakage, and this is not how EU climate policy intends to reach climate neutrality. The system needs urgent repair to avoid serious consequences for Europe’s industrial fabric and strategic autonomy, with no climate benefit. These shortcomings must be addressed well before 2030, including a way to neutralize ETS costs while industry works toward decarbonization. Our industry is an enabler of the transition to a climate-neutral and circular future, but we need support for technologies that will define that future. Europe must ensure that chemical recycling, carbon capture and utilization, and bio-based feedstocks are not only invented here, but also fully scaled here. Complex permitting, fragmented rules and insufficient funding are slowing us down while other regions race ahead. Decarbonization cannot be built on imported technology — it must be built on a strong EU industrial presence. Critically, we must stimulate markets for sustainable products that come with an unavoidable ‘green premium’. If Europe wants low-carbon and circular materials, then fiscal, financial and regulatory policy recipes must support their uptake — with minimum recycled or bio-based content, new value chain mobilizing schemes and the right dose of ‘European preference’. If we create these markets but fail to ensure that European producers capture a fair share, we will simply create new opportunities for imports rather than European jobs. > If Europe wants a strong, innovative resilient chemical industry in 2030 and > beyond, the decisions must be made today. The window is closing fast. The Critical Chemicals Alliance offers a path forward. Its primary goal will be to tackle key issues facing the chemical sector, such as risks of closures and trade challenges, and to support modernization and investments in critical productions. It will ultimately enable the chemical industry to remain resilient in the face of geopolitical threats, reinforcing Europe’s strategic autonomy. But let us be honest: time is no longer on our side. Europe’s chemical industry is the foundation of countless supply chains — from clean energy to semiconductors, from health to mobility. If we allow this foundation to erode, every other strategic ambition becomes more fragile. If you weren’t already alarmed — you should be. This is a wake-up call. Not for tomorrow, for now. Energy support, enforceable rules, smart regulation, strategic trade policies and demand-driven sustainability are not optional. They are the conditions for survival. If Europe wants a strong, innovative resilient chemical industry in 2030 and beyond, the decisions must be made today. The window is closing fast. -------------------------------------------------------------------------------- Disclaimer POLITICAL ADVERTISEMENT * The sponsor is CEFIC- The European Chemical Industry Council  * The ultimate controlling entity is CEFIC- The European Chemical Industry Council  More information here.

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.

A minimum tax on the EU’s richest individuals will not discourage innovators and start-up founders from investing in the bloc, prominent economist Gabriel Zucman told POLITICO. “Innovation does not depend on just a tiny number of wealthy individuals paying zero tax,” Zucman said in an interview at this year’s POLITICO 28 event. The young economist has become a household name in France thanks to his proposal to have households worth more than €100 million paying an annual tax of at least 2 percent of the value of all their assets. Critics of the tax warned about the risk of scaring investors out of the EU and that tech entrepreneurs could leave the bloc as they would be forced to pay a tax based on the market value of shares they own in their companies without necessarily having the liquidity to do so. But Zucman rejected “the notion that someone […] would be discouraged to create a start-up, to innovate in AI because of the possibility that once that person is a billionaire, he or she will have to pay a tiny amount of tax” “Who can believe in that?” he scoffed. The “Zucman tax” was one of the key demands by left-wing parties for France’s budget for next year. But the measure has been ignored by all France’s short-lived prime ministers, and rejected by the French parliament during ongoing budget debates. But Zucman is not giving up and still promotes the measure, including at the EU level. “This would generate about €65 billion in tax revenue for the EU as whole,” Zucman insisted.

