Europe’s chemical industry has reached a breaking point. The warning lights are no longer blinking — they are blazing. Unless Europe changes course immediately, we risk watching an entire industrial backbone, with the countless jobs it supports, slowly hollow out before our eyes. Consider the energy situation: this year European gas prices have stood at 2.9 times higher than in the United States. What began as a temporary shock is now a structural disadvantage. High energy costs are becoming Europe’s new normal, with no sign of relief. This is not sustainable for an energy-intensive sector that competes globally every day. Without effective infrastructure and targeted energy-cost relief — including direct support, tax credits and compensation for indirect costs from the EU Emissions Trading System (ETS) — we are effectively asking European companies and their workers to compete with their hands tied behind their backs. > Unless Europe changes course immediately, we risk watching an entire > industrial backbone, with the countless jobs it supports, slowly hollow out > before our eyes. The impact is already visible. This year, EU27 chemical production fell by a further 2.5 percent, and the sector is now operating 9.5 percent below pre-crisis capacity. These are not just numbers, they are factories scaling down, investments postponed and skilled workers leaving sites. This is what industrial decline looks like in real time. We are losing track of the number of closures and job losses across Europe, and this is accelerating at an alarming pace. And the world is not standing still. In the first eight months of 2025, EU27 chemicals exports dropped by €3.5 billion, while imports rose by €3.2 billion. The volume trends mirror this: exports are down, imports are up. Our trade surplus shrank to €25 billion, losing €6.6 billion in just one year. Meanwhile, global distortions are intensifying. Imports, especially from China, continue to increase, and new tariff policies from the United States are likely to divert even more products toward Europe, while making EU exports less competitive. Yet again, in 2025, most EU trade defense cases involved chemical products. In this challenging environment, EU trade policy needs to step up: we need fast, decisive action against unfair practices to protect European production against international trade distortions. And we need more free trade agreements to access growth market and secure input materials. “Open but not naïve” must become more than a slogan. It must shape policy. > Our producers comply with the strictest safety and environmental standards in > the world. Yet resource-constrained authorities cannot ensure that imported > products meet those same standards. Europe is also struggling to enforce its own rules at the borders and online. Our producers comply with the strictest safety and environmental standards in the world. Yet resource-constrained authorities cannot ensure that imported products meet those same standards. This weak enforcement undermines competitiveness and safety, while allowing products that would fail EU scrutiny to enter the single market unchecked. If Europe wants global leadership on climate, biodiversity and international chemicals management, credibility starts at home. Regulatory uncertainty adds to the pressure. The Chemical Industry Action Plan recognizes what industry has long stressed: clarity, coherence and predictability are essential for investment. Clear, harmonized rules are not a luxury — they are prerequisites for maintaining any industrial presence in Europe. This is where REACH must be seen for what it is: the world’s most comprehensive piece of legislation governing chemicals. Yet the real issues lie in implementation. We therefore call on policymakers to focus on smarter, more efficient implementation without reopening the legal text. Industry is facing too many headwinds already. Simplification can be achieved without weakening standards, but this requires a clear political choice. We call on European policymakers to restore the investment and profitability of our industry for Europe. Only then will the transition to climate neutrality, circularity, and safe and sustainable chemicals be possible, while keeping our industrial base in Europe. > Our industry is an enabler of the transition to a climate-neutral and circular > future, but we need support for technologies that will define that future. In this context, the ETS must urgently evolve. With enabling conditions still missing, like a market for low-carbon products, energy and carbon infrastructures, access to cost-competitive low-carbon energy sources, ETS costs risk incentivizing closures rather than investment in decarbonization. This may reduce emissions inside the EU, but it does not decarbonize European consumption because production shifts abroad. This is what is known as carbon leakage, and this is not how EU climate policy intends to reach climate neutrality. The system needs urgent repair to avoid serious consequences for Europe’s industrial fabric and strategic autonomy, with no climate benefit. These shortcomings must be addressed well before 2030, including a way to neutralize ETS costs while industry works toward decarbonization. Our industry is an enabler of the transition to a climate-neutral and circular future, but we need support for technologies that will define that future. Europe must ensure that chemical recycling, carbon capture and utilization, and bio-based feedstocks are not only invented here, but also fully scaled here. Complex permitting, fragmented rules and insufficient funding are slowing us down while other regions race ahead. Decarbonization cannot be built on imported technology — it must be built on a strong EU industrial presence. Critically, we must stimulate markets for sustainable products that come with an unavoidable ‘green premium’. If Europe wants low-carbon and circular materials, then fiscal, financial and regulatory policy recipes must support their uptake — with minimum recycled or bio-based content, new value chain mobilizing schemes and the right dose of ‘European preference’. If we create these markets but fail to ensure that European producers capture a fair share, we will simply create new opportunities for imports rather than European jobs. > If Europe wants a strong, innovative resilient chemical industry in 2030 and > beyond, the decisions must be made today. The window is closing fast. The Critical Chemicals Alliance offers a path forward. Its primary goal will be to tackle key issues facing the chemical sector, such as risks of closures and trade challenges, and to support modernization and investments in critical productions. It will ultimately enable the chemical industry to remain resilient in the face of geopolitical threats, reinforcing Europe’s strategic autonomy. But let us be honest: time is no longer on our side. Europe’s chemical industry is the foundation of countless supply chains — from clean energy to semiconductors, from health to mobility. If we allow this foundation to erode, every other strategic ambition becomes more fragile. If you weren’t already alarmed — you should be. This is a wake-up call. Not for tomorrow, for now. Energy support, enforceable rules, smart regulation, strategic trade policies and demand-driven sustainability are not optional. They are the conditions for survival. If Europe wants a strong, innovative resilient chemical industry in 2030 and beyond, the decisions must be made today. The window is closing fast. -------------------------------------------------------------------------------- Disclaimer POLITICAL ADVERTISEMENT * The sponsor is CEFIC- The European Chemical Industry Council  * The ultimate controlling entity is CEFIC- The European Chemical Industry Council  More information here.

