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

HOW TWO WARS ARE PULLING EUROPE AND THE US APART The EU is worried President Trump could abandon Ukraine if the bloc doesn’t support him in the Middle East. By NICHOLAS VINOCUR in Brussels Illustration by Natália Delgado/ POLITICO  The biggest fear of European leaders is that Donald Trump’s war in Iran will lead him to abandon Ukraine. Governments are terrified that the U.S. president could retaliate against America’s European allies for spurning his appeals for assistance in the Middle East, primarily by cutting off what’s left of U.S. help for Kyiv, according to four EU diplomats with knowledge of their discussions. As they scramble to avoid a permanent break in the transatlantic relationship, leaders hope their offer of limited support for his action against Tehran will suffice to convince Trump to stay the course in the conflict with Russia. The war in Iran “must not divert our attention from the support we give Ukraine,” French President Emmanuel Macron said at the end of last week’s EU summit in Brussels. It’s easy to see why EU leaders are so anxious. In recent days Trump has repeatedly blasted them for failing to do more to help him unblock the Strait of Hormuz, the shipping route used by about 20 percent of the world’s oil that has effectively been closed by Iran. He has also explicitly linked continued U.S. involvement in NATO to the Middle East conflict. “NATO IS A PAPER TIGER!” he railed in a Truth Social Post over the weekend. “They complain about the high oil prices they are forced to pay, but don’t want to help open the Strait of Hormuz … COWARDS,” he concluded. “[W]e will remember.” At the same time, further deepening fears about the transatlantic alliance, Moscow offered Washington a quid pro quo under which the Kremlin would stop sharing intelligence with Iran if Washington ceased supplying Ukraine with intel about Russia, POLITICO revealed on Friday. While the U.S. declined the offer, according to two people familiar with the U.S.-Russia negotiations, the fact it was proffered in the first place points to a possible tradeoff between U.S. involvement in Ukraine and the Middle East. “There’s a crack right now emerging between, you know, Europe and the U.S., which, again, as an avid pro-American and transatlanticist, I lament,” Finnish President Alexander Stubb said in an interview with the Daily Telegraph. “But it’s a reality that I have to live with. And I obviously try to salvage what I can.” MISSILES LIKE CANDIES Governments are concerned that the war in Iran is using up missiles and air defense munitions that Kyiv needs to protect itself against Russia, the four EU diplomats, who were granted anonymity to discuss sensitive diplomatic exchanges, told POLITICO. “When you see what Trump did on Greenland, how he cut off intelligence-sharing with Ukraine on a whim, there’s always a risk [that Trump could remove U.S. support for Ukraine],” one of the diplomats said. “The concern is obviously that the Middle East is taking attention away from Ukraine,” added a second diplomat from a mid-sized EU country. “The Emiratis are shooting out Patriot [air defense missiles] like candies, whereas Ukraine desperately needs them. It can’t become an either-or situation” in which the U.S. only has enough bandwidth for one conflict and abandons Ukraine, the diplomat added. Ukrainian President Volodymyr Zelenskyy has been explicit about the risk of such a tradeoff, telling the BBC on Thursday that he had a “very bad feeling” about the impact of the Middle East war on Ukraine. He lamented the fact that as the war goes on, U.S.-led peace negotiations between Ukraine and Russia are being “constantly postponed” in what the Kremlin calls a “situational pause.” Ukrainian President Volodymyr Zelenskyy is pictured at Moncloa Palace in Madrid, Spain on March 18, 2026. | Alberto Gardin/SOPA Images/LightRocket via Getty Images Ukrainian negotiators traveled over the weekend to the U.S. for talks with Trump’s envoys, Steve Witkoff and Jared Kushner. The latter praised the talks as “constructive” in a post on X, but gave no hint of when negotiations with Russia would resume. DAMAGE CONTROL European leaders, including France’s Emmanuel Macron, Britain’s Keir Starmer and NATO Secretary-General Mark Rutte, are ramping up efforts to show they support the U.S. president’s goal of freeing up the Strait of Hormuz. In a now familiar role, Rutte has been outspoken in praising Trump’s efforts. The former Dutch prime minister last week called the destruction of Iran’s military capacity by the U.S. and Israel “very important,” linking it to “European security” at a time when some EU leaders, like Spanish Prime Minister Pedro Sanchez, have criticized the war as “illegal.” Macron has been more circumspect in public, but active behind the scenes. In two separate calls with Trump before last Thursday’s gathering of EU leaders, the French president assured his U.S. counterpart that France would help clear the Strait when conditions allow, according to comments from Trump himself and a third EU diplomat who was briefed on the calls. “This is about managing the man,” the diplomat said. In the early hours of Friday, Macron — who has otherwise pledged to send a naval detachment to the Strait of Hormuz after the hot phase of the war dies down — said France was pursuing the aim of freeing it up via the United Nations. In response to a question from POLITICO at the European Council on Thursday, the French leader said Paris intends to “sound out its main partners” about tabling a resolution in the Security Council on securing freedom of navigation in the vital waterway. Trump is no fan of the United Nations, but he could see an advantage to a U.N. Security Council resolution that forms the basis for a broader coalition to free up the Strait, a fourth EU diplomat said. The southern suburbs of Beirut after an Israeli airstrike on March 10, 2026. | Fadel Itani/AFP via Getty Images The U.K.’s Starmer is also doing more to help Trump in the Middle East. Following reports that Iran had fired a ballistic missile at the Diego Garcia U.S.-U.K. base in the Indian Ocean, Starmer gave the U.S. a green light to use British bases to launch strikes on Iranian sites targeting the Strait of Hormuz. Previously he had only granted permission for the bases to be used for defensive strikes. Starmer was also the main organizer of a statement signed by seven EU and allied countries (the United Kingdom, France, Germany, Italy, the Netherlands, Canada and Japan) in which they expressed their “readiness to contribute to appropriate efforts to ensure safe passage through the Strait.” Asked about the intent of this statement, which doesn’t promise any immediate material help, the third diplomat said: “It’s part of the same effort. We need to show Trump we are active in the Middle East. It’s in our interests, but also in Ukraine’s.” Such pledges remain vague for now. Macron and German Chancellor Friedrich Merz have both asserted they have no intention of being drawn into the war in Iran. But as far as Trump is concerned, “appearances matter — sometimes more than substance,” said the same diplomat.

Iranian missiles late Saturday hit two southern Israeli towns close to a nuclear facility in what Tehran said was retaliation for Israeli strikes on Iran’s nuclear site at Natanz. More than 160 people were injured in the strikes, which hit the towns of Dimona and Arad near Israel’s Negev Nuclear Research Center, according to the Israeli health ministry. The attack came as U.S. President Donald Trump warned that the United States will “obliterate” energy plants in Iran if the government in Tehran doesn’t fully open the Strait of Hormuz, giving the country a 48-hour deadline to comply. Tehran warned in reply that any strike on its energy facilities would prompt retaliatory attacks on U.S. and Israeli energy and infrastructure facilities. Iranian state TV said Saturday’s strikes by Tehran were a response to an attack on Iran’s Natanz nuclear facility earlier in the day, according to the BBC. Mohammad Bagher Ghalibaf, speaker of Iran’s parliament, said the fact that ballistic missiles evaded Israeli defenses and struck near the nuclear research site appears to signal “a new phase” in the war. “If Israel is unable to intercept missiles in the heavily protected Dimona area, it is, operationally, a sign of entering a new phase of the conflict,” he posted on social media network X. “Israel’s skies are defenseless.” He added that the “time has come to implement the next pre-planned schemes,” without providing further details. Israeli military spokesman Effie Defrin said the strikes did not represent a new threat. “The air defense systems operated but did not intercept the missile. We will investigate the incident and learn from it,” he wrote on X. Israeli Prime Minister Benjamin Netanyahu said it had been a “very difficult evening,” and vowed to “continue to strike our enemies on all fronts.” The International Atomic Energy Agency said it was aware of the strikes near the nuclear research center and has not received any indication of damage to the facility, nor any information from regional states indicating that abnormal radiation levels have been detected.

