LONDON — Keir Starmer’s keeping Britain out of the war in Iran — but he can’t duck the conflict’s grave economic consequences. In a sign of growing fears about the impact of the war on Britain, the prime minister chaired a rare meeting of the government’s emergency COBRA committee Monday night, joined by senior ministers and Governor of the Bank of England Andrew Bailey. Starmer’s top finance minister, Rachel Reeves, will update the House of Commons on the economic picture Tuesday, as an already-unpopular administration worries that chaos in the Middle East is shredding plans to lower the cost of living and get the British economy growing. For Starmer’s government — headed for potentially brutal local elections in May — the crisis in the Gulf risks a nightmare combination of a rise in energy prices, interest rates, inflation and the cost of government borrowing that threatens to undermine everything he’s done since winning office. Economists are now warning that even if Donald Trump’s promise of a “complete and total resolution of hostilities” with Iran were to bear fruit, the effects on the British economy could still last for months. Already there are signs of a split within Starmer’s party over how to respond. Labour MPs want the government to think seriously about action to protect households — but Starmer and Reeves have long talked up the need for fiscal responsibility, and economics are warning that there’s little room for maneuver. Fuel prices displayed at a Shell garage in Southam, Warwickshire on March 23, 2026. | Jacob King/PA Images via Getty Images Jim O’Neill, a former Treasury minister who served as an adviser to Reeves, told POLITICO the government should “not get sucked into reacting to every external shock” and “concentrate on boosting our underlying growth trend.” WHY THE UK IS SO HARD HIT Just before the outbreak of war, there was reason for Starmer and Reeves to feel quietly optimistic about the long-stagnant British economy. The Bank of England had expected inflation to fall back sustainably toward its two percent target for the first time in five years, giving the central bank the space to carry on cutting interest rates.  With the Iran war in full flow, it was forced to rewrite those forecasts at the Monetary Policy Committee’s meeting last week — and now sees inflation at around 3.5 percent by the summer. The U.K. is a big net importer of energy and also needs constant imports of foreign capital to fund its budget and current account deficits. That’s made it one of first targets in the financial markets’ crosshairs. The government’s cost of borrowing has risen by more than half a percentage point over the last month. That threatens both the real economy and Reeves’ painstakingly-negotiated budget arithmetic. Higher inflation means higher interest rates and a higher bill for servicing the government’s debt: fiscal watchdog the Office for Budget Responsibility estimates a one-point increase in inflation would add £7.3 billion to debt servicing costs in 2026-2027 alone. The effect on businesses and home owners is also likely to be chilling. Britain’s banks are already repricing their most popular mortgages, which are tied to the two-year gilt rate. Hundreds of mortgage products were pulled in a hurry after the MPC meeting last week, something that will hit the housing market and depress Reeves’ intake from both stamp duty and capital gains. Duncan Weldon, an economist and author, said: “Even if this were to stop tomorrow, the inflation numbers and growth numbers are going to look materially worse throughout 2026. “If this continues for longer… it’s an awful lot more challenging and you end up with a much tougher budget this autumn than the government would have been hoping to unveil.” DECISION TIME The U.K.’s economic plight presents an acute political headache for Starmer, as he faces a mismatch between his own party’s expectations about the government’s ability to help people and his own scarce resources. Energy Secretary Ed Miliband has promised to keep looking at different options for some form of assistance to bill-payers hit by an energy price shock. A pain point is looming in July, when a regulated cap on energy costs is due to expire and bills could jump significantly. One left-leaning Labour MP, granted anonymity to speak frankly, said: “They [ministers] need to be treating this like a financial crisis. They need plans for multiple scenarios with clear triggers for government support.” A second MP from the 2024 intake said “it’s right that a Labour government steps in, particularly to help the most vulnerable.” Foreign Secretary Yvette Cooper and Chancellor of the Exchequer Rachel Reeves at the first cabinet meeting of the new year at No. 10 Downing St. on Jan. 6, 2026 in London, England. | Pool photo by Richard Pohle via Getty Images This demand for action is being felt in the upper echelons of the party too, as Culture Secretary Lisa Nandy recently argued Reeves’ fiscal rules — seen as crucial in the Treasury to reassure the markets — may need to be reconsidered if prices continue to rise and a major support package is needed.  One Labour official said there are clear disagreements with Labour over how to go about drawing up help and warned “the fiscal approach is going to be a massive dividing line at any leadership election.” The same official pointed to recent comments by former Starmer deputy — and likely leadership contender — Angela Rayner about the OBR, with Rayner accusing the watchdog of ignoring the “social benefit” of government spending. Despite the pressure, ministers have so far restricted themselves to criticizing petrol retailers for alleged profiteering, and have been flirting with new powers for markets watchdog the Competition and Markets Authority. The government said Reeves would on Tuesday set out steps to “help protect working people from unfair price rises,” including a new “anti-profiteering framework” to “root out price gouging.” But Starmer signaled strongly in an appearance before a Commons committee Monday evening that he was not about to unveil any wide-ranging bailout package, telling MPs he was “acutely aware” of what it had cost when then-Prime Minister Liz Truss launched her own universal energy price guarantee in 2022.  O’Neill backed this approach, saying: “I don’t think they should do much… They can’t afford it anyhow. The nation can’t keep shielding people from external shocks.” Weldon predicted, however, that as the May elections approach and the energy cap deadline draws nearer, the pressure will prove too much and ministers could be forced to step in. The furlough scheme rolled out during the pandemic to project jobs and Truss’s 2022 intervention helped create “the expectation that the government should be helping households,” he said. “But it’s incredibly difficult. Britain’s growth has been blown off-course an awful lot in the last 15 years by these sorts of shocks.” Geoffrey Smith, Dan Bloom, Andrew McDonald and Sam Francis contributed to this report.

