Listen on * Spotify * Apple Music * Amazon Music Vor genau einem Jahr verlor Olaf Scholz die Vertrauensfrage und Friedrich Merz wurde später Kanzler. Gordon Repinski zieht eine politische Bilanz. Was hat Merz aus der Opposition heraus damals am 16. Dezember 2024 angekündigt, was hat er als Regierungschef eingelöst und wo ist er hinter den eigenen Ansprüchen zurückgeblieben. Im Mittelpunkt stehen Außenpolitik, Wirtschaft und der Stil der schwarz-roten Koalition. Parallel richtet sich der Blick dorthin in Berlin, wo sich Bewegung in den Gesprächen über ein Ende des Krieges in der Ukraine zeigt. Erstmals seit 2022 erscheint ein Waffenstillstand zumindest vorstellbar. Hans von der Burchard berichtet von den Gesprächen im Kanzleramt und erklärt, welche Rolle Sicherheitsgarantien, territoriale Fragen und der Druck aus Washington spielen. Im 200-Sekunden-Interview spricht Marie Agnes Strack Zimmermann, FDP Verteidigungspolitikerin im Europäischen Parlament, über die Grenzen des aktuellen Prozesses. Sie warnt vor falschem Optimismus, kritisiert die amerikanische Verhandlungsführung und fordert klare Entscheidungen Europas, etwa beim Umgang mit eingefrorenen russischen Vermögen. Und: Bundestagspräsidentin Julia Klöckner feiert Geburtstag, den Spaziergang aus dem Sommer mit ihr gib es hier. Das Berlin Playbook als Podcast gibt es jeden Morgen ab 5 Uhr. Gordon Repinski und das POLITICO-Team liefern Politik zum Hören – kompakt, international, hintergründig. Für alle Hauptstadt-Profis: Der Berlin Playbook-Newsletter bietet jeden Morgen die wichtigsten Themen und Einordnungen. Jetzt kostenlos abonnieren. Mehr von Host und POLITICO Executive Editor Gordon Repinski: Instagram: @gordon.repinski | X: @GordonRepinski. Legal Notice (Belgium) POLITICO SRL Forme sociale: Société à Responsabilité Limitée Siège social: Rue De La Loi 62, 1040 Bruxelles Numéro d’entreprise: 0526.900.436 RPM Bruxelles info@politico.eu www.politico.eu

LONDON — The British government is working to give its trade chief new powers to move faster in imposing higher tariffs on imports, as it faces pressure from Brussels and Washington to combat Chinese industrial overcapacity. Under new rules drawn up by British officials, Trade Secretary Peter Kyle will have the power to direct the Trade Remedies Authority (TRA) to launch investigations and give ministers options to set higher duty levels to protect domestic businesses. The trade watchdog will be required to set out the results of anti-dumping and anti-subsidy investigations within a year, better monitor trade distortions and streamline processes for businesses to prompt trade probes. The U.K. is in negotiations with the U.S. and the EU to forge a steel alliance to counter Chinese overcapacity as the bloc works to introduce its own updated safeguards regime. The EU is the U.K.’s largest market and Brussels is creating a new steel protection regime that is set to slash Britain’s tariff-free export quotas and place 50 percent duties on any in excess. The government said its directive to the TRA will align the U.K. with similar powers in the EU and Australia, and follow World Trade Organization rules. It is set out in a Strategic Steer to the watchdog and will be introduced as part of the finance bill due to be wrapped up in the spring. “We are strengthening the U.K.’s system for tackling unfair trade to give our producers and manufacturers — especially SMEs who have less capacity and capability — the backing they need to grow and compete,” Business and Trade Secretary Peter Kyle said in a statement. “By streamlining processes and aligning our framework with international peers, we are ensuring U.K. industry has the tools to protect jobs, attract investment and thrive in a changing global economy,” Kyle added. These moves come after the government said on Wednesday that its Steel Strategy, which plots the future of the industry in Britain and new trade protections for the sector, will be delayed until next year. The Trump administration has been concerned about the U.K.’s steps to counter China’s steel overcapacity and refused to lower further a 25 percent tariff carve-out for Britain’s steel and aluminum exports from the White House’s 50 percent global duties on the metals. Trade Secretary Kyle discussed lowering the Trump administration’s tariffs on U.K. steel with senior U.S. Cabinet members in Washington on Wednesday.  “We are very much on the case of trying to sort out precisely where we land with the EU safeguard,” Trade Minister Chris Bryant told parliament Thursday, after meeting with EU Trade Commissioner Maroš Šefčovič on Wednesday for negotiations. “We will do everything we can to make sure that we have a strong and prosperous steel sector across the whole of the U.K.,” Bryant said. The TRA has also launched a new public-facing Import Trends Monitor tool to help firms detect surges in imports that could harm their business and provide evidence that could prompt an investigation by the watchdog. “We welcome the government’s strategic steer, which marks a significant milestone in our shared goal to make the U.K.’s trade remedies regime more agile, accessible and assertive, as well as providing greater accountability,” said the TRA’s Co-Chief Executives Jessica Blakely and Carmen Suarez. Sophie Inge and Jon Stone contributed reporting.