U.S. President Donald Trump warned late Saturday that the United States will “obliterate” energy plants in Iran if the government doesn’t fully open the Strait of Hormuz, giving the country a 48-hour deadline to comply. “If Iran doesn’t fully open, without threat, the Strait of Hormuz, within 48 hours from this exact point in time, the United States of America will hit and obliterate their various power plants, starting with the biggest one first,” Trump said in a post on Trust Social. Iran warned in reply that any strike on its energy facilities would prompt attacks on U.S. and Israeli energy and infrastructure facilities — specifically information technology and desalination operations — in the region, the Associated Press reported, citing a statement by an Iranian military spokesperson carried by state media and semiofficial outlets. The warnings of escalation in the Mideast conflict come after the British government on Saturday confirmed that Tehran launched an unsuccessful attack on Diego Garcia, a joint U.S.-U.K. military base in the Indian Ocean. Media reports said Iran fired two ballistic missiles at the base but missed. Meanwhile, Israel claimed that Iran has missiles with a range of about 4,000 kilometers, capable of hitting London, Paris and Berlin. “The Iranian terrorist regime poses a global threat. Now, with missiles that can reach London, Paris or Berlin,” the Israel Defense Forces said in a post on X. Iran’s targeting of the base on Diego Garcia occurred before Britain on Friday confirmed that U.S. use of its bases includes defensive operations against “missile sites and capabilities being used to attack ships in the Strait of Hormuz,” a permission that includes the Indian Ocean island.

BRUSSELS — United Nations Secretary-General António Guterres said Thursday there are “reasonable grounds” to believe both sides in the U.S.-Israel conflict with Iran may have committed war crimes, as attacks and retaliatory strikes on energy facilities intensify. Speaking exclusively to POLITICO on a visit to Brussels before Thursday’s European Council summit, Guterres said: “If there are attacks either on Iran or from Iran on energy infrastructure, I think that there are reasonable grounds to think that they might constitute a war crime.”  Israel attacked Iran’s South Pars natural gas field on Wednesday, then Tehran launched a retaliatory strike on a major energy complex in Qatar. Beyond that, Guterres said the growing civilian casualties left both sides in the conflict open to possible war crimes charges. “I don’t see any difference. It doesn’t matter who targets civilians. It is totally unacceptable,” he said. Representatives for the U.S. and Israeli governments did not immediately respond to requests for comment on Guterres’ remarks. America and Israel began a bombing campaign on Feb. 28, killing Iran’s supreme leader and sparking ongoing retaliatory missile-and-drone attacks from Tehran on sites across the Middle East. Having called for deescalation in the region, Guterres appeared to blame Israel for driving the conflict forward, and called on U.S. President Donald Trump to persuade Israeli leader Benjamin Netanyahu to bring it to an end. “The war needs to stop … and I believe that it is in the hands of the U.S. to make it stop. It is possible [to end the war], but it depends on the political will to do it,” Guterres told host Anne McElvoy for an episode of the EU Confidential podcast publishing Friday morning. “I am convinced that Israel, as a strategy, wants to achieve a total destruction of the military capacity of Iran and regime change. And I believe Iran has a strategy, which is to resist for as much time as possible and to cause as much harm as possible. So the key to solve the problem is that the U.S. decides to claim that they have done their job. “President Trump will be able to convince … those that need to be convinced that the work is done. That the work can end,” Guterres added. The secretary-general also attributed America’s decision to launch strikes on Iran to Israel. “I have no doubt that this was something that corresponds to Israel’s strategy … to draw the United States into a war. That objective was achieved. But this is creating dramatic suffering in Iran, [and] in the region, even in Israel. And it is creating a devastating impact in the global economy and whose consequences are still too early to foresee. So, we absolutely must end this conflict,” he said. But finding an off-ramp might prove difficult, and relations between the U.N. and the Trump administration remain frosty.   Asked if he had spoken with Trump since the conflict began three weeks ago, Guterres responded emphatically: “No, no, no … I speak with those I need to speak to. But this is not a soap opera.” He claimed, however, to have been “in contact with all sides,” including with the Trump administration, since hostilities spread across the Gulf.  “It’s vital for the world at large that this war ends quickly,” Guterres said. “This is indeed spiraling out of control and the recent attacks represent an escalation that is extremely dangerous.” Trump said on his Truth Social site that the U.S. had not authorized the attack by Israel on the South Pars site, and that Israel had “violently lashed out,” raising questions about how much influence the U.S. has over its ally. “My hope is that the United States will be able to understand that this has gone too far,” Guterres said. The conflict was primarily benefitting Russia, Guterres added, with Moscow welcoming the distraction from its own war on Ukraine. “Russia is the biggest beneficiary of the Iran crisis,” Guterres said. “Russia is the country that is gaining more with what’s happening in this horrible disaster. Russia is already the winner.” Meanwhile, European leaders, including U.K. Prime Minister Keir Starmer and German Chancellor Friedrich Merz, have said they won’t be sending ships to the Persian Gulf in response to Trump’s appeal for help to open the Strait of Hormuz. France has said it will only contribute support vessels “when the situation is calmer.” Guterres applauded the restraint shown by the Europeans, despite Trump’s anger at their refusal to actively support the war or help reopen the Strait of Hormuz, a critical maritime artery that Iran has largely sealed off, driving up global energy prices. “I think these countries made their own reading of the situation, and I believe they took a decision not to get too much involved, knowing that the most important objective is the deescalation,” he said. Listen to the full episode of EU Confidential on Friday morning.