BRUSSELS — The United States wants to engage in a meaningful dialogue with Brussels on reducing European tech regulation, its Ambassador to the EU Andrew Puzder told POLITICO. The U.S. administration and its allies have been vocal critics of the EU’s tech rules, saying they unfairly target American companies and hurt freedom of speech. The European Commission has repeatedly denied such allegations, saying it is merely trying to rein in Big Tech and protect the online space from harmful behavior. In an interview Monday, Puzder said he hoped that this week’s vote in the European Parliament to advance last year’s transatlantic trade deal would set the scene for talks to loosen constraints on business. “I’ve had talks with individuals within the EU about moving this discussion forward. I haven’t, as yet, experienced the concrete steps we need to make that happen,” Puzder said. He was referring to the EU’s tech rulebook — and the Digital Services Act and the Digital Markets Act in particular — that Washington sees as barriers to trade. “Hopefully, we’ll continue to talk. Once this trade agreement is approved, in the spirit of moving forward with these non-tariff trade barriers, we’ll be able to break down some of these walls,” he added.  Discussions are still in their very early stages and “there’s nothing formal,” Puzder clarified. The next steps between Brussels and Washington should be “diplomatic engagement followed by political engagement,” he added.  RECALIBRATION NEGOTIATION The envoy’s comments follow a heated series of exchanges between senior American and European officials over whether the EU’s tech rules should even be part of the transatlantic trade discussion. In November 2025, Commerce Secretary Howard Lutnick tied a potential easing of U.S. steel and aluminum tariffs to a “recalibration” by the EU of the bloc’s digital regulations. European Commission Executive Vice President Teresa Ribera responded that tying tariff relief to European tech rules amounted to “blackmail.” Ribera, the EU’s top competition official, told POLITICO at the time that the EU would not accept such attempts to strong-arm it on a topic that it considers to be a matter of sovereignty. She is currently visiting the U.S. and is due to meet tech industry bosses in San Francisco this week. Transatlantic ties took another turn for the worse when the Donald Trump administration in December barred former Industry Commissioner Thierry Breton from traveling to the U.S. over his role in creating and implementing the EU’s tech rules.  Puzder explained that Washington doesn’t think “that Europe shouldn’t have regulation,” but that it shouldn’t be “regulating in such an extreme manner that companies feel they can’t innovate — which is why … most of the tech startups in Europe end up moving to Silicon Valley.” European Commission Vice President Teresa Ribera attends a press conference in Brussels on Feb. 25, 2026. | Dursun Aydemir/Anadolu via Getty Images Responding, the European Commission stressed there is “continued engagement” between the EU and the U.S.  “Executive Vice President [Henna] Virkkunen has held several meetings with U.S. Representatives, both in Europe and in the U.S. At technical level, our teams also engage on a continuous basis with their American counterparts,” spokesperson Thomas Regnier said in a statement to POLITICO.  Virkunnen’s remit covers technology policy. Before Trump’s return to the White House, the two sides held held a structured dialogue under the auspices of the now-defunct EU-U.S. Trade and Technology Council.  The occasional forum, launched by former U.S. President Joe Biden, sought to establish a structured dialogue around regulatory cooperation. Yet in the view of observers it under-delivered, failing for instance to resolve a long-running steel dispute. The TTC has not met since Trump returned to the White House in early 2025. 

What makes a tree important? Is it the ability to withstand storms, wars and human greed through the centuries? The people that rest in its shade, the lovers who carve their names, the playing children creating eternal memories? Or is it just what country it grows in? The organizers of the European Tree of the Year contest, a relatively niche event on the Brussels social calendar, have been grappling with these questions for years. The competition, which started in 2002 as a national event in Czechia before expanding to Europe in 2011, has over the years crowned an Estonian oak that stood in the middle of a football pitch; a lone pine that survived a flood in a Czech village; and a 500-year-old Romanian lime tree that is part of local folk legend. The contest’s last four winners, however, all grew in Poland. “From the beginning, the competition was not about the beauty of the trees, but about the stories and the communities. [But] the last four years, it became difficult because it turned into a competition between nations,” said Petr Skřivánek, who runs the event on behalf of the Environmental Partnership Association, a Czech NGO. Poland’s recent success is largely due to Make Life Harder, the country’s most popular Instagram meme account, which has been promoting the contest to its 1.7 million followers since 2021. The enthusiastic response has been both a blessing and a curse. “It’s really good because it can really attract visitors. But any time the website is down, I know it’s because they posted a link to it,” Skřivánek said. His routine as the overwhelmed website administrator is itself the subject of memes from the account. “You don’t only vote for the tree that you like, but you have to vote for another tree — so you don’t just express support on a national level,” said Michal Wiezik, a Renew MEP who has been an ambassador for the contest since 2019. “But the Polish were able to crack the system.” Things took a nastier turn last year, when a whiff of online hooliganism arrived to disturb the sylvan community. MEP Michal Wiezik attends a European Parliament meeting in Brussels on Jan. 27, 2025. | Martin Bertrand/Hans Lucas/AFP via Getty Images La Revuelta, a comedy talk show on Spain’s La 1 public broadcaster, launched a campaign to support their nation’s champion, the Pine of Juan Molinera. The program identified a Polish tree — Heart of the Dalkowskie Hills —  as its main competition. During the segment, as comedian Lalachus sang a cover of Eros Ramazzotti’s La cosa más bella (“The most beautiful thing”) in praise of the Spanish contestant, another comic held up signs saying “The Polish tree smells like armpits” and “The tree from Poland, what a load of shit.” Make Life Harder shared the clips on Instagram, unleashing a bitter feud on social media. (Neither Make Life Harder, RTVE nor Lalachus replied to requests for comment from POLITICO.) The tension ultimately spread to the European Parliament, which hosted the awards ceremony. “The atmosphere was not good in the venue. And on the stream, it was not nice either,” Skřivánek said. Spain finished third; Poland won. “I hope this was the first year and the last year when this competition became a space for spreading hate and being aggressive to others,” said Anna Gomułka in accepting the award for Heart of the Dalkowskie Hills. “We felt we had to defend our honor. At some point, voting became an expression of patriotism,” Gomułka wrote in an email to POLITICO. To avoid such tensions in future and to make the online vote more suspenseful, the organizers are now using a system of “tree points” in which trees from smaller countries get more points for each vote than trees from larger countries. As a result of the changes, the 2026 competition “was really less nationalist compared to previous years,” Skřivánek said. This year’s winner will be named Tuesday during a ceremony in Brussels.