Donald Trump’s drive to secure peace in Ukraine must not let Vladimir Putin off the hook for war crimes committed by Russian forces, a top EU official has warned, effectively setting a new red line for a deal.  In an interview with POLITICO, Michael McGrath, the European commissioner for justice and democracy, said negotiators must ensure the push for a ceasefire does not result in Russia escaping prosecution.  His comments reflect concerns widely held in European capitals that the original American blueprint for a deal included the promise of a “full amnesty for actions committed during the war,” alongside plans to reintegrate Russia into the world economy. The Trump team’s push to rehabilitate the Kremlin chief comes despite international condemnation of Russia for alleged crimes including the abduction of 20,000 Ukrainian children and attacks targeting civilians in Bucha, Mariupol and elsewhere.  “I don’t think history will judge kindly any effort to wipe the slate clean for Russian crimes in Ukraine,” McGrath said. “They must be held accountable for those crimes and that will be the approach of the European Union in all of these discussions. “Were we to do so, to allow for impunity for those crimes, we would be sowing the seeds of the next round of aggression and the next invasion,” he added. “And I believe that that would be a historic mistake of huge proportions.” Protesters in London, June 2025. There has been international condemnation of Russia for alleged crimes including the abduction of 20,000 Ukrainian children and attacks targeting civilians. | Vuk Valcic/SOPA Images/LightRocket via Getty Images Ukrainian authorities say they have opened investigations into more than 178,000 alleged Russian crimes since the start of the war. Last month, a United Nations commission found Russian authorities had committed crimes against humanity in targeting Ukrainian residents through drone attacks, and the war crimes of forcible transfer and deportation of civilians.  “We cannot give up on the rights of the victims of Russian aggression and Russian crimes,” McGrath said. “Millions of lives have been taken or destroyed, and people forcibly removed, and we have ample evidence.”  The EU and others have worked to set up a new special tribunal for the crime of aggression with the aim of bringing Russian leaders to justice for the full-scale invasion of Ukraine, which began in February 2022. In March 2023, judges at the International Criminal Court issued an arrest warrant for Putin, naming him “allegedly responsible for the war crime of unlawful deportation of population [children]” from Ukraine. But Trump and his team have so far shown little interest in prosecuting Putin. In fact, the U.S. president has consistently described his Russian counterpart in positive terms, often talking about how he is able to have a “good conversation” with Putin. Trump has expressed the hope of building new economic and energy partnerships with Russia, and the pair have even discussed organizing ice hockey matches in Russia and the U.S. once the war is over.   The draft 28-point peace plan that Trump’s team circulated last week continues in a similar vein.  It states that “Russia will be reintegrated into the global economy” and invited to rejoin the G8 after being expelled in 2014 following Moscow’s annexation of Crimea. “The United States will enter into a long-term economic cooperation agreement for mutual development in the areas of energy, natural resources, infrastructure, artificial intelligence, data centers, rare earth metal extraction projects in the Arctic, and other mutually beneficial corporate opportunities,” the document said. The U.S. peace plan proposes to lift sanctions against Russia in stages, though European leaders have pushed back to emphasize that the removal of EU sanctions will be for them to decide. Not everyone in Europe wants to maintain the squeeze on Moscow, however. Hungary has repeatedly stalled new sanctions, especially on oil and gas, for which it relies on Russia. Senior politicians in Germany, too, have floated the idea of lifting sanctions on the Nord Stream gas pipeline from Russia. 

