LONDON — U.K. Home Secretary Shabana Mahmood has been warned her planned overhaul of settlement rules for migrants will not save the £10 billion she has claimed. Instead, the policy to drastically increase the length of time migrants must wait before gaining permanent residency could end up costing the Treasury billions, according to a private briefing note shared with the Home Office and obtained by POLITICO.  The document, drawn up by the IPPR think tank where Mahmood made the case for her reforms earlier this month, is being used by Labour MPs to pressure for a rethink of the policy. A leading critic said it totally “dismantles” her financial argument. In her speech, Mahmood cited increased welfare costs from the 196,000 migrants on health and social care visas and their dependents who arrived during a post-Brexit immigration spike, and who are expected to start getting settled status soon, as a key reason for the overhaul.  Under her proposals, care workers would have to wait around 15 years before being eligible for indefinite leave to remain (ILR), up from the current five years.  “If we do not, we will see a £10 billion pound drain on our public finances and further strain on public services, like housing and healthcare, already under immense pressure,” Mahmood said. But the progressive think tank, which is well-connected in Labour circles, argues the Home Office’s calculations are flawed for four reasons.  The department’s figure is based on the cost of welfare spending over the individuals’ lifetimes. But the IPPR points out that estimates from the government’s own Migration Advisory Committee (MAC) show dependents making net positive financial contributions until they stop working, claim the state pension and start having higher health costs. Though Mahmood’s proposals will lengthen the time it takes them to gain access to the welfare system, the change “will not make a significant difference to the lifetime fiscal impact” of these migrants, according to the report. “The only way this policy would significantly bring down the £10 billion lifetime fiscal cost is if it led to large numbers of care workers and dependents leaving the U.K. before they reached the qualifying period for settlement,” the IPPR says. As it stands, that’s not the case Mahmood is making. The primary reason care workers make a negative net lifetime financial contribution is because they are poorly paid. Gaining settlement would allow them to earn more by opening the door to work in any occupation. But delaying this traps them in lower-paid work for longer, the document argues. “The overall fiscal impact of the proposed earned settlement reforms should therefore consider the potential costs of lower tax contributions from the care worker cohort while they wait for settlement, as well as the fiscal benefits of restricting access to public funds for longer,” the IPPR says. If indeed the policy is to encourage care workers and their dependents to leave the U.K. in large numbers then the briefing argues it could in fact add to costs.  Estimates by the MAC, which advises the Home Office, point out that their adult dependents are net positive contributors for 20 — and it’s only after around 40 years that they make a cumulative net negative financial impact to the British state. “Given the [Treasury’s] fiscal rules work to a 5-year horizon, the emigration of care workers would make it harder — not easier — for the Treasury to meet its fiscal targets,” the IPPR argues. ‘DISMANTLES THE RATIONALE’ The briefing also digs into the wider “earned settlement” policy. Estimates of the effects are hard to ascertain because behavioral impacts are uncertain. But last year’s immigration white paper was accompanied by an illustrative example of a drop of between 10-20 per cent in skilled workers, care workers and their dependents. The IPPR uses this to calculate the cost to the Treasury based on that reduction being applied to both care workers and skilled workers. They argue that this would mean a potential cost to the exchequer of £11 billion to £22 billion over the lifetimes of migrants granted relevant visas last year.  “Even if the policy is designed in such a way to minimise any direct effects on skilled workers who make a positive fiscal contribution, it is possible that the reforms will deter (and indeed may already be deterring) higher-paid workers who seek certainty for their and their family’s status,” it says. “Even a small impact on higher-paid skilled workers would counteract the savings from care workers, given the per person net lifetime fiscal contribution of skilled workers is £689,000, nearly 20 times larger than the per person net costs of care workers.”  Leading Labour critic of the policy Tony Vaughan used the findings to argue that Mahmood’s proposals “will be a fiscal cost to the U.K. for decades.” “The IPPR report dismantles the rationale for this earned settlement policy,” the MP told POLITICO. “It would also undermine community cohesion and integration, weakening the bonds that hold our society together. This is not a policy that can be trimmed around the edges. It is fundamentally flawed and should be abandoned.” POLITICO reported this week that the government is considering watering down the proposals, potentially introducing transitions to ease the retrospective nature of the changes that are proving most controversial among Labour MPs. But, as critics consider parliamentary action to force a vote on the issue, Vaughan indicated the compromises under consideration would not be enough.  “I say that as a loyal Labour MP who has never voted against the government and who desperately wants us to succeed, but cannot in good conscience stand by and see a policy as flawed as this, which is so strongly against our national interest, reach the statute books,” he said. The Home Office has yet to respond to a request for comment.