LONDON — A British police force investigating bribery and money laundering will be expanded amid fears corruption is threatening U.K. national security. The U.K. government on Monday pledged £15 million to expand its “Domestic Corruption Unit” — a body which investigates corruption in local authorities and banks. The announcement came as ministers published a new U.K. anti-corruption strategy setting out more than 100 measures to tackle bribery, money laundering and intimidation. “Corruption threatens our national security, undermines legitimate business and steals money from working people’s pockets,” Security Minister Dan Jarvis said in a press statement issued alongside the anti-corruption document. “Our landmark strategy will take on the rogue actors and insiders who often exploit their positions of power and manipulate the public purse for personal gain,” he added.   The U.K. government wants to crackdown on what it calls “professional enablers” of corruption and crime, which it claims are sometimes working for the benefit of hostile states, such as Russia, or criminal gangs overseas. A plan to strengthen sanctions against bad actors in banking, accountancy and the law were also set out Monday. There will also be increased vetting for new police, prison officer and border security recruits, and staff moving between organizations to stop organized crime groups infiltrating Britain’s frontline services. Ministers are also considering payments for whistleblowers. The U.K. government will host an illicit finance summit next year to tackle the flow of dirty money. It will examine tools such cryptocurrency, which are being used by criminals, those evading sanctions and hostile states. Margaret Hodge, the government’s anti-corruption champion, will also lead a review into asset ownership in Britain, which will aim to track the flow of dirty money into the country. Transparency campaigners and MPs have tentatively supported the strategy, but some have warned that there are glaring omissions. Andrew Mitchell, the former Tory minister who chairs the APPG on Anti-Corruption and Responsible Tax, said that without “full and proper financial transparency” in Britain’s overseas tax havens, “[the] U.K.’s credibility as a global leader on anti-corruption and economic crime will continue to be undermined.”

Sprawling defense legislation set for a vote as soon as this week would place new restrictions on reducing troop levels in Europe, a bipartisan rebuke of Trump administration moves that lawmakers fear would limit U.S. commitments on the continent. A just-released compromise version of the National Defense Authorization Act — which puts Congress’ stamp on Pentagon programs and policy each year — has been in the works for months. The measure stands in stark contrast to President Donald Trump’s new national security strategy, which sharply criticizes European allies and suggests the continent is in cultural decline. Lawmakers also endorsed a slight increase in the Pentagon budget with a price tag that is $8 billion more than Trump requested. And it would repeal decades-old Middle East war powers, a small win for lawmakers who’ve been fighting to reclaim a sliver of Congress’ war-declaring prerogatives. The final bill is the result of weeks of negotiations between House and Senate leadership in both parties, heads of the Armed Services panels and the White House. The measure had been slowed in recent days by talks on issues unrelated to defense, including a major Senate-backed housing package and greater scrutiny of U.S. investment in China. The defense bill typically passes with broad bipartisan support. Speaker Mike Johnson will likely need to win back some Democrats who opposed the House GOP’s hard-right initial bill in September. And the speaker will have to contend with fellow Republicans upset that their priorities weren’t included. But both House and Senate-passed defense bills reflected bipartisan concerns that the Trump administration would seek to significantly reduce the U.S. military footprint in Europe. Both measures included language that imposes requirements the Pentagon must meet before trimming military personnel levels on the continent below certain thresholds. Republicans, led by Senate Armed Services Chair Roger Wicker (R-Miss.) and House Armed Services Chair Mike Rogers (R-Ala.), broke with the Trump administration, arguing that troop reductions — such as a recent decision to remove a rotational Army brigade from Romania — would invite aggression from Russia. The final bill blocks the Pentagon from reducing the number of troops permanently stationed or deployed to Europe below 76,000 for longer than 45 days until Defense Secretary Pete Hegseth and the head of