LONDON — Chancellor Rachel Reeves has insisted that the government’s new trade deals will boost growth, after the Office for Budget Responsibility (OBR) snubbed a request to count them in its growth forecast. In its pre-budget forecast on Wednesday, the OBR acknowledged that new trade deals “have the potential to increase U.K. trade and GDP,” including the government’s Brexit “reset” deal with the EU and its free trade agreement with India. But the budget watchdog indicated that neither of the deals had met the criteria to be included in its forecast. As elements of the U.K.-EU reset deal were still under negotiation, the OBR said there was “not sufficient detail to assess their potential fiscal and economic impacts.” In the case of the India deal, the OBR said it could be seen to increase GDP by 0.13 percent, in line with the government’s impact assessment, but only once ratified. When it came to the U.S. trade pact — which saw the U.K. hit with 10 percent baseline tariffs on most goods — the OBR noted that some “details of the future trading arrangement are yet to be negotiated and confirmed.” The assessments came as a disappointment for Reeves, who had pinned her hopes on trade as a booster for growth. In an interview with the BBC on Thursday, the chancellor said she was “confident that the growth policies that we’re pursuing will grow our economy,” pointing to trade deals with the EU, India and U.S., as well as planning and pensions reforms. “Why do I say that?” Reeves added. “Because the OBR said in the spring our economy would grow by 1 percent this year. They revised it up yesterday to 1.5 percent. The IMF, the OECD, the Bank of England, also revised up their growth forecasts for this year.” “So I’ve defied the forecast this year, and I’m determined to defy them next year and the year after, because it is absolutely the case that the best way to fund our public services and keep taxes down is to grow the economy.” GLOBAL HEADWINDS While the U.K.-EU reset deal and India deal are not included in the OBR’s current forecast, it does offers some hope for the future. “The result of the UK-EU strategic partnership and the Youth Mobility Scheme are still being negotiated and therefore there is not sufficient detail to assess their potential fiscal and economic impacts,” it said. “We will consider whether any such impacts should be included in the forecast once the full details of the agreements have been finalised, published and agreed by both the EU and UK. This is the standard approach we have taken to assessing the fiscal and economic impacts of trade deals and other international agreements.” The assessments came as a disappointment for Reeves, who had pinned her hopes on trade as a booster for growth. | Neil Hall/EPA Once the U.K.-India free trade agreement is ratified by both countries, the OBR said it could increase real GDP by amounts rising to 0.13 percent by 2040, in line with the government’s impact assessment. But Reeves has less reasons to be cheerful about the state of trade overall, with global trade growth expected to slow from 3.7 percent in 2024 to 2.3 percent in 2026 in line with the IMF’s forecast. Speaking at a Resolution Foundation event on Thursday, OBR chair Richard Hughes said tariffs and global trade restrictions had played a part in their decision to downgrade productivity. “There are some new global headwinds in the global economy since our forecast in March — U.S. tariffs going up and also just wider global trade restrictions being put in place,” Hughes warned. “Trade wars are very bad things for everybody, especially an open economy like the U.K., which relies a lot on trade as a driver for growth so and for the first time that I’ve seen in my career, the IMF is actually forecasting over the next five years trade falling as a share of GDP.”

The European Central Bank is hatching a plan to boost the use of the euro around the world, hoping to turn the world’s faltering confidence in U.S. political and financial leadership to Europe’s advantage. Liquidity lines — agreements to lend at short notice to other central banks — have long been a standard part of the crisis-fighting toolkits of central banks, but the ECB is now thinking of repurposing them to further Europe’s political aims, four central bank officials told POLITICO. One aim of the plan is to absorb any shocks if the U.S. — which has backstopped the global financial system with dollars for decades — suddenly decides not to, or attaches unacceptable conditions to its support. The other goal is to underpin its foreign trade more actively and, ultimately, grab some of the benefits that the U.S. has historically enjoyed from controlling the world’s reserve currency. Officials were granted anonymity because the discussions are private. Bruegel fellow Francesco Papadia, who was previously director-general for the ECB’s market operations, told POLITICO that such efforts are sensible and reflect an increasing willingness among European authorities to see the euro used more widely around the world. WHAT’S A LIQUIDITY LINE? Central banks typically use two types of facilities to lend to each other: either by swapping one currency for another (swap lines) or by providing funds against collateral denominated in the lender’s currency (repo lines). The ECB currently maintains standing, unlimited swap lines with the U.S. Federal Reserve, the Bank of Canada, the Bank of England, the Swiss National Bank, and the Bank of Japan, as well as standing but capped lines with the Danish and Swedish central banks. It also operates a facility with the People’s Bank of China, capped in both volume and duration. Other central banks seeking euro liquidity must rely on repo lines known as EUREP, under which they can borrow limited amounts of euros