The Radio Spectrum Policy Group’s (RSPG) Nov. 12 opinion on the upper 6-GHz band is framed as a long-term strategic vision for Europe’s digital future. But its practical effect is far less ambitious: it grants mobile operators a cost-free reservation of one of Europe’s most valuable spectrum resources, without deployment obligations, market evidence or a realistic plan for implementation. > At a moment when Europe is struggling to accelerate the deployment of digital > infrastructure and close the gap with global competitors, this decision > amounts to a strategic pause dressed up as policy foresight. The opinion even invites the mobile industry to develop products for the upper 6-GHz band, when policy should be guided by actual market demand and product deployment, not the other way around. At a moment when Europe is struggling to accelerate the deployment of digital infrastructure and close the gap with global competitors, this decision amounts to a strategic pause dressed up as policy foresight. The cost of inaction is real. Around the world, advanced 6-GHz Wi-Fi is already delivering high-capacity, low-latency connectivity. The United States, Canada, South Korea and others have opened the 6-GHz band for telemedicine, automated manufacturing, immersive education, robotics and a multitude of other high-performance Wi-Fi connectivity use cases. These are not experimental concepts; they are operational deployments generating tangible socioeconomic value. Holding the upper 6- GHz band in reserve delays these benefits at a time when Europe is seeking to strengthen competitiveness, digital inclusion, and digital sovereignty. The opinion introduces another challenge by calling for “flexibility” for member states. In practice, this means regulatory fragmentation across 27 markets, reopening the door to divergent national spectrum policies — precisely the outcome Europe has spent two decades trying to avert with the Digital Single Market. > Without a credible roadmap, reserving the band for hypothetical cellular > networks only exacerbates policy uncertainty without delivering progress. Equally significant is what the opinion does not address. The upper 6-GHz band is already home to ‘incumbents’: fixed links and satellite services that support public safety, government operations and industrial connectivity. Any meaningful mobile deployment would require refarming these incumbents — a technically complex, politically sensitive and financially burdensome process. To date, no member state has proposed a viable plan for how such relocation would proceed, how much it would cost or who would pay. Without a credible roadmap, reserving the band for hypothetical cellular networks only exacerbates policy uncertainty without delivering progress. There is, however, a pragmatic alternative. The European Commission and the member states committed to advancing Europe’s connectivity can allow controlled Wi-Fi access to the upper 6-GHz band now — bringing immediate benefits for citizens and enterprises — while establishing clear, evidence-based criteria for any future cellular deployments. Those criteria should include demonstrated commercial viability, validated coexistence with incumbents, and fully funded relocation plans where necessary. This approach preserves long-term policy flexibility for member states and mobile operators, while ensuring that spectrum delivers measurable value today rather than being held indefinitely in reserve. > Spectrum is not an abstract asset. RSPG itself calls it a scarce resource that > must be used efficiently, but this opinion falls short of that principle. Spectrum is not an abstract asset. RSPG itself calls it a scarce resource that must be used efficiently, but this opinion falls short of that principle. Spectrum underpins Europe’s competitiveness, connectivity, and digital innovation. But its value is unlocked through use, not by shelving it in anticipation that hypothetical future markets might someday justify withholding action now. To remain competitive in the next decade, Europe needs a 6-GHz policy grounded in evidence, aligned with the single market, and focused on real-world impact. The upper 6-GHz band should be a driver of European innovation, not the latest casualty of strategic hesitation. -------------------------------------------------------------------------------- Disclaimer POLITICAL ADVERTISEMENT * The sponsor is Wi-Fi Alliance * The ultimate controlling entity is Wi-Fi Alliance More information here.

