EINDHOVEN, Netherlands — Europe needs to be “realistic” about its reliance on the rest of the world for technology, the chief executive of Europe’s largest technology company told POLITICO. Christophe Fouquet, CEO of Dutch chips giant ASML, tempered expectations about Europe’s drive to become technologically sovereign in an interview Wednesday following the release of the company’s annual results. “Everyone would have to find a balance between this huge claim for sovereignty … ‘we want everything to be done in our country’ … and the reality, which is: this is a fairly spread ecosystem, with key elements in different places,” Fouquet said.  “Everyone should be realistic on what it takes and how long it may take,” he said, adding that there will always be a “need” to import key parts of technology supply chains from abroad.  As the company that designs and builds the world’s most advanced machines for making semiconductors, ASML is not only a major economic asset but also gives Europe a rare point of leverage and resilience in the geopolitically sensitive chips industry. While Wednesday’s better-than-expected financial results sent the company’s stock soaring, ASML also said it would cut 1,700 jobs to “streamline” its organization.  Fouquet’s remarks follow growing calls in Brussels to reduce Europe’s heavy reliance on foreign technology, amid strained EU-U.S. ties and concerns about China.  On Monday, the European Commission’s tech chief Henna Virkkunen told POLITICO in an interview that Europe’s dependencies “can be weaponized against us” and urged the continent not to be dependent on “one country or one company.” She pointed to chips as the area where she saw the biggest need for Europe to break away from foreign reliance. Asked about the ongoing U.S.-EU tensions and the continuous threat of tariffs, Fouquet on Wednesday labeled those as “a lot of noise.”  He cited Nexperia, a Dutch-based yet Chinese-owned chipmaker that has been the subject of a recent geopolitical fight, as the latest example of “the interdependencies between the different blocs.” The ASML boss had another warning for Brussels’ ambitions to boost homegrown technology, arguing the EU needs to dial back its regulatory environment further than it has to date. Europe needs to make deeper regulatory cuts to get more promising companies, Fouquet said — citing the example of French artificial intelligence frontrunner Mistral, in which ASML last year invested €1.3 billion. Both ASML and Mistral signed a letter in July last year advocating for a pause to key parts of the bloc’s artificial intelligence law, a suggestion that the EU’s executive picked up in its first digital simplification package, presented in November.  That simplification package is already an “improvement” but more is needed, Fouquet said.  “You cannot make things very complicated, and then simplify it a bit and be proud of it,” he said.  Europe needs to create the conditions for companies “to grow without being annoyed by regulations,” he said. 

BRUSSELS — When cocoa farmer Leticia Yankey came to Brussels last October, she had a simple message for the EU: Think about the mess your simplification agenda is creating for companies and communities. It was just weeks after the European Commission said it might delay the EU’s anti-deforestation law, which requires companies to prove the goods they import into the region are not produced on deforested land, for the second time. But in Yankey’s Ghana, cocoa farmers were ready for the rules, known as the EU Deforestation Regulation or EUDR, to kick in. “How are we going to be taken serious the next time we move to our communities, our farmers, and even the [Licensed Buying Companies] to tell them that EUDR is … coming back?” Yankey asked.  Since then, the Commission has kept making changes to the plan. First by floating the delay, then backtracking but proposing tweaks to the law — only for EU governments and lawmakers to reinstate the postponement, pile on additional carve-outs and then leave open the door for further changes in the spring. All within three months. It’s not just smaller companies and remote communities that are rankled by the EU’s will-they-won’t-they approach to lawmaking. Bart Vandewaetere, a VP for government relations and ESG engagement at Nestlé, says that when he reports on European legislative developments to the company board, they “[look] a little bit at me like: ‘Okay, what’s next? Will you come next week with something else, or do we need to implement it this way, or we wait?’” Since the start of Ursula von der Leyen’s second term as European Commission President, the EU has been rolling back dozens of rules in a bid to make it easier for businesses to make money and create jobs.   