LONDON — War in the Middle East has put Keir Starmer in a tight spot.  The U.K. government can’t afford to spend big on protecting voters from looming energy bill hikes. But politically, the British prime minister has little choice.  Starmer said Monday that his “first instinct” in responding to the Iran conflict — and the global energy price shock it has triggered — is protecting the household finances of ordinary voters.  “It’s moments like this that tell you what a government is about,” Starmer said, addressing yet another hastily-arranged Downing Street press conference.   “My answer is clear. Whatever the challenges that lie ahead, this government will always support working people.”  He was announcing £53 million in state support for low-income families already hit by a sharp rise in the cost of heating oil, a fuel that warms around one in 20 U.K. homes.    But much bigger, much pricier policy choices are coming down the track.    STRAITENED FINANCES A regulated cap on energy costs is keeping a lid on most people’s household bills. But the current cap expires in July — at which point, without intervention, bills could jump significantly. Wholesale gas prices, which significantly influence household bills, have nearly doubled since the crisis began. Starmer’s Energy Secretary Ed Miliband told The Mirror newspaper he would “keep looking at how we can do more” to protect consumers. The government must decide how big they go with any support package.  But the Institute for Fiscal Studies think tank has already sounded the alarm over the government’s fiscal wiggle room. “The public finances are in a more strained position than they were [in 2022] at the start of the Russia-Ukraine war, and a sustained increase in energy prices is likely to worsen them further,” the think tank said last week. Starmer sought to contrast the situation now with that faced by Liz Truss’s Conservative government in 2022, and her multi-billion pound energy bailout.  The policy reduced the energy bills of every family in the country. It also, coupled with sweeping tax cuts, led sterling to crash, borrowing costs to soar, and forced Truss out of her job days later.  His Labour government, Starmer said, had “brought stability back to our public finances, stability that I will never put at risk.”  Now he faces the challenge of meeting that pledge on stability, while standing by his cost-of-living guarantee to the British people.   TO TARGET To help people most exposed to rising bills, while avoiding Truss’s fate, the obvious option for Starmer is to make a targeted intervention on energy bills come July.  The heating oil policy follows this approach, aimed squarely at “people who need it most,” Chancellor Rachel Reeves said Monday. The Treasury is similarly looking at “targeted options” for any future energy support package, she told The Times at the weekend.  Starmer himself said on Monday “we’re not ruling anything out.” But the signals are that a universal offer like Truss’s — which ended up costing an eye-watering £23 billion — is unlikely.   Among Labour MPs, the penny is already dropping that not all households will benefit from government largesse.   “It’s right that the government steps in at a time of national crisis and supports those that are struggling,” Suffolk Coastal MP Jenny Riddell-Carpenter told the BBC on Monday. “But it’s complex,” she added. “There isn’t a limitless pot of money.”   And targeting the right people for help will not be straightforward. In 2022, government lacked the data required to know which households should be targeted, Reeves told MPs on the Treasury committee last week.    Work on this inside government is now “more advanced,” she insisted. But officials still lack the targeting data needed, said Ben Westerman, director of policy at the energy campaign group Electrify Britain.    Officials simply “haven’t moved on” with targeting data since the last energy crisis, Westerman said, adding: “That is a failure of governments plural to learn the lessons from last time.”   Energy companies, pushing ministers over the issue, have grown frustrated.   “Industry has called for government to provide the data so that we can target support [to] those who need it. And there’s just been little to no progress on this,” Caitlin Berridge-Dunn, head of external affairs at energy supplier Utilita, said.  NEW AND OLD IDEAS  One option, separate from bills, would be to maintain a longstanding, five pence per liter tax relief on gasoline and diesel, a fuel duty cut which expires in September. The oil price shock has driven up costs at the pump by more than eight pence per liter for gasoline and more than 18 pence for diesel. Another approach officials could opt for, according to Westerman, and reported in The Times Monday, is to expand the existing Warm Homes Discount, a one-off payment to reduce bills for the poorest households, as a vehicle for getting more support to people who need it most.  But that approach, he cautioned, would not catch the “squeezed middle” of households.   Another option is to repeat a trick Starmer and Reeves pulled off at last year’s budget — shifting green and other levies currently added to energy bills into general taxation.   Miliband hailed that move at the time — which saved around £150 on the average energy bills — as a way of “asking some of the wealthiest in our society” to subsidize everyone’s bills.  There is enthusiasm for the principle in Whitehall, even if no decisions have yet been made. A government official, granted anonymity because they were not authorized to speak on the record, said the £150 cut could be “the beginning of a big principled move” of the burden of energy costs from consumers onto tax.     A study by the industry group the MCS Foundation found that moving all such levies onto taxation could cut bills by up to £410 a year. But that, of course, would put taxpayers on the hook. MCS Foundation estimated it would cost £5.7 billion per year. The most important difference from the Truss era, argued Sam Alvis, a former Labour adviser and now a director of energy security and environment at the influential IPPR think tank, is that Starmer cannot hang around.  The government should be planning any intervention now and not allow prices to rise in July, he argued, avoiding a repeat of the last Conservative government’s mis-step, when it waited until the fall to act.  “I think the public tolerance for [energy bill] increases will be a lot lower than it was in 2022, when Liz Truss waited from February to September to react,” Alvis said. “I just don’t think we’ll have that same time.” 

Rachel Reeves is U.K. chancellor of the exchequer and Elisabeth Svantesson is Sweden’s minister of finance. Four years ago Russia illegally invaded Ukraine — striking at peace in Europe and undermining global security. Since then, Vladimir Putin’s propaganda machine has been working in overdrive to spread the false narrative of a strong Russian economy. It is now clear that the country is not performing as well as its official statistics suggest. A report commissioned by the Swedish government last year showed signs of mounting imbalances in the Russian economy, suggesting that key economic indicators such as inflation and real GDP growth were likely manipulated. Since then, we have had access to intelligence that confirms that the Russian government is deliberately lying to the world about the state of the Russian economy. This is the weakest Russia’s economy has been since the start of the war, and it is likely to get worse over the next year. Putin wants to undermine international support for sanctions and portray Russia as strong. Through inflated threats and by pointing to problems in other economies, he is trying to divert attention from the hardships faced by his own population as a result of his illegal war. Inflation caused by the Kremlin’s spending on the war in Ukraine now means Russian households are cutting back on food under the burden of rising costs. Four years into Russia’s illegal invasion, the resolve and courage of the Ukrainian people endures and our determination to defend peace and security remains unshakeable. We’ve been strongly targeting Russia’s energy revenues, which are down by a third since the latest sanctions on Rosneft and Lukoil were announced. It is also welcome that the EU has reached an agreement to ban Russian gas imports completely and the UK has committed to adopting a full maritime services ban on Russian Liquefied Natural Gas (LNG). Now it is important to continue to increase pressure on Russian oil exports. This is why we should move towards a comprehensive maritime services ban on all Russian exports of crude oil and refined products. Squeezing Russia’s remaining revenues will further deplete its ability to finance the war.   We can already see that a large share of Russia’s National Wealth Fund – its financial buffer used to pay for everything from pensions to roads – has been drained to pay for the war. In fact, the Russian government has stopped drawing funds from it and is instead relying on banks to buy government bonds, adding to public debt. The remaining funds are not even sufficient to cover the projected budget deficit for 2025.  We’ve been strongly targeting Russia’s energy revenues, which are down by a third since the latest sanctions on Rosneft and Lukoil were announced. | Getty Images The Russian economy is failing. Spending has increased while exports and earning have decreased. The National Wealth Fund is being drained while banks and ordinary Russians are being forced to finance the war.  We estimate that Russia has lost over $450 billion due to international sanctions; the equivalent of four years of war funding. This does not mean the Russian economy is about to collapse, or that we can afford complacency. It means that data proves that pressure on Russia works and should be intensified.  That’s why this week the U.K. announced the biggest sanctions package against Russia since the early months of the invasion in 2022, clamping down on Russian banks, its liquefied natural gas industry, and international suppliers involved in sustaining Russia’s war machine. As well as continuing our pressure on Russia’s economy, we must ensure that Ukraine has the financing it needs to fight back. We welcome the European Council’s agreement in December to provide Ukraine with a €90 billion loan. This is a vital step and this desperately needed support must reach Ukraine as soon as possible. Continued European unity is central to getting us closer to a just and lasting peace.    Four years in to Russia’s illegal invasion, the resolve and courage of the Ukrainian people endures and our determination to defend peace and security remains unshakeable. | Sebastian Gollnow/picture alliance via Getty Images By strengthening Ukraine’s hand, it sends a clear signal to Putin that he cannot wait Ukraine out. We must not be intimidated by Putin’s bluster and we cannot let Russia dictate our actions.  We should take every possible step to increase pressure on the Russian economy and strengthen the position of Ukraine. Only if we do so will Russia abandon its illegal war and engage meaningfully toward a just and lasting peace.   The United Kingdom and Sweden stand united in our support for Ukraine. 