BRUSSELS — Britain’s top Europe minister defended a decision to keep the U.K. out of the EU’s customs union — despite sounding bullish on a speedy reset of ties with the bloc in the first half of 2026. Speaking to POLITICO in Brussels where he was attending talks with Maroš Šefčovič, the EU trade commissioner, Nick Thomas-Symonds said a non-binding British parliamentary vote on Tuesday on rejoining the tariff-free union — pushed by the Liberal Democrats, but supported by more than a dozen Labour MPs — risked reviving bitter arguments about Brexit. Thomas-Symonds described the gambit by the Lib Dems — which had the backing of one of Labour’s most senior backbenchers, Meg Hillier — as “Brexit Redux.” And he accused Ed Davey, the Lib Dem leader, of wanting “to go back to the arguments of the past.” The Lib Dems have drawn support from disillusioned Labour voters, partly inspired by the party’s more forthright position on moving closer to the EU. But Thomas-Symonds defended Labour’s manifesto commitment to remain outside the single market and the customs union. “The strategy that I and the government have been pursuing is based on our mandate from the general election of 2024, that we would not go back to freedom of movement, we would not go back to the customs union or the single market,” the British minister for European Union relations said. Thomas-Symonds said this remained a “forward-looking, ruthlessly pragmatic approach” that is “rooted in the challenges that Britain has in the mid 2020s.” He pointed out that post-Brexit Britain outside of the customs union has signed trade deals with India and the United States, demonstrating the “advantages of the negotiating freedoms Britain has outside the EU.” ‘GET ON WITH IT’ Speaking to POLITICO’s Anne McElvoy for the “Politics at Sam and Anne’s” podcast, out on Thursday, Thomas-Symonds was optimistic that a grand “reset” of U.K.-EU relations would progress more quickly in the new year. The two sides are trying to make headway on a host of areas including a youth mobility scheme and easing post-Brexit restrictions on food and drink exports. “I think if you look at the balance of the package and what I’m talking about in terms of the objective on the food and drink agreement, I think you can see a general timetable across this whole package,” he said. Pressed on whether this could happen in the first half of 2026,  the U.K. minister sounded upbeat: “I think the message from both of us to our teams will be to get on with it.”  The Brussels visit comes after talks over Britain’s potential entry into a major EU defense program known as SAFE broke down amid disagreement over how much money the U.K. would pay for access to the loans-for-arms scheme. The program is aimed at re-arming Europe more speedily to face the threat from Russia. Asked if the collapse of those talks showed the U.K. had miscalculated its ability to gain support in a crucial area of re-connection, Thomas-Symonds replied: “We do always impose a very strict value for money. What we would not do is contribute at a level that isn’t in our national interest.” The issued had “not affected the forward momentum in terms of the rest of the negotiation,” he stressed. YOUTH MOBILITY STANDOFF Thomas-Symonds is a close ally of Prime Minister Keir Starmer and has emboldened the under-fire British leader to foreground his pro-Europe credentials. The minister for European relations suggested his own elevation in the British government — he will now attend Cabinet on a permanent basis — was a sign of Starmer’s intent to focus on closer relations with Europe and tap into regret over a post-Brexit loss of business opportunities to the U.K. Fleshing out the details of a “youth mobility” scheme — which would allow young people from the EU and the U.K. to spend time studying, traveling, or working in each other’s countries — has been an insistent demand of EU countries, notably Germany and the Netherlands. Yet progress has foundered over how to prevent the scheme being regarded  as a back-door for immigration to the U.K. — and how exactly any restrictions on numbers might be set and implemented. Speaking to POLITICO, Thomas-Symonds hinted at British impatience to proceed with the program, while stressing: “It has to be capped, time-limited, and  it’ll be a visa-operated scheme. “Those are really important features, but I sometimes think on this you can end up having very dry discussion about the design when actually this is a real opportunity for young Brits and for young Europeans to live, work, study, enjoy other cultures.” The British government is sensitive to the charge that the main beneficiaries of the scheme will be students or better-off youngsters. “I’m actually really excited about this,” Thomas-Symonds said, citing his own working-class background and adding that he would have benefited from a chance to spend time abroad as a young man “And the thing that strikes me as well is making sure this is accessible to people from all different backgrounds,” he said. Details however still appear contentious: The EU’s position remains that the scheme should not be capped but should have a break clause in the event of a surge in numbers. Berlin in particular has been reluctant to accept the Starmer government’s worries that the arrangement might be seen as adding to U.K. immigration figures, arguing that British students who are outside many previous exchange programs would also be net beneficiaries.  Thomas-Symonds did not deny a stand-off, saying: “When there are ongoing talks about particular issues, I very much respect the confidentiality and trust on the ongoing talks.”  Britain’s most senior foreign minister, Yvette Cooper, on Wednesday backed a hard cap on the number of people coming in under a youth mobility scheme. She told POLITICO in a separate interview that such a scheme needs to be “balanced.” “The UK-EU relationship is really important and is being reset, and we’re seeing cooperation around a whole series of different things,” she said. We also, at the same time, need to make sure that issues around migration are always properly managed and controlled.” A U.K. official later clarified that Cooper is keen to see an overall cap on numbers. BOOZY GIFT As negotiations move from the technical to the political level this week, Thomas-Symonds sketched out plans for a fresh Britain-EU summit in Brussels when the time is right. “In terms of the date, I just want to make sure that we have made sufficient progress, to demonstrate that progress in a summit,” Nick Thomas-Symonds said. “I think that the original [post-Brexit] Trade and Cooperation Agreement did not cover services in the way that it should have done,” he added. “We want to move forward on things like mutual recognition of professional qualifications.” Thomas-Symonds, one of the government’s most ardent pro-Europeans, meanwhile told POLITICO he had forged a good relationship with “Maroš” (Šefčovič) – and had even brought him a Christmas present of a bottle of House of Commons whisky. “So there’s no doubt that there is that trajectory of closer U.K.-EU cooperation,” he quipped. Dan Bloom and Esther Webber contributed reporting.