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

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

BRUSSELS — Norway should reapply to become a member of the European Union in light of their shared security challenges — namely Russia — the leader of the country’s conservative opposition party told POLITICO. The oil-rich Nordic nation applied to join the EU in 1992, but the bid was rejected in a referendum two years later. Since then, Norway has been a member of the European Economic Area, which means it adopts many of the EU’s rules and regulations, as well as being a member of NATO. But with wars and growing threats around the world, the arms-length relationship between Brussels and Oslo is no longer fit for purpose, argued Ine Eriksen Søreide, who was elected leader of Norway’s conservative party last month. “In my opinion, and my party’s opinion, we would be best served by being full members of the EU,” she said in an interview on Thursday as EU leaders were convening for a summit in Brussels. “I’ve been talking consistently about the need for a constructive debate based on the EU as it is today, not as it was in 1994 … and saying very clearly and loudly” that Norway’s interests lie inside the 27-member bloc, added Søreide, who was defense minister from 2013 to 2017 and foreign minister from 2017 to 2021. A recent spat between Oslo and Brussels over ferro-alloys (additives in steelmaking) had underscored the drawbacks of being outside the union, said Søreide. The spat, during which the EU imposed restrictions on imports from Norway, “very clearly illustrated that we are a part of the [EU] internal market … but that doesn’t help if something comes from the outside like these protective measures.” Iceland’s potential bid to join the EU is another spur for Oslo to seek membership in the bloc. “If Iceland then decides in a referendum to reopen negotiations, it’s a very different ballgame,” she said. “I’m not suggesting that what Iceland does will in itself change the view of Norwegians, but it can lead to certain institutional changes and also a kind of different approach for the EU, making it more difficult for us to be on the outside.” Beyond benefits on trade, Søreide listed defense, space, health and Arctic security as areas where Oslo would benefit from full EU membership. The fact that Norway isn’t part of the EU, but nevertheless transposes its laws, means that the country is “missing out in so many areas,” she said. While Norway had transposed some 14,000 legal acts from the EU into national law in recent years, the country nonetheless gets no say in setting the bloc’s agenda or weighing in on its strategic orientations. The ferro-alloy case shows how Oslo can be seen as “a second-tier member” of the club, Søreide added. ‘MORE OPEN’ TODAY The question of Norway’s EU membership has come up repeatedly during the past 30 years, with voters typically deciding not to join the bloc. Norway applied for EU membership in 1992 along with Finland, Sweden and Austria, but ultimately voted against membership in a referendum — with 52.2 percent against and 47.8 percent in favor — while the other three countries opted to join. In recent years, polls have shown that a majority remains against joining the bloc, with concerns about protecting Norway’s vast energy wealth outweighing the benefits of membership. Norway’s parliament has a majority of MPs opposed to membership. However, support for joining the EU has ticked up over the past 18 months amid tensions in the transatlantic relationship and U.S. President Donald Trump’s threats of seizing Greenland. A tense exchange of leaked messages between Trump and Norwegian Prime Minister Jonas Gahr Støre — in which the former criticized the latter for not granting him the Nobel Peace Prize — drove home concerns about the transatlantic relationship for many Norwegians. On the prospect of EU membership, Søreide said it was unlikely to materialize “immediately.” Indeed, Norway’s current government has not shown interest in launching a national debate about membership, and the next parliamentary elections aren’t until 2029. But Søreide said that attitudes toward membership were shifting. “I do sense … there is a more open approach to the issue in Norway,” she said. “Now when you hear debates among everything from the business sector to large private sector organizations to people on the street, there is a difference in tone.” The conservative party leader also criticized Norway’s Labour Party minority government, which is backed by a center-left coalition, for making the subject of EU membership taboo. “I’m very disappointed and also quite surprised that the government, a Labour government, has kind of put even the debate off for the next four years,” she said, adding she found the approach “very strange in this situation.” Søreide’s Høyre party is currently the third most popular in Norway, with about 18 percent support, according to POLITICO’s Poll of Polls. But that share has been inching up in recent months. Asked about her own plans, she said she aimed to make her party “significantly bigger than we did in the last election, which was a very poor election for us,” and would seek to become prime minister in 2029.