for a limited period against high-quality euro-denominated collateral. At present, only Hungary, Romania, Albania, Andorra, San Marino, North Macedonia, Montenegro and Kosovo have such lines in place. But these active lines have sat untouched since Jan. 2, 2024 — and even at the height of the Covid crisis, their use peaked at a mere €3.6 billion. For the eurozone’s international partners, the knowledge that they can access the euro in times of stress is valuable in itself, helping to pre-empt self-fulfilling fears of financial instability. But some say that if structured generously enough, the facilities can also reduce concerns about exchange rate fluctuations or liquidity shortages. Such details may sound academic, but the availability of liquidity lines has real impacts on business: A Romanian carmaker whose bank has trouble securing euros may fail to make payments to a supplier in Germany, disrupting its production and raising its costs.  “The knowledge that foreign commercial banks can borrow in euros while being assured that they have access to euro liquidity [as a backstop] encourages the use of the euro,” one ECB rate-setter explained.  French central bank chief François Villeroy de Galhau suggested that Europe could at least take a leaf out of China’s book, noting that the Eurosystem “can make euro invoicing more attractive” by expanding the provision of euro liquidity lines. | Kirill Kudryavtsev/Getty Images “Liquidity lines, in particular EUREP, should be flexible, simple and easy to activate,” he argued. One option, he said, would be to extend them to more countries. Another could be to make EUREP a standing facility — removing any doubts about whether, and under what conditions, euro access would be granted. Papadia added that the ECB could also ease access to EUREP by cutting its cost, boosting available volumes or extending the timeframe for use. NOT JUST AN ACADEMIC QUESTION French central bank chief François Villeroy de Galhau suggested in a recent speech that Europe could at least take a leaf out of China’s book, noting that the Eurosystem “can make euro invoicing more attractive” by expanding the provision of euro liquidity lines. China has established around 40 swap lines with trading partners worldwide to underpin its burgeoning foreign trade, especially with poorer and less stable countries. By contrast, the ECB — a historically cautious animal — “is not marketing the euro to the same extent that the Chinese market the renminbi,” according to Papadia.  Another policymaker told POLITICO that while there is a broad consensus that liquidity lines should be made more widely available, the Governing Council had not yet hashed out the details. Austrian National Bank Governor Martin Kocher told POLITICO in a recent interview that there has been “no deeper discussion” on the Council, adding that he sees no reason to promote euro liquidity lines actively. “I’m not arguing that you should incentivize or create a demand. Rather, if there is demand, we should be prepared for it,” he said, acknowledging that “preparation is very important.” He noted that erratic U.S. policies could force the euro “to take on a stronger role in the international sphere” — both as a reserve currency and in transactions. According to a Reuters report earlier this month, similar concerns among central banks worldwide have sparked a debate over creating an alternative to Federal Reserve funding backstops by pooling their own dollar reserves. The ECB declined to comment for this article. RISK AVERSION AND OTHER OBSTACLES  However, swap lines in particular don’t come without risks. “The main risk is that the country would use a swap and then would not be able to return the drawn euros,” said Papadia. “And then you will be left with foreign currency you don’t really know what to do with.” That is exactly the kind of trap some economists warn the U.S. is stumbling into with its $20 billion swap line to Argentina. “The United States doesn’t really want Argentina’s currency,” the Council on Foreign Relations’ Brad Setser wrote in a blog post. “It expects to be repaid in dollars, so it would be a massive failure if the swap was never unwound and the U.S. Treasury was left holding a slug of pesos.” Austrian National Bank Governor Martin Kocher said there has been “no deeper discussion” on the Council, adding that he sees no reason to promote euro liquidity lines actively. | Heinz-Peter Bader/Getty Images Such thinking, another central bank official said, will incline the ECB to focus first on reforming the EUREP lines, which have always been its preferred tool. The trouble with that, however, is that EUREP use may be limited by a lack of safe assets denominated in euros to serve as collateral. Papadia noted that the Fed’s network of liquidity lines works because “the Fed has the U.S.  Treasury as a kind of partner in granting these swaps.” So long as Europe fails to create a joint debt instrument, this may put a natural cap on such lines.  Even with a safe asset, focusing on liquidity lines first could be putting the cart before the horse, said Gianluca Benigno, professor of economics at the University of Lausanne and former head of the New York Fed’s international research department. Europe’s diminishing geopolitical relevance means that the ECB is unlikely to see much demand — deliberately engineered or not — for its liquidity outside Europe without much broader changes, Benigno told POLITICO. Liquidity lines can be used to advance your goals if you already have power — but they can’t create it. For that, he argued, Europe first needs a clear political vision for its role in the global economy, alongside a Capital Markets Union and the creation of a common European safe asset — issues that only politicians can address.

