FRANKFURT —  Germany’s government has redirected the bulk of funds originally earmarked for infrastructure into covering budget gaps, according to new reports from two leading research institutes — raising fresh doubts about Berlin’s ability to deliver on its long-promised investment drive. The findings — coming a year after German lawmakers approved historic constitutional reforms to unlock hundreds of billions of euros in borrowing — could expose Chancellor Friedrich Merz to fresh criticism that his government has failed to harness a €500 billion infrastructure and climate fund to revive Germany’s stagnating economy. The scale of the misallocation is striking, according to the reports. The Cologne-based German Economic Institute (IW) calculates that 86 percent of the funds were diverted, while the Ifo Institute puts the figure at an even more damning 95 percent. “We have found that policymakers have used almost all of the debt-financed funds for other purposes, namely, to cover budget shortfalls. This is a major problem,” said Ifo President Clemens Fuest. After two consecutive years of recession, Germany’s economy barely grew in 2025. It was widely expected to pick up speed in 2026, helped by public investment. But a rebound appears to have failed to materialize thus far.  New headwinds from the conflict in the Middle East will make any recovery even more contingent on effective government spending, analysts warn. The IW report calculated that, last year, the governing coalition of the Christian Democratic Union (CDU) and Social Democratic Party (SPD) in Berlin tapped just 42 percent of funds originally earmarked. The conservatives and SPD “had the chance to clear the investment backlog. So far, they have not taken it,” said Tobias Hentze of the German Economic Institute. According to Ifo, borrowing from the €500 billion fund increased by €24.3 billion in 2025. Actual federal investments, however, rose by only €1.3 billion overall from 2024. The reason, says Ifo, is that Berlin shifted investment commitments from the current budget into the special fund — known as the Special Fund for Infrastructure and Climate Neutrality, or SVIK — in order to make room for higher day-to-day spending. As such, the net increase in actual overall investment has been minuscule. “There were shifts of individual items from the core budget into the debt-financed [special fund] SVIK, particularly grants in the transport sector, which meant that less was invested in the core budget than in previous years,” said Ifo researcher Emilie Höslinger. “A large part of the special fund’s investments is therefore not truly additional.” Germany’s Bundesbank has previously called on the government to use the SVIK’s borrowing capacity “more purposefully” to ensure that the borrowed money actually creates the potential for faster growth in future, which will in turn make it easier to service the debt that has been taken on. Before the fund was launched, critics including the Federation of German Industries (BDI) warned that the potentially beneficial effects of the SVIK risked being diluted unless the money was put to use properly.

Anton, a 44-year-old Russian soldier who heads a workshop responsible for repairing and supplying drones, was at his kitchen table when he learned last month that Elon Musk’s SpaceX had cut off access to Starlink terminals used by Russian forces. He scrambled for alternatives, but none offered unlimited internet, data plans were restrictive, and coverage did not extend to the areas of Ukraine where his unit operated. It’s not only American tech executives who are narrowing communications options for Russians. Days later, Russian authorities began slowing down access nationwide to the messaging app Telegram, the service that frontline troops use to coordinate directly with one another and bypass slower chains of command. “All military work goes through Telegram — all communication,” Anton, whose name has been changed because he fears government reprisal, told POLITICO in voice messages sent via the app. “That would be like shooting the entire Russian army in the head.” Telegram would be joining a home screen’s worth of apps that have become useless to Russians. Kremlin policymakers have already blocked or limited access to WhatsApp, along with parent company Meta’s Facebook and Instagram, Microsoft’s LinkedIn, Google’s YouTube, Apple’s FaceTime, Snapchat and X, which like SpaceX is owned by Musk. Encrypted messaging apps Signal and Discord, as well as Japanese-owned Viber, have been inaccessible since 2024. Last month, President Vladimir Putin signed a law requiring telecom operators to block cellular and fixed internet access at the request of the Federal Security Service. Shortly after it took effect on March 3, Moscow residents reported widespread problems with mobile internet, calls and text messages across all major operators for several days, with outages affecting mobile service and Wi-Fi even inside the State Duma. Those decisions have left Russians increasingly cut off from both the outside world and one another, complicating battlefield coordination and disrupting online communities that organize volunteer aid, fundraising and discussion of the war effort. Deepening digital isolation could turn Russia into something akin to “a large, nuclear-armed North Korea and a junior partner to China,” according to Alexander Gabuev, the Berlin-based director of the Carnegie Russia Eurasia Center. In April, the Kremlin is expected to escalate its campaign against Telegram — already one of Russia’s most popular messaging platforms, but now in the absence of other social-media options, a central hub for news, business and entertainment. It may block the platform altogether. That is likely to fuel an escalating struggle between state censorship and the tools people use to evade it, with Russia’s place in the world hanging in the balance. “It’s turned into a war,” said Mikhail Klimarev, executive director of the internet Protection Society, a digital rights group that monitors Russia’s censorship infrastructure. “A guerrilla war. They hunt down the VPNs they can see, they block them — and the ‘partisans’ run, build new bunkers, and come back.” THE APP THAT RUNS THE WAR On Feb. 4, SpaceX tightened the authentication system that Starlink terminals use to connect to its satellite network, introducing stricter verification for registered devices. The change effectively blocked many terminals operated by Russian units relying on unauthorized connections, cutting Starlink traffic inside Ukraine by roughly 75 percent, according to internet traffic analysis by Doug Madory, an analyst at the U.S. network monitoring firm Kentik. The move threw Russian operations into disarray, allowing Ukraine to make battlefield gains. Russia has turned to a workaround widely used before satellite internet was an option: laying fiber-optic lines, from rear areas toward frontline battlefield positions. Until then, Starlink terminals had allowed drone operators to stream live video through platforms such as Discord, which is officially blocked in Russia but still sometimes used by the Russian military via VPNs, to commanders at multiple levels. A battalion commander could watch an assault unfold in real time and issue corrections — “enemy ahead” or “turn left” — via radio or Telegram. What once required layers of approval could now happen in minutes. Satellite-connected messaging apps became the fastest way to transmit coordinates, imagery and targeting data. But on Feb. 10, Roskomnadzor, the Russian communications regulator, began slowing down Telegram for users across Russia, citing alleged violations of Russian law. Russian news outlet RBC reported, citing two sources, that authorities plan to shut down Telegram in early April — though not on the front line. In mid-February, Digital Development Minister Maksut Shadayev said the government did not yet intend to restrict Telegram at the front but hoped servicemen would gradually transition to other platforms. Kremlin spokesperson Dmitry Peskov said this week the company could avoid a full ban by complying with Russian legislation and maintaining what he described as “flexible contact” with authorities. Roskomnadzor has accused Telegram of failing to protect personal data, combat fraud and prevent its use by terrorists and criminals. Similar accusations have been directed at other foreign tech platforms. In 2022, a Russian court designated Meta an “extremist organization” after the company said it would temporarily allow posts calling for violence against Russian soldiers in the context of the Ukraine war — a decision authorities used to justify blocking Facebook and Instagram in Russia and increasing pressure on the company’s other services, including WhatsApp. Telegram founder Pavel Durov, a Russian-born entrepreneur now based in the United Arab Emirates, says the throttiling is being used as a pretext to push Russians toward a government-controlled messaging app designed for surveillance and political