Encouraged by EU leaders to hack back regulations quickly and without fuss, the Commission presented 10 simplification packages last year — on top of its plan to loosen the anti-deforestation law — to water down rules in the agricultural, environment, tech, defense and automotive sectors as well as on access to EU funding. COMPLICATION AGENDA Brussels says it is answering the wishes of business for less paperwork and fewer legislative constraints, which companies claim prevent them from competing with their U.S. and Chinese rivals. It also promises billions in savings as a result. “We will accelerate the work, as a matter of utmost priority, on all proposals with a simplification and competitiveness dimension,” the EU institutions wrote this month in a joint declaration of priorities for the year ahead. The ones who got ready to implement the laws already even go as far as to say the EU is losing one of its key appeals: being a regulatory powerhouse with policies that encourage companies to transition towards more sustainable business models. | Nicolas Economou/NurPhoto via Getty Images But for many businesses, the frequent introduction, pausing and rewriting of EU rules is, just making life more complicated. “What we constantly hear from clients is that regulatory uncertainty makes it difficult to plan ahead,” said Thomas Delille, a partner at global law firm Squire Patton Boggs, even though they generally support the simplification agenda. The ones who got ready to implement the laws already even go as far as to say the EU is losing one of its key appeals: being a regulatory powerhouse with policies that encourage companies to transition towards more sustainable business models. “The European Union unfortunately has lost some trust in the boardrooms by making simplifications that are maybe undermining predictability,” said Nestlé’s Vandewaetere. The risk is that the EU will shoot itself in the foot by making it harder for companies to invest in the region, which is essential for competitiveness.  “This approach rewards the laggards,” said Tsvetelina Kuzmanova, senior project manager as the Cambridge Institute for Sustainability Leadership, adding that it “lowers expectations at the very moment when companies need clarity and policy stability to invest.” INEVITABLE TURBULENCE Many of Europe’s decision-makers are convinced that undoing business rules is a necessary step in boosting economic growth.  The simplification measures “were needed and they are needed,” said Danish Environment Minister Magnus Heunicke, confirming that he believes the EU regulatory environment is clearer now for businesses than it was a year ago. Denmark, which held the rotating presidency of the Council of the EU for the last six months, had led much of the negotiations on the simplification packages, or “omnibuses” in Brussels parlance. Brussels is also receiving as many calls from businesses to speed up its deregulation drive as those urging caution. For example, European agriculture and food chain lobbies like Copa-Cogeca and FoodDrink Europe said in a joint appeal that the EU should “address the regulatory, administrative, legal, practical and reporting burdens that agri-food operators are facing.” These, they added, are major obstacles to investing in sustainability and productivity. Successive omnibus packages should, meanwhile, be “proposed whenever necessary.” But undoing laws requires as much work and time as drafting them. Over the past year, lawmakers and EU governments have been enthralled in deeply political negotiations over these packages. Entire teams of diplomats, elected officials, assistants, translators and legal experts have been mobilized to argue over technical detail that many were engaged in drafting just a couple of years earlier.   Of the 10 omnibus proposals, three have already been finalized. The EU has also paused the implementation of the rules it’s currently reviewing so that companies don’t have to comply while the process is ongoing. “If you look at this from an industry perspective, there will be some turbulence before there is simplification, it’s inevitable,” said Gerard McElwee, another partner at Squire Patton Boggs.  Ironically, the EU has also faced criticism for making cuts too quickly — particularly to rules on environmental protection — and without properly studying the effect they would have on Europe’s economy and communities. Yankey, the cocoa farmer, said she understands the Commission’s quandary. “They just want to listen to both sides,” she said. “Somebody is ready, somebody is not ready.” But her community will need more EU support to help understand and adapt to legislative tweaks that impact them. The constant changes do not “help us to build confidence in the rules or the game that we are playing,” she said.

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 — More than 80 percent of Europe’s companies will be freed from environmental-reporting obligations after EU institutions reached a deal on a proposal to cut green rules on Monday.   The deal is a major legislative victory for European Commission President Ursula von der Leyen in her push cut red tape for business, one of the defining missions of her second term in office. However, that victory came at a political cost: The file pushed the coalition that got her re-elected to the brink of collapse and led her own political family, the center-right European People’s Party (EPP), to team up with the far right to get the deal over the line. The new law, the first of many so-called omnibus simplification bills, will massively reduce the scope of corporate sustainability disclosure rules introduced in the last political term. The aim of the red tape cuts is to boost the competitiveness of European businesses and drive economic growth. The deal concludes a year of intense negotiations between EU decision-makers, investors, businesses and civil society, who argued over how much to reduce reporting obligations for companies on the environmental impacts of their business and supply chains — all while the effects of climate change in Europe were getting worse. “This is an important step towards our common goal to create a more favourable business environment to help our companies grow and innovate,” said Marie Bjerre, Danish minister for European affairs. Denmark, which holds the presidency of the Council of the EU until the end of the year, led the negotiations on behalf of EU governments. Marie Bjerre, Den|mark’s Minister for European affairs, who said the agreement was an important step for a more favourable business environment. | Philipp von Ditfurth/picture alliance via Getty Images Proposed by the Commission last February, the omnibus is designed to address businesses’ concerns that the paperwork needed to comply with EU laws is costly and unfair. Many companies have been blaming Europe’s overzealous green lawmaking and the restrictions it places on doing business in the region for low economic growth and job losses, preventing them from competing with U.S. and Chinese rivals.   