Sen. Mark Warner (D-Va.) said Sunday morning that the Trump administration’s 28-point plan for peace between Russia and Ukraine “would go down, frankly, as a historically bad deal, rivaling Neville Chamberlain giving in to Hitler before World War II. Warner, the highest ranking Democrat on the Intelligence Committee, told “Fox News Sunday” host Shannon Bream that he fears the plan could embolden Chinese leader Xi Jinping to pursue an invasion of Taiwan if accepted, blasting the proposal as “a total capitulation by Ukraine.” “Clearly this plan was at least initially laid out as simply Russian input and no Ukrainian input,” Warner said. “Now they’re saying there has been Ukrainian input. Now the president is changing his mind again about whether this is a final offer or not. At the end of the day, we all want to see peace, but we don’t want to see a peace that rewards Vladimir Putin.” The proposal, which was first reported by Axios, would see Ukraine cede the Donbas region to Russia, in addition to facing limits on the size of its military, per details of the plan obtained by POLITICO. Warner told Bream he’s not sure the deal is something Ukrainian President Volodymyr Zelenskyy “could even survive within his own government.” The plan has attracted criticism from some of the GOP’s top Russia hawks, including Sens. Lindsey Graham (R-S.C.), Mitch McConnell (R-Ky.) and Roger Wicker (R-Miss.), who are pushing the Trump administration to rethink the proposal. Still, the Trump administration enjoys the backing of many voices in the party, including Sen. Eric Schmitt (R-Mo.), who urged restraint from critics during a Sunday morning interview with Bream. Schmitt said key details of the plan, including security guarantees and territorial concessions, remain in flux. “I think President Trump approaches this as a realist,” Schmitt said on Fox. “You take the world as it is, not how you want it to be, not how you wish it would be, but actually how it is. And the truth of the matter is — and a lot of people won’t say it — is the Ukrainians have been losing for a long time.” Neither party in the war has publicly commented on the plan, although Ukrainian President Volodymyr Zelenskyy’s office said in a Thursday statement that it remains “ready now, as before, to work constructively with the American side, as well as with our partners in Europe and around the world so that the outcome is peace.” Ambassador to the United States Olga Stefanishyna was guarded in her remarks Sunday on CBS’ “Face the Nation,” telling host Margaret Brennan only that negotiations are ongoing and that the plan “is not about the justice” in Ukraine’s view. Zelenskyy reiterated Sunday afternoon that “The crux of the entire diplomatic situation is that it was Russia, and only Russia, that started this war, and it is Russia, and only Russia, that has been refusing to end it throughout the full-scale invasion.” He also urged all parties to seek a “dignified” peace “so that this war is truly ended and so that it does not happen again.” Warner echoed his comments during a Sunday appearance on “This Week,” telling ABC’s Martha Raddatz that the plan “would make Neville Chamberlain’s giving in to Hitler outside of World War II look strong in comparison.” British Prime Minister Chamberlain lauded the 1938 Munich agreement, which allowed for Germany to annex parts of Czechoslovakia, as “peace for our time,” but historians largely see the deal as a key turning point in laying the groundwork for Adolf Hitler’s invasion of Poland the following year. White House press secretary Karoline Leavitt defended the proposal, telling POLITICO in a Thursday statement it “was crafted to reflect the realities of the situation, after years of a devastating war, to find the best win-win scenario, where both parties gain more than they must give.” She also reiterated the Trump administration’s commitment to ensuring any truce deal includes security guarantees and deterrence measures in addition to opportunities for Ukraine to rebuild and for Russia to rejoin the global economy. The proposal says that any future Russian attack on Ukrainian territory would be met with a “decisive, coordinated military response,” although it does not specify what such a response would entail. It also allows Ukraine to negotiate for membership in the European Union and calls for about $100 billion in frozen Russian assets and another $100 billion in European funds to be used for the rebuilding of Ukraine. European officials have roundly lambasted the proposal, with security officials from Ukraine’s staunchest allies meeting for high-level talks to weigh in on the proposal. Top Trump administration officials were also set to meet with Zelenskyy’s advisers in Geneva on Sunday to iron out details of the plan, which Trump has given Ukraine until Thursday to sign on to.

Russian President Vladimir Putin said late Friday that a U.S. proposal for a peace deal in Ukraine could be “the basis” of a resolution to Moscow’s war on Ukraine while warning that if Kyiv rejected the plan then Russian forces would advance farther. “I believe that it can be used as the basis for a final peaceful settlement,” Putin told senior officials at a meeting of the Russian Security Council, according to media reports. The 28-point framework titled “U.S.-Russia-drafted peace plan” would confirm Ukraine’s sovereignty but limit its armed forces to 600,000 personnel, hand a significant amount of Ukrainian territory to Russia and bar Kyiv from joining NATO permanently. NATO should agree to “not accept Ukraine at any moment in the future” and “not to deploy its troops in Ukraine,” according to the text. Putin said Russia is ready to “show flexibility” regarding the settlement proposal, Ukrainian media outlet Ukrainska Pravda reported. Putin said the U.S. proposal is an “upgraded” version of one put forward at the Alaska summit between the Russian and American leaders in August. “But this text has not been discussed with us in any substantive way,” Putin said, according to other media reports. “Ukraine is against it. Apparently, Ukraine and its European allies are still under illusions and the dream of inflicting a strategic defeat on Russia on the battlefield,” Putin was quoted as saying. According to the U.S. framework, Russia would commit to not attack again and would be granted reintegration into the global economy, including potential sanctions relief to be discussed “on a case-by-case basis.” Moscow would also be invited to return to the G7 — which was formerly the G8 before Russia was kicked out in 2014 after its illegal annexation of Crimea and military intervention in eastern Ukraine. Aspects of the proposal were criticized by European and Ukrainian officials on Thursday, claiming that it only favors Moscow and warning that caving in to Russia will only encourage Putin to attack NATO next.  U.S. President Donald Trump has given Kyiv a deadline of Thanksgiving Day, next Thursday. Ukrainian President Volodymyr Zelenskyy said on Friday that Ukraine faced a “very difficult choice” in considering the U.S. proposal. “Either loss of dignity, or the risk of losing a key partner,” Zelenskyy said, in reference to Washington. Ukraine’s allies will aim to “strengthen” the U.S. plan at the G20 summit taking place this weekend in South Africa, U.K. Prime Minister Keir Starmer has said. Neither Trump nor Putin is attending the G20 meeting.