BRUSSELS ― For much of the past decade, Hungary’s Viktor Orbán has succeeded in bending the EU’s agenda to his will by forcing leaders to overcome his vetoes in one high-level gathering after another. On Thursday he’s ready to do it again — possibly for the last time as he faces a tough battle for reelection against rival Péter Magyar next month. By threatening to block, at a gathering of EU leaders in Brussels, a €90 billion loan for Ukraine that he’d approved in December, Orbán has crossed a red line when it comes to opposing Brussels. In doing so he is setting himself up for a reckoning with the bloc that could come soon after the Hungarian election, five EU diplomats and one national European government cabinet minister said. While the bloc has so far shied away from a major confrontation with Hungary — it hasn’t stripped Budapest’s voting rights, for example — this cautious calculus may well change after the election. At that point, fears of feeding into Orbán’s campaign narrative will be displaced by the need to dissuade other leaders from copying the Hungarian strongman, said the same diplomats and officials, who were granted anonymity to discuss sensitive summit preparations. A reckoning was in the cards regardless of the outcome of Hungary’s April 12 election, the officials said, but would arrive much faster if Orbán is re-elected. He is currently nine percentage points behind Magyar, according to POLITICO’s Poll of Polls. “The behavior from Hungary is a new low,” Sweden’s Europe Minister Jessica Rosencrantz told POLITICO ahead of Thursday’s European Council. Asked if Stockholm would consider using legal tools against Hungary, including deploying Article 7 of the EU’s Treaty to take Budapest’s voting rights away, she said: “Absolutely, we are open.” Swedish EU Affairs Minister Jessica Rosencrantz speaks to the media in the Europa building in Brussels on March 17, 2026. | Thierry Monasse/Getty Images If Orbán is reelected, “there will be a serious conversation among a group of countries about how to handle this going into the future,” one of the diplomats said. That conversation would likely play out differently if Magyar prevails, as he “indicates that he wants to play a more constructive game,” while EU leaders would likely play a “waiting game” to see how the new government behaves. What exactly the EU would do to rein in a reelected Orbán remains an open question. So far it has proven impossible to obtain the backing of 26 out of 27 EU countries for an Article 7 proceeding against Budapest. But other legal options, such as tying EU funds to even more stringent rule-of-law conditions, are already on the table, the diplomats said, as is dragging Orbán to court over his obstruction on the loan. During a closed-door meeting of foreign ministers in Brussels earlier this week, German Foreign Minister Johann Wadephul showed just how little patience the EU still has for Hungary, warning that Budapest’s obstructionism could no longer be tolerated, according to three diplomats who were briefed on Foreign Affairs Council talks. The diplomats disputed an account of the exchange by the Hungarian PM’s political adviser — who wrote in a post on X that Wadephul had threatened Hungarian Foreign Minister Péter Szijjártó with “very serious consequences.” The diplomats described the German minister’s remarks as “very direct,” “very clear” and “leaving no doubt that this can no longer be tolerated.” Other unnamed foreign ministers had been even more direct with Szijjártó, leaving him “taken aback,” according to one of the diplomats. “Prime Minister Orbán should understand that he is all the time testing the limits of what other member states are willing to put up with,” said a second senior EU diplomat from a mid-sized country. “This cannot continue.” A third diplomat said: “This will definitely have consequences after the elections. We are just waiting for that to happen.” Hungarian Foreign Affairs Minister Peter Szijjártó speaks to the media in Brussels on March 16, 2026. | Thierry Monasse/Getty images ROCK AND HARD PLACE What’s especially galling about Orbán’s latest standoff to many of his critics is how well he laid his trap — and how easily EU leaders walked into it. Merely blocking the EU’s 20th Russian sanctions package wasn’t a big enough spectacle for the Hungarian PM. But the Druzhba oil pipeline, which Kyiv said had been damaged in a Russian attack in January, fit the bill perfectly. Orbán seized on the halt in Russian oil deliveries to block the €90 billion loan, reneging on his own word to other EU leaders and devising an ideal Brussels-Budapest-Kyiv standoff for his campaign. And the Hungarian, who is now the longest-serving leader around the EU Council table, made the most of it by detaining an armored convoy carrying Ukrainian gold and officials, and then posting a video of himself alleging that Ukraine had threatened his family. It didn’t help that Ukrainian President Volodymyr Zelenskyy also escalated the situation by refusing to allow EU inspectors to examine the pipeline for weeks and then saying he had no interest in repairing Druzhba. “This was building for weeks, literally. And now here we are [in] the Council, and it’s his [Orbán’s] show again,” the third EU diplomat said. European Council President António Costa, the main EU official in charge of dealing with Orbán ahead of leaders’ summits, hinted at taking a harder stance against the Hungarian prime minister in a letter he sent Orbán on Feb. 23. The letter that warned that by reneging on his support for the loan, Orbán had broken the EU’s principle of sincere cooperation, thereby exposing himself to legal consequences. But Costa didn’t follow up on the threat, with a European Council official telling POLITICO that the idea of suing Budapest over the obstruction had been dropped because the Court of Justice would “take too much time” to act. The EU needs a short-term solution for the Ukraine loan, the official said. European Council President António Costa speaks to the media in the Justus Lipsius building in Brussels on March 18, 2026. | Thierry Monasse/Getty Images “This is hard to understand,” the third diplomat said. “They should have played hardball, at least tried it out, in the meantime put some temporary measures on him. It would have been at least something than this wobbling. But nothing came.” Now leaders face a dilemma as Orbán once again threatens to steal the show at the European Council meeting: Call his bluff by taking the loan off the table, and risk infuriating Zelenskyy, who has been invited to the the meeting — or embrace a confrontation with Orbán that will inevitably seem like the EU is giving in to blackmail. “There is clear reluctance to give Orbán the spotlight,” the same diplomat said. “We won’t give him that space at the EUCO. But if we fail on the loan, Zelenskyy will rightly be furious.” 

BRUSSELS — The EU’s 27 member countries are set to back a push to send more naval ships to the Middle East as conflict paralyzes shipping routes, but will insist on them operating strictly within the parameters of missions that predate the war in Iran. Presidents and prime ministers from across the bloc will meet in Brussels Thursday to discuss their response to the Iran crisis. In a draft statement being negotiated by ambassadors in advance of the talks — seen by POLITICO — the leaders show support for an increased naval presence in the region. “The European Council highlights the role of the EU maritime defensive operations EUNAVFOR ASPIDES and EUNAVFOR ATALANTA, and calls for their reinforcement with more assets,” reads the latest version of the text, dated March 17. However, the text introduces new language demanding that the vessels take part in the missions only “in line with their respective mandates.” The EU-led Aspides is confined to the Red Sea and the Gulf of Aden, and was launched in 2024 in response to Houthi militant attacks on naval traffic travelling to and from Europe via the Suez Canal. Atalanta, meanwhile, patrols the east coast of Africa and the Indian Ocean to combat piracy. The Trump administration has urged European allies to send frigates to escort naval traffic through the Strait of Hormuz. Energy prices have skyrocketed as a result of tankers being unable to cross the narrow waterway, which links oil- and gas-rich exporters like Saudi Arabia and Qatar to the global market. “I wonder what would happen if we ‘finished off’ what’s left of the Iranian Terror State, and let the Countries that use it, we don’t, be responsible for the so called ‘Strait?’ That would get some of our non-responsive ‘Allies’ in gear, and fast!!!,” U.S. President Donald Trump wrote on Truth Social on Wednesday. Ahead of the EU summit, a group of countries — Italy, Spain, Greece, Malta and Cyprus — have written to the bloc’s leadership warning of another potential maritime crisis caused by the Russian liquefied natural gas carrier Arctic Metagaz, which has been adrift in the Mediterranean since March 3. “The precarious condition of the vessel, combined with the nature of its specialised cargo, gives rise to an imminent and serious risk of a major ecological disaster in the heart of the Union’s maritime space,” the leaders of the coastal nations warned. “In this context, we look to the European Commission to facilitate the mobilisation and coordination of Member States and existing EU-level mechanisms, with the goal of ensuring their more efficient, better coordinated and faster response.”