censorship. That app is MAX, which was launched in March 2025 and has been compared to China’s WeChat in its ambition to anchor a domestic digital ecosystem. Authorities are increasingly steering Russians toward MAX through employers, neighborhood chats and the government services portal Gosuslugi — where citizens retrieve documents, pay fines and book appointments — as well as through banks and retailers. The app’s developer, VK, reports rapid user growth, though those figures are difficult to independently verify. “They didn’t just leave people to fend for themselves — you could say they led them by the hand through that adaptation by offering alternatives,” said Levada Center pollster Denis Volkov, who has studied Russian attitudes toward technology use. The strategy, he said, has been to provide a Russian or state-backed alternative for the majority, while stopping short of fully criminalizing workarounds for more technologically savvy users who do not want to switch. Elena, a 38-year-old Yekaterinburg resident whose surname has been withheld because she fears government reprisal, said her daughter’s primary school moved official communication from WhatsApp to MAX without consulting parents. She keeps MAX installed on a separate tablet that remains mostly in a drawer — a version of what some Russians call a “MAXophone,” gadgets solely for that app, without any other data being left on those phones for the (very real) fear the government could access it. “It works badly. Messages are delayed. Notifications don’t come,” she said. “I don’t trust it … And this whole situation just makes people angry.” THE VPN ARMS RACE Unlike China’s centralized “Great Firewall,” which filters traffic at the country’s digital borders, Russia’s system operates internally. Internet providers are required to route traffic through state-installed deep packet inspection equipment capable of controlling and analyzing data flows in real time. “It’s not one wall,” Klimarev said. “It’s thousands of fences. You climb one, then there’s another.” The architecture allows authorities to slow services without formally banning them — a tactic used against YouTube before its web address was removed from government-run domain-name servers last month. Russian law explicitly provides government authority for blocking websites on grounds such as extremism, terrorism, illegal content or violations of data regulations, but it does not clearly define throttling — slowing traffic rather than blocking it outright — as a formal enforcement mechanism. “The slowdown isn’t described anywhere in legislation,” Klimarev said. “It’s pressure without procedure.” In September, Russia banned advertising for virtual private network services that citizens use to bypass government-imposed restrictions on certain apps or sites. By Klimarev’s estimate, roughly half of Russian internet users now know what a VPN is, and millions pay for one. Polling last year by the Levada Center, Russia’s only major independent pollster, suggests regular use is lower, finding about one-quarter of Russians said they have used VPN services. Russian courts can treat the use of anonymization tools as an aggravating factor in certain crimes — steps that signal growing pressure on circumvention technologies without formally outlawing them. In February, the Federal Antimonopoly Service opened what appears to be the first case against a media outlet for promoting a VPN after the regional publication Serditaya Chuvashiya advertised such a service on its Telegram channel. Surveys in recent years have shown that many Russians, particularly older citizens, support tighter internet regulation, often citing fraud, extremism and online safety. That sentiment gives authorities political space to tighten controls even when the restrictions are unpopular among more technologically savvy users. Even so, the slowdown of Telegram drew criticism from unlikely quarters, including Sergei Mironov, a longtime Kremlin ally and leader of the Just Russia party. In a statement posted on his Telegram channel on Feb. 11, he blasted the regulators behind the move as “idiots,” accusing them of undermining soldiers at the front. He said troops rely on the app to communicate with relatives and organize fundraising for the war effort, warning that restricting it could cost lives. While praising the state-backed messaging app MAX, he argued that Russians should be free to choose which platforms they use. Pro-war Telegram channels frame the government’s blocking techniques as sabotage of the war effort. Ivan Philippov, who tracks Russia’s influential military bloggers, said the reaction inside that ecosystem to news about Telegram has been visceral “rage.” Unlike Starlink, whose cutoff could be blamed on a foreign company, restrictions on Telegram are viewed as self-inflicted. Bloggers accuse regulators of undermining the war effort. Telegram is used not only for battlefield coordination but also for volunteer fundraising networks that provide basic logistics the state does not reliably cover — from transport vehicles and fuel to body armor, trench materials and even evacuation equipment. Telegram serves as the primary hub for donations and reporting back to supporters. “If you break Telegram inside Russia, you break fundraising,” Philippov said. “And without fundraising, a lot of units simply don’t function.” Few in that community trust MAX, citing technical flaws and privacy concerns. Because MAX operates under Russian data-retention laws and is integrated with state services, many assume their communications would be accessible to authorities. Philippov said the app’s prominent defenders are largely figures tied to state media or the presidential administration. “Among independent military bloggers, I haven’t seen a single person who supports it,” he said. Small groups of activists attempted to organize rallies in at least 11 Russian cities, including Moscow, Irkutsk and Novosibirsk, in defense of Telegram. Authorities rejected or obstructed most of the proposed demonstrations — in some cases citing pandemic-era restrictions, weather conditions or vague security concerns — and in several cases revoked previously issued permits. In Novosibirsk, police detained around 15 people ahead of a planned rally. Although a small number of protests were formally approved, no large-scale demonstrations ultimately took place. THE POWER TO PULL THE PLUG The new law signed last month allows Russia’s Federal Security Service to order telecom operators to block cellular and fixed internet access. Peskov, the Kremlin spokesman, said subsequent shutdowns of service in Moscow were linked to security measures aimed at protecting critical infrastructure and countering drone threats, adding that such limitations would remain in place “for as long as necessary.” In practice, the disruptions rarely amount to a total communications blackout. Most target mobile internet rather than all services, while voice calls and SMS often continue to function. Some domestic websites and apps — including government portals or banking services — may remain accessible through “whitelists,” meaning authorities allow certain services to keep operating even while broader internet access is restricted. The restrictions are typically localized and temporary, affecting specific regions or parts of cities rather than the entire country. Internet disruptions have increasingly become a tool of control beyond individual platforms. Research by the independent outlet Meduza and the monitoring project Na Svyazi has documented dozens of regional internet shutdowns and mobile network restrictions across Russia, with disruptions occurring regularly since May 2025. The communications shutdown, and uncertainty around where it will go next, is affecting life for citizens of all kinds, from the elderly struggling to contact family members abroad to tech-savvy users who juggle SIM cards and secondary phones to stay connected. Demand has risen for dated communication devices — including walkie-talkies, pagers and landline phones — along with paper maps as mobile networks become less reliable, according to retailers interviewed by RBC. “It feels like we’re isolating ourselves,” said Dmitry, 35, who splits his time between Moscow and Dubai and whose surname has been withheld to protect his identity under fear of governmental reprisal. “Like building a sovereign grave.” Those who track Russian public opinion say the pattern is consistent: irritation followed by adaptation. When Instagram and YouTube were blocked or slowed in recent years, their audiences shrank rapidly as users migrated to alternative services rather than mobilizing against the restrictions. For now, Russia’s digital tightening resembles managed escalation rather than total isolation. Officials deny plans for a full shutdown, and even critics say a complete severing would cripple banking, logistics and foreign trade. “It’s possible,” Klimarev said. “But if they do that, the internet won’t be the main problem anymore.”