A top Pentagon policy official went to Munich this week to deliver a wake-up call to America’s NATO allies. Elbridge Colby, an under secretary of defense, warned them that the days when the U.S. served as the primary guarantor of European security are gone: “The core strategic reality …. is this: Europe must assume primary responsibility for its own conventional defense.” It’s a message that President Donald Trump himself conveyed in his own brash way to America’s allies across the Atlantic, and which his administration has forcefully underscored in its latest strategic documents. But it’s still an idea that leaves Europeans scratching their heads: Where is Trump’s aggressive new stance toward the NATO alliance coming from? One answer can be found in an unexpected place: a 2023 white paper authored by the British academic and conservative historian Sumantra Maitra. In the paper, published by the Trump-aligned think tank Center for Renewing America, Maitra sketched out a theory of what he called “Dormant NATO” — a radically re-imagined Western alliance in which America plays a much more minor role relative to its European allies. This new NATO would be “dormant,” Maitra wrote, kept in a kind of cryogenic sleep unless a “hegemonic” threat to Western security emerged. Maitra’s paper — which he later turned into a much-talked about essay in Foreign Affairs — was reportedly handed around among Trump’s inner circle of foreign policy advisors, and his major policy recommendations have since been incorporated into the administration’s National Security Strategy and National Defense Strategy. Both documents stressed the importance of “burden shifting” between the United States and its European allies — a term that Maitra has pushed in lieu of the gentler “burden sharing” advocated by past administrations. As this year’s Munich Security Conference got underway, POLITICO Magazine spoke with Maitra about the rationale for Trump’s new policy and what Europeans should expect as the U.S. pushes the alliance into this more “dormant” posture. “If I were advising a European government, I would say to sit down with the U.S. and ask for a timeline and an outline of a troop drawdown,” Maitra said. “That is inevitably going to happen someday, so they might as well prepare for it.” This interview has been edited for length and clarity. What is “Dormant NATO?” Dormant NATO is a theoretical doctrine which deals with the concept of burden shifting. It tries to find a middle ground between complete U.S. retrenchment from Europe on the one hand and the continuation of the current U.S. strategy of forward defense and forward positioning and complete primacy over the European continent. Essentially, it has three components, which are very similar to the kind of thing that you’re going to find in the National Security Strategy — but Dormant NATO said it first. First, it has “burden shifting,” a phrase I helped coin. The debate was about “burden sharing,” but now it is about“burden shifting” — the United States can keep the nuclear umbrella or the naval power in Europe, but most of the logistics, the intelligence, the army and the infantry are going to be in the hands of the Europeans. The second thing is that the Europeans will have commands. Right now, the United States is the head of the combatant commands in NATO, and that will transfer to the hands of the European generals and European admirals. And the final phase would be a pledge to have no new expansion of NATO. NATO needs to be finite, because you cannot have a grand strategy of an entity if it’s constantly mutating and shifting. NATO, the way it is now, is going to be a closed club, and that is it. Why is this shift in posture necessary? What problem is it trying to solve? The foreign policy of any country is determinant on structural factors, and the structural reality of the world that we live now is this: On one hand, you have the rise of China as a peer rival in Asia, which is in a different league compared to pretty much every other great power rival the United States has faced in his entire history. The second thing is the Global War on Terror that went on for 20 years, and it’s decimated American coffers. The U.S. is in massive debt, and people are unhappy about forever wars. So I think the best way to move forward would be to radically change the grand strategy to an offshore balancing of position. That means that Europe is extremely important to us, but fundamentally we are going to be a Western Hemisphere power. We will obviously go to Europe if there is a hegemonic threat, but if there is no hegemonic threat, Europe is stable, it’s rich, it’s powerful, and they’re allied to us, so they can take a lot more burden when it comes to continental security. How are you seeing these ideas reflected in the administration’s policy? There is a lot of overlap. I don’t speak for the administration, but I know the administration has read Dormant NATO, and if you look at the policy suggestions coming out of the administration, you know you’re going to see a lot of similarity between the two doctrines — even using the phrase “burden shifting.” So there are quite a few things that are happening. Secretary of Defense [Pete] Hegseth gave a speech in Brussels last year where he talked about no NATO expansion [into Ukraine]. Obviously the NSS and the NDS talk about burden shifting and they talk about no NATO expansion. The NSS specifically mentions that there shouldn’t be any NATO expansion. You have seen combatant commands being handed over to the British, to the Germans, the Poles and the Italians — so that is another pillar of Dormant NATO that is being utilized in the American strategy. The administration is signaling a major pullback from Europe, but at the same time it’s announcing relatively minor troop withdrawals. How do you square the ambition of its rhetoric with the relatively small-bore nature of its with troop withdrawal commitments? The troop withdrawal could do a little bit more, if I’m being honest with you, but I also don’t think that troop withdrawals are the be-all-and-end-all of the administration strategy. At the end of the day, troop deployment is completely in the hands of the president, depending on the president’s will, so that is not the big part of it. The bigger shifts are happening in two directions: One, we are handing over the combatant commands and the Joint Forces commands to the Europeans. That trains the European officer class to be in a position where they are going to have a lot more power and commanding interoperability, and where they can do things in Europe without the Americans having to spoonfeed them every single detail. That