Netflix co-CEO Ted Sarandos arrives in Brussels on Tuesday with a clear message for EU regulators ahead of a looming review of Europe’s streaming rules: Don’t overcomplicate them. In an exclusive interview with POLITICO, Sarandos said Netflix can live with regulation — but warned the EU not to fracture the single market with a patchwork of national mandates as officials prepare to reopen the Audiovisual Media Services Directive. “It doesn’t make it a very healthy business environment if you don’t know if the rules are going to change midway through production,” Sarandos said. He also warned regulators are underestimating YouTube as a direct competitor for TV viewing, too often treating it like a social media platform with “a bunch of cat videos” than a massive streaming rival. Sarandos’ effort to win over European regulators comes soon after the collapse of Netflix’s bid to buy Warner Bros. Discovery — but Sarandos maintained that the political dynamics around the deal only “complicated the narrative, not the actual outcomes.” He added that there was no political interference in the deal, and he shrugged off President Donald Trump’s demand to remove Susan Rice, a former national security adviser under President Barack Obama, from the Netflix board. “It was a social media post,” Sarandos said. “It was not ideal, but he does a lot of things on social media.” This conversation has been edited for length and clarity. What’s bringing you back to Brussels now? Well, we have ongoing meetings with regulators around Europe all the time. We have so much business in Europe, obviously, and so this has been on the books for quite a while. Can you give me a little bit of a sense of who you’re meeting with, and what is the focus? I think one of the things to keep in mind is that we’ve become such an important part, I’d think, of the European audiovisual economy. We’ve spent, in the last decade, over $13 billion in creating content in Europe. It makes us one of the leading producers and exporters of European storytelling. First of all, we’ve got a lot of skin in the game in Europe, obviously. We work with over 600 independent European producers. We created about 100,000 cast and crew jobs in Europe from our productions. So we talk to folks who are interested in all the elements of that — how to keep it, how to maintain it, how to grow it and how to protect it. In terms of regulation in the EU, Netflix is governed by a directive here. The commission is looking to reopen that this year. There seems to be a sense here from regulators that the current rules don’t create a level playing field between the broadcasters, the video on demand, the video sharing, and so they may look to put more requirements on that. How steeped in the details are you there? And how would Netflix react to more rules put on Netflix at this moment? Well, first and foremost, we comply with all the rules that apply to us in terms of how we’re regulated today. We have seen by operating around the world that those countries where they lean more into incentives than the strict regulatory scheme, that the incentives pay off. We’ve got multibillion dollar investments in Spain and the UK, where they have really leaned into attracting production through incentives versus regulatory mandates, so we find that that’s a much more productive environment to work in. But the core for me is that obviously they’re going to evolve the regulatory models, but as long as they remain simple, predictable, consistent — the single market, the benefit of the single-market is this — as long as these rules remain simple, predictable and consistent, it’s a good operating model. I think the more that it gets broken up by individual countries and individual mandates, you lose all the benefits of the single market. There’s a lot of talk in Brussels right now about simplification, getting rid of a lot of red tape. Do you think the rules that you’re governed by would benefit from a similar kind of effort to simplify, of pulling back on a lot of these patchwork of rules, even at the EU? Look, I think it doesn’t make it a very healthy business environment if you don’t know if the rules are going to change midway through production, so for me, having some stability is really important, and I understand that we’re in a dynamic market and a dynamic business, and they should reflect the current operating models that we’re in too. We want to work closely with the regulators to make sure that what they’re doing and what we’re doing kind of reflect each other, which is trying to protect the healthy work environment for folks in Europe. When you meet with regulators here, is there a message you’re going to be delivering to them or what do you want them to walk away with in terms of the bottom line for you in terms of your business at this moment in the EU? I think some things are well understood and other things I think are less so. I think our commitment to European production is unique in the world. Both in our original production but also in our investment in second right’s windows that we pre-invest in films that compel production. Tens of millions of dollars’ worth of film production is compelled by our licensing agreements as well beyond our original production. And the fact that we work with local European producers on these projects — I think there’s a misconception that we don’t. And the larger one is the economic impact that that brings to Europe and to the world with our original program strategy that supports so many, not just the productions themselves but even tourism in European countries. Think about President [Emmanuel] Macron pointing out that 38 percent of people who went to France last year cited “Emily in Paris” as one of the top reasons they went. We’ve seen that in other countries. We saw it in Madrid with the “Casa de Papel.” And so it’s one of those things where it really raises all boats across the economies of these countries. Regulators often focus on the competition between streaming services, but as you know very well, younger audiences are spending more time on platforms like YouTube. Do you think policymakers are underestimating that shift? Would you like to see that taken into account more in the regulatory landscape? One of the things that we saw in recent months with the Warner Brothers transaction is a real deep misunderstanding about what YouTube is and isn’t. YouTube is a straightforward direct competitor for television, either a local broadcaster or a streamer like Netflix. The connected television market is a zero-sum screen. So whichever one you choose, that’s what you’re watching tonight. And you monetize through subscription or advertising or both, but at the end of the day, it’s that choosing to engage in how you give them and how, and how that programming is monetized is a very competitive landscape and it includes YouTube. I think what happens is people think of YouTube as a bunch of cat videos and maybe some way to, to promote your stuff by putting it on there for free. But it turns out it is a zero-sum game. You’re going to be choosing at the expense of an RTL or Netflix. I think in this case it’s one of these things where recognizing and understanding that YouTube is in the same exact game that we