The Trump administration may suspend sanctions on Iranian oil already at sea in a bid to clamp down on energy prices that have shot up amid the war in the Middle East, Treasury Secretary Scott Bessent said Thursday. It’s the latest play weighed by the administration to stabilize the oil market against price shocks since the U.S. and Israel launched their joint operation in February. The maneuver could free up 140 million barrels of Iranian oil for global use, Bessent said. “In essence, we will be using the Iranian barrels against the Iranians to keep the price down for the next 10 or 14 days, as we continue this campaign,” he said on Fox Business. It’s one of several “levers” Bessent said the administration has at its disposal, as Iranian attacks cripple the Strait of Hormuz, a critical waterway that carries roughly 20 percent of the world’s oil supply. The administration could also make more oil from the Strategic Petroleum Reserve available, Bessent added. The administration already started making 172 million barrels from the SPR available. “So we have lots of levers, we’ve got plenty more that we can do,” Bessent said. “Some countries are going to do more, the U.S. could unilaterally do another SPR release to keep the price down.” The White House has discussed adding up to 100 million more barrels to the administration’s pledge last week, said a person familiar with the plan who was granted anonymity to discuss conversations within the administration. “Some military advisers are concerned [about] draining so much, and are pushing for more like 50 million barrels on the concern that further destruction of oil and gas infrastructure in the [Middle East] region could leave the country vulnerable from a reserve standpoint,” this person said. A spokesperson for the Department of Energy — which controls the SPR — said in a statement following Bessent’s interview there were currently no plans for another release. “The United States has taken several actions thus far to mitigate disruptions to energy markets,” DOE spokesperson Ben Dietderich said. “While the U.S. continues to consider all options to keep markets supplied, there are currently no plans for an additional SPR release.” The White House did not immediately respond to a request for comment. Oil and product flows through the strait have plummeted from roughly 20 million barrels a day to just “a trickle,” the International Energy Agency reported last week, marking the largest supply disruption in history. U.S. gas prices are up by more than 85 cents per gallon from the start of the war. Bessent called the blockade a “temporary chokepoint” and implored American allies to help secure the strait. “They’re the ones who need this oil,” he said. “The U.S., we’re an oil exporter.” Trump, in the meantime, has skewered American allies, oscillating between calling for their assistance to insisting on Truth Social that “WE DO NOT NEED THE HELP OF ANYONE.” “We are intervening in markets by creating this excess supply with oil that’s on the water,” Bessent said Thursday.

