LONDON — Green Party leader Zack Polanski is open to forming a discrete non-aggression pact with Labour in order to stop right-winger Nigel Farage from ever entering Downing Street, according to two senior Green officials. Polanski, the leader of the “eco-populist” outfit that is helping squeeze the incumbent Labour government’s progressive vote, has been keen to make the case that his radical politics can halt Farage — whose insurgent Reform UK is riding high in the polls — in his tracks. But the recently elected party chief, who has overseen a big boost to Green polling with his punchy defenses of leftist causes on social media and television, has told allies he “couldn’t live with myself” if he contributed to Farage’s victory, according to a second senior Green official, granted anonymity like others in this piece to speak about internal thinking. Such a move would stop short of a formal Green-Labour deal, instead tapping into tactical voting. Green officials are discussing the prospect of informal, local prioritizations of resources so the best-placed progressive challenger can win, as seen in elections past with Labour and the centrist Liberal Democrats. At the same time, Green advisers are keen to lean into the deep divisions within Labour about whether Starmer should be replaced with another leader to prevent electoral oblivion. Starmer appears deeply unpopular with Green supporters. One YouGov study has him rated just as unfavorably as Conservative chief Badenoch with backers of Polanski’s party. The first Green official argued there is “no advantage in working electorally with Labour under Starmer.” Instead, they’re eyeing up — even expecting — a change in Labour leadership. Polanski has talked up Andy Burnham, the Greater Manchester Labour mayor who is seen as one potential challenger to Starmer.  LABOUR: WE ARE NOT EVEN THINKING ABOUT THAT As the party in power, Labour — which has ramped up its attacks on the Greens in recent weeks — is keen to tamp down talk of working together. Asked about the Greens, a senior U.K. government adviser said: “We are not even thinking about that. We need to focus on being a viable government.”  They expect Polanski’s polling to plummet once there’s more scrutiny of his politics, including his criticism of NATO, as well as his more colorful comments. Back in 2013, as a hypnotherapist, Polanski suggested to a reporter he could enlarge breasts with his mind. “The hypnotist thing goes down in focus groups like a bucket of cold sick,” the government adviser added. There’s skepticism that a non-aggression deal could work anyway, not least because the Greens will be vying for the kind of urban heartlands Labour can’t afford to back down from. Neither party “has an incentive to go soft on one another,” as a result, Luke Tryl, a director at the More in Common think tank, said. “I really doubt they’re going to forgo taking more seats off us in London or Bristol in the greater interest of the left,” said a Labour MP with a keen eye on the polling. “They’re trying to replace us — they’re not trying to be our little friends.” The Labour MP instead argued that voters typically make their minds up in the lead-up to elections as to how best to stop a certain outcome, whether that’s due to past polling or activities on the ground. Zack Polanski has been keen to make the case that his radical politics can halt Nigel Farage — whose insurgent Reform UK is riding high in the polls — in his tracks. | Lesley Martin/Getty Images That can well work against Labour, as seen in the Caerphilly by-election in October. The constituency of the devolved Welsh administration had been Labour since its inception in 1999 — but no more. Voters determined to stop Farage decided it was the center-left Welsh nationalists of Plaid Cymru that represented the best party to coalesce around. Reform’s success was thwarted — but Labour’s vote plummeted in what were once party heartlands.  “There’s no doubt the Greens risk doing to Labour what Farage did to the Conservatives,” said Tryl of More in Common, who pointed out that the Greens may not even win many seats as a result of the fracturing (party officials internally speak of winning only 50 MPs as being a huge ask).   “Labour’s hope instead will have to be that enough disgruntled progressives hold their nose and opt for PM Starmer over the threat of PM Farage.” Labour and the Greens are not the only parties dealing with talk of a pact, despite a likely four-year wait for Britain’s next general election. Ever since 1918, it’s been either the Conservatives or Labour who’ve formed the British government, with Westminster’s first-past-the-post, winner-takes-all system across 650 constituencies meaning new parties rarely get a look in. But the general election in July last year suggested this could be coming apart. Farage has already been forced to deny a report that he views an electoral deal with establishment Conservatives as the “inevitable” route to power. His stated aim is to replace the right-wing party entirely. Conservative Leader Kemi Badenoch is publicly pretty firm that she won’t buddy up with Reform either. “I am the custodian of an institution that has existed for nigh on 200 years,” she said in February. “I can’t just treat it like it’s a toy and have pacts and mergers.” Robert Jenrick, the right-winger who’s widely tipped as her successor, has been more circumspect, however. That appears to be focusing minds on the left. Farage may be polling the highest — but there’s still a significant portion of the public horrified by the prospect of him entering No.10. A YouGov study on tactical voting suggested that Labour would be able to count on a boost in support from Liberal Democrat and Green voters to stave off the threat of Farage. Outwardly, Polanski is a vocal critic of Labour under Starmer and wants to usurp the party as the main vehicle for left-wing politics. The Green leader is aiming to win over not just progressives, but also disenchanted Reform-leaning voters, with his support for wider public ownership, higher taxes on the wealthy, and opposition to controversial measures like scaling back jury trials and introducing mandatory digital IDs. But privately, Polanski is more open to doing deals because in his mind, “at the general election, stopping Farage is the most important objective,” as the first senior Green adviser put it. “We expect to be the main challengers to Reform, but of course we are open to discussing what options exist to help in that central mission of stopping Farage,” they said.