But Green and civil society groups — and some businesses too — argued this backtracking would put environmental and human health at risk. That disagreement reverberated through Brussels, disturbing the balance of power in Parliament as the EPP broke the so-called cordon sanitaire — an unwritten rule that forbids mainstream parties from collaborating with the far right — to pass major cuts to green rules. It set a precedent for future lawmaking in Europe as the bloc grapples with the at-times conflicting priorities of boosting economic growth and advancing on its green transition. The word “omnibus” has since become a mainstay of the Brussels bubble vernacular with the Commission putting forward at least 10 more simplification bills on topics like data protection, finance, chemical use, agriculture and defense. LESS PAPERWORK   The deal struck by negotiators from the European Parliament, EU Council and the Commission includes changes to two key pieces of legislation in the EU’s arsenal of green rules: The Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD).  The rules originally required businesses large and small to collect and publish data on their greenhouse gas emissions, how much water they use, the impact of rising temperatures on working conditions, chemical leakages and whether their suppliers — which are often spread across the globe — respect human rights and labor laws.    Now the reporting rules will only apply to companies with more than 1,000 employees and €450 million in net turnover, while only the largest companies — with 5,000 employees and at least €1.5 billion in net turnover — are covered by supply chain due diligence obligations. They also don’t have to adopt transition plans, with details on how they intend to adapt their business model to reach targets for reducing greenhouse gas emissions.   Importantly the decision-makers got rid of an EU-level legal framework that allowed civilians to hold businesses accountable for the impact of their supply chains on human rights or local ecosystems. MEPs have another say on whether the deal goes through or not, with a final vote on the file slated for Dec. 16. It means that lawmakers have a chance to reject what the co-legislators have agreed to if they consider it to be too far from their original position.

BRUSSELS — The European Union’s drive to cut red tape is creating uncertainty for business and chaos in the EU’s institutions, Executive Vice President Teresa Ribera said on Thursday, in comments that put her squarely at odds with her boss Ursula von der Leyen. “In too many occasions we have this sense that it is not simplification but [a] messy combination of things that end in uncertainty,” Ribera said in Brussels. The Commission’s dealings with EU member countries and lawmakers have degenerated into “a terrible political spectacle,” she added. The remarks by the Spanish socialist represent the most serious pushback by a top EU official since von der Leyen launched a massive effort to simplify the bloc’s regulatory rulebook after being confirmed for a second term a year ago. This has taken the form of a series of “omnibus” packages — on issues ranging from business supply chains to agriculture funding and migration — that have emerged from the EU’s policy machinery with little or no consultation. The EU ombudsman has slammed the Commission for procedural shortcomings in proposing the measures, saying they amounted to “maladministration.” Ribera, who ranks second at the EU executive behind its German president, acknowledged in a keynote speech that it was important to avoid duplication, align procedures, move faster and provide greater clarity to businesses. But this should not go too far. “Deregulation eliminates safeguards, it puts costs onto citizens and taxpayers, creates uncertainty, discourages investment,” she said at an event hosted by think tank Bruegel. “It’s a kind of Trumpist approach against being stable, reliable and predictable. It weakens our standards. It lowers the credibility of the single market, it enlarges inequalities and distortions.” Von der Leyen made the case for deregulation in a speech last month in Copenhagen. “When we look at simplification, we all agree we need simplification, we need deregulation,” she said. But Ribera cautioned against that on Thursday. “Simplifying rules is not the same as weakening protections or giving up on regulation,” she said. Lawmakers in the European Parliament earlier this month agreed to exempt more companies from green reporting rules after the center-right, right-wing and far-right groups allied to pass the EU’s first omnibus simplification package. Louise Guillot contributed reporting.