itself is a major change. The second thing that’s happening is that, at the end of the day, a country’s strategy is dependent on the documents that it puts out — so, for example, if the National Security Strategy comes out and includes burden shifting, the Europeans will take that as the grand strategy of the Republic, and they, in turn, develop their forces depending on that strategy. We have seen that before with George H.W. Bush’s New World Order, or George W Bush’s War on Terror, or Biden’s “autocracy versus democracy” framing. The NSS shapes how European powers position their military and their capability, so I think the fact that we are pretty openly talking about burden shifting will in itself shape the European capability in a way. They are going to be like, “Fine, these guys are moving out, and we have to do something about it,” and that will create a snowballing effect in Europe. Some of your critics charge that a dormant NATO will inevitably become a “dead NATO” because it would neuter the Article 5 commitment. How do you respond to that? In what type of scenario would a dormant NATO reactivate and wake up? For pretty much the entirety of its first phase [between 1949 and 1991], NATO was essentially a dormant NATO. It was a defensive alliance which was only there in case of a break-glass-in-case-of-emergency scenario. And if you actually read Dormant NATO, you will see that at no point does it suggest a complete withdrawal, and at no point does it suggest that we shouldn’t be part of the common defense or Europe. NATO Article 5 says one single thing: if one of the countries is attacked, it has the right to call the other countries and they’re going to come to the table. And depending on the kind of threat, they’re going to decide on what kind of participation they’re going to have in the future. That isn’t changing with Dormant NATO. If we are called to the defense of Europe, and if we foresee a hegemonic threat, the U.S Congress still has the power to decide that we are going to go there and defend. The question then becomes what kind of threat Europe is facing. If it’s genuinely facing something like the Third Reich or something like the USSR, that’s a whole different thing. At that point of time, clearly the United States has to go and defend, because the U.S. grand strategy has forever been to oppose a unified Europe under one single hegemon. That hasn’t changed. Other than that, I think Dormant NATO is essentially how NATO was in its first phase. There is a revanchist power in Europe at this point in Putin’s Russia, so how do you respond to the counterargument that now is simply not the time for the U.S. to carry through on this strategy? I think Colby is completely right in his assessment that Russia is a regional nuisance. It is a power, but it’s also a very odd kind of power. It can be revanchist, but, like, I can want to be James Bond, but I’m not capable of doing that. Putin’s Russia is not capable of being a hegemonic threat to the European continent. Under no military scenario can one foresee Russian tanks rolling through Poland or Germany or France. Russia is, though, a big power with 6,000 nukes, so we have to figure out a way that Russian interests are sort of satiated without them being any kind of genuine revanchist threat. So we have to talk to the Russians and to the Germans and say, “Hey, by the way, you guys have to talk too, and we can only do so much from this distance.” And if this is not the time, when will it be the time? If Russians are a revanchist threat to Europe, does that not push the Europeans to rearm rapidly? If that doesn’t push the Europeans to rearm rapidly, what would? In his speech, Colby said there’s nothing “anti-European” about this strategy, but other administration officials have made some rather pointed comments about Europe, and the NSS openly criticized Europe for overseeing “civilizational erasure.” What do you make of the administration’s rhetoric around this sort of civilizational politics? Personally, I’m a military historian and a realist, so let me put it this way: Historically, there is no evidence that kinship or culture is solid ground for any kind of solidarity or alliance. Alliances are built on interest. At the end of the day, it doesn’t matter who’s ruling Western Europe — Germany, France or the U.K. Those are the countries which will be the most important to us purely because of geography and because of manpower and production capacity. So I don’t really buy some of those civilizational arguments, and I think some of that is basically rhetorical. But is it counterproductive? Does it make it harder to effectuate this change in military strategy if America’s political leaders are privately and publicly casting aspersions on European political leadership? If it were me, I would probably be a little bit more disciplined when it comes to rhetorical extremes about Europe. But that being said, one has to differentiate between a private chat, for example, and the actual grand strategy. I might hate my neighbor, but if their house is on fire, I’m still going to try and save it. So spin this forward a bit. What moves in this direction should Europe expect next from the U.S., and how should they best prepare for them? If I were advising a European government, I would say to sit down with the U.S. and ask for a timeline and an outline of a troop drawdown. That is inevitably going to happen someday, so they might as well prepare for it. The way that they have reacted to the combatant command change to and the burden shifting is pretty optimistic. They were expecting that, and they saw it coming, so that was fine. I think they have to figure out two things. One, they have to accept that it is the U.S. that is ideally positioned to provide the nuclear deterrence to Europe, so any idea of a European nuclear weapon is completely dead on arrival. That is not going to happen, and they are just wasting time if they keep on talking about that nonsense. Second, I think they need to sit down among themselves and figure out the nitty-gritty details of basic things like troop movements and logistical movements. They need to talk to Americans and say “Fine, we understand that you want to shift some of the logistical burden on the infantry, so give us a timeline, and let’s decide on when you’re going to do it.” For example, if the U.S. wants to move back the surge of 20,000 troops that happened after the Russian invasion [of Ukraine] under Biden, the Americans should just tell the Europeans, “By the way, this is 2026, and by 2028 we’re moving that out, so figure it out.” That kind of simple logistical conversation is going to be very helpful.