LONDON — On the face of it, the new MI6 chief’s first speech featured many of the same villains and heroes as those of her predecessors. But in her first public outing Monday, Blaise Metreweli, the first female head of the U.K.’s foreign intelligence service, sent a strong signal that she intends to put her own stamp on the role – as she highlighted a wave of inter-connected threats to western democracies. Speaking at MI6’s HQ in London, Metreweli, who took over from Richard Moore in October, highlighted a confluence of geo-political and technological disruptions, warning “the frontline is everywhere” and adding “we are now operating in a space between peace and war.” In a speech shot through with references to a shifting transatlantic order and the growth of disinformation, Metreweli made noticeably scant  reference to the historically close relationship with the U.S. in intelligence gathering — the mainstay of the U.K.’s intelligence compact for decades. Instead, she highlighted that a “new bloc and identities are forming and alliances reshaping.” That will be widely seen to reflect an official acknowledgement that the second Donald Trump administration has necessitated a shift in the security services towards cultivating more multilateral relationships. By comparison with a lengthy passage on the seriousness of the Russia threat to Britain, China got away only with a light mention of its cyber attack tendencies towards the U.K. — and was referred to more flatteringly as “a country where a central transformation  is  taking place this century.” Westminster hawks will note that Metreweli — who grew up in Hong Kong and  so knows the Chinese system close-up — walked gingerly around the risk of conflict in the  South China Sea and Beijing’s espionage activities targeting British politicians – and even its royals. In a carefully-placed line, she reflected that she was  “going to break with tradition and won’t give you a global threat tour.” Moore, her predecessor, was known for that approach, which delighted those who enjoyed a plain-speaking MI6 boss giving pithy analysis of global tensions and their fallout, but frustrated some in the Foreign Office who believed the affable Moore could be too unguarded in his comments on geo-politics. The implicit suggestion from the new chief was that China needs to be handled differently to the forthright engagement with “aggressive, expansionist and revisionist” Russia. The reasons may well lie in the aftermath of a bruising argument within Whitehall about how to handle the recent case of two Britons who were arrested for spying for China, and with a growth-boosting visit to Beijing by the prime minister scheduled for 2026. Sources in the service suggest the aim of the China strategy is to avoid confrontation, the better to further intelligence-gathering and have a more productive economic relationship with Beijing. More hardline interpreters of the Secret Intelligence Service will raise eyebrows at her suggestion that the “convening power” of the service would enable it to “ defuse tensions.” But there was no doubt about Metreweli’s deep concern at the impacts of social-media disinformation and distortion, in a framing which seemed just as worried about U.S. tech titans as conventional state-run threats:  “We are being contested from battlefield to boardroom — and even our brains — as disinformation manipulates our understanding of each other.” Declaring that “some  algorithms become as powerful as states,” seemed to tilt at outfits like Elon Musk’s X and Mark Zuckerberg’s Meta-owned Facebook. Metreweli warned that “hyper personalized tools could become a new vector for conflict and control,” pushing their effects on societies and individuals  in “minutes not months – my service must operate in this new context too.” The new boss used the possessive pronoun, talking about “my service” in her speech several times – another sign that she intends to put a distinctive mark of the job, now that she has, at the age of just 48,  inherited the famous green-ink pen in which the head of the service signs correspondence.  Metreweli is experienced operator in war zones including Iraq who spent a secondment with MI5, the domestic intelligence service, and won the job in large part because of her experience in the top job via MI6’s science and technology “Q”  Branch. She clearly wants to expedite changes in the service – saying agents must be as fluent in computer coding as foreign languages. She is also expected to try and address a tendency in the service to harvest information, without a clear focus on the action that should follow – the product of a glut of intelligence gathered via digital means and AI. She  was keen to stress that the human factor is at the heart of it all — an attempt at reassurance for spies and analysts wondering if they might be replaced by AI agents as the job of gathering intelligence in the era of facial recognition and biometrics gets harder.  Armed with a steely gaze Metreweli speaks fluent human, occasionally with a small smile. She is also the first incumbent of the job to wear a very large costume jewelry beetle brooch on her sombre navy attire. No small amount of attention in Moscow and Beijing could go into decoding that.