BRUSSELS — The U.S. must preserve and grow the dominance of its financial sector worldwide, President Donald Trump argues in his new National Security Strategy. The 33-page document is a rare formal explanation of Trump’s foreign policy worldview by his administration, and can shape U.S. policy priorities. “The United States boasts the world’s leading financial and capital markets, which are pillars of American influence that afford policymakers significant leverage and tools to advance America’s national security priorities,” the document states. “But our leadership position cannot be taken for granted,” it continues, calling on America to leverage “our dynamic free market system and our leadership in digital finance and innovation to ensure that our markets continue to be the most dynamic, liquid, and secure and remain the envy of the world.” The strategy lists the “world’s leading financial system and capital markets, including the dollar’s global reserve currency status” as one of the U.S. key levers of power. Trump’s comments come as Europe looks to grow its own finance system to reduce the continent’s dependence on Wall Street. The EU has put forward a broad plan to boost its own finance industry by strengthening its single market for investment, and it will draft policy plans in the coming months aiming to boost its banks’ ability to compete globally. It is also creating a digital version of the euro currency, which would reduce its reliance on the dollar and on U.S. payment giants.

BRUSSELS — It’s time for Europeans to stop trailing behind Donald Trump and instead draw up their own peace plan for Ukraine, Defense Commissioner Andrius Kubilius told POLITICO. The EU “needs to be independent or at least be ready to be strong in geopolitical developments, including to have our plans on how peace in Ukraine can be brought and to discuss them with our transatlantic partners,” Kubilius said. The EU is scrambling to respond after the U.S. president’s negotiators — real estate tycoon Steve Witkoff and Trump’s son-in-law Jared Kushner — were in Moscow Tuesday to talk over the latest peace proposal with Russian leader Vladimir Putin. Europe was caught off guard by the 28-point peace plan drafted by Witkoff and Russia’s Kirill Dmitriev, which included a ban on Ukraine’s membership of NATO and a limit on the size of the Ukrainian army. That draft was modified after a desperate intervention by European allies and Ukraine, but there is wariness about yet another Trump-led peace effort. European countries were not represented at the Kremlin during the meeting with Putin, despite Ukraine’s future being crucial to the continent’s security. EU officials worry that even if this new Trump plan doesn’t fly, in a few months, there’ll be a new one.  “Each six months, we’re getting new plans and in some way I feel that we are waiting here to know the plans that will come from Washington this year. The plans should come also from Brussels or from Berlin,” Kubilius said. The defense commissioner argued that it is “very much needed” for Europe to craft its own plan to end the war to secure a seat at the table. “We should have the possibility to discuss two plans: one that is European and another one, maybe, prepared by our American friends,” he said. The aim would be to “find synergies between these two plans and achieve the best outcome.” DEFENSE IS A TOP PRIORITY The former Lithuanian prime minister has been the bloc’s first defense commissioner for a year — a sign of how much has changed in the EU as it wakes up to the threat posed by Russia and ramps up its rearmament efforts, all while the Trump-led U.S. pulls back from the continent. The U.S. has been the linchpin of Europe’s security since the end of World War II, and Kubilius said, “We should always count on Article 5,” referring to NATO’s common defense provision. However, he argued that America’s shift toward the Pacific “is happening.” “The question is whether we need to have some kind of additional security guarantees and institutional arrangements in order to be ready — in case Article 5 suddenly is not implemented,” he said.   He also mentioned recent comments by U.S. NATO Ambassador Matthew Whitaker that Germany might take over NATO’s top military job, rather than keeping it in the hands of an American general. That “is a signal that really Americans are asking us to take care about European defense,” not only from a military point of view but also from an institutional perspective, Kubilius said. The geopolitical shift “pushed Europe to understand that defense is a clear strategic priority, which demands action from our side,” the commissioner said, mentioning some of the EU’s key legislative actions like the €150 billion SAFE loans-for-weapons program aimed at boosting the bloc’s military production. Next year, “we are planning to spend a lot of our efforts on the development of industry,” he said, including a communication on the single market. Defense companies are currently not fully integrated into the single market as governments have an opt-out for national security interests, but that is a cause of the bloc’s fragmented defense industry and is hampering rearmament efforts. Kubilius also said he wants to open a discussion on “institutional defense readiness,” including revamping the bloc’s mutual defense provision — often overshadowed by NATO’s more muscular promise. The EU clause needs procedural language that spells out the actions member countries must take to protect each other.