Heidi Kingstone is a journalist and author covering human rights issues, conflict and politics. Her most recent book is “Genocide: Personal Stories, Big Questions.” Slavery is alive and thriving, and it’s wrapped inside shiny chocolate bars that promise to be “fair trade,” “child-labor free” and “sustainable.” In West Africa, which produces more than 60 percent of the world’s cocoa, over 1.5 million children still work under hazardous conditions. Kids, some as young as five, use machetes to crack pods open in their hands, carry loads that weigh more than they do and spray toxic pesticides without protection. Meanwhile, of the roughly 2 million metric tons of cocoa the Ivory Coast produces each year, between 20 percent and 30 percent is grown illegally in protected forests. And satellite data from Global Forest Watch shows an increase in deforestation across key cocoa-growing regions as farmers, desperate for income, push deeper into forest reserves. The bitter truth is that despite decades of pledges, certification schemes and packaging glowing with virtue — of forests saved, farmers empowered and consciences soothed — most chocolate companies have failed to eradicate exploitation from their supply chains. Today, many cocoa farmers in the Ivory Coast and Ghana still earn less than a dollar a day, well below the poverty line. According to a 2024 report by the International Cocoa Initiative, the average farmer earns only 40 percent of a living wage. Put starkly, as the global chocolate market swells close to a $150 billion a year in 2025, the average farmer now receives less than 6 percent of the value of a single chocolate bar, whereas in the 1970s they received more than 50 percent. Then there’s the use of child labor, which is essentially woven into the fabric of this economy, where we have been sold the illusion of progress. From the 2001 Harkin-Engel Protocol — a voluntary agreement to end child labor by the world’s chocolate giants — to today’s glossy environmental, social and governance (ESG) reports, every initiative has promised progress and delivered delay. In 2007, the industry quietly redefined “public certification,” shifting it from a commitment to consumer labeling to a vague pledge to compile statistics on labor conditions. It missed the original 2010 deadline to eliminate child labor, as well as a new target to reduce it by 70 percent by 2020. And that year, a study by the University of Chicago’s National Opinion Research Center found that hazardous child labor in cocoa production increased from 2008 to 2019. “We covered a story about a ship carrying trafficked children,” recalled journalist Humphrey Hawksley, who first exposed the issue in the BBC documentary called Slavery: A Global Investigation. “The chocolate companies refused to comment and spoke as one industry. That was their rule. Even now, none of them is slave-free,” he added. As it stands, many of the more than 1.5 million West African children working in cocoa production are trafficked from neighboring Burkina Faso and Mali. Traffickers lure them with false promises or outright abduction, offering children as young as 10 either bicycles or small sums to travel to the Ivory Coast. There, they are sold to farmers for as little as $34 each. And once on these farms, they are trapped. They work up to 14 hours a day, sleep in windowless sheds with no clean water or toilets, and most never see the inside of a classroom. Last but not least, we come to deforestation: Since its independence, more than 90 percent of the Ivory Coast’s forests have disappeared due to cocoa farming. In 2024, deforestation accelerated despite corporate commitments to halt it by 2025, as declining soil fertility and stagnant prices pushed farmers farther into the forest to plant new cocoa trees. But as Reuters Correspondent for West and Central Africa Ange Aboa described them, such labels are “the biggest scam of the century!” | Lena Klimkeit/Picture Alliance via Getty Images Certification labels like “Rainforest Alliance” and “Fairtrade” are supposed to prevent this. But as Reuters Correspondent for West and Central Africa Ange Aboa described them, such labels are “the biggest scam of the century!” Complicit in all of this are the financiers and investors who profit. For example, Norway’s sovereign wealth fund is the world’s largest investor, and Norges Bank Investment Management (NBIM) is a shareholder in 9,000 corporations, including Nestlé, Mondelez, Hershey, Barry Callebaut and Lindt — all part of the direct chocolate cluster. NBIM also has shares in McDonald’s, Starbucks, Unilever, the Dunkin’ parent company and Tim Hortons — the indirect high-volume buyer cluster. “The richest families in cocoa — the Marses, the Ferreros, the Cargills, the Jacobs — are billionaires thanks to the exploitation of the poorest children on earth,” said journalist and human rights campaigner Fernando Morales-de la Cruz, the founder of Cacao for Change. “And countries like Norway, which claim to be ethical, profit from slavery and child labor.” The problem is, few are asking who picks the cocoa. And though the EU’s Corporate Sustainability Due Diligence Directive, which was adopted last year, requires large companies to address human rights and environmental abuses in their supply chains, critics say the directive’s weaknesses, loopholes, and delayed enforcement will blunt its impact. However, all of this could still be fixed. Currently, a metric ton of cocoa sells for about $5,000 on world markets, but Morales-de la Cruz estimates that a fair farm-gate price would be around $7,500 per metric ton. To that end, he advocates for binding international trade standards that enforce living incomes and transparent pricing, modeled on the World Trade Organization’s compliance mechanisms. “Human rights should be as binding in trade as tariffs,” he insisted. The solution isn’t to buy more “ethical” bars but to demand accountability and support legislation that makes exploitation unprofitable. “We can’t shop our way to justice,” he said. So, as the trees in the Ivory Coast’s forests fall, the profits in Europe and North America continue to soar. And two decades after the industry vowed to end child labor, the cocoa supply chain remains one of the world’s most exploitative and least accountable. Moreover, the European Parliament’s vote on the Omnibus simplification package last month laid bare the corporate control and moral blindness still present in EU policymaking, all behind talk of “cutting red tape.” “Yet Europe’s media and EU-funded NGOs stay silent, talking of competitiveness and green transitions, while ignoring the children who harvest its cocoa, coffee and cotton,” said Morales-de la Cruz. “Europe cannot claim to defend human rights while profiting from exploitation.” However, until the industry pays a fair price and governments enforce real accountability, every bar of chocolate remains an unpaid moral debt.