Russia would make sweeping territorial gains and Ukraine would get an as-yet-undefined U.S. security guarantee under the Trump administration’s 28-point proposal to end the deadliest conflict in Europe since World War II. Under the agreement — which has not yet drawn a formal response from either side — Ukraine would face limits on the size of its military in addition to giving up the Donbas region that has been the focus of much of the fighting since the war began, according to details of the proposal obtained Thursday by POLITICO. The proposal, which would fulfill President Donald Trump’s campaign pledge to end the war, is the most comprehensive U.S. overture to both sides and would grant major concessions to Russian President Vladimir Putin, who launched a full-scale invasion of Ukraine in 2022. Ukraine President Volodymyr Zelenskyy has not publicly commented on the plan, details of which were first reported by Axios, but a U.S. official, granted anonymity to discuss the peace negotiations, said the proposal came together after discussions with Rustem Umerov, the country’s minister of defense. Zelenskyy’s office expressed willingness to negotiate Thursday without committing to any specific proposal. “Ukraine has sought peace, and we support all substantive proposals capable of bringing genuine peace closer. Since the beginning of this year, Ukraine has supported President Trump’s proposals aimed at ending the bloodshed,” the office said on X. “We are ready now, as before, to work constructively with the American side, as well as with our partners in Europe and around the world so that the outcome is peace.” The plan would achieve a long-standing Putin aim by granting the Donbas to Russia. Ukrainian forces would have to leave the part of Donetsk oblast they currently occupy, and this zone would become a demilitarized buffer zone that would be recognized as a part of Russia, according to plan. Russian troops would not be allowed to enter the zone. The battle lines around Kherson and Zaporizhzhia would remain frozen, expanding Russian borders. It also requires Ukraine to hold elections within 100 days of the signing of the agreement. The proposal also calls for roughly $100 billion in frozen Russian assets to be used to help rebuild Ukraine. The U.S. will receive 50 percent of the profits from the effort, under the plan, though it’s unclear exactly what would generate profits. Europe, the plan states, would kick in another $100 billion, though it is unclear if this refers to the EU or some other international body. No European organization has publicly endorsed the plan, which would also mandate the return of all captured civilians, including thousands of children seized by Russia from parts of Ukraine occupied by its forces. The plan also allows Ukraine to negotiate for EU membership, though Hungary has long opposed its joining the alliance. The U.S. would provide Ukraine with a security guarantee, pledging that if Russia again attacked, there would be a “decisive, coordinated military response” and that all the border and territory agreements in the plan would be voided. But the plan did not specify what a coordinated military response might entail. In a statement, White House press secretary Karoline Leavitt defended the proposal. “As the Trump Administration has clearly said, any deal must provide full security guarantees and deterrence for Ukraine, Europe, and Russia to ensure the end of the war, in addition to financial opportunities for Ukraine to rebuild, and for Russia to rejoin the global economy, to benefit the people in both countries,” Leavitt said. “This plan was crafted to reflect the realities of the situation, after years of a devastating war, to find the best win-win scenario, where both parties gain more than they must give.”