U.S. Energy Secretary Chris Wright on Friday took action to hit back at two of the Trump administration’s top antagonists: oil supply disruptions brought on by the war in Iran and California Governor Gavin Newsom. Wright issued an order paving the way for a company operating off the California coast to restart an oil pipeline that state officials have kept offline since 2015. The Energy Department framed it as a way to ease reliance on oil imports through the Strait of Hormuz, a key waterway for oil tanker traffic that the war has choked off. “Today, more than 60 percent of the oil refined in California comes from overseas, with a significant share traveling through the Strait of Hormuz — presenting serious national security threats,” the department wrote in its announcement. Wright said in a statement that the move would “strengthen America’s oil supply and restore a pipeline system vital to our national security and defense, ensuring that West Coast military installations have the reliable energy critical to military readiness.” Wright’s directive invoked the Defense Production Act, a 1950 law that gives the president broad powers over domestic industry in the interest of national defense. President Donald Trump signed an executive order earlier Friday that delegated some of his authority under the law to the energy secretary, opening the door to Wright’s move. Newsom was quick to push back against the Trump administration’s justification. “Donald Trump started a war, admitted it would spike gas prices nationwide, told Americans it was a small price to pay, and now he’s using this crisis of his own making to attempt what he’s wanted to do for years: open California’s coast for his oil industry friends so they can poison our beaches,” Newsom said in a statement. He called the attempt to restart the pipeline illegal and said that it “wouldn’t lower prices by a cent” due to the fact that oil prices are set on the global marketplace. In overriding California’s authority over a pipeline system that connects a trio of offshore platforms to the California coast, Wright is also bringing the full powers of the federal government to bear against California in an escalating conflict over whether oil producers should be allowed to expand drilling off the Golden State coast. The pipeline owner, Texas-based Sable Offshore Corp., appealed last year to Trump’s National Energy Dominance Council for help securing federal permits to transport its oil to market in a bid to get around state regulators, who had raised environmental concerns. Bringing Sable’s oil to market won’t come close to making up for the supply disruptions caused by the war in Iran, according to Ryan Cummings, chief of staff of the Stanford Institute for Economic Policy Research. While the nearby oil will provide a more profitable supply to Golden State refiners, “we shouldn’t expect that to really flow through to consumers in any meaningful way in California, and certainly not in the United States,” Cummings said. California Attorney General Rob Bonta has already sued the U.S. Transportation Department over its December move to assert jurisdiction over Sable’s pipelines. Wright’s order sets the stage for more legal clashes between California and the White House. “California will not stand by while the Trump administration attempts to sacrifice our coastal communities, our environment, and our $51 billion coastal economy,” Newsom said. “The Trump administration and Sable are defying multiple court orders, and we will see them back in court.” Wright’s directive is a lifeline for Sable, a company whose stock price had plummeted at the end of last year amid the barrage of regulatory setbacks. Its share value rose significantly after a Department of Justice opinion last week signaled that the company might benefit from a presidential intervention. Company representatives didn’t immediately respond to a request for comment. Sable’s pipeline system has been shut down since it was responsible for a major 2015 oil spill in Santa Barbara County, while owned by a different company. Sable purchased the three offshore platforms, the pipelines and an onshore processing facility in 2024 and has been working to restart the operation ever since. But the company has run afoul of state and local agencies in the process. The California Coastal Commission fined the company $18 million, accusing it of defying orders to stop work on its pipeline. California Attorney General Rob Bonta sued Sable in October alleging water discharge violations, and the Santa Barbara County District Attorney filed criminal charges against the company in September alleging environmental violations. In December, the U.S. Transportation Department’s Pipeline and Hazardous Materials Safety Administration wrested oversight of Sable’s pipelines from the California Fire Marshal and approved the company’s restart plan. California Attorney General Rob Bonta then sued the federal pipeline regulator, challenging the move in a case that remains ongoing. A California judge last month ruled that Sable still needed a waiver from the state fire marshal before restarting the pipeline, citing a federal consent decree in the wake of the 2015 spill.

The National Fund for Environmental Protection and Water Management (NFEPWM) will be the first institution to implement the ELENA (European Local Energy Assistance) instrument at the national level in Poland. As the leader of green investment financing in Poland, it is launching a new advisory services segment for companies and local governments preparing sustainable investments. On March 3, 2026, in Luxembourg, Ioannis Tsakiris, a vice president at the European Investment Bank, and Dorota Zawadzka-Stepniak, the board president of the NFEPWM, officially acknowledged an agreement for the ELENA National Pilot Program. The project preparation budget is €4.5 million, with €4.05 million provided as grant support from the ELENA facility — a joint EIB and European Commission facility under InvestEU. Pre-investment support will target local government authorities and heating companies. Increased investments in heating and energy efficiency will lead to energy savings and reduced carbon dioxide emissions. These efforts are part of Poland’s energy transition, with the NFEPWM playing a significant role. In 2026, the fund will allocate 85 percent of its planned green investment budget of €8.8 billion to the energy transition. After a consultation, the European Commission formally approved the ELENA grant, and it was decided to leverage the NFEPWM’s experience to implement an ELENA pilot mechanism nationally. The fund will combine its experience with the EIB’s established practices under the ELENA instrument. After the pilot phase, the NFEPWM plans to continue and expand the program to include beneficiaries from other sectors. > In 2026, the fund will allocate 85 percent of its planned green investment > budget of €8.8 billion to the energy transition. “The competence center, established as part of the ELENA project, addresses market needs in investment consulting to support Poland’s energy transition. The ELENA program will provide the NFEPWM with a unique range of services in Europe, combining advisory and financial support for future beneficiaries. This initiative aligns with the fund’s strategy for 2025–2028, which focuses on developing advisory services and creating a competence center within the