The White House is pleading with allies to help secure the Strait of Hormuz — and privately assuring them that President Donald Trump is fine with high-level statements — as it pushes to calm financial markets, according to three European officials. The Trump administration is urging European and Asian allies to issue these public commitments by the end of the week, the officials said. The White House is less concerned about specific contributions at this stage, they added. All were granted anonymity to discuss sensitive deliberations. The move comes as Trump has been getting increasingly irate about allies not signing on to help keep ships moving through the vital waterway, posting on Truth Social on Tuesday: “WE DO NOT NEED THE HELP OF ANYONE!” Even just a note of public support could help reassure increasingly dismayed investors, and perhaps give the Trump administration a framework of cooperation to build on later. Those who have spoken with Trump administration officials in recent days said it’s clear the White House values the market reaction most of all, according to two of the European officials. Asked for comment, the White House pointed to Trump’s criticism of allies in the Oval Office Tuesday. “I think NATO is making a very foolish mistake,” Trump told reporters during an appearance Tuesday beside Ireland’s leader in the Oval Office. “I’ve long said … I wonder whether or not NATO would ever be there for us. So this is a, this was a great test, because we don’t need them, but they should have been there.” Trump’s war with Iran has put many of America’s closest allies and partners in a difficult spot. Trump didn’t brief many of these countries about the operation ahead of time. Those that got advanced notice had hours or days, not weeks, to prepare to defend their infrastructure and people in the region. In Europe, committing ships to escort tankers through the strait would take away resources needed to help defend Ukraine against Russian attacks. In the Indo-Pacific, publicly backing a Hormuz security effort risks domestic backlash in countries where another Middle East conflict is unpopular, while also raising concerns about diverting already stretched naval resources from deterring China and protecting critical regional sea lanes. It would also take time for many countries to reroute ships or other assets to the Middle East. While many of Washington’s allies are keen to find a way to support Trump’s efforts, some want to sort out the details of their contributions before signing on to the effort, one of the European officials said. “Leaders are well aware that it’s a one-way street with him, that they can no longer count on the U.S. the way they used to. But most are looking to avoid a total rupture,” another one of the European officials said. “So despite the ironic twist here, they are weighing practical and political considerations, not emotional ones. If there is a lack of interest in what he’s asking, it’s because Europe is already stretched economically and with defending Ukraine. But there is also real concern about oil prices and what it would mean if the strait is shut down.” Trump repeated his earlier complaints on Tuesday that the U.K. had been too slow to accede to his requests to send two aircraft carriers to the Strait of Hormuz. But those aircraft carriers are located in far away theaters — such as near Australia — and would take weeks to get in place, should the U.K. bow to Trump’s request. Speaking alongside Ukraine’s President Volodymyr Zelenskyy on Tuesday, U.K. Prime Minister Keir Starmer said Europe must not be distracted by the Middle East. “Putin can’t be the one who benefits from the conflict in Iran, whether that’s oil prices or the dropping of sanctions,” Starmer said. “It is really important we keep our resolve in relation to supporting Ukraine, doing everything we can to weaken the hand of Putin.” Germany, Canada and Australia, meanwhile, have ruled out any military participation. France did the same on Tuesday, with President Emmanuel Macron saying France is “not a party to the conflict and therefore France will never take part in operations to open or liberate the Strait of Hormuz” and would only participate in naval escorts “once the situation has calmed down.” Tokyo is “vigorously examining” whether the dispatch of escort vessels “is within the bounds of the law,” Japanese Prime Minister Sanae Takaichi said Tuesday, per the Japan Times. That hesitation likely reflects the restrictions imposed by Japan’s post-war constitution, which forbid “armed troops to be dispatched to the land, sea, or airspace of other countries with the aim of using force.” Trump has flip-flopped publicly about how much the U.S. needs its allies to help protect freedom of navigation in the Strait of Hormuz and has downplayed how much the shutdown of the channel affects America. Anwar Gargash, the diplomatic adviser to the UAE’s president, said Tuesday that his country was considering joining the U.S. effort to secure Hormuz. “We all have a responsibility to ensure the flow of trade, the flow of energy,” he said at an online event hosted by the Council on Foreign Relations. Some affected countries have talked about standing up their own operations to protect freedom of navigation when the conditions allow. European foreign ministers also met on Monday to discuss extending its Operation Aspides, which stood up last year to protect ships transiting the Red Sea amid Houthi attacks. At the same time, U.S. allies are seeking better information from Washington about what Trump and his team see as the endpoint for the war that began in late February. “Allies are still more in an, ‘Ok so, how’s it going, what’s your thinking mode. What are your assessments? We hear what you’re saying publicly on the aims, but what does success and the point you put the pencil down look like?’” the first European official said. Phelim Kine contributed to this report.