are. Do you feel like you’re on different planes though, in the eyes of regulators at this moment? I don’t think that they see them as a direct competitor in that way. I think they think of that as an extension of social media. And the truth is when we talk about them as a competitor, we’re only talking about them on the screen. I’m not talking about their mobile usage or any of that. You know, about 55 percent of all YouTube engagement now is on the television through their app. So to me, that’s the thing to keep an eye on. As you get into this, it’s a pretty straightforward, competitive model and we think probably should have a level playing field relative to everybody else. Who do you view as Netflix’s main competitors today? Look, our competitive space is really the television screen. When people pick up the remote and pick what to watch, everyone is in that mix. We identified YouTube — this isn’t new for us — we identified YouTube as a competitor in the space 10 years ago, even before they moved to the television. And I think, for the most part, TikTok forced their hand to move to the television because they were kind of getting chased off the phone more or less by TikTok. I think that’s the other one that regulators should pay a lot of attention to is what’s happening with the rise of TikTok engagement as well. It’s not directly competitive for us, but it is for attention and time and to your point, maybe the next generation’s consumer behavior. Last question on regulation: With the EU looking at the rules again, there’s a tendency always to look to tinker more and more and do more. Is there a point at what regulation starts affecting your willingness to invest in European production? Well, like I said, those core principles of predictability and simplicity have really got to come into play, because I think what happens is, just like any business, you have to be able to plan. So, if you make a production under one set of regs and release it under another, it’s not a very stable business environment. The topic that dominated a lot of your attention in recent months was obviously the merger talks with Warner Brothers Discovery. I know you’ve said it didn’t work for financial reasons. I want to ask you a little bit about the political dynamics. How much did the political environment, including the Susan Rice incident, how much did that complicate the calculus in your mind? I think it complicated the narrative, not the actual outcomes. I think for us it was always a business transaction, was always a well-regulated process in the U.S. The Department of Justice was handling it, everything was moving through. We were very confident we did not have a regulatory issue. Why would that be? It’s because it was very much a vertical transaction. I can’t name a transaction that was similar to this that has ever been blocked in history. We did not have duplicated assets. We did have a market concentration issue in the marketplace that we operate in. And I think that’s the feedback I was getting back from the DOJ and from regulators in general, which was, they understood that, but I do think that Paramount did a very nice job of creating a very loud narrative of a regulatory challenge that didn’t exist. But looking back to those early days of the merger discussions, did you have an appreciation for what might follow in terms of that complicated narrative? Yeah. Look, I think it opens up the door to have a lot of conversations that you wouldn’t have had otherwise, but that’s okay. A lot great things came out of it, the process itself. I would say in total, we had a price for where we thought this was good for our business. We made our best and final offer back in December and it was our best and final offer. So that’s all. But what came out a bit that’s positive is, we’ve had really healthy conversations with folks who we hardly ever talked to, theater operators, as a good example. I had a great meeting in February with the International Union of Cinemas, and the heads from all the different countries about what challenges they have, how we could be more helpful, or how they could be helpful to us too. I think we’ll come out of this with a much more creative relationship with exhibitions around the world. And by way of example, doing things that we haven’t done before. I don’t recommend testifying before the Senate again, but it was an interesting experience for sure. Probably a good learning experience. Hopefully not in the future for anything that you don’t want to be there for, but yes. Yeah, exactly. We’ve always said from the beginning, the Warner transaction was a nice-to-have at the right price, not a must-have-at-any-price. The business is healthy, growing organically. We’re growing on the path that we laid out several years ago and we didn’t really need this to grow the business. These assets are out there through our growth period and they’re going to be out there and for our next cycle growth as well and we’ve got to compete with that just like we knew we had to at the beginning. This was I think something that would fortify and maybe accelerate some of our existing models, but it doesn’t change our outcome. Are there regrets or things you might have wished you’d done differently? I mean honestly we took a very disciplined approach. I think we intentionally did not get distracted by the narrative noise, because we knew, we recognized what it was right away, which is just narrative noise. This deal was very good for the industry. Very good for both companies, Warner Brothers and Netflix. Our intent was obviously to keep those businesses operating largely as they are now. All the synergies that we had in the deal were mostly technologies and managerial, so we would have kept a big growth engine going in Hollywood and around the world. The alternative, which we’ve always said, is a lot of cutting. I think regulators in Europe and regulators in the U.S. should keep an eye on horizontal mergers. They should keep a close eye on [leveraged buyouts]. They typically are not good for the economy anywhere they happen. What were you preparing for in terms of the EU regulatory scrutiny with Warner Brothers? What was your read on how that might have looked? I think we’re a known entity in Europe. Keep in mind, like in Q4 of last year, we reported $3.5 billion or $3.8 billion in European revenues. So 18 percent year-on-year growth. The EU is now our largest territory. We’re a known entity there. The reason we didn’t take out press releases, we had meetings in Europe as we know everybody. We talked to the regulators, both at the EU and at the country level. And I do think that in many of the countries that we operate in, we’re a net contributor to the local economy, which I think is really important. We’ve got 12 offices across Europe with 2,500 people. So we’re members of the local ecosystem, we’re not outsiders. With President Trump, he demanded that Netflix remove Susan Rice from the board or pay the consequences. Did that cross a line for you in terms of political interference? It was a social media post, and we didn’t, no, it did not. It was not ideal, but he does a lot of things on social media. So you didn’t interpret it as anything bigger than that. I mean, he does that