fund, as well as utilizing modern financial instruments,” explains Zawadzka-Stepniak. ELENA in Poland: pilot project assumptions Between 2026 and 2029, Polish investors planning thermal modernization of public buildings and upgrades in the heating sector will have access to advisory services. Local government authorities and heating companies will receive comprehensive expert support in preparing their investments. The involvement of relevant experts will facilitate the development of high-quality project documentation, leading to effective funding applications in calls for proposals conducted by the NFEPWM. The pilot program will support entities that choose not to modernize public buildings or heating plants due to a lack of know-how. It will target new investors who can evaluate the profitability of potential investments, helping to expand the NFEPWM program’s beneficiaries. Some Polish local authorities and heating companies, constrained by limited finances, avoid the risk of inefficient spending on investment analysis, missing the chance to secure support from European funds or the Modernisation Fund. Under the ELENA project, the NFEPWM will reach out to these investors, providing technical assistance and identifying financing opportunities for future projects. This approach addresses the need for local governments to enhance energy efficiency and the requirements for heating companies to adopt more environmentally friendly heat generation methods. The future beneficiary will gain a partner in the NFEPWM, an expert in preparing technical documentation for co-financing applications and green project funding. Assistance will focus on supporting preparatory processes, including energy audits, feasibility studies, technical documentation, public procurement services and ex-ante analyses. The transformation of district heating is a priority for change in the Polish economy, making it crucial to enhance the efficiency of district heating systems and increase the use of renewable energy from various sources. More than 15 million Poles are daily users of district heating produced by small municipal heating plants typical of the Central European region. Although the networks are extensive, improving their efficiency is often necessary. The challenges include reducing heat production from coal combustion and minimizing unnecessary heat consumption. Companies are increasingly investing in modern technologies that decrease the release of dust and harmful compounds into the atmosphere. The last 20 years have brought significant changes to the Polish heating sector — carbon dioxide emissions have fallen by nearly 20 percent, the production of harmful dust has been reduced by over 90 percent, sulfur dioxide emissions have decreased by almost 90 percent and nitrogen oxides by over 60 percent. > For nearly 37 years, the NFEPWM has led green transformation financing in > Poland, improving the natural environment and quality of life. It has > co-financed environmental protection and water management investments totaling > nearly 160 billion złoty. Modernizing the heating sector and improving the energy efficiency of public buildings will reduce greenhouse gas emissions locally and nationally. The ELENA project in Poland will co-finance at least 65 entities in the heating sector. Energy efficiency projects will lower energy consumption, increase renewable energy use and enhance facility comfort. Long-term investments will reduce local government operating costs, improving air quality and residents’ quality of life. The national pilot aims to support analyses and documentation for at least 80 thermal modernization investments in public buildings. The ELENA instrument is implemented by the European Investment Bank under an agreement with the European Commission. Established in 2009 as part of the Intelligent Energy Europe II program, ELENA provides pre-investment support for sustainable energy, transport and housing. It is an EIB Advisory grant facility, under InvestEU, which supports the preparation of sustainable investments. As of the end of 2025, the ELENA facility has provided €374 million in grants for 206 projects across the European Union, supporting investments of over €12.7 billion. For nearly 37 years, the NFEPWM has led green transformation financing in Poland, improving the natural environment and quality of life. It has co-financed environmental protection and water management investments totaling nearly 160 billion złoty. Thanks to the NFEPWM, green investments worth approximately 340 billion złoty have been implemented in Poland. Under the Ministry of Climate and Environment, NFEPWM supports EU environmental and energy policy objectives. -------------------------------------------------------------------------------- Polish National ELENA Pilot Programme Co-funded by the InvestEU Advisory Hub of the European Union

LE HAVRE, France — Former Prime Minister Édouard Philippe is often seen as the centrist candidate best placed to challenge the far right in France’s presidential election next year — but his political future is under threat in the gritty industrial port of Le Havre. Philippe, one of President Emmanuel Macron’s most popular former lieutenants, has been mayor of this city in Normandy since 2020, but polling suggests he now faces a make-or-break battle not to lose it to a Communist rival in the municipal elections of March 15 and 22. If he does lose his northern stronghold — which he also ran from 2010 to 2017 — Philippe’s loss will send shockwaves through France. The center-right politician has said that will mean he won’t run in the 2027 election against the candidate from the far-right National Rally (RN) party — either Marine Le Pen or Jordan Bardella, the current frontrunners for the presidency. It will also be a grave personal disappointment for Philippe, who has long held ambitions to run for the Élysée. As prime minister from 2017 to 2020 he steered France through the Covid pandemic, but was ultimately sidelined by Macron when the president wanted to give his government a “new direction,” a decision that many in the administration believed was due to Philippe’s higher popularity ratings. This month’s local elections are an opportunity to launch his campaign ahead of the 2027 presidential race. But Philippe now risks slipping up before he even reaches the starting line. A shock poll from OpinionWay landed last month and predicted that Philippe could be squeezed out by the far right and far left in the second round of the contest in Le Havre. Philippe was seen winning only 40 percent, pipped by the Communist Jean-Paul Lecoq on 42 percent. Franck Keller, backed by the RN, was set to win 18 percent. The center-right politician has said that will mean he won’t run in the 2027 election against the candidate from the far-right National Rally (RN) party — either Marine Le Pen or Jordan Bardella. | Adnan Farzat/NurPhoto via Getty Images On Friday, POLITICO caught up with 55-year-old Philippe on the campaign train. He was dashing between events but still keen to grab a beer, drop the formalities and chat with voters — in true retail politician style. “Elections are always tight here,” he said in an interview with POLITICO between two campaign stops on Friday. “Le Havre is a working-class city where the Communist Party is very rooted and very strong.” While the Communist Party is no longer the national force it used to be, many