Mathias Döpfner is chair and CEO of Axel Springer, POLITICO’s parent company. America and Europe have been transmitting on different wavelengths for some time now. And that is dangerous — especially for Europe. The European reactions to the new U.S. National Security Strategy paper and to Donald Trump’s recent criticism of the Old Continent were, once again, reflexively offended and incapable of accepting criticism: How dare he, what an improper intrusion! But such reactions do not help; they do harm. Two points are lost in these sour responses. First: Most Americans criticize Europe because the continent matters to them. Many of those challenging Europe — even JD Vance or Trump, even Elon Musk or Sam Altman — emphasize this repeatedly. The new U.S. National Security Strategy, scandalized above all by those who have not read it, states explicitly: “Our goal should be to help Europe correct its current trajectory. We will need a strong Europe to help us successfully compete, and to work in concert with us to prevent any adversary from dominating Europe.” And Trump says repeatedly, literally or in essence, in his interview with POLITICO: “I want to see a strong Europe.” The transatlantic drift is also a rupture of political language. Trump very often simply says what he thinks — sharply contrasting with many European politicians who are increasingly afraid to say what they believe is right. People sense the castration of thought through a language of evasions. And they turn away. Or toward the rabble-rousers. My impression is that our difficult American friends genuinely want exactly what they say they want: a strong Europe, a reliable and effective partner. But we do not hear it — or refuse to hear it. We hear only the criticism and dismiss it. Criticism is almost always a sign of involvement, of passion. We should worry far more if no criticism arrived. That would signal indifference — and therefore irrelevance. (By the way: Whether we like the critics is of secondary importance.) Responding with hauteur is simply not in our interest. It would be wiser — as Kaja Kallas rightly emphasized — to conduct a dialogue that includes self-criticism, a conversation about strengths, weaknesses and shared interests, and to back words with action on both sides. Which brings us to the second point: Unfortunately, much of the criticism is accurate. Anyone who sees politics as more than a self-absorbed administration of the status quo must concede that for decades Europe has delivered far too little — or nothing at all. Not in terms of above-average growth and prosperity, nor in terms of affordable energy. Europe does not deliver on deregulation or debureaucratization; it does not deliver on digitalization or innovation driven by artificial intelligence. And above all: Europe does not deliver on a responsible and successful migration policy. The world that wishes Europe well looked to the new German government with great hope. Capital flows on the scale of trillions waited for the first positive signals to invest in Germany and Europe. For it seemed almost certain that the world’s third-largest economy would, under a sensible, business-minded and transatlantic chancellor, finally steer a faltering Europe back onto the right path. The disappointment was all the more painful. Aside from the interior minister, the digital minister and the economics minister, the new government delivers in most areas the opposite of what had been promised before the election. The chancellor likes to blame the vice chancellor. The vice chancellor blames his own party. And all together they prefer to blame the Americans and their president. Instead of a European fresh start, we see continued agony and decline. Germany still suffers from its National Socialist trauma and believes that if it remains pleasantly average and certainly not excellent, everyone will love it. France is now paying the price for its colonial legacy in Africa and finds itself — all the way up to a president driven by political opportunism — in the chokehold of Islamist and antisemitic networks. In Britain, the prime minister is pursuing a similar course of cultural and economic submission. And Spain is governed by socialist fantasists who seem to take real pleasure in self-enfeeblement and whose “genocide in Gaza” rhetoric mainly mobilizes bored, well-heeled daughters of the upper middle class. Hope comes from Finland and Denmark, from the Baltic states and Poland, and — surprisingly — from Italy. There, the anti-democratic threats from Russia, China and Iran are assessed more realistically. Above all, there is a healthy drive to be better and more successful than others. From a far weaker starting point, there is an ambition for excellence. What