one day, he could obviously weigh in on content the next day. How does somebody like you manage situations like that? I think it’s really important to be able to separate noise from signal, and I think a lot of what happens in a world where we have a lot of noise. There was so much attention to you going to the White House that day. And we didn’t learn until several days later that you didn’t actually have the meetings that were predicted. Before you arrived in Washington that day, had you already made the decision not to proceed? Not before arriving in Washington, but we knew the framework for if this, then that. So, yeah, I would say that it was interesting, but again, we don’t make a big parade about our meetings with government and with the regulators. I had a meeting on the books with the DOJ scheduled several weeks before, meeting with Susie Wiles, the president’s chief of staff, scheduled several months before, unrelated to the Warner Brothers deal. And that was just the calendar that lined up that way. We didn’t know when Warner Brothers would make the statement about the deal. It’s all very dramatic, like it belongs on Netflix as a movie. There was paparazzi outside of the White House waiting for me when I came out. I’ve never experienced that before. Yeah, it’s a remarkable story. I would tell you, and I’m being honest with you, there was no political interference in this deal. The president is interested in entertainment and interested in deals, so he was curious about the mechanics of things and how things were going to go or whatever, but he made it very clear that this was under the DOJ. So it’s just like we all spun it up from the media? How do you explain it all? First of all, Netflix is clickbait. So people write about Netflix and it gets read. And that’s a pretty juicy story. And [Trump] said, and by the way, like I said, he makes statements sometimes that lead to the beliefs of things that do and sometimes that don’t materialize at all. But I found my conversations with him were 100 percent about the industry, protecting the industry. And I think it’s very healthy that the president of the United States speaks to business leaders about industries that are important to the economy. To what degree did the narrative or the fact that David Ellison had a relationship or seemed to have a relationship with people in Washington who were in power, that that might have swayed or changed the dynamic at the end with where Warner Brothers went though? I can’t speak to what their thinking is on it. I feel like for me, it’s very important to know the folks in charge, but I wouldn’t count on it if you’re doing something that is not in the best interest of the country or the economy. You talked with Trump in the past about entertainment jobs. Were there specific policies you’ve advocated to him or anything that he brought up on that point? He has brought up tariffs for the movie and television industry many times. And I’ve hopefully talked to him the way out of them. I just said basically the same thing I said earlier. I think that incentive works much better. We’re seeing it in the U.S. things like the states compete with each other for production incentives and those states with good, healthy incentive programs attract a lot of production, and you’ve seen a lot of them move from California to Georgia to New Jersey, kind of looking for that what’s the best place to operate in, where you could put more on the screen. And I do think that having the incentives versus tariffs is much better. Netflix is now buying Ben Affleck’s AI company. What areas do you see AI having the most potential to change Netflix’s workflow? My focus is that AI should be a creator tool. But with the same way production tools have evolved over time, AI is just a rapid, important evolution of these tools. It is one of those. And the idea that the creators could use it to do things that they could never do before to do it. Potentially, they could do faster and cheaper. But the most impact will be if they can make it better. I don’t think faster and cheaper matters if it’s not better. This is the most competitive time in the history of media. So you’ve gotta be better every time out of the gate. And faster and cheaper consumers are not looking for faster and cheaper, they’re looking for better. I do think that AI, particularly InterPositive, the company we bought from Ben, will help creators make things better. Using their own dailies, using their own production materials to make the film that they’re making better. Still requires writers and actors and lighting techs and all the things that you’d use to make a movie, but be able to make the movie more effective, more efficient. Being able to do pick up shots and things like this that you couldn’t do before. It’s really remarkable. It’s a really remarkable company. As AI improves, do you see the role of human voice actors shrinking at Netflix? What’s interesting about that is if you look at the evolution of tools for dubbing and subtitling, the one for dubbing, we do a lot of A-B tests that people, if you watch something and you don’t like it, you just turn it off. The one thing that we find to be the most important part of dubbing is the performance. So good voice actors really matter. Yeah, it’s a lot cheaper to use AI, but without the performance, which is very human, it actually runs down the quality of the production. Will it evolve over time? Possibly, but it won’t evolve without the cooperation and the training of the actual voice actors themselves too. I think what will happen is you’ll be able to do things like pick up lines that you do months and months after the production. You’ll be able to recreate some of those lines in the film without having to call everybody back and redo everything which will help make a better film. You’re in the sort of early stages of a push into video podcast. What have you learned so far about what works and what doesn’t? It’s really early. The main thing is we’ve got a broad cross-section of podcasts. It’s nowhere near as complete as other podcast outlets yet. But the things that we leaned into are the things that are working. We kind of figured they would. You’ve got true crime, sports, comedy, all those things that we do well in the doc space already. And I really am excited about things where people can develop and deepen the relationship with the show itself or the [intellectual property] itself. Our Bridgerton podcast is really popular, and people really want to go deeper and we want to be able to provide that for them. I think a video podcast is just the evolution of talk shows. We have tried to and failed at many talk shows over the years, and for the most part it’s because the old days of TV, when 40 million people used to tune in to the Tonight Show every night, [are over]. What’s happened now is that it’s much smaller audiences that tune into multiple shows in the form of a podcast every day. And then they come up to be way bigger than the 40 million that Johnny Carson used to get. They’re all individual, and it’s a deeper relationship than it is a broad one. So instead of trying to make one show for the world, you might have to make hundreds or thousands of shows for the whole world.