of the issues close to the hearts of its voters are the same as those driving the National Rally vote in other parts of the country. Here in Le Havre, blue-collar voters stress job protection, early retirement and a strong welfare state. In the 2027 presidential race, Philippe would have to convince voters, disaffected after a decade under Macron, that his brand of center-right politics is what France needs. A SHAKY STRONGHOLD The man who might bring Philippe down is hardly a political big gun. Jean-Paul Lecoq is a 67-year-old electrician who spent much of his life repairing typewriters in Le Havre. Unlike Philippe, who was educated in France’s elite schools, Lecoq had a long career in local politics before becoming a member of parliament in 2017. Here in Le Havre, blue-collar voters stress job protection, early retirement and a strong welfare state. | Lou Benoist/AFP via Getty Images Lecoq’s team has been buoyed by the OpinionWay poll — the only one available on Le Havre — which showed Philippe leading in the first round with 37 percent, but Lecoq winning the runoff. In a market in the Sanvic neighbourhood of Le Havre, Lecoq lampooned Philippe for using the local election as a stepping stone for his presidential ambitions. “He wanted to link the local and the presidential election,” he said. “With Philippe, it’s me, me, me. I know best.” Le Havre’s incumbent mayor “has done some beautiful brand-new projects in Le Havre, turned it into a showcase. But he hasn’t taken care of the city property … the schools, the sports clubs,” Lecoq said. The idea he has one eye on the Élysée is getting some traction with voters. “If he’s elected, and then launches into a presidential campaign, who is going take over here?” asked Cédric Perisbeau, a former company manager and stay-at-home father. “If the person is not up to the job, it could all fall apart here.” While the political forces in Le Havre are different from the national dynamics, where the far-right National Rally is tipped to win the presidency, Le Havre is a testing ground for the type of politics Philippe wants to offer France: debt reduction, long-term investments, and fewer hand-outs. He describes himself as “offering very ambitious projects for Le Havre.” The man who might bring Philippe down is hardly a political big gun. Jean-Paul Lecoq is a 67-year-old electrician who spent much of his life repairing typewriters in Le Havre. | Lou Benoist/AFP via Getty Images “There are few freebies in our campaign, whether it’s free water or transport,” he told a group of voters. If you stop investing in the city, he argued, eventually “it hurts a lot.” But retiree Linda Deloge wanted him to put more resources into childcare and housing. “I’m fed up with all the road works,” complained Deloge, who voted for Philippe in the last election but is undecided this time. Deloge said Phillippe’s track record was “pretty good,” particularly on rehabilitating run-down neighborhoods, but added she wanted a greater focus on welfare. DOUBLE OR NOTHING The National Rally is relishing its position as potential kingmaker in Le Havre. In the 2020 municipal election the RN failed to make the second round, but this time it could do so, challenging Philippe to his right. The RN has betrayed no willingness to step back in the second round to help Philippe. “We’ll never pull out,” said one adviser to National Rally leader Marine Le Pen, who was granted anonymity to speak candidly about party strategy. Even if it lets the Communists in? “We don’t care,” he said. Philippe, one of President Emmanuel Macron’s most popular former lieutenants, has been mayor of this city in Normandy since 2020. | Pool photo by Benoit Tessier/AFP via Getty Images A poll published late last year showed that far-right leader Bardella would win in most second-round scenarios against mainstream candidates, but that Philippe posed the biggest threat, securing 47 percent to Bardella’s 53 percent. Indeed, Philippe’s supporters say the far right is deliberately exploiting local politics to wipe him out ahead of the presidential election. “The National Rally candidate is such a caricature of the outsider who has been parachuted in to stir things up,” said a former adviser from Philippe’s Horizons party, a reference to Keller, who was a councilor in the upscale Paris neighborhood of Neuilly-sur-Seine. “The National Rally isn’t going to win this election, so all they are going to do is favor a Communist candidate.” Although polls have repeatedly shown Philippe as having the best shot against the far right in 2027, he is being challenged within his own camp by a glut of presidential hopefuls including former Prime Minister Gabriel Attal, conservative former Interior Minister Bruno Retailleau, former Prime Minister Dominique de Villepin and many others. A hard-earned victory in a dockers’ city would propel Philippe ahead of his rivals, his supporters argue, and cement him as a locally-rooted politician who can appeal to voters beyond the center right. “It’s like a party primary for him,” said Gilles Boyer, an MEP and longtime ally of Philippe. “The Havre is a difficult city. If he wins this election … it’ll give him a boost.” Philippe also tells his electorate that his national ambitions could help them too. “I tell the people here, that if by an extraordinary chance, someone from Le Havre became president of France, it wouldn’t be a bad thing for Le Havre,” he said. Sarah Paillou contributed reporting.

Hungary’s ruling party on Monday introduced a bill aimed at cementing last week’s controversial seizure of millions of euros worth of Ukrainian state bank cash and gold. The measure would allow authorities to freeze the assets while a national security investigation unfolds. The proposal, introduced by Fidesz parliamentary leader Máté Kocsis, would treat the €35 million, $40 million and 9 kilograms of gold seized from vehicles linked to Ukraine’s state-owned Oschadbank as confiscated property until Hungary’s tax and customs authority concludes its probe. According to Hungarian outlet Telex, lawmakers plan to debate the legislation under an unusual fast-track procedure after the parliament’s national security committee met Monday. Hungarian authorities say they are examining whether the convoy — stopped while transiting the country last week — posed national security risks. They are also investigating the origin and intended use of the money. Hungarian officials insist key questions about the convoy remain unresolved. Fidesz parliamentary leader Kocsis described the episode as a “scandalous Ukrainian gold convoy” and said investigators are examining whether the transport of such large quantities of cash and bullion could pose security risks to Hungary. Ukraine’s foreign minister, Andrii Sybiha, slammed the move on X, accusing Budapest of trying to retroactively legitimize an illegal seizure. “Hungary is falling down a spiral of lawlessness,” Sybiha wrote, calling the bill “a de facto recognition that Hungary’s actions lack any legal grounds.” The clash is the latest flare-up in a long-running feud between Kyiv and Budapest. Prime Minister Viktor Orbán has repeatedly butted heads with Ukraine over energy flows through the Druzhba pipeline, opposed Kyiv’s bid to join the European Union and blocked major EU financial support packages — including a €90 billion lifeline intended to keep Ukraine’s government functioning during the country’s war with Russia.