BRUSSELS — The EU’s announcement that Ukraine has accepted its offer to help repair the Druzhba oil pipeline gives Viktor Orbán a chance to end his showdown with Brussels over a loan to Kyiv, according to two EU officials. Two days before EU leaders meet for crunch talks in Brussels, European Commission President Ursula von der Leyen and European Council President António Costa said that “the Ukrainians have welcomed and accepted” an offer of “technical support and funding” to help repair the damaged pipeline, in a bid to restore Russian oil flows to Hungary and Slovakia. Orbán has refused to back a €90 billion loan to fund Ukraine’s war effort unless the oil starts flowing. The agreement gives Orbán a way out of the standoff with the EU as he attempts to overturn a nine-point polling deficit ahead of Hungary’s April 12 election, according to the two officials, who granted anonymity to speak freely on the sensitive diplomacy, as were others in this article. In a video posted to social media after Tuesday’s pipeline news, Orbán doubled down, saying that “if there is no oil, there is no money” for Ukraine. But a diplomat familiar with Budapest’s thinking hinted there could be room for a breakthrough ahead of Thursday’s summit, given the movement from the EU and Ukrainian President Volodymyr Zelenskyy. Brussels wants Orbán to lift his veto on the delayed 20th package of sanctions against Russia and on the loan to Ukraine, which EU leaders, including the Hungarian prime minister, agreed to in December. Orbán later changed his mind, taking the unprecedented step backtracking on a decision agreed at a European Council meeting. Two senior EU officials said Brussels believed Orbán was looking for an off-ramp. Orbán has used the spat with Ukraine over the Druzhba pipeline to score political points against his rival, Tisza party leader Péter Magyar. Orbán accused Kyiv of intentionally delaying repairs to the pipeline, which was damaged during a Russian drone attack in late January, to help Magyar in the election — a claim Tisza and Kyiv strongly deny. Zelenskyy has denied he has been slow-walking repairs to the pipeline for political reasons. He said he didn’t want to fix Druzhba both because Russia has repeatedly attacked it, including during repair works, and because doing so would help fill the Kremlin’s coffers and allow Moscow to continue its full-scale invasion of Ukraine. He has decried the pressure placed on him by his EU allies, accusing them at the weekend of “blackmail.” But on Tuesday, Zelenskyy finally agreed to the request. In a letter sent to von der Leyen and Costa, Zelenskyy said, “We are undertaking all possible efforts to repair the damage and restore operations” of the pipeline. “Ukraine is a reliable energy partner for the European Union and honours fully its commitments,” he added. In their response to Zelenskyy, von der Leyen and Costa said his acquiescence “would allow [the EU] to move forward in a timely manner with the EU Ukraine Support Loan funding for your own macro-economic stability and for the purchase of defence equipment, as well as the final adoption of the 20th package of sanctions.” The Council and Commission presidents also said their priority “is to ensure energy security for all European citizens,” while working on “alternative routes for the transit of non-Russian crude oil” to Central and Eastern Europe. Speaking to POLITICO on Monday, before the announcement, Hungary’s EU Minister János Bóka said: “I see that the mood has changed after the escalation of the crisis in the Middle East. I think now that most member states do understand that the Ukrainian decision to cut off access to the Druzhba pipeline undermines energy security and security of supply in the Central European region, and this will have implications for the European Union as a whole.” “I think that this understanding is slowly but surely sinking in and my feeling is that the Commission can no longer pretend that it is OK not to do anything in order to help two member states in securing their energy supplies through Ukraine via the Druzhba pipeline,” Bóka added. The episode has been a bruising one for Brussels and for Ukraine, which needs the EU cash to keep afloat through this year and was meant to start receiving the money from April. A previous bid to use frozen Russian assets to fund Ukraine collapsed at the last minute in December amid opposition from Belgium. Any EU country can block the €90 billion loan, because one of the bills that needs approval before the cash can be disbursed requires a unanimous yes from all member countries. Kyiv was expected to run out of money by April, but the urgency eased somewhat after the International Monetary Fund approved an $8.1 billion loan late last month. Ukraine should have enough money to stay solvent until early May, POLITICO reported last week. The EU now appears cautiously optimistic that Orbán may climb down from blocking the loan and sanctions — but potentially not until after the Hungarian election next month. Costa expects Orbán to follow through on the commitment he made at the December EU leaders’ summit “in the very short run,” said one of the EU officials above. But while a German official conceded there is now “some momentum” to resolve the issues over Druzhba, whether a deal on the €90 billion loan will be done at Thursday’s leaders’ summit “remains to be seen.” Nette Nöstlinger, Sebastian Starcevic, Gabriel Gavin and Gerardo Fortuna contributed reporting.

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.