Europe needs is less wounded pride and more patriotism defined by achievement. Unity and decisive action in defending Ukraine would be an obvious example — not merely talking about European sovereignty but demonstrating it, even in friendly dissent with the Americans. (And who knows, that might ultimately prompt a surprising shift in Washington’s Russia policy.) That, coupled with economic growth through real and far-reaching reforms, would be a start. After which Europe must tackle the most important task: a fundamental reversal of a migration policy rooted in cultural self-hatred that tolerates far too many newcomers who want a different society, who hold different values, and who do not respect our legal order. If all of this fails, American criticism will be vindicated by history. The excuses for why a European renewal is supposedly impossible or unnecessary are merely signs of weak leadership. The converse is also true: where there is political will, there is a way. And this way begins in Europe — with the spirit of renewal of a well-understood “Europe First” (what else?) — and leads to America. Europe needs America. America needs Europe. And perhaps both needed the deep crisis in the transatlantic relationship to recognize this with full clarity. As surprising as it may sound, at this very moment there is a real opportunity for a renaissance of a transatlantic community of shared interests. Precisely because the situation is so deadlocked. And precisely because pressure is rising on both sides of the Atlantic to do things differently. A trade war between Europe and America strengthens our shared adversaries. The opposite would be sensible: a New Deal between the EU and the U.S. Tariff-free trade as a stimulus for growth in the world’s largest and third-largest economies — and as the foundation for a shared policy of interests and, inevitably, a joint security policy of the free world. This is the historic opportunity that Friedrich Merz could now negotiate with Donald Trump. As Churchill said: “Never waste a good crisis!”

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.

BRUSSELS — The EU has struck a political agreement to overhaul the bloc’s foreign direct investment screening rules, the Council of the EU announced on Thursday, in a move to prevent strategic technology and critical infrastructure from falling into the hands of hostile powers. The updated rules — the first major plank of European Commission President’s Ursula von der Leyen’s economic security strategy — would require all EU countries to systematically monitor investments and further harmonize the way those are screened within the bloc. The agreement comes just over a week after Brussels unveiled a new economic security package. Under the new rules, EU countries would be required to screen investments in dual-use items and military equipment; technologies like artificial intelligence, quantum technologies and semiconductors; raw materials; energy, transport and digital infrastructure; and election infrastructure, such as voting systems and databases. As previously reported by POLITICO, foreign entities investing into specific financial services must also be subject to screening by EU capitals. “We achieved a balanced and proportionate framework, focused on the most sensitive technologies and infrastructures, respectful of national prerogatives and efficient for authorities and businesses alike,” said Morten Bødskov, Denmark’s minister for industry, business and financial affairs. It took three round of political talks between the three institutions to seal the update, which was a key priority for the Danish Presidency of the Council of the EU. One contentious question was which technologies and sectors should be subject to mandatory screening. Another was how capitals and the European Commission should coordinate — and who gets the final say — when a deal raises red flags. Despite a request from the European Parliament, the Commission will not get the authority to arbitrate disputes between EU countries on specific investment cases. Screening decisions will remain firmly in the purview of national governments. “We’re making progress. The result of our negotiations clearly strengthens the EU’s security while also making life easier for investors by harmonising the Member States’ screening mechanism,” said the lead lawmaker on the file, French S&D Raphaël Glucksmann. “Yet more remains to be done to ensure that investments bring real added value to the EU, so that our market does not become a playground for foreign companies exploiting our dependence on their technology. The Commission has committed to take an initiative; it must now act quickly,” he said in a statement to POLITICO. This story has been updated.