PARIS — The rising price of oil is undermining the European Union’s efforts to rein in Vladimir Putin’s shadow fleet of sanctioned oil tankers. Russian oil is in high demand as the war in the Middle East and tensions around the Strait of Hormuz tighten global supply, sending benchmark crude prices above $100 per barrel on Monday. That risks weakening a central plank of the EU’s efforts to cut off funding for the Russian president’s war in Ukraine: making it harder and more expensive for Moscow to export oil through a network of aging vessels operating outside the Western shipping system. EU countries have already sanctioned hundreds of tankers and are working on new measures aimed at the insurance, crewing and other maritime services that allow those ships to operate — tools Brussels hopes will make the shadow fleet increasingly costly and difficult to run. But a tighter oil market means buyers may still be willing to purchase discounted Russian crude. As prices rise, the financial incentive to secure cheaper Russian barrels grows, offsetting the higher risks and costs associated with sanctioned ships. The demand is expected to be driven by Asian countries like China and India — the world’s first and third-largest importers of oil — which rely heavily on Middle Eastern supplies and are likely to turn to Russia to make up for any shortfalls. Indian refiners have already reportedly moved to buy more Russian crude after the U.S. temporarily eased pressure on the South Asian country by allowing purchases to resume last week. India imports, on average, 10 million metric ton of crude oil per month through the Strait of Hormuz, said Vaibhav Raghunandan, an EU-Russia analyst at the Centre for Research on Energy and Clean Air. “Even if half of this volume is replaced with Russian volumes at sea, it will translate to huge profits for the Kremlin.” The shift comes after millions of barrels of oil were stranded at sea last week as escalating tensions blocked the Strait of Hormuz, a maritime choke point through which a fifth of the world’s oil and liquefied natural gas flows. Meanwhile, around €1.3 billion of Russian crude is currently at sea looking for buyers, Raghunandan estimates. SANCTIONS STALL The market squeeze also comes at a difficult moment for Brussels. The EU is trying to push through a new sanctions package aimed at tightening restrictions on Russia’s shadow fleet — including limits on maritime services — but the proposal is currently stalled after Hungary vetoed the plan. The shadow fleet includes hundreds of aging tankers used to transport Russian crude outside Western oversight. Last month, President Donald Trump announced a trade deal with Indian Prime Minister Narendra Modi that included a commitment from New Delhi to halt purchases of Russian oil in exchange for reduced trade barriers with the United States. | Andrew Harnik/Getty Images EU foreign policy chief Kaja Kallas warned last week that rising oil prices risk boosting Moscow’s war effort. “When the oil price goes up, it actually benefits Russia to fund its war,” she said, making the case for the maritime services ban at a virtual meeting of EU foreign ministers. Malte Humpert, founder and senior fellow at The Arctic Institute, said a prolonged Iran–U.S. conflict would likely benefit Moscow by pushing energy prices higher. “Rising prices for sure,” he said, noting that Russian oil and gas revenues have been declining in recent months.  “The question is how long the Hormuz situation is going to last,” he added. “If this is over in a week, the effects are probably negligible. If this continues for a few weeks … especially as we’re getting into the summer months, that’s when exports really pick up again from the Russian side.” Humpert argued that supply disruptions “always favor the seller who can deliver on time, reliably and discounted.” India has been a key buyer of Russian crude since the start of the war in Ukraine, though purchases had recently declined under pressure from Washington. Last month, President Donald Trump announced a trade deal with Indian Prime Minister Narendra Modi that included a commitment from New Delhi to halt purchases of Russian oil in exchange for reduced trade barriers with the United States. Before that, Indian ports had become a major destination for tankers carrying Russian crude that were shut out of Western markets by sanctions. Last September, the Boracay, a ship under EU sanctions carrying approximately $100 million in Russian oil, was boarded by the French navy, which found two Russian crew members presented by her captain as “security agents” on board.  Upon the ship’s release, it went on to the port of Vadinar in western India, home to an offshore oil terminal that supplies local refineries, maritime traffic data shows. Elena Giordano contributed reporting to this article.

Scattered among the candy shelves and freezer cabinets in Russian supermarkets across Germany are advertisements promoting a business with a service the government has tried to outlaw: a logistics company specialized in moving packages from the heart of Germany to Russia, in defiance of European Union sanctions. Trade restrictions have been in place since 2014 and were tightened just after the 2022 invasion of Ukraine, when Western nations began to impose far-reaching financial and trade sanctions on Russia. But an investigation by the Axel Springer Global Reporters Network, which includes POLITICO, has identified a clandestine Berlin-based postal system that exploits the special status of postal parcels to transport all kinds of European goods — including banned electronics components — into President Vladimir Putin’s empire. We know every stop and turn in the route because we sent five packages and used digital tracking devices to follow them — through an illicit 1,100-mile journey that undermines the sanctions regime European policymakers consider their strongest tool to generate political pressure on Russian leaders by weakening their country’s economy. LS Logistics said its internal controls make violations of EU sanctions “virtually impossible” but that it was not immune from customers making fraudulent declarations about the goods they ship. “Sanctions enforcement is whack-a-mole,” said David Goldwyn, who worked on sanctions policy as U.S. State Department coordinator for international energy affairs and now chairs the Atlantic Council Global Energy Center’s energy advisory group. “It’s a hard process, and you have to constantly be adapting to how the evaders are adapting.” THE UZBEK LABEL In late December, we packed five square brown parcels with electronic components specifically banned under EU sanctions and addressed the parcels to locations in Moscow and St. Petersburg. When we brought our parcels to the counters of Russian supermarkets in Berlin, we told salespeople the packages included books, scarves and hats. But they never checked inside the packages, which in fact held banned electronic components we rendered unusable before packing. Salespeople charged us 13 euros per kilogram, about $7 per pound, refusing to provide receipts. What makes these cardboard packages even more special is their disguise: The employee does not affix Russian postal stickers to the boxes, but rather those of UzPost, the national postal service of Uzbekistan. The former Soviet republic is not subject to EU sanctions. UzPost maintains close ties to the Russian postal service, according to a person familiar with the entities’ history of cooperation granted anonymity to discuss confidential business practices. Tatyana Kim, the CEO of Russian ecommerce marketplace Wildberries and reputedly her country’s richest woman, recently acquired a large stake in UzPost, according to media reports. “We work with partners, including private postal service providers,” the Uzbek postal service stated in response to our inquiry. “They can use our solutions for deliveries.” In Germany, registered logistics companies are permitted to provide postal services — including pick-up, sorting and delivery — for international postal operators. However, the Federal Network Agency, which is responsible for postal oversight, says the Uzbek postal service is not authorized to perform any of these functions in Germany. (The Federal Network Agency said in a response to our inquiry that it is “currently reviewing” the case and that it would pursue penalties for LS if it is found to be using Uzbek documents without authorization.) After our packages spent one to two days at the supermarkets, we saw them begin to move. Inside each package we had placed a small black GPS device, naming them “Alpha,” “Beta,” “Gamma,” “Delta” and “Epsi.” We could track their movements in real time in an app, watching them closely as they wound through Berlin’s roads to Schönefeld, site of the capital’s international airport. There they stopped, unloaded into a modern warehouse that has been repurposed into a Russian shadow postal service. COLOGNE, TECHNICALLY In 2014, a retired professional gymnast was tasked with launching a subsidiary of Russia’s national postal service, the RusPost GmbH, which would operate with official authorization to collect, process and deliver postal items in Germany, according to a former employee granted anonymity to speak openly about the business. For 18 years, the St. Petersburg-raised Alexey Grigoryev had competed and coached