Teresa Graham, © EFPIA European governments navigate an ever more competitive global landscape, stagnating productivity and competing demands on budgets. We have successfully faced and solved many challenges in the past, but this situation is different: the choices we make today will shape our health care systems and patient care, and these choices will dictate Europe’s economic performance and global relevance for decades to come. For those of us in the life sciences, these aren’t just macroeconomic trends — they are the pulse of a system that determines how quickly a breakthrough reaches a patient. It is a high-stakes environment where policies on health care and innovation carry urgent human and economic consequences. When a medicine has the power to treat or potentially cure, neither innovators nor policymakers want to drag their heels, because no person requiring health care can afford the luxury of delay. > The true economic burden of health care isn’t financing health innovation, but > the cost of failing to do so. Europe’s challenge is clear: we must better align our industrial strength in life science with public health goals, ensuring innovation reaches both patients and economies faster. The question is no longer what Europe wants to be — it is where Europe chooses to invest to remain a global player. Health as e conomic i nfrastructure Under the weight of mounting budget pressures, it is understandable that governments often view health primarily as a cost to be contained. However, this perspective is disconnected from modern economic reality. And let me be clear: the true economic burden of health care isn’t financing health innovation, but the cost of failing to do so. For years, Europe has already been paying the price of lost productivity: citizens forced out of the workforce too early and chronic diseases managed too late. For instance, cardiovascular diseases alone cost the E uropean U nion economy up to €282 billion annually. This creates a massive yet avoidable strain on national budgets, especially as pharmaceutical innovation is estimated to be responsible for up to two-thirds of life expectancy gains in high-income countries . 1 > Every medical breakthrough that enables a citizen to return to work or care > for their family is a direct investment in Europe’s economic strength. We must shift our mindset . H ealth is not merely a social good; it is economic infrastructure. Healthier societies are inherently more productive and resilient, and every medical breakthrough that enables a citizen to return to work or care for their family is a direct investment in Europe’s economic strength. Investing in innovation today is the only way to secure a competitive workforce and reduce long-term systemic costs. The c ompetitiveness t est: a s trategic a sset, n ot a l ine i tem Europe’s life sciences sector is one of the few remaining areas that retains genuine global competitiveness and strength, contributing more than €300 billion to annual output and supporting 2 million high-skilled jobs across m ember s tates . 2 It anchors Europe’s trade resilience, generating a trade surplus 66 percent higher than all other EU sectors combined . 3 But the warning signs are clear: while Europe still accounts for 20 percent of global pharmaceutical research and development , its share of global investment is shrinking as capital and talent migrate elsewhere . 4 Europe’s world-class science is being held back by fragmentation and regulatory inertia. > We must treat this sector as a pillar of our sovereignty and a strategic > asset, not merely a cost to be managed. If we want to lead the next wave of medical breakthroughs, we must move at the speed of global change. This requires a fundamental shift: simplifying clinical trial regulations, deploying AI-driven digital tools, incentivizing research through strong intellectual property frameworks and establishing a public-private dialogue on innovative pharmaceuticals. We need a clear action plan, not just more legislation, to translate our scientific leadership into tangible health outcomes.   We must treat this sector as a pillar of our sovereignty and a strategic asset, not merely a cost to be managed.  A  c onsequential  c hoice  Europe has to choose. Either we can continue to approach life science innovation as a budgetary threat, only to reali z e too late that we have weakened our competitiveness and delayed new treatments for patients. Or we can recogni z e innovation for what it is  —  an economic multiplier that strengthens our productivity, resilience  and global influence  —  and ensure that Europe remains a place where the next generation of medical breakthroughs is discovered, developed  and delivered to patients.  There is no middle ground. Europe must stop focus ing solely on the cost of innovation and start asking how much innovation it can afford to lose. In the global race for talent and capital, hesitation is a decision. The rest of the world is not waiting. -------------------------------------------------------------------------------- References 1. The value of health: Investing in Europe’s future [EPC 2026] 2. Economic and Societal Footprint of the Pharmaceutical Industry in Europe [VE / PwC 2024] 3. International trade of EU and non-EU countries since 2002 by SITC [Eurostat 2026] 4. The 2025 EU Industrial R&D Investment Scoreboard [EC 2025] -------------------------------------------------------------------------------- Disclaimer POLITICAL ADVERTISEMENT * The sponsor is European Federation of Pharmaceutical Industries and Associations (EFPIA) * The entity ultimately controlling the sponsor is European Federation of Pharmaceutical Industries and Associations (EFPIA) * The political advertisement is linked to  EU pharmaceutical regulation and innovation policy. More information here.