The Radio Spectrum Policy Group’s (RSPG) Nov. 12 opinion on the upper 6-GHz band is framed as a long-term strategic vision for Europe’s digital future. But its practical effect is far less ambitious: it grants mobile operators a cost-free reservation of one of Europe’s most valuable spectrum resources, without deployment obligations, market evidence or a realistic plan for implementation. > At a moment when Europe is struggling to accelerate the deployment of digital > infrastructure and close the gap with global competitors, this decision > amounts to a strategic pause dressed up as policy foresight. The opinion even invites the mobile industry to develop products for the upper 6-GHz band, when policy should be guided by actual market demand and product deployment, not the other way around. At a moment when Europe is struggling to accelerate the deployment of digital infrastructure and close the gap with global competitors, this decision amounts to a strategic pause dressed up as policy foresight. The cost of inaction is real. Around the world, advanced 6-GHz Wi-Fi is already delivering high-capacity, low-latency connectivity. The United States, Canada, South Korea and others have opened the 6-GHz band for telemedicine, automated manufacturing, immersive education, robotics and a multitude of other high-performance Wi-Fi connectivity use cases. These are not experimental concepts; they are operational deployments generating tangible socioeconomic value. Holding the upper 6- GHz band in reserve delays these benefits at a time when Europe is seeking to strengthen competitiveness, digital inclusion, and digital sovereignty. The opinion introduces another challenge by calling for “flexibility” for member states. In practice, this means regulatory fragmentation across 27 markets, reopening the door to divergent national spectrum policies — precisely the outcome Europe has spent two decades trying to avert with the Digital Single Market. > Without a credible roadmap, reserving the band for hypothetical cellular > networks only exacerbates policy uncertainty without delivering progress. Equally significant is what the opinion does not address. The upper 6-GHz band is already home to ‘incumbents’: fixed links and satellite services that support public safety, government operations and industrial connectivity. Any meaningful mobile deployment would require refarming these incumbents — a technically complex, politically sensitive and financially burdensome process. To date, no member state has proposed a viable plan for how such relocation would proceed, how much it would cost or who would pay. Without a credible roadmap, reserving the band for hypothetical cellular networks only exacerbates policy uncertainty without delivering progress. There is, however, a pragmatic alternative. The European Commission and the member states committed to advancing Europe’s connectivity can allow controlled Wi-Fi access to the upper 6-GHz band now — bringing immediate benefits for citizens and enterprises — while establishing clear, evidence-based criteria for any future cellular deployments. Those criteria should include demonstrated commercial viability, validated coexistence with incumbents, and fully funded relocation plans where necessary. This approach preserves long-term policy flexibility for member states and mobile operators, while ensuring that spectrum delivers measurable value today rather than being held indefinitely in reserve. > Spectrum is not an abstract asset. RSPG itself calls it a scarce resource that > must be used efficiently, but this opinion falls short of that principle. Spectrum is not an abstract asset. RSPG itself calls it a scarce resource that must be used efficiently, but this opinion falls short of that principle. Spectrum underpins Europe’s competitiveness, connectivity, and digital innovation. But its value is unlocked through use, not by shelving it in anticipation that hypothetical future markets might someday justify withholding action now. To remain competitive in the next decade, Europe needs a 6-GHz policy grounded in evidence, aligned with the single market, and focused on real-world impact. The upper 6-GHz band should be a driver of European innovation, not the latest casualty of strategic hesitation. -------------------------------------------------------------------------------- Disclaimer POLITICAL ADVERTISEMENT * The sponsor is Wi-Fi Alliance * The ultimate controlling entity is Wi-Fi Alliance More information here.

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.

European Commission President Ursula von der Leyen is “buying into [Donald] Trump’s agenda” by slashing regulations on businesses, according to the head of the Socialists & Democrats group in the European Parliament. Iratxe García slammed the “absolute deregulation zeal” being shown by the Commission as it pushes through omnibus simplification packages — revising laws spanning green, agriculture, digital and defense rules — saying it was straight out of the Trump playbook. García argued that von der Leyen and her European People’s Party are pushing for a major backtracking on EU laws, disguised as simplification. “Until now, there has been a dynamic of presenting [an] omnibus every 15 days … suddenly they appear on the table, like mushrooms.” Many top Socialist lawmakers asked García during an S&D retreat in Antwerp on Monday to demand that the Commission stop putting forward any more omnibuses, according to two people present, granted anonymity to speak freely. But the group is not united on the issue — some factions want simplification to keep rolling on. Instead, the retreat’s draft conclusions, seen by POLITICO, ask the Commission to consult with political groups before proposing further omnibus packages, and to conduct impact assessments for every omnibus, past and future. The EU Ombudsman said two weeks ago the Commission’s handling of omnibuses has had “procedural shortcomings” amounting to “maladministration,” opening the door for a court case. Asked about such a possibility, García said that “if the Commission does not respond as we expect, then we will have to take measures, but right now I want to give them the benefit of the doubt and see if the Commission understands the message we are sending them.” PRECOOKING DEALS García added that the basics of any future omnibuses, and other legislative files, should be “shared and worked on” in advance with von der Leyen’s centrist majority — EPP, S&D, and Renew — which could stop the EPP allying with the far-right, as happened with the first omnibus on slashing green rules. “This group has been the one that has guaranteed political and institutional stability in Europe in recent months, but what we are not prepared to do is to be the ones who guarantee stability while policies are negotiated with others,” she said. “Today’s message to the European Commission is clear: if you want the Group of Socialists and Democrats to continue to guarantee Europe’s political and institutional stability, you must involve us from the outset of the process,” said García.  On the looming battle over Parliament President Roberta Metsola’s potential third term, García reiterated that there is a written agreement covering the distribution of top posts, but declined to show the document or discuss its exact terms. “There is an agreement at the beginning of the legislative term on the distribution of responsibilities at the beginning [of the term] and at the mid-term,” repeated García. Asked if she will step down as S&D leader and hand the leadership to an Italian or German lawmaker for the second half of the mandate, as some lawmakers claim she promised to do, García refused to comment. Socialist MEPs expect her to push to remain in the job. “Obviously, there were discussions at the beginning of the legislative session, but I also want to emphasize that whatever is decided in this group will be a discussion shared with the entire group.”