BRUSSELS — The European Union’s drive to cut red tape is creating uncertainty for business and chaos in the EU’s institutions, Executive Vice President Teresa Ribera said on Thursday, in comments that put her squarely at odds with her boss Ursula von der Leyen. “In too many occasions we have this sense that it is not simplification but [a] messy combination of things that end in uncertainty,” Ribera said in Brussels. The Commission’s dealings with EU member countries and lawmakers have degenerated into “a terrible political spectacle,” she added. The remarks by the Spanish socialist represent the most serious pushback by a top EU official since von der Leyen launched a massive effort to simplify the bloc’s regulatory rulebook after being confirmed for a second term a year ago. This has taken the form of a series of “omnibus” packages — on issues ranging from business supply chains to agriculture funding and migration — that have emerged from the EU’s policy machinery with little or no consultation. The EU ombudsman has slammed the Commission for procedural shortcomings in proposing the measures, saying they amounted to “maladministration.” Ribera, who ranks second at the EU executive behind its German president, acknowledged in a keynote speech that it was important to avoid duplication, align procedures, move faster and provide greater clarity to businesses. But this should not go too far. “Deregulation eliminates safeguards, it puts costs onto citizens and taxpayers, creates uncertainty, discourages investment,” she said at an event hosted by think tank Bruegel. “It’s a kind of Trumpist approach against being stable, reliable and predictable. It weakens our standards. It lowers the credibility of the single market, it enlarges inequalities and distortions.” Von der Leyen made the case for deregulation in a speech last month in Copenhagen. “When we look at simplification, we all agree we need simplification, we need deregulation,” she said. But Ribera cautioned against that on Thursday. “Simplifying rules is not the same as weakening protections or giving up on regulation,” she said. Lawmakers in the European Parliament earlier this month agreed to exempt more companies from green reporting rules after the center-right, right-wing and far-right groups allied to pass the EU’s first omnibus simplification package. Louise Guillot contributed reporting.

LONDON — Keir Starmer is promising British voters he’ll fix the Brexit-shaped hole in the U.K. economy, but Brussels appears to have quite enough on its plate. Days after Britain’s grim growth prospects were laid bare in the U.K. budget, the country’s PM gave two speeches promising closer ties with the European Union and elevated his EU point person, Nick Thomas-Symonds, to the Cabinet. “We have to keep moving towards a closer relationship with the EU, and we have to be grown-up about that, to accept that that will require trade-offs,” Starmer said on Monday.   But European leaders are already grappling with packed in-trays as they look for an end to Russia’s war in Ukraine and confront their own domestic economic challenges — and skepticism remains as to how much room for maneuver the British PM actually has.  Starmer’s political red lines — no customs union, no single market, and no return to freedom of movement — remain in place, and ministers continue to stress that a return to full EU membership remains off the table. Even Starmer’s existing EU “reset” agenda — which aims to walk back some of the harder edges of Boris Johnson’s Brexit settlement — is not all going to plan. A push to join the EU’s SAFE loans-for-arms scheme crashed last week after the two sides failed to agree on how much money the U.K. would pay. “The same ‘how much should the U.K. contribute?’ question has been slowing down the actual implementation of basically all the reset topics,” said one EU diplomat who was not authorized to speak on the record. Despite plenty of talk in London about closer ties, the forum for putting fresh topics on the agenda would be the EU-U.K. summit that is due next year. But a date has yet to be set for that gathering. “Nobody is talking about the next summit here yet. I’m not saying it isn’t going to happen, it’s just a question of bandwidth,” another EU diplomat said. “For us the focus now is to work through our existing commitments and finalize those deals, start implementing them and then showing that the deals are bringing value. That takes time,” a third diplomat said. LIMITED SCOPE  The problem for Starmer is that his existing plan to rebuild EU ties is unlikely to move the dial on U.K. economic growth. Economists at the Centre for European Reform reckon that the government’s reset package — if delivered in full — is worth somewhere between 0.3 percent and 0.7 per cent of U.K. GDP over a decade.   Meanwhile, academics at the Bank of England and Stanford University calculate that the economic hit from Brexit could be as high as 8 percent of GDP over a similar period. “It is striking how frequently the chancellor and prime minister will now lament the costs of Brexit, without making any suggestions on how to change the status quo,” said Joël Reland, research fellow at the U.K. In A Changing Europe think tank.  “This could be read as a slow creep towards a breach of their red lines, but I suspect it is mostly about domestic political management. They are in a sticky economic situation and Brexit is a convenient thing to blame. I don’t think they’d be brave enough to risk a manifesto breach on Brexit, but I’d be surprised if ‘no single market or customs union’ is in the 2029 manifesto,” Reland said.  One British government official stressed that Labour’s red lines remain in place — but added: “We don’t think we’re at those red lines yet.”  BREAKING THE TABOO  Labour’s previous reluctance to talk about Brexit was born of a fear of upsetting Leave-leaning swing voters whom the party wanted to win over in the last election.  But that started to change over the summer.  Thomas-Symonds, the minister in charge of delivering the reset, went on the attack in a speech hosted by the Spectator, a right-wing magazine. Parties pledging to reverse Starmer’s reset were offering “more red tape, mountains of paperwork, and a bureaucratic burden,” he argued. To the surprise of Downing Street aides, the attacks landed well and drew a line between the government’s agenda and that of Reform UK boss Nigel Farage — the longstanding Brexiteer dominating in the polls — and Conservative Leader Kemi Badenoch.  It emboldened Starmer and his lieutenants. Rachel Reeves, the U.K.’s chief finance minister, used her speech at the Labour Party conference in Liverpool to talk up the benefits of improved cross-border mobility for the economy.   Ahead of last week’s difficult budget stuffed with tax rises, she waded in further, damning the effects of a “chaotic Brexit.” While the new rhetoric has yet to be backed up by a shift in policy, there are signs that some of Starmer’s close allies are starting to think bigger.  Rejoining the EU customs union was reportedly raised as an option by Starmer’s economic advisor ahead of the budget — but was rejected. “There are definitely people who have been pushing at this for a long time,” one person with knowledge of conversations in government said.  “I don’t think that will be that surprising to people, because if your primary goal allegedly is growth then that’s one of the easiest levers you can pull. Most economists would agree — it’s the politics that’s stopping it.”  Pressed on the prospect of Britain’s applying to rejoin the customs union on Wednesday, Health Secretary Wes Streeting did not explicitly rule out the idea but stressed the government’s policy was about “new partnerships and new relationships, not relitigating the past.” If Starmer opts for a risky manifesto-busting push to rejoin the customs union, diplomats say even that is unlikely to be a quick fix for the British PM.  “It would take time. Just consider how slow has been so far the progress on SPS, ETS and Erasmus,” the first diplomat quoted above said. “As of now, the U.K. needs the EU to spur its growth, not the other way around.”