BRUSSELS — You can even put an exact date on the day when Brussels finally gave up on its decade-long dream of seeking to be the predominant global tech regulator that would rein in American tech titans like Google and Apple.  It came last Wednesday — Nov. 19 — when the European Commission made an outright retreat on its data and privacy rules and hit pause on its AI regulation, all part of an attempt to make European industries more competitive in the global showdown with the United States and China.   It sounded the death knell for what has long been described as the “Brussels Effect” — the idea that the EU would be a trailblazer on tech legislation and set the world’s standards for privacy and AI.  Critics say Washington is now setting the deregulatory trajectory, while U.S. President Donald Trump is battering down Europe’s ambitions by threatening to roll out tariffs against countries that he accuses of attacking “our incredible American Tech Companies.” “I don’t hear anybody in Brussels saying ‘We’re a super regulator’ anymore,” said Marietje Schaake, who shaped Europe’s tech rulebooks as a former European Parliament member and special adviser to the European Commission. The big pivot away from rule-setting came in a “digital omnibus” proposal on Wednesday — a core part of Commission President Ursula von der Leyen’s “simplification” program to cut red tape to make Europe more competitive. The digital omnibus was one of the “main discussion points” at a meeting between the EU’s tech chief Henna Virkkunen and U.S. Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer. | Nicolas Tucat/AFP via Getty Images “Whether you call it ‘simplification’ or ‘deregulation,’ you are certainly moving away from the high watermark era of regulation,” said Anu Bradford, a professor at Columbia University who coined the term “Brussels Effect” in 2012. The deregulation drive followed a year in which the Trump administration pressured the EU to roll back enforcement of its tech rulebooks, which Big Tech giants and Trump himself deem “taxes” targeted at U.S. companies. The digital omnibus was one of the “main discussion points” at a meeting between the EU’s tech chief Henna Virkkunen, U.S. Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer on Monday. “We adopted a major package that would have an impact not only on EU companies, but also on U.S. companies, so this is the appropriate moment … to explain what we’re doing on our side,” European Commission spokesperson Thomas Regnier told reporters on Monday when asked why Virkkunen had discussed the topic with her U.S. counterparts. Lutnick, however, told Bloomberg that Washington was seeking more than just an explanation of EU laws — it wanted changes to its tech rulebooks as well. U.S. giants like Google and Meta have led a full-frontal lobbying push to replace heavy-handed EU enforcement with lighter-touch rules. Behind the push to break the shackles for tech firms is a fear of missing out on the promised economic boom linked to AI technologies. The bloc has traded its role as global tech cop for a ticket to the AI race.  GLOBAL FIRST Brussels showed its ambition to lead the world in regulating the online space throughout the 2010s. In 2016 it adopted the General Data Protection Regulation. Since then, the law has been copied in new legislation across more than 100 countries, said Joe Jones, director of research and insights at the International Association of Privacy Professionals.  When the GDPR came into force, international companies like Microsoft, Google and Facebook acknowledged it spurred them to apply EU privacy standards globally.  It served as a quintessential case of the Brussels Effect: When setting the bar in Brussels, multinational firms would roll out standards across their businesses far beyond the EU’s borders. Other governments, too, copied some of Brussels’ early attempts at setting the rules. After the GDPR, the EU adopted other laws that had the ambition of reining in Big Tech, either by pressing platforms to police for illegal content through its Digital Services Act or by blocking them from using their dominance to favor own services through the Digital Markets Act. Right after the EU adopted its risk-focused AI rulebook, Trump took office and scrapped AI safety rules embraced by his predecessor Joe Biden.  | Chip Somodevilla/Getty Images The EU’s latest blockbuster tech rulebook, the Artificial Intelligence Act, was Brussels’ latest attempt at pioneering legislation, as it sought to address the risks posed by the fledgling technology. “There was more confidence in the EU’s regulation, partially because the EU seemed confident. Right now, when the EU seems to be retreating, any government around is also asking the same question,” Bradford said. Right after the EU adopted its risk-focused AI rulebook, Trump took office and scrapped AI safety rules embraced by his predecessor Joe Biden.   The changing of the guard in Washington came right as Brussels was waking up to the need to be competitive in a global technology race. Former Italian Prime Minister Mario Draghi presented the EU’s competitiveness report in 2024, just weeks before Trump won a second term. “I think the Brussels effect is still alive and well. It just has a bit of the Draghi effect, in that it has a bit of this geopolitical innovation, pro-growth effect in it,” said IAPP’s Jones.  According to German politician Jan Philipp Albrecht, a former European Parliament member who was a chief architect of the GDPR, Europe has become blind to the benefits of its regulatory regime that set the gold standard. “Europeans have no self-secureness anymore … They don’t see the strength in their own market and in their own regulatory and innovative power,” Albrecht said.  WASHINGTON EFFECT Other critics of deregulation are taking a step further, claiming that Washington has hijacked the Brussels Effect — but just on its own terms.   “In an odd way, maybe the Trump administration has taken inspiration from the Brussels Effect, in the sense [that] they see what it means for this one regulating entity to be the one that sets global standards,” said Brian J. Chen, policy director at nonprofit research group Data & Society. It’s just, “they want to be the ones setting those standards,” Chen said. The Trump administration pressured Brussels to tone down its tech regulation during heated trade talks this summer, POLITICO previously reported. That the EU followed through with scaling back its tech laws just as the U.S. is pressing the EU is bad optics, said Schaake, the former lawmaker. “The timing of the whole simplification [package] is very bad,” she said.  She argued that it’s essential to deal with the unnecessary burden on companies, but issuing the digital omnibus after the U.S. pressure “looks like a response to that criticism.” Commission spokesperson Thomas Regnier dismissed the idea that the EU was acting on U.S. pressure. “On the digital omnibus, absolutely no third country had an influence on our sovereign simplification agenda. Because this omnibus is about Europe: less administrative burden, less overlaps, less costs,” Regnier said in a comment on Friday. “We have always been clear: Europe has its sovereign right to legislate,” Regnier added. “Nothing in the omnibus is watering down our digital legislation and we will keep enforcing it, firmly but always fairly.” This article has been updated to include new developments.