The starter’s gun is about to fire on the race to succeed Christine Lagarde as European Central Bank president in 2027, and two heavyweight countries who have never held the position look likely to make the running: Spain and Germany. Madrid has been conspicuously silent on nominating a replacement for its current representative on the board, Luis de Guindos, who is preparing to leave the vice presidency in June. That has fueled speculation in markets and policy circles that the eurozone’s fourth-largest member is eyeing a bigger prize. The ECB is set for a major leadership reshuffle over the next two years, creating a rare opportunity for national governments to install trusted figures at the top of one of the EU’s most powerful institutions. De Guindos’ post is up for grabs in May next year, while the chief economist role, the presidency and the important markets division will all become vacant in 2027. While Germany, France and Italy have always held one of the six coveted Executive Board seats, Spain has endured a six-year gap without representation. Should it remain silent as the other board seats fill up, this would be a clear indication that Spain wants the top spot. The Spanish economy ministry declined to comment directly, but stressed that “Spain remains firmly committed to having a meaningful and influential presence in key European institutions, as it has consistently done.” Betting on the presidency is a gamble for Madrid, and the competition is fierce — not least because Germany, which has never held the top ECB post, may also want to seize the chance. For once, Spain has a strong candidate in Pablo Hernández de Cos, the former Bank of Spain governor who is now general manager at the Bank for International Settlements. Groomed by former ECB President Mario Draghi, de Cos restored the Bank of Spain’s reputation after a series of missteps before and during the financial crisis. His achievement was implicitly acknowledged by his appointment to two terms as chair of the Basel Committee for Banking Supervision (BCBS), the global standard-setter for bank regulation. But inevitably, the shadow of U.S. President Donald Trump looms over the issue. De Cos moving to the ECB could cost Europe the BIS leadership. Given Europe’s fading relevance to the global economy, Trump may persuade others that — with the IMF, BCBS and the Financial Stability Board already headed by Europeans — the Old Continent has more than its fair share of top jobs. While not powerful, the BIS is a highly prestigious institution commanding a unique overview of global financial flows. Two people familiar with the ECB’s thinking told POLITICO that its current top management is concerned about the risk of losing a slot that has traditionally been held by a European. GERMANY’S MOMENT Much will depend on Germany, which, like Spain, has never held the ECB presidency. The German government will form an opinion “in due course” but will refrain from speculation today, a spokesperson said. The country’s previous contenders — Axel Weber and Jens Weidmann — both fell victim to their unbending faith in conservative monetary orthodoxy in times of crisis. But today, after the worst bout of inflation in Europe for over half a century, the climate looks far more welcoming for a more hawkish leader. As the current Bundesbank president, Joachim Nagel would be the obvious choice. | Pool photo by Maxim Shemetov via Getty Images As the current Bundesbank president, Joachim Nagel would be the obvious choice. A more moderate voice than either Weber or Weidmann, Nagel may be more acceptable to other member states. However, Nagel — a member of the SPD junior coalition partner — has more than once stepped on the toes of German Chancellor Friedrich Merz — most recently by expressing support for joint European debt issuance to finance defense projects. Like de Cos, Nagel could also face competition within his own country. Lars-Hendrik Röller, formerly chief economic advisor to then-Chancellor Angela Merkel and still a heavyweight in Berlin policy circles, has floated Jörg Kukies, who was finance minister under Olaf Scholz. While also a social democrat, Kukies is clearly associated with the right wing of the party and has not recently opposed Merz in public. Kukies may well be an acceptable candidate for the chancellor, a person close to Merz told POLITICO. His impeccable English, PhD in finance from the University of Chicago and a spell leading Goldman Sachs’s German operations would also help his candidacy. But intriguingly, at a recent public event in Berlin, Bank of France Governor François Villeroy de Galhau appeared to suggest that Röller has also been touting a German woman — rather than Nagel — for the presidency. That woman could be the ECB’s current head of markets, Isabel Schnabel, who is said to be eyeing the post. Ordinarily, however, no one is allowed to serve more than one term on the Executive Board, meaning a legal loophole would need to be found to accommodate her. Given the presence of alternative candidates, and given that other member states may view her as excessively hawkish, one former board member said there’s no obvious reason why Germany should risk advancing her. In any case, Berlin may prefer to support a hawk from another country, to avoid pressure to give up the European Commission presidency early: Ursula von der Leyen’s term expires in 2029. GOING DUTCH? Enter Klaas Knot, who stepped down as president of the Dutch central bank in June after 14 years. Knot, like Draghi, a former chair of the Financial Stability Board, would bring deep institutional experience and monetary policy expertise. He also drew conspicuously supportive comments last month from Lagarde, who said he “has the intellect” as well as the stamina and the “rare” and “very necessary” ability to include people. Most of the obstacles in Knot’s way look surmountable: While he took a clearly hawkish line throughout the eurozone crisis, he became a far more nuanced team player during his second term. And while the Netherlands would still have a representative — Frank Elderson — on its board when the presidency comes up, a similar situation was dealt with easily enough in 2011, when Lorenzo Bini Smaghi left early to make room for Draghi. Knot’s only real problem is that he is currently out of the policy circus. “He will need to find a way to stay visible and relevant to bridge the time,” the former Executive Board member said. Knot is still tending potentially important connections: He is advising the European Stability Mechanism (the EU’s bailout fund) on strategic positioning, and the European Commission on central bank independence in potential accession countries. He also remains an avid public speaker — with no less than five engagements at the International Monetary Fund’s annual meeting last month.  But two years can be a long time in European politics. Carlo Boffa contributed reporting.