Europe’s security does not depend solely on our physical borders and their defense. It rests on something far less visible, and far more sensitive: the digital networks that keep our societies, economies and democracies functioning every second of the day. > Without resilient networks, the daily workings of Europe would grind to a > halt, and so too would any attempt to build meaningful defense readiness. A recent study by Copenhagen Economics confirms that telecom operators have become the first line of defense in Europe’s security architecture. Their networks power essential services ranging from emergency communications and cross-border healthcare to energy systems, financial markets, transport and, increasingly, Europe’s defense capabilities. Without resilient networks, the daily workings of Europe would grind to a halt, and so too would any attempt to build meaningful defense readiness. This reality forces us to confront an uncomfortable truth: Europe cannot build credible defense capabilities on top of an economically strained, structurally fragmented telecom sector. Yet this is precisely the risk today. A threat landscape outpacing Europe’s defenses The challenges facing Europe are evolving faster than our political and regulatory systems can respond. In 2023 alone, ENISA recorded 188 major incidents, causing 1.7 billion lost user-hours, the equivalent of taking entire cities offline. While operators have strengthened their systems and outage times fell by more than half in 2024 compared with the previous year, despite a growing number of incidents, the direction of travel remains clear: cyberattacks are more sophisticated, supply chains more vulnerable and climate-related physical disruptions more frequent. Hybrid threats increasingly target civilian digital infrastructure as a way to weaken states. Telecom networks, once considered as technical utilities, have become a strategic asset essential to Europe’s stability. > Europe cannot deploy cross-border defense capabilities without resilient, > pan-European digital infrastructure. Nor can it guarantee NATO > interoperability with 27 national markets, divergent rules and dozens of > sub-scale operators unable to invest at continental scale. Our allies recognize this. NATO recently encouraged members to spend up to 1.5 percent of their GDP on protecting critical infrastructure. Secretary General Mark Rutte also urged investment in cyber defense, AI, and cloud technologies, highlighting the military benefits of cloud scalability and edge computing – all of which rely on high-quality, resilient networks. This is a clear political signal that telecom security is not merely an operational matter but a geopolitical priority. The link between telecoms and defense is deeper than many realize. As also explained in the recent Arel report, Much More than a Network, modern defense capabilities rely largely on civilian telecom networks. Strong fiber backbones, advanced 5G and future 6G systems, resilient cloud and edge computing, satellite connectivity, and data centers form the nervous system of military logistics, intelligence and surveillance. Europe cannot deploy cross-border defense capabilities without resilient, pan-European digital infrastructure. Nor can it guarantee NATO interoperability with 27 national markets, divergent rules and dozens of sub-scale operators unable to invest at continental scale. Fragmentation has become one of Europe’s greatest strategic vulnerabilities. The reform Europe needs: An investment boost for digital networks At the same time, Europe expects networks to become more resilient, more redundant, less dependent on foreign technology and more capable of supporting defense-grade applications. Security and resilience are not side tasks for telecom operators, they are baked into everything they do. From procurement and infrastructure design to daily operations, operators treat these efforts as core principles shaping how networks are built, run and protected. Therefore, as the Copenhagen Economics study shows, the level of protection Europe now requires will demand substantial additional capital. > It is unrealistic to expect world-class, defense-ready infrastructure to > emerge from a model that has become structurally unsustainable. This is the right ambition, but the economic model underpinning the sector does not match these expectations. Due to fragmentation and over-regulation, Europe’s telecom market invests less per capita than global peers, generates roughly half the return on capital of operators in the United States and faces rising costs linked to expanding security obligations. It is unrealistic to expect world-class, defense-ready infrastructure to emerge from a model that has become structurally unsustainable. A shift in policy priorities is therefore essential. Europe must place investment in security and resilience at the center of its political agenda. Policy must allow this reality to be reflected in merger assessments, reduce overlapping security rules and provide public support where the public interest exceeds commercial considerations. This is not state aid; it is strategic social responsibility. Completing the single market for telecommunications is central to this agenda. A fragmented market cannot produce the secure, interoperable, large-scale solutions required for modern defense. The Digital Networks Act must simplify and harmonize rules across the EU, supported by a streamlined governance that distinguishes between domestic matters and cross-border strategic issues. Spectrum policy must also move beyond national silos, allowing Europe to avoid conflicts with NATO over key bands and enabling coherent next-generation deployments. Telecom