BRUSSELS — The EU’s push for the U.S. to scrap its tariffs on steel and aluminum has opened the door to an old demand from Washington: Loosen your digital rulebook, and we’ll meet you halfway. Brussels raised its concerns over Washington’s expanded list of goods covered by high steel and aluminum tariffs at meetings on Monday between Trade Commissioner Maroš Šefčovič and EU trade ministers and, from the U.S. side, Secretary of Commerce Howard Lutnick and Trade Representative Jamieson Greer. The Commerce Department in August subjected over 400 products containing steel and aluminum to a 50 percent tariff — a list the EU feels is so broad it goes against the spirit of a framework trade deal struck in July. That trade deal, which President Donald Trump and European Commission President Ursula von der Leyen clinched at Trump’s Turnberry golf resort in Scotland, sets a baseline tariff of 15 percent on most EU imports to the U.S., while the EU committed to cutting most of its own tariffs to zero. At the time, the EU and the U.S. pledged to work together to reduce tariffs on steel and aluminum — but remained vague on the details. After the Europeans raised the steel tariffs on Monday, Lutnick responded by calling on the EU to “analyze their digital rules, trying to come away with a balance … not put them away, but find a balanced approach that works with us.” “And if they can come up with that balanced approach, which I think they can, then we will, together with them, handle the steel and aluminum issues and bring that on together,” he added. Lutnick’s remarks signal a departure from the previous U.S. position, which threatened to retaliate against the bloc’s digital laws, while advocating for light-touch artificial intelligence regulation.  Lutnick sold the loosening of the bloc’s digital rules as an “opportunity” for the EU, offering U.S. investment in return, mainly through data centers that could power artificial intelligence.   “If the European Union can find a way to have a balanced digital set of rules, I think the European Union can see $1 trillion of investment,” he said. PUSHING BACK — SORT OF In response, Šefčovič reiterated the bloc’s commitment to its regulatory autonomy and its belief that its rules are not — contrary to what Washington asserts — discriminatory.  The EU side, he added, “explained how our legislation is working, we explained that this is not discriminatory. It’s not aimed at American companies. And I think that we just simply need to do more of the explanation in that regard.”  A Commission official, speaking on condition of anonymity, was more direct: “Steel and digital are completely unrelated. Steel has always been part of the discussions with the U.S. and has been formalized in the joint statement. Our sovereign digital legislation is not up for negotiations.” The EU’s digital rules are a major concern for the Donald Trump administration, and U.S. Commerce Secretary Howard Lutnick raised the matter on a visit to Brussels. | Pool photo by Aaron Schwartz/EPA The EU executive has already moved to simplify its tech rules through a digital omnibus presented last week, an effort that the EU’s tech chief, Henna Virkkunen, raised with Lutnick and Greer at an earlier meeting that day. That omnibus brought major changes to the EU’s GDPR data protection regulation, and also proposed to pause the rollout of a key part of the EU’s Artificial Intelligence Act — a controversial move championed by U.S. Big Tech companies and lobby groups.  European lawmakers and civil society groups have expressed concerns in recent weeks that the Commission’s digital simplification push is meant to placate Washington, a claim the Commission has vehemently denied.   Lawmakers are due to discuss the digital simplification package with the Commission on Tuesday. Last week, the Commission also kicked off a process to review all of its tech rulebooks, which could lead to further simplification efforts.  STEEL TALKS  Washington’s earlier decision to widen the list of steel products facing the 50 percent tariff caused uproar in Brussels, with some European lawmakers arguing that the EU should refrain from lowering its own tariffs on steel until the issue is resolved. In a bid to cozy up to the White House, the EU side on Monday pushed the idea that Brussels and Washington should jointly face up to a common enemy — China — rather than dwelling on their differences.  Danish Foreign Minister Lars Løkke Rasmussen said the two sides had addressed “some of the challenges we are facing together,” such as “overcapacity” and “China’s role in the global economy.” Asked about joint work on overcapacity, Lutnick said such issues are “easy for us to work together, and those don’t take up a lot of time when we’re talking, because when everybody just agrees right away, it’s not very difficult.” Behind closed doors, however, the U.S. stressed to its European counterparts that cooperation on China didn’t mean they would simply give the EU a pass on steel and aluminum tariffs. Šefčovič said a team from Brussels would travel to Washington in the coming weeks to address these issues.