U.S. European Command certify to Congress that doing so is in U.S. national security interests and that NATO allies were consulted. They would also need to provide assessments of that decision’s impact. The legislation applies the same conditions to restrict the U.S. from vacating the role of NATO’s Supreme Allied Commander in Europe, a role that the U.S. officer who leads European Command chief has held simultaneously for decades. Negotiators included similar limitations on reducing the number of troops on the Korean Peninsula below 28,500, a provision originally approved by the Senate. Lawmakers agreed to a slight increase to the bill’s budget topline, reflecting some momentum on Capitol Hill for more military spending. The final agreement recommends an $8 billion hike to Trump’s $893 billion flat national defense budget, for a total of roughly $901 billion for the Pentagon, nuclear weapons development and other national security programs. The House-passed defense bill matched Trump’s budget request while the Senate bill proposed a $32 billion boost. Republicans separately approved a $150 billion multi-year boost for the Pentagon through their party-line tax cut and spending megabill earlier this year. Regardless of the signal the topline budget agreement sends, the defense policy bill does not allocate any money to the Pentagon. Lawmakers must still pass annual defense spending legislation to fund Pentagon programs. House Armed Services ranking member Adam Smith (D-Wash.) described the agreement as a “placeholder” that would allow lawmakers to finish the NDAA, while congressional appropriators continue their talks on a separate full-year Pentagon funding measure. A House Republican leadership aide who, like others, was granted anonymity to discuss details of the bill ahead of its release, said the revised topline is a “fiscally responsible increase that meets our defense needs.” The bill also would repeal a pair of old laws that authorize military action in the Middle East, including 2002 legislation that preceded the invasion of Iraq and the 1991 Gulf War. Those repeals were included in both the House and Senate defense bills as bipartisan support for scrubbing the old laws — which critics contend could be abused by a president — overcame opposition from some top Republicans. Repealing those decades-old measures is a win for critics of expansive presidential war powers, who argued the measures aren’t needed anymore. They point to the potential for abuses — citing Trump’s use of the 2002 Iraq authorization to partly justify a strike that killed Iranian military commander Qasem Soleimani in Iraq in 2020. A second House GOP leadership aide said the repeal of the two Iraq authorizations won’t impact Trump’s authority as commander-in-chief. But the repeal is ultimately a minor win for lawmakers seeking to reclaim congressional power. The 2001 post-9/11 authorization that undergirds much of the U.S. counterterrorism operations around the world remains on the books. And the bill is silent on Trump’s ongoing campaign against alleged drug smuggling vessels in the Caribbean. Many lawmakers — including some Republicans — have questioned the administration’s legal justification for the lethal strikes. The final bill also doesn’t include an expansion of coverage for in-vitro fertilization and other fertility services for military families under the Tricare health system. The provision, backed by Sen. Tammy Duckworth (D-Ill.), Rep. Sara Jacobs (D-Calif.) and others, was included in both Senate and House bills before it was dropped. Johnson reportedly was seeking to remove the provision, which similarly was left out of last year’s bill.

LONDON — Keir Starmer is promising British voters he’ll fix the Brexit-shaped hole in the U.K. economy, but Brussels appears to have quite enough on its plate. Days after Britain’s grim growth prospects were laid bare in the U.K. budget, the country’s PM gave two speeches promising closer ties with the European Union and elevated his EU point person, Nick Thomas-Symonds, to the Cabinet. “We have to keep moving towards a closer relationship with the EU, and we have to be grown-up about that, to accept that that will require trade-offs,” Starmer said on Monday.   But European leaders are already grappling with packed in-trays as they look for an end to Russia’s war in Ukraine and confront their own domestic economic challenges — and skepticism remains as to how much room for maneuver the British PM actually has.  