As trilogue negotiations on the End-of-Life Vehicles Regulation (ELVR) reach their decisive phase, Europe stands at a crossroads, not just for the future of sustainable mobility, but also for the future of its industrial base and competitiveness. The debate over whether recycled plastic content in new vehicles should be 15, 20 or 25 percent is crucial as a key driver for circularity investment in Europe’s plastics and automotive value chains for the next decade and beyond. The ELVR is more than a recycled content target. It is also an important test of whether and how Europe can align its circularity and competitiveness ambitions. Circularity and competitiveness should be complementary  Europe’s plastics industry is at a cliff edge. High energy and feedstock costs, complex regulation and investment flight are eroding production capacity in Europe at an alarming rate. Industrial assets are closing and relocating. Policymakers must recognize the strategic importance of European plastics manufacturing. Plastics are and will remain an essential material that underpins key European industries, including automotive, construction, healthcare, renewables and defense. Without a competitive domestic sector, Europe’s net-zero pathway becomes slower, costlier and more import-dependent. Without urgent action to safeguard plastics manufacturing in Europe, we will continue to undermine our industrial resilience, strategic autonomy and green transition through deindustrialization. The ELVR can help turn the tide and become a cornerstone of the EU’s circular economy and a driver of industrial competitiveness. It can become a flagship regulation containing ambitious recycled content targets that can accelerate reindustrialization in line with the objectives of the Green Industrial Deal. > Policymakers must recognize the strategic importance of > European plastics manufacturing. Without a competitive domestic sector, > Europe’s net-zero pathway becomes slower, costlier and more import-dependent. Enabling circular technologies  The automotive sector recognizes that its ability to decarbonize depends on access to innovative, circular materials made in Europe. The European Commission’s original proposal to drive this increased circularity to 25 percent recycled plastic content in new vehicles within six years, with a quarter of that coming from end-of-life vehicles, is ambitious but achievable with the available technologies and right incentives. To meet these targets, Europe must recognize the essential role of chemical recycling. Mechanical recycling alone cannot deliver the quality, scale and performance required for automotive applications. Without chemical recycling, the EU risks setting targets that look good on paper but fail in practice. However, to scale up chemical recycling we must unlock billions in investment and integrate circular feedstocks into complex value chains. This requires legal clarity, and the explicit recognition that chemical recycling, alongside mechanical and bio-based routes, are eligible pathways to meet recycled content targets. These are not technical details; they will determine whether Europe builds a competitive and scalable circular plastics industry or increasingly depends on imported materials. A broader competitiveness and circularity framework is essential  While a well-designed ELVR is crucial, it cannot succeed in isolation. Europe also needs a wider industrial policy framework that restores the competitiveness of our plastics value chain and creates the conditions for increased investment in circular technologies, and recycling and sorting infrastructure. We need to tackle Europe’s high energy and feedstock costs, which are eroding our competitiveness. The EU must add polymers to the EU Emissions Trading System compensation list and reinvest revenues in circular infrastructure to reduce energy intensity and boost recycling. Europe’s recyclers and manufacturers are competing with materials produced under weaker environmental and social standards abroad. Harmonized customs controls and mandatory third-party certification for imports are essential to prevent carbon leakage and ensure a level playing field with imports, preventing unfair competition. > To accelerate circular plastics production Europe needs a true single market > for circular materials. That means removing internal market barriers, streamlining approvals for new technologies such as chemical recycling, and providing predictable incentives that reward investment in recycled and circular feedstocks. Today, fragmented national rules add unnecessary cost, complexity and delay, especially for the small and medium-sized enterprises that form the backbone of Europe’s recycling network. These issues must be addressed. Establishing a Chemicals and Plastics Trade Observatory to monitor trade flows in real time is essential. This will help ensure a level playing field, enabling EU industry and officials to respond promptly with trade defense measures when necessary. We need policies that enable transformation rather than outsource it, and these must be implemented as a matter of urgency if we are to scale up recycling and circular innovations and investments.  A defining moment for Europe’s competitiveness and circular economy > Circularity and competitiveness should not be in conflict; together, they will > allow us to keep plastics manufacturing in Europe, and safeguard the jobs, > know-how, innovation hubs and materials essential for the EU’s climate > neutrality transition and strategic autonomy. The ELVR is not just another piece of environmental legislation. It is a test of Europe’s ability to turn its green vision into industrial reality. It means that the trilogue negotiators now face a defining choice: design a regulation that simply manages waste or one that unleashes Europe’s industrial renewal. These decisions will shape Europe’s place in the global economy and can provide a positive template for reconciling our climate and competitiveness ambitions. These decisions will echo far beyond the automotive sector. Disclaimer POLITICAL ADVERTISEMENT * The sponsor is Plastics Europe AISBL * The advertisement is linked to policy advocacy on the EU End-of-Life Vehicles Regulation (ELVR), circular plastics, chemical recycling, and industrial competitiveness in Europe. More information here.