BRUSSELS — The U.S. is reorienting its foreign funding program to export MAGA ideology to Europe — and a growing set of far-right and conservative think tanks and political groups are lining up to take Washington’s money. U.S. State Department officials have held early talks about government funding with representatives of the new MAGA-supporting French think tank Western Arc and Britain’s Free Speech Union, an advocacy group. Those approaches were informed by a list provided to U.S. officials by the Washington-based Heritage Foundation of groups the MAGA-aligned think tank described as “like-minded.” Other far-right and conservative groups in Italy and Brussels told POLITICO they would also be interested in support from a U.S. administration they see as an ally. POLITICO spoke to representatives from 10 European think tanks and policy groups, all of them aligned in some way with far-right politics. They described a burgeoning ecosystem of ideologically-aligned organizations that had rapidly professionalized in recent years and were working to build cooperation with similar groups across the Atlantic. With U.S. President Donald Trump’s second presidency giving European nationalists and hardline conservatives a champion at the head of the world’s largest economic and military power, groups on both sides of the Atlantic want to seize the moment. Their ambition is to repurpose the soft-power tools America once deployed to spread the gospel of liberalism, to expand their reach and power and ultimately rebuild the West in their image — a project both sides call a “civilizational alliance.” FRENCH CONNECTION Nicolas Conquer, a former media director for Republicans Overseas France, launched Western Arc, a self-described “MAGA-inspired” think tank in Paris in December. Conquer, a French-American citizen, said he had discussed specific projects that could receive funding with several U.S. State Department officials. Western Arc pledges to connect “ideas, people and projects” across the Atlantic to “organize western civilizational renewal.” Its mission statement aligns closely with language from the U.S. National Security Strategy, released earlier that month, as well as a prior essay from Samuel Samson, a senior adviser for the U.S. State Department. Conquer said he had been in touch with Samson and others in the U.S. State Department in the past few months and was exploring ideas for projects of mutual interest, such as stakeholder mapping or transatlantic trips for targeted groups, including around the 250th anniversary celebrations of U.S. independence this July. “There is this logic, which I think is very healthy, of project-based funding,” Conquer said.  The U.S. State Department did not answer a detailed list of questions. But in response to a query about U.S. funding of European organizations, a spokesperson said: “This is a transparent, lawful use of resources to advance U.S. interests and values abroad.”  Samson made headlines last year for proposing the use of American taxpayer funds to support far-right leader Marine Le Pen. He traveled to European capitals last May to meet with NGOs and civil society groups. U.S. State Department officials approached The Heritage Foundation in the second half of last year to ask which organizations in Europe would be viable targets for funding, said Heritage Foundation Senior Research Fellow Paul McCarthy. Throughout the postwar era the U.S. has supported projects that promoted democratic ideals and American-style liberalism. | Andrew Harnik/Getty Images “We’ve suggested some institutions, just a few names of organizations back in the late summer, early fall. And maybe that formed the basis of it,” he said.  The amount of money discussed at that time was “tiny.” That was before the U.S. National Security Strategy laid out a policy of “cultivating resistance” in Europe and boosting organizations that stood against left wing “censorship” and migration policies that it said were “transforming the continent and creating strife.” “Once they got the imprimatur in the national strategy, it’s really taking off right now,” said McCarthy, while stressing he had no inside knowledge of the State Department’s latest plans. Last week the FT reported that U.S. Under Secretary of State Sarah Rogers was pushing a funding program for think tanks and institutes, with a focus on London, Brussels, Paris and Berlin. In December she met with Toby Young, a British social commentator and founder of the Free Speech Union.  “We’ve discussed the possibility of the State Department funding some of the FSU’s sister organisations in other parts of the world, but not the organisation I run,” Young said. He would not be drawn on which organizations he meant, but the British Free Speech Union is affiliated with similar bodies in Australia, Canada, South Africa and New Zealand, indicating the U.S. State Department’s plans may not be confined to Europe. AMERICAN TRADITION U.S. government funding for European institutions is not a new phenomenon: Throughout the postwar era the U.S. has supported projects that promoted democratic ideals and American-style liberalism. Since the 1950s, Radio Free Europe floated the sounds of capitalist freedom into Eastern Europe, all on the U.S. taxpayer dime. This, along with U.S. philanthropic funding, helped many think tanks and other organizations grounded in mainstream liberal values flourish in Europe. Many became highly-networked policy shops that acted as a pseudo civil service, crafting reports and laws that could be transposed into ministerial proclamations. The right has taken note of that playbook. “There was a time when the right were incredibly unprofessional, unconnected, and so concerned with their own national concerns that it’s very difficult for them to see beyond that,” said John O’Brien, head of communications at MCC Brussels, a think tank funded by a private educational institute in Hungary with close ties to the government of Trump ally Viktor Orbán. That has rapidly changed, O’Brien said. Though unlike many networks of progressive institutions, the right has yet to set up a WhatsApp group for collaboration — “If there is, we’re not part of it,” said O’Brien — right-wing operatives and thinkers meet regularly at major events, like the CPAC and NatCon summit series.  They also invite one another to co-host meetings or attend events as panelists. From the U.S. side, The Heritage Foundation, which authored Trump’s Project 2025 blueprint for government, is a frequent guest of the European right.  On Tuesday, The Heritage Foundation’s McCarthy appeared on a panel in Rome co-hosted with the Fondazione Machiavelli. McCarthy said The Heritage Foundation was fostering ties with groups in Europe through joint summit hosting and research. Their aim is to push back against “European federalism” and the “green transition madness” while fostering a vision for families that excludes gay couples, trans rights and promotes higher birth rates.  