Starmer’s political red lines — no customs union, no single market, and no return to freedom of movement — remain in place, and ministers continue to stress that a return to full EU membership remains off the table. Even Starmer’s existing EU “reset” agenda — which aims to walk back some of the harder edges of Boris Johnson’s Brexit settlement — is not all going to plan. A push to join the EU’s SAFE loans-for-arms scheme crashed last week after the two sides failed to agree on how much money the U.K. would pay. “The same ‘how much should the U.K. contribute?’ question has been slowing down the actual implementation of basically all the reset topics,” said one EU diplomat who was not authorized to speak on the record. Despite plenty of talk in London about closer ties, the forum for putting fresh topics on the agenda would be the EU-U.K. summit that is due next year. But a date has yet to be set for that gathering. “Nobody is talking about the next summit here yet. I’m not saying it isn’t going to happen, it’s just a question of bandwidth,” another EU diplomat said. “For us the focus now is to work through our existing commitments and finalize those deals, start implementing them and then showing that the deals are bringing value. That takes time,” a third diplomat said. LIMITED SCOPE  The problem for Starmer is that his existing plan to rebuild EU ties is unlikely to move the dial on U.K. economic growth. Economists at the Centre for European Reform reckon that the government’s reset package — if delivered in full — is worth somewhere between 0.3 percent and 0.7 per cent of U.K. GDP over a decade.   Meanwhile, academics at the Bank of England and Stanford University calculate that the economic hit from Brexit could be as high as 8 percent of GDP over a similar period. “It is striking how frequently the chancellor and prime minister will now lament the costs of Brexit, without making any suggestions on how to change the status quo,” said Joël Reland, research fellow at the U.K. In A Changing Europe think tank.  “This could be read as a slow creep towards a breach of their red lines, but I suspect it is mostly about domestic political management. They are in a sticky economic situation and Brexit is a convenient thing to blame. I don’t think they’d be brave enough to risk a manifesto breach on Brexit, but I’d be surprised if ‘no single market or customs union’ is in the 2029 manifesto,” Reland said.  One British government official stressed that Labour’s red lines remain in place — but added: “We don’t think we’re at those red lines yet.”  BREAKING THE TABOO  Labour’s previous reluctance to talk about Brexit was born of a fear of upsetting Leave-leaning swing voters whom the party wanted to win over in the last election.  But that started to change over the summer.  Thomas-Symonds, the minister in charge of delivering the reset, went on the attack in a speech hosted by the Spectator, a right-wing magazine. Parties pledging to reverse Starmer’s reset were offering “more red tape, mountains of paperwork, and a bureaucratic burden,” he argued. To the surprise of Downing Street aides, the attacks landed well and drew a line between the government’s agenda and that of Reform UK boss Nigel Farage — the longstanding Brexiteer dominating in the polls — and Conservative Leader Kemi Badenoch.  It emboldened Starmer and his lieutenants. Rachel Reeves, the U.K.’s chief finance minister, used her speech at the Labour Party conference in Liverpool to talk up the benefits of improved cross-border mobility for the economy.   Ahead of last week’s difficult budget stuffed with tax rises, she waded in further, damning the effects of a “chaotic Brexit.” While the new rhetoric has yet to be backed up by a shift in policy, there are signs that some of Starmer’s close allies are starting to think bigger.  Rejoining the EU customs union was reportedly raised as an option by Starmer’s economic advisor ahead of the budget — but was rejected. “There are definitely people who have been pushing at this for a long time,” one person with knowledge of conversations in government said.  “I don’t think that will be that surprising to people, because if your primary goal allegedly is growth then that’s one of the easiest levers you can pull. Most economists would agree — it’s the politics that’s stopping it.”  Pressed on the prospect of Britain’s applying to rejoin the customs union on Wednesday, Health Secretary Wes Streeting did not explicitly rule out the idea but stressed the government’s policy was about “new partnerships and new relationships, not relitigating the past.” If Starmer opts for a risky manifesto-busting push to rejoin the customs union, diplomats say even that is unlikely to be a quick fix for the British PM.  “It would take time. Just consider how slow has been so far the progress on SPS, ETS and Erasmus,” the first diplomat quoted above said. “As of now, the U.K. needs the EU to spur its growth, not the other way around.”