Listen on * Spotify * Apple Music * Amazon Music When Europe’s biggest political family crosses the aisle to vote with the far right, something fundamental shifts in Brussels. In this episode, host Sarah Wheaton unpacks the vote that cracked the European Parliament’s cordon sanitaire — and what a newly disciplined, image-polished far right means for Ursula von der Leyen’s shaky centrist alliance. POLITICO’s Marianne Gros and Max Griera take us inside the omnibus showdown; Tim Ross demonstrates how the same forces are reshaping politics across Europe — from the English seaside town of Jaywick to Paris, Berlin and beyond. Plus — Aitor Hernández-Morales brings us a surprising counterpoint from Denmark, where voters pushed back against a left-wing government they felt had leaned too far toward the right.

BRUSSELS — The far right last week broke through the firewall in the European Parliament and is now looking to flex its muscles again to secure a wider set of goals.   Next on the target list: Deporting more migrants, reversing a ban on the combustion engine, new rules on gene-edited crops, and even more red tape reductions for businesses. After decades of being sidelined by mainstream political parties, the far right scored a major victory last week when the center-right European People’s Party (EPP) ditched its traditional centrist allies and pressed ahead with plans to cut green rules for businesses that received the backing of lawmakers on the right. Now that the cordon sanitaire against the far right “has fallen,” there will be space for a right-wing majority to pass legislation “when it comes to competitiveness, in some areas of the Green Deal where they want to scale down the targets or the burdens for the businesses,” Anders Vistisen, chief whip for the far-right Patriots group, told POLITICO.   There’s dispute over how much cooperation actually took place last week, however. The EPP says it did not — and never will — negotiate directly with far-right groups. Instead, the EPP insists it merely puts forward its position, which may or may not be supported by others. “It is a lie that we negotiated with them,” EPP spokesperson Daniel Köster said following the green rules vote, after MEPs from the Patriots claimed there were formal compromises and negotiations between both parties. Yet the Patriots argue that EPP lawmakers, behind the scenes and at committee level, discreetly consult with their right-wing counterparts on areas where they have overlapping priorities. “They coordinate with us quite often on these files,” Vistisen said, “but it is becoming a little bit ridiculous and silly that they don’t just want to own up to it.” The extent of cooperation largely depends on which nationality the center-right lawmakers are from, according to the Patriots. “On a technical level we work constructively with almost all delegations, except with the German EPP,” Roman Haider, top Patriots MEP in the transport committee, told POLITICO, echoing comments from his colleague Paolo Borchia, a member of the industry and energy committee, who said only some national EPP delegations are open to talking. “Cooperation with the German EPP is practically impossible. They refuse any professional interaction with us,” said Haider. For many years, the German center-right has opposed co-operation with the far-right because of the country’s Nazi past. IT’S NOT OVER FOR THE CENTER Any further collaboration has clear boundaries — after all, many far-right lawmakers want to tear the EU down. The EPP also still needs the centre to pass a majority of files, such as the long-term EU budget. However, Italy’s Nicola Procaccini, chair of the right-wing European Conservatives and Reformists (which ideologically sits between the EPP and the Patriots), told POLITICO that the right can easily team up on deregulation, migration, farming, and family issues. However, Italy’s Nicola Procaccini, chair of the right-wing European Conservatives and Reformists (which ideologically sits between the EPP and the Patriots), told POLITICO that the right can easily team up on deregulation, migration, farming, and family issues. | Emmanuel Dunand/AFP via Getty Images “In these issues for sure we are closer” on the right side of the Parliament, Procaccini said. He believes the cordon sanitaire, which kept the far right from power, is not dead, but that the first steps in tearing it down have been taken, and parts of the EPP are ready to openly work with the right-wing side of the hemicycle. Liberal and Socialist lawmakers point out the Patriots often coordinate closely with the ECR, which then presents their position to the EPP. According to a parliamentary official, granted anonymity to speak freely, the ECR acts as a “Trojan horse” for the Patriots to circumvent the cordon sanitaire. Asked about future deals with the far right, EPP spokesperson Pedro López de Pablo said: “We are fully committed to working with all our platform partners [Socialists and Democrats, the liberals of Renew] and they know our guiding principle is content, content, content.” Vistisen also acknowledged that, while lawmakers from the Patriots are ready to sit at the table and negotiate on all things related to deregulation and migration, the EPP continues to try to find compromises