at Germany’s highest levels, winning three national championship titles with the KTV Straubenhardt team and working with an Olympic gold medalist on the high bar. But he had no evident experience in the postal business. RusPost’s German business model collapsed upon the imposition of an expanded sanctions package in the weeks after Russia’s invasion of Ukraine in February 2022. Much like American sanctions on Russia, the European Union blocks sensitive technical materials that could boost the Russian defense sector, while allowing the export of personal effects and quotidian consumer items. “The sanctions are accompanied by far-reaching export bans, particularly on goods relevant to the war, in order to put pressure on the Russian war economy,” according to a statement the Federal Ministry of Economics provided us. In March 2022, while conducting random checks of postal traffic to Moscow, customs officials discovered sanctioned goods (including cash, jewelry and electrical appliances) in numerous RusPost packages. The Berlin public prosecutor’s office launched an investigation of the company, concluding that a former RusPost managing director had deliberately failed to set up effective control mechanisms, in breach of his duties. He was charged with 62 counts of attempting to violate the Foreign Trade and Payments Act over an eight-month period; criminal proceedings are ongoing. The Russian postal network did not quite disappear, however. A new company called LS Logistics Solution GmbH was formed in December 2022, according to corporate filings. LS filled its top jobs, including customs manager and head of customer service, with former RusPost employees, according to their LinkedIn profiles. The new company listed as its business address an inconspicuous semi-detached house in a residential area of Cologne, across from a church. When we visited, we found an old white mailbox whose plated sign lists LS Logistics alongside dozens of other companies supposed to be housed there. But none of them seemed to be active. The building was empty during business hours, its mailbox overflowing with discolored brochures and old newspapers. The operational heart of LS is the warehouse complex in Berlin-Schönefeld, just a few minutes from the capital’s airport. The building itself is functional and anonymous: a long, gray industrial structure with several metal rolling doors, some fitted with narrow window slits. Through them, towering stacks of parcels are visible, packed tightly, sorted roughly, stretching deep into the hall. Trucks arrive and depart regularly, from loading bays lit by harsh white floodlights that cut through the otherwise quiet industrial area. Behind the warehouse lies a wide concrete parking lot where a black BMW SUV with a license plate bearing the initials AG is often parked. We saw a man resembling Grigoryev enter the car. The former head of RusPost officially withdrew from the postal business after authorities froze the company’s operations. Unofficially, however, the 50-year-old’s continued presence in Schönefeld suggests otherwise. According to one former RusPost employee, the warehouse near the airport serves as a collection point for parcels from all over Europe. Other logistics companies with Russian management have listed the warehouse as their business address, some of their logos decorating the façade. LS Logistics Solution GmbH has the largest sign of them all. THE A2 GETAWAY According to tracking devices, our packages spent several days in the warehouse before being loaded onto 40-ton trucks covered with grey tarps, among several that leave every day loaded with mail. They were then driven toward the Polish border, through the German city of Frankfurt (Oder). Without any long stops, the 40-ton trucks traversed Poland on the A2 motorway, past Warsaw. Two days after leaving Berlin, they were approaching the eastern edge of the European Union. They arrived at a border checkpoint in Brest, the Belarusian city where more than a hundred years ago Russia signed a peace pact with Germany to withdraw from World War I. Now it marked the last place for European officials to identify contraband leaving for countries they consider adversaries. In 2022, the European Union applied a separate set of sanctions on Belarus because its leader, Alexander Lukashenko, a close ally of Putin, has supported Russia’s presence in Ukraine. Yet despite provisions that should have stopped our packages from leaving Poland, they moved onward into Belarus, their tracking devices apparently undetected. What makes this possible is the special legal status that accompanies international mail. While a formal export declaration is required for the export of regular goods, such as those moving via container ship or rail freight, simplified paperwork helps speed up the departure process for postal items. At Europe’s borders, this distinction becomes crucial, as postal packages are examined largely on risk-based checks rather than comprehensive inspections. “International postal items are subject to the regular provisions of customs supervision both on import and on export and transit and are checked on a risk-oriented basis in accordance with applicable EU and national legislation, including with regard to compliance with sanctions regulations,” the German General Customs Directorate stated in response to our inquiry. Two of our tracking devices briefly lost their signal in Belarus — likely part of a widespread pattern of satellite navigation systems being disrupted across Eastern Europe — but after a journey of around 1,100 miles, they all showed the same destination. Our packages had reached Russia’s largest cities. Ukrainian authorities told us they were not surprised by our investigation. The country’s presidential envoy for sanctions policy, Vladyslav Vlasiuk, said at the Ukrainian embassy in Berlin that his government regularly collects intelligence on such schemes and shares it with international partners. “Nobody is doing enough, if you look at the number of cases,” Vlasiuk said. ONE STEP BEHIND After the arrival of the packages, we confronted all parties involved, including LS Logistics Solution GmbH, the mysterious shipper that helped transport the goods from Europe to Russia. We called Grigoryev several times, but he never answered; efforts to reach him through the company failed as well. An LS executive would not answer our questions about his role. “Our internal control mechanisms are designed in such a way that violations of EU sanctions are virtually impossible,” LS managing director Anjelika Crone wrote to us. “Shipments that do not meet the legal requirements are not processed further. We are not immune to fraudulent misdeclarations, such as those that obviously underlie the ‘test shipments’ you refer to.” Crone said she could not answer further questions due to data protection and contractual confidentiality concerns. This month, Germany took steps to strengthen enforcement of its sanctions regime, expanding the range of violations subject to criminal penalties. The law, passed by the Bundestag in January, amends the country’s Foreign Trade and Payments Act to integrate a European Union directive harmonizing criminal sanctions law across its 27 member states and ensure efficient, uniform enforcement. Germany was one of the 18 countries put on notice by EU officials last May for having failed to follow the 2024 directive. The Federal Ministry for Economic Affairs, which is responsible for implementing the new policy, argued in a statement to the Axel Springer Global Reporters Network that the very ingenuity of the logistics network we unmasked operating within Germany was a testament to the strength of the country’s sanctions regime. “The state-organized Russian procurement systems operate at enormous financial expense to create ever new and more complex diversion routes,” said ministry spokesperson Tim-Niklas Wentzel. “This confirms that the considerable compliance efforts of many companies and the work of the sanctions enforcement authorities in combating circumvention are also having a practical effect. Procurement is becoming increasingly difficult, time-consuming, and expensive for Russia.” According to those who have tried to administer sanctions laws, that argument rings true — but only partly. “It’s probably more fair to say that sanctions had a material impact and increased the cost of bad actors to achieve their goals. But to say that they’re working well is probably overstating the truth of the matter,” said Max Meizlish, formerly an official with the U.S. Treasury’s Office of Foreign Assets Control and now a research fellow at the Foundation for Defense of Democracies. “When there’s evasion, it requires enforcement,” Meizlish went on. “And when you need more enforcement I think it’s hard to make a compelling case that the tool is working as intended.” The Axel Springer Global Reporters Network is a multi-publication initiative publishing scoops, investigations, interviews, op-eds and analysis that reverberate across the world. It connects journalists from Axel Springer brands—including POLITICO, Business Insider, WELT, BILD, and Onet— on major stories for an international audience. Their ambitious reporting stretches across Axel Springer platforms: online, print, TV, and audio. Together, these outlets reach hundreds of millions of people worldwide.