Prime minister’s questions: a shouty, jeery, very occasionally useful advert for British politics. Here’s what you need to know from the latest session in POLITICO’s weekly run-through. What they sparred about: The economy, of course. A week after Rachel Reeves’ second tax-raising budget, Tory Leader Kemi Badenoch and Prime Minister Keir Starmer went toe to toe on the aftermath, which hasn’t been plain sailing for the government. Lo and behold: Badenoch asked the PM if he believed “when an organization descends into total shambles, the person at the top should resign,” i.e., him. Starmer, obviously, wouldn’t go there, given his uncertain political future, insisting he was “very proud” to lead a Labour government that was “fixing the mess that they [the Tories] left.” Got your number: Badenoch, you won’t be surprised to read, was unsatisfied, arguing Starmer “doesn’t want to answer a question about taking responsibility, because he likes to blame everyone else except himself.” She accused the chancellor of “twisting the facts” and asked if Reeves would comply with any Financial Conduct Authority investigation over the biggest post-budget row … If economic forecasts send you to sleep: Opposition parties claim the chancellor told porkies about the fiscal situation to justify a planned manifesto-breaching income tax hike, which was later ditched. Reeves naturally denies any such charge. Still with us? This blessed plot: The PM gave as good as he got, accusing the Tory leader of “completely losing the plot” and said the government was “turning the page” on the Tories’ financial record. However, the briefing wars may mean members of the public struggle to spot the difference between the red and blue parties. Case in point: The Tory leader had plenty of fun reading out anonymous briefings from irate Cabinet ministers. “The handling of this budget has been a disaster from start to finish,” Badenoch quoted, looking across the despatch box to speculate who was the culprit. “Was it him? Was it her?” she joked, pointing at different ministers. The hardest word: The session may be called Prime Minister’s Questions, but Starmer repeatedly said Badenoch should “get up now and apologize” for claiming Reeves had misled the public. The Tory leader, who’d have thought it, didn’t oblige and continued her forthright attacks: “She doesn’t belong in the Treasury, she belongs in la la land.” Brutal scenes. Whip hand: Badenoch had one final go at landing a blow by highlighting the scrapped two-child benefit cap, despite previously removing the whip from seven Labour MPs who supported that measure just after the election. “How did it suddenly become affordable at the very time he needed to save his own skin?” Badenoch cried. Mission impossible: Starmer ducked the point but had some fire in his belly, saying the Tories should be “utterly ashamed” as “the party of child poverty.” He insisted bringing down child poverty was “a moral mission, a political mission and a personal mission,” but stirring rhetoric came too late in their joust. “Isn’t the truth that behind it all is a prime minister who only cares about one person’s job, his own?” Badenoch concluded. Helpful backbench intervention of the week: Blyth and Ashington MP Ian Lavery decried the Tories’ record on poverty in the north east of England, asking the PM if his constituents had much to look forward to from Labour. Starmer listed the government’s many policies to alleviate poverty, with a few jabs at the Conservatives for good measure. Totally unscientific scores on the doors: Starmer 6/10. Badenoch 8/10. The Tory leader had reams of ammo to work with following briefing wars and Office for Budget Responsibility watchdog Richard Hughes’ resignation as chair over leaked fiscal documents. Badenoch continued the tirade that was at the front and center of her immediate response to the budget last week, and effectively laid out the political choices Starmer made. The PM gave decent stats and some emotional language, but wasn’t able to seize the narrative.