BRUSSELS — Meta has formally committed to offering EU users a new “third alternative” for advertising on Facebook and Instagram, as it seeks to resolve a high-stakes investigation under the Digital Markets Act. The European Commission announced on Monday that, following a dialogue, the Facebook parent would introduce a “hybrid approach” whereby users can opt for a free service driven by less personalized data. This new model is intended to break the binary choice currently facing users: either consent to full tracking or pay for a subscription. “This is very positive news for consumers in the EU,” said Commission spokesperson Thomas Regnier, noting that the new option — described as a gray zone between full consent and a paywall — is slated for rollout in January 2026. A Meta spokesperson acknowledged the Commission’s statement while defending the economic importance of its data practices. “Personalized ads are vital for Europe’s economy,” the spokesperson said. The main EU consumer lobby group gave a guarded welcome. “We will be very closely analysing what Meta puts out in January, given that it has failed since November 2023 to provide consumers with a fair choice on ads that complies with the law,” said Agustín Reyna, director-general of the European Consumer Organisation (BEUC). The Commission has been in discussions with Meta ever since it issued the U.S. firm with a €200 million fine in April for non-compliance with the Digital Markets Act, which regulates large online platforms. The Commission will now watch closely to monitor the changes, said Regnier, adding that the case is not yet closed. This story has been updated.

LONDON — The Ministry of Defence plans to develop autonomous vessels that operate AI technology alongside warships and aircraft to better protect Britain’s undersea cables and pipelines from Moscow. Under the Atlantic Bastion program, surface and underwater vessels, ships, submarines, and aircraft would be connected through AI-powered acoustic detection technology and integrated into a “digital targeting web,” a network of weapons systems, allowing faster decisions to be made. The government explained that the program was in response to a resurgence of Russian submarine and underwater activity in British waters. British intelligence says Russian President Vladimir Putin was modernizing his fleet to target critical undersea cables and pipelines. Last month, the Russian spy ship Yantar directed lasers at British forces deployed to monitor the vessel for the first time after it entered U.K. waters. Yantar was previously in U.K. territorial seas in January. Defence Secretary John Healey said Yantar was “designed for gathering intelligence and mapping our undersea cables.” The Ministry of Defence says Atlantic Bastion will create a hybrid naval force that can find, track, and, if required, act against adversaries. A combined £14 million has been invested by the Ministry of Defence and industry, with 26 U.K. and European firms submitting proposals to develop anti-submarine sensor technology. Any capabilities would be deployed underwater from 2026. “People should be in no doubt of the new threats facing the U.K., and our allies under the sea, where adversaries are targeting infrastructure that is so critical to our way of life,” said Defence Secretary John Healey. “Our pioneering Atlantic Bastion program is a blueprint for the future of the Royal Navy. It combines the latest autonomous and AI technologies with world-class warships and aircraft to create a highly advanced hybrid fighting force to detect, deter and defeat those who threaten us.” Britain’s Chief of the Naval Staff, Gwyn Jenkins, was expected to say at the International Sea Power Conference on Monday: “We are a Navy that thrives when it is allowed to adapt. To evolve. We have never stood still — because the threats never do.” The first sea lord general added: A revolutionary underwater network is taking shape — from the Mid-Atlantic Ridge to the Norwegian Sea. More autonomous, more resilient, more lethal — and British built.”