Dr. Daniel Steiners This is not an obituary for Germany’s economic standing. It is an invitation to shift perspective: away from the language of crisis and toward a clearer view of our opportunities — and toward the confidence that we have more capacity to shape our future than the mood indicators might suggest. For years, Germany seemed to be traveling along a self-evident path of success: growth, prosperity, the title of export champion. But that framework is beginning to fray. Other countries are catching up. Parts of our industrial base appear vulnerable to the pressures of transformation. And global dependencies are turning into strategic vulnerabilities. In short, the German model of success is under strain. Yet a glance at Europe’s economic history suggests that moments like these can also contain enormous potential — if strategic thinking and decisive action come together. One example, which I find particularly striking, takes us back to 1900. At the time, André and Édouard Michelin were producing tires in a relatively small market, when the automobile itself was still a niche product. They could have focused simply on improving their product. Instead, they thought bigger; not in silos, but in systems. With the Michelin Guide, they created incentives and orientation for greater mobility: workshop directories, road maps, and recommendations for hotels and restaurants made travel more predictable and attractive. What began as a service booklet for motorists gradually evolved into an entire ecosystem — and eventually into a globally recognized benchmark for quality. > In times of change, those who recognize connections and are willing to shape > them strategically can transform uncertainty into lasting strength. What makes this example remarkable is that the real innovation did not lie in the tire itself or merely even a clever marketing idea to boost sales. It lay in something more fundamental: connected thinking and ecosystem thinking. The decision to see mobility as a broad space for value creation. It was the courage to break out of silos, to recognize strategic connections, to deepen value chains — and to help define the standards of an emerging market. That is precisely the lesson that remains relevant today, including for policymakers. In times of change, those who recognize connections and are willing to shape them strategically can transform uncertainty into lasting strength. Germany’s industrial health economy is still too often viewed in public debate in narrowly sectoral terms — primarily through the lens of health care provision and costs. Strategically, however, it has long been an industrial ecosystem that spans research, development, manufacturing, digital innovation, exports and highly skilled employment. Just as Michelin helped shape the ecosystem of mobility, Germany can think of health as a comprehensive domain of value creation. The industrial health economy: cost driver or engine of growth? Yes, medicines cost money. In 2024, Germany’s statutory health insurance system spent around €55 billion on pharmaceuticals. But much of that increase reflects medical progress and the need for appropriate care in an aging society with changing disease patterns. Innovative therapies benefit both patients and the health system. They can improve quality and length of life while shifting treatment from hospitals into outpatient care or even into patients’ homes. They raise efficiency in the system, reduce downstream costs and support workforce participation. > In short, the industrial health economy is not merely part of our health care > system. It is a key industry, underpinning economic strength, prosperity and > the financing of our social security systems. Despite public perception, pharmaceutical spending has remained remarkably stable for years, accounting for roughly 12 percent of total expenditures in the statutory health insurance system. That figure also includes generics — medicines that enter the ‘world heritage of pharmacy’ after patent protection expires and remain available at low cost. Truly innovative, patent-protected medicines account for only about seven percent of total spending. Against these costs stands an economic sector in which Germany continues to hold a leading international position. With around 1.1 million employees and value creation exceeding €190 billion, the industrial health economy is among the largest sectors of the German economy. Its high-tech products, bearing the Made in Germany label, are in demand worldwide and contribute significantly to Germany’s export surplus. In short, the industrial health economy is not merely part of our health care system. It is a key industry, underpinning economic strength, prosperity and the financing of our social security systems. Its overall balance is positive. The central question, therefore, is this: how can we unlock its untapped potential? And what would it mean for Germany if we fail to recognize these opportunities while economic and innovative capacity increasingly shifts elsewhere? Global dynamics leave little room for hesitation Governments around the world have long recognized the strategic importance of the industrial health economy — for health care, for economic growth and for national security. China is demonstrating remarkable speed in scaling and implementing biotechnology. The United States, meanwhile, illustrates how determined industrial policy can look in practice. Regulatory authorities are being modernized, approval procedures accelerated and bureaucratic barriers systematically reduced. At the same time, domestic production is being strategically strengthened. Speed and market size act as magnets for capital — especially in a sector where research is extraordinarily capital-intensive and requires long-term planning security. When innovation-friendly conditions and economic recognition of innovation meet a large, well-funded market, global shifts follow. Today roughly 50 percent of the global pharmaceutical market is located in the United States, about 23 percent in Europe — and only 4 to 5 percent in Germany. This distribution is no coincidence; it reflects differences in economic and regulatory environments. At the same time, political pressure is growing on countries that benefit from the American innovation engine without offering an equally attractive home market or recognizing the value of innovation in comparable ways. Discussions around a Most Favored Nation approach or other trade policy instruments are moving in precisely that direction — and they affect Europe and Germany directly. For Germany, the implications are clear. Those who want to attract investment must strengthen their competitiveness. Those who want to ensure reliable health care must appropriately reward new therapies. Otherwise, these global dynamics will inevitably affect both the economy and health care at home. Already today, roughly one in four medicines introduced in the United States between 2014 and 2023 is not available in Europe. The gap is even larger for gene and cell therapies. The primacy of industrial policy: from consensus to action — now Germany does not lack potential or substance. We still have a strong industrial base, a tradition of invention, outstanding universities and research institutions, and a private sector willing to invest. Political initiatives such as the coalition agreement, the High-Tech Agenda and plans for a future strategy in pharmaceuticals and medical technology provide important impulses, which I strongly welcome. > A fair market environment without artificial price caps or rigid guardrails is > the strongest magnet for private capital, long-term investment and a resilient > health system. But programs must now translate into a coherent action plan for growth. We need innovation-friendly and stable framework conditions that consider health care, economic strength and national security together — as a strategic ecosystem, not as separate silos. The value of medical innovation must also be recognized in Germany. A fair market environment without artificial price caps or rigid guardrails is the strongest magnet for private capital, long-term investment and a resilient health system. Faster approval procedures, consistent digitalization and a determined reduction of bureaucracy are essential if speed is once again to become a competitive advantage and a driver of innovation. Germany can reinvent itself, of that I am convinced. With courage, strategic determination and an ambitious push for innovation. The choice now lies with us: to set the right course and unlock the potential that is already there.