policy nowadays is also defense policy. When we measure investment gaps in digital network deployment, we still tend to measure simple access to 5G and fiber. However, we should start considering that — if security, resilience and defense-readiness are to be taken into account — the investment gap is much higher that the €200 billion already estimated by the European Commission. Europe’s strategic choice The momentum for stronger European defense is real — but momentum fades if it is not seized. If Europe fails to modernize and secure its telecom infrastructure now, it risks entering the next decade with a weakened industrial base, chronic underinvestment, dependence on non-EU technologies and networks unable to support advanced defense applications. In that scenario, Europe’s democratic resilience would erode in parallel with its economic competitiveness, leaving the continent more exposed to geopolitical pressure and technological dependency. > If Europe fails to modernize and secure its telecom infrastructure now, it > risks entering the next decade with a weakened industrial base, chronic > underinvestment, dependence on non-EU technologies and networks unable to > support advanced defense applications. Europe still has time to change course and put telecoms at the center of its agenda — not as a technical afterthought, but as a core pillar of its defense strategy. The time for incremental steps has passed. Europe must choose to build the network foundations of its security now or accept that its strategic ambitions will remain permanently out of reach. -------------------------------------------------------------------------------- Disclaimer POLITICAL ADVERTISEMENT * The sponsor is Connect Europe AISBL * The ultimate controlling entity is Connect Europe AISBL * The political advertisement is linked to advocacy on EU digital, telecom and industrial policy, including initiatives such as the Digital Networks Act, Digital Omnibus, and connectivity, cybersecurity, and defence frameworks aimed at strengthening Europe’s digital competitiveness. More information here.

In a luxury Saudi hotel some 3,000 miles away from her economic woes, Britain’s Chancellor Rachel Reeves delivered a plucky pitch to some of the wealthiest people on the planet. “I believe that countries are successful when they are open and trading — I think that’s good for productivity because competition spurs productivity, growth,” she told business leaders at the Fortune Global Forum last month. “And in a small and open economy like Britain’s … we want our businesses to be able to access global markets.” With this in mind, the chancellor said, Britain was striking trade deals with the EU, the U.S., as well as fast-growing economies like India, as she teased “big opportunities” from an upcoming free trade agreement with Gulf countries. With a difficult budget looming, the chancellor has increasingly turned her gaze overseas in her elusive search for economic growth. And with the Office for Budget Responsibility expected to downgrade the U.K.’s productivity outlook before the budget, Reeves is urging the fiscal watchdog to positively “score” new trade deals according to how much growth they might deliver. But her efforts may be in vain. Far from being the magic bullet that will reinvigorate the economy, the benefits of trade deals may take years to materialize — and some government claims appear to be overstated, experts have told POLITICO. EU ‘RESET’ HOPES By the government’s estimation, its plans to “reset” its relationship with the European Union will add nearly £9 billion to the U.K. economy by 2040, equivalent to a GDP boost of 0.3 percent. Key elements include deals on agrifood, energy trading, and a youth mobility scheme.  Separate analysis by John Springford, an associate fellow at the Centre for European Reform in London, is more optimistic, predicting a GDP boost of between 0.3 and 0.7 percent over ten years as a result of the agreement. The biggest uplifts, he claims, would come from a youth mobility deal.  But negotiations on key elements of the deal have only just begun, and Springford admits details are still “a bit sketchy.” As a result, he says, it would be difficult for the OBR to accept Reeves’ ask to score these deals, which would also take a long time to play out. Even if the government’s estimates are met, he added, the deal will do little to reverse the overall damage caused by Brexit, which the OBR estimates will reduce the U.K.’s long-run productivity by 4 percent. “The damage caused by Brexit can never be significantly repaired without getting rid of one or all of the government’s ‘red lines’,” he continued, in reference to Labour’s refusal to rejoin the single market or customs union.  In recent months the chancellor has talked about the impact of Brexit on the economy, but has suggested this impact can be offset by the reset deal, as well as by trade deals with non-EU countries. “There is no doubting that the impact of Brexit is severe and long lasting,” she said in an interview with Sky News in October, “and that is why we are trying to do trade deals around the world, with the U.S., India, but most importantly with the EU, so that our exporters here in Britain have a chance to sell things made here all around the world.” Guests at the Fortune Global Forum 2025 Gala Dinner. | Cedric Ribeiro/Getty Images for Fortune Media But Ahmet Kaya, principal economist at the National Institute of Economic and Social Research, said the EU deal was “more symbolic than transformative.”  “It slightly eases checks on agri-food products, which should help certain sectors, but the macroeconomic effect is minimal considering that the government’s impact estimate is just £9 billion — which is cumulative gain over time — relative to the size of the £3.6 trillion economy.” INDIA FREE TRADE AGREEMENT Reeves will also be pinning her growth hopes on the U.K.’s recently completed free trade agreement with India, which the government predicts will boost U.K. GDP by 0.13 percent, worth £4.8 billion a year.  The deal will ultimately see India remove tariffs on up to 90 percent of U.K. exports and cut India’s average effective tariffs on U.K. goods from roughly 15 percent to 3 percent, with significant benefits for Britain’s automotive and Scotch whisky exports. But Sophie Hale, principal economist at the Resolution Foundation, said it could take 10 to 15 years for the full effects of the deal to be felt, partly because many tariff reductions will be introduced gradually and are subject to quotas. “Given the OBR is looking over a five-year window, we really aren’t going to expect a big impact,” she said. “Even if it was spread evenly, you’re maybe getting less than half of that by the end of the forecast, because it has to actually be implemented.” The deal is “definitely worth having,” Hale added. “But in terms of … OBR productivity growth forecasts or shifting the dial on U.K. growth, it’s pretty small and a lot of those impacts are going to be delayed.”  TARIFF TERRORS Reeves will also be hoping that the U.K.’s Economic Prosperity Deal with the U.S. — announced with much fanfare in May — will have gone some way in cushioning the impact of President Donald Trump’s punitive tariff regime. The deal saw the U.K. hit with 10 percent baseline tariffs on most goods, with reduced duties for automotives, steel and aluminum, and increased market access for agricultural exports.  While this gave Britain a comparative advantage over most other countries, it has still left the U.K. in a weaker trade position with the U.S. than a year ago. According to NIESR’s latest forecast, U.S. tariffs have reduced U.K. growth by around 0.1 percentage points this year and 0.2 percentage points next year.  “That’s a smaller drag than expected in March, reflecting the more moderate global spill-overs from tariffs, but the overall impact remains negative,” said Kaya. But even this remains uncertain. Like the EU deal agreed earlier this year, much of the EPD remains under negotiation, including pharmaceutical tariffs, which makes it difficult to “score” in terms of its economic impact. MAKING TRADE DEALS WORK Even when trade deals are fully agreed and implemented, their economic impacts are not guaranteed, and it is sometimes an uphill struggle to get businesses to actually make use of them.  “Trade deals have the potential to support economic growth, but their impact does not appear overnight and needs time and support to make it happen,” noted George Riddell, managing director of the Goyder trade consultancy.  “Businesses need to make connections with local customers, understand local regulatory requirements and establish partnerships to help with relevant legal, tax and customs procedures.” In the government’s trade strategy, published over the summer, the Department for Business and Trade committed to overhauling how it supports U.K. businesses and provides export advice through a “one-stop-shop.”  “While the new website is a substantial improvement on what was there before, more needs to be done to get businesses using it,” said Riddell.  Britain’s Chancellor of the Exchequer Rachel Reeves will be hoping that the U.K.’s Economic Prosperity Deal with the U.S. will have gone some way in cushioning the impact of President Donald Trump’s punitive tariff regime. | Pool photo by Jordan Pettitt/AFP via Getty Images Trade Minister Chris Bryant acknowledged this issue in a recent speech, telling businesses the estimates of the economic impact of trade deals could only be realized “if businesses are ambitious enough to exploit these opportunities.”  “It’s not just about signing free trade agreements,” he said at a pitching event for exporters earlier this month. “We can sign FTAs, we can do all that negotiating … But it’s exploiting those FTAs once they’ve been signed that is really important and will actually drive growth.” Looking back at the U.K.’s first post-Brexit trade deals, David Henig, director of the UK Trade Policy Project at the European Centre for International Political Economy think tank, says there is little sign of material impact. “There is currently no evidence that the new trade deals with Australia and New Zealand have affected the U.K. economy in any meaningful sense,” he said, adding there was “nothing that indicates any permanent increase in trade so far.” ‘BEATING THE FORECASTS’ As the budget approaches, Reeves’ growth ambitions look increasingly uncertain. The OBR has downgraded the U.K.’s productivity outlook, potentially increasing government borrowing by £14 billion and £20 billion. Just last week, figures from the Office for National Statistics show that U.K. GDP fell unexpectedly by 0.1 percent in September. Publicly, at least, the chancellor has remained upbeat. “My job as chancellor is to try and beat those forecasts,” she said last month, “and what we’re doing with those trade deals with India, the U.S. and the EU, the investments that we’ve secured, including from big tech companies in the U.K., shows that we have a huge amount to offer as a place to grow a business, to start and scale a business.  “We’ll continue to secure those investments in all parts of Britain, to create those good jobs, paying wages and to boost our productivity, which means that we will start to see those numbers coming through in economic growth and prosperity for working people.” James Fitzgerald contributed to this report.