U.S. government funding for European institutions is not a new phenomenon: Throughout the postwar era the U.S. has supported projects that promoted democratic ideals and American-style liberalism. | Saul Loeb/AFP via Getty Images Collaboration among such groups is “growing,” said Fondazione Machiavelli President Scalea. On its website, the center advertises formal partnerships or signed memoranda with a series of other right-wings groups: The Heritage Foundation, the Jerusalem Institute for Strategy and Security, Hungary’s Oeconomus Economic Research Foundation, and the Center for Fundamental Rights, which organizes CPAC. “But it’s most like a friendship,” he said. “Since we have common missions, we have shared values and shared views of the future … We’re not formally intertwined, we have no institutional bond and link, we are not exchanging money or resources … We are just working together because this is making it more effective for everyone else.” Scalea added that his institute had a “lot of commonality with the Trump administration.” So far he hasn’t heard directly from the U.S. government about funding being made available to organizations like his, but he said he would look at any funding proposal. “We will see. But for now, we do not have any concrete opportunity or thing to look at.” ‘EUROPEAN INDEPENDENCE’ This year, Trump has poured accelerant on existing tensions between Europe and the U.S. by pressuring Denmark to cede control of Greenland, the world’s largest island. That left many right-wing groups walking a narrow line between standing up for European sovereignty and maintaining their ideological alliance with the White House. But calls for “European independence” by leaders such as European Commission President Ursula von der Leyen have presented right-wingers with an opportunity to frame themselves as the true defenders of the Western alliance. “It’s quite important, especially in this moment, to maintain a unity inside the Western world,” said Francesco Giubilei, president of Nazione Futura, another Italian think tank that has partnered with The Heritage Foundation. “It’s not easy. We understand that sometimes the position of Trump is different from the position of Europe. But we think that if in this moment, we create a split between the United States and Europe, we are doing a favor for China, we are doing a favor for Russia.”  Some of the organizations POLITICO contacted said they weren’t interested in funding from a foreign government. But where European laws prevent direct foreign funding of political parties, some are finding other means of collaboration. Gerald Otten, a lawmaker with the far-right Alternative for Germany (AfD) party, traveled to Washington in January as part of a delegation from the German Bundestag. Prior to his visit he had been invited by the U.S. embassy to discuss possible joint work. AfD officials are planning to travel to the U.S. for an event in March billed as a “counter Davos” by Republican member of Congress Anna Paulina Luna. Markus Frohnmaier, a leading AfD foreign policy lawmaker and trustee of co-chair Alice Weidel, will meet Rogers on the sidelines of the Munich Security Conference this week. Scalea, of the Fondazione Machiavelli, said having Trump in the White House gave groups in Europe a sense they were no longer on the fringes.  “We have an ally, a powerful voice,” he said. “It’s not just a conspiracy theory that we are saying mass migration is making us weaker as a nation, but it’s something that is said also by the leader of our alliance. This is obviously useful for us.”

BRUSSELS — Rome is again aligning with Berlin by saying that it’s not the time to discuss European joint debt as proposed by French President Emmanuel Macron — even though it’s an idea Italy has pushed for years. Italian Foreign Minister Antonio Tajani on Wednesday said while the government broadly agrees on the need for shared borrowing to fund investments in strategic sectors it isn’t worth contemplating while France and Germany were at odds over the matter. “I prefer to find solutions on issues that various countries already agree on, rather than opening debates on issues where there is no agreement,” Tajani told Sky TV on Wednesday. “If there is no agreement, there is no point in getting bogged down in a debate, even on issues that we consider positive.” Ahead of Thursday’s meeting of EU leaders, Macron on Tuesday called for a joint borrowing scheme to fund investments in strategic sectors. Germany was quick to shoot down the idea, stressing that it is more pressing to discuss the bloc’s productivity problems. Even under current Prime Minister Giorgia Meloni, Italy continued to support EU joint debt. But over the past weeks, she has increasingly got closer to German Chancellor Friedrich Merz, including distancing herself from some of Macron’s “Made in Europe” proposals to favor European companies in tenders and local content rules. Rome is making no secret that its caution over discussing joint debt at Thursday’s meeting of EU leaders is a way to avoid tension with Germany. “I have always been in favor of eurobonds, but at the moment there is no agreement between Germany and France,” Tajani said. “It is pointless to start a debate and divide ourselves. We must find the things that unite us and move forward.”

Listen on * Spotify * Apple Music * Amazon Music Der EU-Sondergipfel zur Wettbewerbsfähigkeit legt Spannungen in Europa offen: Friedrich Merz drängt auf schnellen Bürokratieabbau, um die Wirtschaftswende in Deutschland voranzubringen. Doch ausgerechnet mit Frankreich wird es schwieriger. Die deutsch-französische Achse wirkt angeschlagen, während Italien bei der Frage der Deregulierung näher an Berlin rückt. Was auf dem Treffen der Staats- und Regierungschefs morgen im Schloss Alden Biesen auf dem Spiel steht und warum dieser Gipfel für Merz zu den wichtigsten Terminen des Jahres zählt, analysiert Hans von der Burchard. Mehr Insights vom EU-Sondergipfel gibt es auch in unserem ⁠PRO-Newsletter Industrie & Handel am Morgen⁠. Im 200-Sekunden-Interview von Gordon Repinski geht es um die Grundsatzfrage, ob Europa überhaupt wettbewerbsfähig sein kann. EU-Parlaments-Vizepräsidentin Katarina Barley (SPD) erklärt, wie Bürokratieabbau und Verlässlichkeit zusammenpassen sollen. Dazu der Blick in den Nahen Osten: Deutschlands Position im Israel-Palästina-Konflikt wirkt zunehmend widersprüchlich. Während Berlin die Ausweitung der Siedlungen im Westjordanland weiter rügt, setzen deutsche Politikerinnen vor Ort sehr unterschiedliche Akzente. Grünen-Chefin Franziska Brantner und CDU-Politikerin Julia Klöckner reisen zeitgleich in die Region. Mit deutlich abweichenden Botschaften. Maximilian Stascheit berichtet für POLITICO aus Israel und den palästinensischen Gebieten, wie Brantner dort auftritt, wie die Reaktionen vor Ort ausfallen und wie sie sich gerade außenpolitisch neu positioniert. 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. **(Anzeige) Eine Nachricht von Netflix: Netflix – da klingelt was? Das Unternehmen hinter Film- und Serien-Hits wie Im Westen nichts Neues und Adolescence nimmt euch diese Woche im Berlin Playbook Newsletter mit ”behind the Streams”! Erfahrt, wie Netflix als fester Teil des Medienstandorts Deutschland mit Geschichten “made in Germany” weltweit begeistert und gesellschaftliche Debatten anstoßen kann. Eine ganze Woche für Fans von Politik und Popcorn. Aufmerksames Lesen lohnt sich – Gibt auch was zu Gewinnen!** POLITICO Deutschland – ein Angebot der Axel Springer Deutschland GmbH Axel-Springer-Straße 65, 10888 Berlin Tel: +49 (30) 2591 0 ⁠information@axelspringer.de⁠ Sitz: Amtsgericht Berlin-Charlottenburg, HRB 196159 B USt-IdNr: DE 214 852 390 Geschäftsführer: Carolin Hulshoff Pol, Mathias Sanchez Luna