with the center. “It’s also a question of how many times the EPP wants to look ridiculous in this attempt to pretend that the central majority is the one that can be used to deregulate,” said Vistisen. He added that the EPP, as the Parliament’s biggest force, has the leverage to do whatever it wants and that “the only real negotiating strength that the Socialists have left” is calling a motion of no confidence in Ursula von der Leyen. The Commission president has faced — and comfortably survived — three such motions this year, brought by the far right and the far left. TOUGHER ON MIGRATION One major area where the far-right is hoping to lure the EPP into its arms is migration. In December, the Parliament is expected to vote on a new bill on “safe” non-EU countries to which member states could deport migrants, even if they are not originally from there, which the Patriots hope will be passed with a right-wing majority. They are already claiming that the price of securing their votes a second time will be higher. “We know that the EPP are struggling very much to get liberals and social democrats to play ball,” said Vistisen. “If they want to strike a deal with us, it has to be compromise amendments signed by ECR, EPP and Patriots. That is going to be a testing ground for whether the EPP publicly will make policy with us.” The right-wing majority could find common ground on a new deportations regulation proposed by the Commission in March, a key bill for von der Leyen as she seeks to appease calls from across the bloc for tougher migration policies. The lead negotiators on the file from ECR, Patriots, and the far-right Europe of Sovereign Nations group want to pull the EPP away from the center and pass a tougher version of the bill. “In terms of cooperation on the right, what I’ve heard thus far is that both the Patriots and ECR and ESN, but also EPP, are very much on the same line on a great number of issues,” Patriots’ lead negotiator Marieke Ehlers told POLITICO. Ehlers said she is in touch with her EPP counterpart, François-Xavier Bellamy, whose national party, Les Républicains, is advocating tougher migration policies in France.   Fabrice Leggeri, a Patriots MEP, also said that “there are talks or exchanges of views between Patriots for Europe and the EPP”. Bellamy did not respond to a request for comment. CUT, CUT, CUT The European Commission may have found a new ally in its simplification agenda, with right-wing and far-right groups in Parliament eager to tear down policy in the name of cutting bureaucracy and giving power back from Brussels to national capitals. Two of the most explosive files where the right-wing majority could team up are in the automotive sector, as the EPP, pushed by Germany, seeks to slash regulations it says are strangling the car industry. The Commission is set to put forward in December a revision of what is a de facto ban on the combustion engine by 2035, alongside a measure that could set an electric vehicle target for company cars and leasing companies. In Parliament, the EPP could kill both files with the help of the far right. Straight after winning the most seats in the 2024 election, EPP chief Manfred Weber told POLITICO that his group would overturn the 2035 combustion engine ban. The far-right has also made this a major campaign talking point, with the Czech Republic’s Motorist Party basing its entire platform on the issue. The Greens, the Socialists & Democrats and Renew don’t have a unified position on the ban, making things even easier for the EPP and far right to team up. “If the German EPP wants to stand by one of its core pre-election promises, namely ending the phase-out of the combustion engine, then they will have no choice but to work with us,” said Patriots MEP Haider. The digital omnibus, presented by the Commission on Wednesday, is also a potential area where the EPP and Socialists could fail to agree on a way forward, opening the door for a right-wing majority. The bill is being pitched by the Commission as a way to simplify the EU’s digital laws to make life easier for European companies. But the proposal put forward by the Commission on Wednesday seeks extensive changes to the EU’s data protection regulation (GDPR), many to the benefit of AI developers, which the socialists and liberals have said they will block. FARMING TARGETS The right-wing dynamic is also playing out in the talks on Europe’s new rules on gene-edited crops, where exhausted EPP negotiators are quietly weighing far-right votes as a fallback option to break a months-long Parliament deadlock. Italian right-wing lawmakers from the ECR and Patriots could end up delivering the majority needed to push a compromise through — a prospect left-wing MEPs say would result in a deal far too weak to protect the interests of small producers, consumers and the environment. And the next Common Agricultural Policy, the EU’s vast farm-subsidy program, could shift even more dramatically if pushed through with far-right backing. Instead of the slow trend toward stricter environmental and climate obligations, the new coalition arithmetic could deliver a CAP with fewer strings attached, looser oversight and even weaker green conditions, which have been long-standing wishes for both the EPP and far-right groups.