Russian missiles and drones claimed the lives of at least seven people, including children, in the city of Kharkiv, as Moscow’s forces attacked civilian infrastructure across Ukraine, according to Ukrainian officials. The overnight attacks, which involved 480 drones and 29 missiles, also caused casualties in the capital Kyiv as well as Odessa and Dnipro, Ukrainian President Volodymyr Zelenskyy said on his Telegram channel. In Kharkiv, a Russian ballistic missile partially destroyed a residential apartment building, killing civilians, said Zelenskyy. The Ukrainian president said that emergency responders were still combing the rubble in the search of victims. The victims include a 13-year-old girl and a 9-year-old boy, according to the Kharkiv state administration. Zelenskyy said that the barrage appeared to have targeted Ukraine’s energy and transport infrastructure. Russian strikes have also damaged railway infrastructure in the Zhytomyr region. “There must be a response from partners to these brutal attacks on life,” said Zelenskyy.

LONDON — Days into the U.S. war with Iran, the U.K. government is retooling to cope with a crisis that is already squeezing British defense capabilities and driving up energy prices. Teams of officials are being redeployed around Whitehall, including at the Ministry of Defence, Foreign, Commonwealth and Development Office (FCDO) and departments covering energy, transport and trade, in order to cope with fresh demands. Two people working in the civil service, granted anonymity because they like others in this piece were not authorized to speak publicly, said reassignments had been made on a three-to-four-month basis. A third person said internal government assessments are not necessarily that specific — but that they expect to be dealing with the war on Iran and its fallout “for the long haul.”  The government’s central assumption is that the direct, kinetic phase of the conflict will last weeks but its tail could be much longer. While the U.K. is straining to keep out of the conflict — granting only limited use of its military bases to the U.S. — ministers accept there will be a huge knock-on effect from the Middle East crisis. That includes on hot-button cost-of-living issues that are central to embattled Prime Minister Keir Starmer’s chances of political survival. MILITARY RESPONSE The Ministry of Defence is focused on the immediate task of trying to protect U.K. military assets and personnel, while the government’s other top concerns were highlighted Wednesday by Chancellor Rachel Reeves’ audience with oil and gas sector representatives and Treasury Minister Lucy Rigby’s meeting with insurers. “I don’t think anyone’s expecting this thing to be over quickly,” said one British diplomat.  The U.K. has been preparing for potential U.S. strikes on Iran since the beginning of the year, according to four officials, including by surging fighter planes to the region. The MoD moved to a higher level of force protection — measures designed to safeguard military personnel and facilities — in response to mass unrest in Iran and the U.S. bolstering its presence in the Gulf.  Treasury Minister James Murray alluded publicly to these operations, telling Times Radio: “I’m not going to get into exactly the details of what happened. But what I’m clear about is the defensive capability that we’ve been building up in recent weeks.” Nevertheless, two government officials said the eventual action by the U.S. and Israel was beyond what they had expected, as was Iran’s response — which they described as “haphazard.” The U.K. had some foresight of the U.S. intention to move, said one of these officials, but they had far less indication of where Iranian retaliation would fall, which partly explained the apparent slowness of British warship HMS Dragon and helicopters going to the aid of the U.K.’s Royal Air Force base on Cyprus. Jacob Parakilas, research leader at the RAND Europe think tank, said: “RAF Akrotiri was certainly a conceivable target in the event of hostilities but it’s neither the easiest nor the most significant target for Iran.” A Western official said the decision to send the warship to the Mediterranean only landed on U.K. Chief of Defence Staff Rich Knighton’s desk at 9.30 a.m. on Tuesday, and was approved soon afterwards. The MoD is one of the ministries which has redeployed staff internally to work on Iran, with high priority attached to ensuring that the U.K.’s changing posture does not damage existing NATO commitments or sap energy from efforts to support Ukraine. Starmer has already sought to link the Middle East conflict to the war in Ukraine, saying Ukrainian experts will help shoot down Iranian drones, and his government is expected to call on industry to help meet the need for stronger air and missile defenses. Parakilas predicted the conflict would not require a massive outlay of further British defense capabilities, since the U.K.’s naval base in Bahrain is heavily defended and can meet the threat of occasional attacks by Shahed-style drones.  But, he warned: “That should not be cause for complacency.” In this instance, Parakilas said, the U.K. and most of its facilities are at the edge of Iran’s reach — “but that will not necessarily be the case in future conflicts.” TERROR RISK Elsewhere, the Home Office and security services are monitoring for a heightened risk of domestic threats. On Monday the National Cyber Security Centre — part of the GCHQ digital intelligence agency — issued a fresh alert in response to the situation in the Middle East, calling on organizations to review their cybersecurity. It noted that although it views there to be “no current significant change” in the direct cyber threat from Iran to the U.K. this may change due to the “fast-evolving nature of the conflict.” The FCDO is meanwhile leading repatriation efforts described as “unprecedented,” by Foreign Secretary Yvette Cooper with hundreds of thousands of Britons currently stranded in the Gulf. Above all, civil servants are scrambling to deal with potential implications for the energy sector and international trade — two areas that risk upending the unpopular Starmer government’s bid to slash the cost of living. Households could see more than £500 added to their energy bills this summer if hostilities continue, the Resolution Foundation think tank calculated earlier this week. Keir Starmer Starmer told MPs that “the question of energy supply right now is a serious one.” | Wiktor Szymanowicz/Future Publishing via Getty Images Starmer told MPs at prime minister’s questions Wednesday that “the question of energy supply right now is a serious one” and “we are doing all we can, with allies, to make sure that it is preserved. It is vital that we keep trade flowing through the Strait of Hormuz.” The U.K. is currently considering options for protecting commercial ships in the Strait of Hormuz, including sending naval escorts, according to Western officials.  Energy Secretary Ed Miliband has held talks with representatives from Qatar and Saudi Arabia, as well as energy giants BP and Shell about global energy markets in recent days. A third government official said the hope is that consumers are protected for a while because Britain’s energy price cap — a limit on the amount suppliers can charge for each unit of gas and electricity — is locked in for the next three months. But they acknowledged there would be pressure to replicate several support schemes drawn up after Russia’s invasion of Ukraine, even as they cautioned that the need for such a move is a long way off. Treasury Minister Lucy Rigby met insurance firm Lloyds of London Wednesday to discuss how the sector is being affected. A fourth Whitehall official said that while commercial insurance remains available, additional premiums may be needed for vessels transiting these areas. A jump in energy prices could, in turn, hold back the Bank of England from continuing on its path to reducing interest rates, economists have warned – something that would represent a significant blow to Reeves and the government’s wider battle with inflation. The National Institute of Economic and Social Research think tank has carried out analysis which finds that if the shock to energy prices is more than just temporary, the U.K.’s central bank may have to go in the other direction — raising the all-important Bank Rate from its current 3.75 percent rate to back above 4 percent. “The Bank of England will have to contend with a shock to global energy prices, with the question of persistence hanging over their heads. This will cause problems for Rachel Reeves as financing costs increase, putting further pressure on an already precarious fiscal outlook,”  said the NIESR’s Ed Cornforth. Mason Boycott-Owen and Charlie Cooper contributed reporting.