LONDON — Keir Starmer has lost two of his top team, faced a public call for his resignation from a senior Labour figure, and been damaged by fresh revelations about the relationship between Peter Mandelson — the man he chose for the role of ambassador to the U.S — and the convicted sex offender Jeffrey Epstein. But he remains in No. 10 Downing Street, vowing to fight on. “I will never walk away from the mandate I was given to change this country, I will never walk away from the people that I’m charged with fighting for, I will never walk away from the country that I love,” he said Tuesday in his first public comments after Scottish Labour leader Anas Sarwar called for him to quit. The PM remains unpopular across the country, and his fighting talk hasn’t silenced the private whispers about his future in Labour circles.  POLITICO sets out the five reasons Britain’s troubled prime minister might survive — even if only for a little while longer. ANAS SARWAR IS GOING IT ALONE The Scottish Labour leader’s surprise call for Starmer to quit on Monday triggered a wave of speculation about whether any other senior Labour politicians would follow suit. In the end, he was left on his own. Starmer’s entire Cabinet almost immediately declared their support for the prime minister, killing any momentum for a campaign to oust him. Even Sarwar’s counterpart in Wales, Eluned Morgan — who like Sarwar is facing a drubbing in May elections for the Senedd —  declared her support for the PM on Tuesday morning. “There was an expectation when we found out it was happening that others would follow,” said one Labour frontbencher in the Scottish parliament, granted anonymity to discuss internal discussions. “They didn’t.”  What could have been a moment of terminal danger for the PM ultimately never materialized — and the negative reaction that greeted Sarwar may well discourage other senior figures from calling time on Starmer’s tenure. THE CONTENDERS The main question for the PM’s critics is: If not Starmer, then who? The difficulty for those seeking a change of prime minister is that most of Starmer’s obvious successors have their own problems to contend with. Britain’s depleted center-right Tories have been more than happy to depose a figurehead when the going gets tough — but it hasn’t always helped. | Ben Whitley/PA Images via Getty Images Angela Rayner, Starmer’s former deputy leader, still has an HMRC investigation into her tax affairs hanging over her. Wes Streeting, the ambitious health secretary, was an associate of Mandelson. He voluntarily released his text messages with the former ambassador on Monday in an effort to show he has nothing to hide — but the disclosure still suggests the pair had a friendly relationship. His constituency in Ilford is also far from a safe seat.  Andy Burnham, another popular candidate among the Labour Party faithful, isn’t in parliament. The Greater Manchester mayor was blocked by Starmer and Labour’s ruling National Executive Committee from running for a vacant seat in Westminster. That bit of skullduggery from the PM’s team means Burnham won’t be able to challenge the PM for the leadership, unless he runs for another seat that becomes available. Other possible contenders do exist, but right now no one is prepared to go over the top. That could change. If a serious candidate for the leadership were to emerge, all bets are off. THE PARLIAMENTARY LABOUR PARTY Starmer’s MPs could ultimately bring the PM down if they wanted to. A Monday night meeting of the Parliamentary Labour Party (PLP) suggested they aren’t yet in that frame of mind.  After a rallying speech from Starmer, MPs gave the troubled prime minister multiple standing ovations and happily briefed the media about the strength of his performance. What could have been a tricky moment for the PM turned into a triumph — even if only a temporary one. MPs remain worried about upcoming electoral contests. A February by-election in Greater Manchester is expected to be tough for the party, with the Green Party challenging Labour on the left and the poll-topping Reform UK also going for the seat. Opinion polls suggest local and national contests in May will see Labour face deep losses.  Angela Rayner, Starmer’s former deputy leader, still has an HMRC investigation into her tax affairs hanging over her. | Ryan Jenkinson/Getty Images For now, MPs appear willing to wait. The Labour Party is traditionally less disposed to remove its leaders — even when deeply unpopular. “The PLP will use any opportunity they can to kick the can down the road. They are utterly useless at removing a leader,” one senior Labour figure said. THE BOND MARKETS Labour MPs are acutely aware that prime ministers can come unstuck over the economy. Just ask Liz Truss. The shortest-serving ex-Tory prime minister’s “mini-budget” precipitated market turmoil, sent the pound tumbling and roiled stock markets. The PM’s allies are keen to tell anyone who will listen that removing Starmer would create market uncertainty over the economic direction of the country. The cost of government borrowing rose sharply last July when Chancellor Rachel Reeves was seen crying in the Commons. Reeves said her tears were due to an undisclosed personal matter, but they initially prompted speculation about her future in the Treasury — and sent the City into a panic. Borrowing costs rose early on Monday as Starmer’s leadership appeared to be in doubt. Cabinet backing for the prime minister that afternoon prompted a modest rebound. However much they dislike it, some Labour MPs just can’t ignore the markets. LESSONS FROM TORY TURMOIL There is also the “don’t be the Conservatives” pitch. Britain’s depleted center-right Tories have been more than happy to depose a figurehead when the going gets tough — but it hasn’t always helped. Theresa May replaced David Cameron as PM in 2016 — but lost the Conservatives’ majority after calling an ill-advised snap election the following year. Liz Truss took over from Boris Johnson in 2022 … and was out of Downing Street 49 days later. Her successor, Rishi Sunak, led the Tories to their worst-ever defeat in the 2024 general election. Climate Secretary Ed Miliband embraced that argument on Tuesday. “Labour MPs looked over the precipice and they didn’t like what they saw,” he told broadcasters. “As a collective body, the Cabinet, the Labour Party looked at the alternatives of going down this road of a chaotic leadership election, trying to depose a prime minister, and they said: ‘No, that’s not for us.’” The problem for Starmer is that sentiment might not hold. If his poll ratings don’t improve, or if there’s another big misstep from No. 10, Labour MPs might just be willing to roll the dice.