PARIS — A generational reckoning is brewing in Paris and Berlin, where a new wave of younger politicians is putting pensioners on notice: The system is buckling and can’t hold unless retirees do more to help fix it. Culture, language and local politics may add a distinct flavor to each debate, but the European Union’s two biggest economies are dealing with the same issue — how to pay for the soaring costs associated with the retirement of baby boomers.   The problem is both demographic and financial. Declining birthrates mean there aren’t enough young people to offset the boom in retirees at a time when economic growth is sluggish, salaries have stagnated and purchasing power isn’t evolving at the same rate as it did for previous generations. And with the cost of real estate skyrocketing, young people feel that buying a home and other opportunities afforded to their parents’ generation are increasingly out of reach.  With budgets already strapped thanks to priorities such as rearmament in the face of Russian aggression, reindustrialization and the green transition, a growing number of young politicians from the center to the right of the political spectrum are calling out retirees for not contributing to the solution.  Some lawmakers in Germany, like 34-year-old Johannes Winkel, are calling for greater “intergenerational justice.” The 38-year-old French MP Guillaume Kasbarian is going a step further, arguing France should rethink its pay-as-you-go system — similar to Germany’s — in which current workers fund retirees’ pensions through taxes. The 38-year-old French MP Guillaume Kasbarian is going a step further, arguing France should rethink its pay-as-you-go system — similar to Germany’s — in which current workers fund retirees’ pensions through taxes. | Amaury Cornu/Hans Lucas/AFP via Getty Images Targeting pensioners is a politically dangerous proposition. They are a reliable voting constituency, heading to the ballot box in greater numbers than younger generations — and they lean centrist. German Chancellor Friedrich Merz’s conservative bloc got an estimated 43 percent of the vote among people aged 70 and above in February’s general election, and older voters helped Macron secure reelection in 2022.  French Budget Minister Amélie de Montchalin told lawmakers last month that she didn’t “want to trigger a generation war” over the government’s fiscal plans for next year.  But she — and her counterparts across the Rhine — may not have a choice. ‘FAIR TO ALL GENERATIONS’ Lawmakers in France are sparring this week over a highly contentious plan to freeze inflation adjustments on pension payments next year, part of a wide-ranging effort to trim billions of euros from the budget and get the deficit below 5 percent of gross domestic product. The debate in France echoes similar conversations in Germany, where Winkel is among a group of young conservatives who rebelled against a pension reform package put forth by Merz’s government, saying current benefits for older people are too generous and asking for a plan that is “fair to all generations.”   A group of leading economists argued in an op-ed in German newspaper Handelsblatt that Merz’s proposed pension package would be “to the detriment of the younger generation, who are already under increasing financial pressure.”   The leaders of Germany’s coalition set out to resolve the dispute last week, with Merz vowing to take on a second, more far-reaching set of pension reforms as early as next year.   Winkel is among a group of young conservatives who rebelled against a pension reform package put forth by Merz’s government, saying current benefits for older people are too generous and asking for a plan that is “fair to all generations.”  | Photo by Nadja Wohlleben/Getty Images But it’s unclear whether that proposal has appeased all young conservatives. In a letter this week, the group said its 18 lawmakers would decide individually how they will vote on the immediate pension package, which is set to go for a vote on Friday. Every vote will matter, as Merz’s fragile coalition has a majority of only 12 parliamentarians. On Tuesday, Merz’s center-right bloc held a test vote to see if there was enough conservative support to pass the pension reform package. The results of the internal vote were unclear. Opinion surveys in Germany and France show that much of the public favors protecting existing pension systems and benefits. Leftist parties in both countries have also strongly pushed back against measures that would freeze or lower pension benefits, arguing that the public pension system is a core element of social cohesion. But intergenerational cracks are emerging.  “Measures on pensions show a generational cleavage: They are massively rejected by pensioners but supported by nearly one out of two in the younger generation (18-24),” according to an analysis from French pollster Elabe published in October.  In another poll from Odoxa, a small majority of working-age people in France agreed that current pensioners are “better off because they were able to leave earlier than those still working.” KEY DIFFERENCES There are key differences between France and Germany, however. Pension benefits in France are far more generous than in Germany, and help keep the poverty rate among people aged 65 and above lower than that of the general population.  The opposite is true in Germany, where the over-65 population is worse off than those younger than 65, in part because public pensions became comparatively lower after pension reforms passed in the 2000s.  Ultimately, however, demographics and economics vary so much from one generation to another that it’s almost impossible to make a pension system “fair,” according to Arnaud Lechevalier, an economist at the Paris 1 Panthéon-Sorbonne University. The idea that each generation can have the same return on investment on their working-aged contributions is, in Lechevalier’s words, “a deeply stupid idea.”