When pro-European liberal Rob Jetten defeated the far right to win the Dutch election three months ago, he gave beleaguered centrists across the region cause to hope.  Now, with a coalition deal finally agreed, his incoming government intends to do the same for NATO and the battered transatlantic alliance on which it depends.  That is the pledge from Dutch Foreign Minister David van Weel, who told POLITICO in an interview what the world should expect from the new administration in The Hague, which must oversee one of Europe’s fastest growing militaries, and is a significant NATO contributor within the EU.  “You will have a government that will look at the world as it is and not as it wishes it to be,” Van Weel said this week. “Therefore you will see a government that will still consider NATO to be the cornerstone of our collective security.” But the EU itself will also need to be “stronger” on its own, both economically and in military terms, he said. Van Weel was speaking after a bruising three weeks in which Donald Trump has rocked the foundations of the transatlantic alliance. European leaders are brainstorming ideas for how to survive in a world without American protection — or even friendship.  The damage Trump’s Greenland demands have done to transatlantic trust is real: “I think that is undeniable,” he said. “Let’s hope we don’t see Greenland back on the menu.” Van Weel also regards Trump’s demands for Greenland as a damaging distraction from the urgent task of negotiating peace in Ukraine. “I really regret that this has taken up so much time and effort of so many people in these times when the whole world seems to be on fire,” he said. And, he added: “There’s many other areas around the world that we need to work together in order to achieve something. So whether or not there is trust, I think that is something we need to work on, but we need each other.” NATO OR NOT? The Netherlands, a country of only 18 million people, has pledged to meet the new NATO target to spend 5 percent of GDP on national security. It currently spends around $28 billion a year on defense. That’s a larger sum than all the European Union’s NATO members apart from France, Germany, Italy, Poland and Spain, all of which have populations at least twice the size of the Netherlands’. The previous Dutch government aimed to increase the size of the armed forces from 70,000 personnel to 100,000 by 2030, and perhaps 200,000 in future. Earlier in his career, Van Weel worked with Mark Rutte during the latter’s time as prime minister. Rutte now finds himself in a fight to preserve the transatlantic security alliance as secretary-general of NATO. Rutte caused uproar on Jan. 26 when he warned EU politicians they were “dreaming” if they believed Europe could defend itself without American help. Some of his critics think he is the delusional one if he believes Trump can be relied on. Van Weel thinks both sides have a point. “One, at the moment, yes, we rely heavily on the U.S.. Two, we have to decrease that … And three, that’s also in the interest of a more even and balanced transatlantic bond,” he said. European governments must be prepared to take drastic decisions to boost the region’s defenses, he believes. For example, he is not against the idea of creating a new European Security Council, which would include non-EU countries such as the U.K. “The EU was built from a premise of economic cooperation in order to prevent war and therefore never had a security-oriented structure or aim,” Van Weel said. “The world has changed. The EU needs to play a role in the security realm and therefore you might need to look at structures that we don’t have at the moment.” Russia’s full-scale invasion of Ukraine was “a major wake-up call,” as is the “changing geopolitical situation in general.” He added: “Even if you don’t want to do it [increase defense spending] for NATO, even if you don’t want to do it to please the U.S., you should do it for your own interests. And that’s why I am happy that our own coalition will indeed ensure that we reach the targets for defense spending.”  Van Weel said he hopes that a peace deal for Ukraine is “close,” adding that he was hearing “promising things” from the Ukrainian side about progress. But the big problem is Vladimir Putin, he said, and this is where Trump can help. “We do need the U.S. president to put pressure on Russia to come to the negotiating table to finish this conflict,” he said. “It really is time for peace.” 

President Donald Trump on Tuesday said he has no problem with the sharp decline in the dollar that’s been triggered by convulsions in global bond markets and growing skepticism about the U.S.’s reliability as a trading partner. “I think it’s great,” Trump told reporters in Iowa when asked about the currency’s decline. “Look at the business we’re doing. The dollar’s doing great.” Trump has long maintained that a weaker currency helps industries that he’s seeking to boost — particularly manufacturers, but also oil and gas. And U.S. corporations that export goods and services abroad typically report stronger earnings when they can convert foreign payments into a weaker greenback. But a soft dollar also diminishes the purchasing power of U.S. businesses and consumers and can lead to higher inflation. That’s one reason why Treasury officials, including Secretary Scott Bessent, have historically advocated for a stronger dollar. Some of Trump’s other advisers — including Fed Gov. Stephen Miran, who’s on leave from his role as the president’s top economic adviser — argue that the dollar’s strength in recent years has placed domestic businesses at a competitive disadvantage to overseas-based companies. The greenback was trading at its lowest level in nearly four years before Trump weighed in on its recent declines. After the president’s remarks, its value sank even further against a basket of foreign currencies. Trump’s foreign policy agenda and repeated tariff threats — including his push to acquire Greenland — have amplified a “sell America” narrative that has hurt the dollar and other U.S. asset prices. A possible intervention to prop up the value of the Japanese yen has also pushed down the dollar over the last week.