BRUSSELS — The EU and U.K. must overcome historic gripes and “reset” their relationship to be able to work together in an increasingly uncertain world, the bloc’s top parliamentarian said. European Parliament President Roberta Metsola used an address to the Spanish senate on Tuesday to call for closer ties with the U.K. as London steps up efforts to secure smoother access to European markets and funding projects, after the country voted to leave the bloc in 2016. “Ten years on from Brexit … and in a world that has changed so profoundly, Europe and the U.K. need a new way of working together on trade, customs, research, mobility and on security and defense,” Metsola said. “Today it is time to exorcize the ghosts of the past.” Metsola called for a “reset” in the partnership between Britain and the EU as part of a policy of “realistic pragmatism anchored in values that will see all of us move forward together.” Her speech comes after British Prime Minister Keir Starmer said he intended to try and ensure his country’s defense industries can benefit from the EU’s flagship SAFE scheme — a €150 billion funding program designed to boost procurement of military hardware. That push has been far from smooth, with a meeting of EU governments on Monday night failing to sign off U.K. access to SAFE, despite France — which has consistently opposed non-EU countries taking part — supporting the British inclusion. Starmer has also signaled in recent days that he is seeking closer integration with the EU’s single market. Brussels has so far been reluctant to reopen the terms of the U.K.’s relations with the bloc just six years after it exited. While those decisions lie with the remaining 27 EU member countries, rather than the Parliament, Metsola’s intervention marks a shift in tone that could bolster the British case for closer relations. In the context of increasingly tense relations with the U.S., capitals are depending on cooperation with British intelligence and military capabilities and in key industries. Europe must take “the next steps towards a stronger European defense, boosting our capabilities and cooperation, and working closely with our NATO allies so that Europe can better protect its people,” Metsola said.

BRUSSELS — EU countries shouldn’t be afraid of integrating at different speeds if that’s what it takes to gain crucial leverage on the world stage, Mario Draghi said Monday. “We must take the steps that are currently possible, with the partners who are actually willing, in the domains where progress can currently be made,” said the former European Central Bank president and ex-prime minister of Italy during a ceremony at the University of Leuven in Belgium, where he was awarded an honorary doctorate. “Power requires Europe to move from confederation to federation,” said Draghi, stressing that only in domains where EU countries have pooled their competences has the bloc gained clout on the global stage.  “Where Europe has federated, [such as] on trade, on competition, on the single market, on monetary policy, we are respected as a power and negotiate as one,” he said, citing trade agreements recently negotiated with India and Latin America. Draghi’s call comes as Europe struggles to keep pace with the U.S. and China, and is facing Russian aggression in Ukraine plus a transatlantic ally that no longer acknowledges the benefits of its historic European ties. “This is a future in which Europe risks becoming subordinated, divided and de-industrialized at once, and a Europe that cannot defend its interests will not preserve its values for longer,” Draghi warned. In the face of those challenges, areas of weakness are those where EU capitals continue to maintain a grip, such as defense, industrial policy or foreign affairs, Draghi said. In these, he added, “we are treated as a loose assembly of middle-sized states to be divided and dealt with accordingly.” The former top official praised the bloc’s recent stance on Greenland, where it decided to resist rather than accommodate threats coming from the U.S. “By standing together in the face of direct threat, Europeans discovered the solidarity that had previously seemed out of reach,” he said.  Draghi will take part in an informal gathering of European leaders next week aimed at discussing the direction for the bloc’s competitiveness, together with another former Italian prime minister, Enrico Letta. Both have laid out their economic visions in reports that form the building blocks of President Ursula von der Leyen’s second term atop the European Commission.

The center-right European People’s Party is eyeing “better implementation” of the Lisbon Treaty to better prepare the EU for what it sees as historic shifts in the global balance of power involving the U.S., China and Russia, EPP leader Manfred Weber said on Saturday. Speaking at a press conference on the second day of an EPP Leaders Retreat in Zagreb, Weber highlighted the possibility of broadening the use of qualified majority voting in EU decision-making and developing a practical plan for military response if a member state is attacked. Currently EU leaders can use qualified majority voting on most legislative proposals, from energy and climate issues to research and innovation. But common foreign and security policy, EU finances and membership issues, among other areas, need a unified majority. This means that on issues such as sanctions against Russia, one country can block agreement, as happened last summer when Slovakian Prime Minister Robert Fico vetoed a package of EU measures against Moscow — a veto that was eventually lifted. Such power in one country’s hands is something that the EPP would like to change.  As for military solidarity, Article 42.7 of the Lisbon Treaty obliges countries to provide “aid and assistance by all the means in their power” if an EU country is attacked. For Weber, the formulation under European law is stronger than NATO’s Article 5 collective defense commitment. However, he stressed that the EU still lacks a clear operational plan for how the clause would work in practice. Article 42.7 was previously used when France requested that other EU countries make additional contributions to the fight against terrorism, following the Paris terrorist attacks in November 2015.  Such ideas were presented as the party with a biggest grouping in the European Parliament — and therefore the power to shape EU political priorities — presented its strategic focus for 2026, with competitiveness as its main priority.  Keeping the pulse on what matters in 2026  The EPP wants to unleash the bloc’s competitiveness through further cutting red tape, “completing” the EU single market, diversifying supply chains, protecting economic independence and security and promoting innovation including in AI, chips and biotech, among other actions, according to its list 2026 priorities unveiled on Saturday. On defense, the EPP is pushing for a “360-degree” security approach to safeguard Europe against growing geopolitical threats, “addressing state and non-state threats from all directions,” according to the document. The EPP is calling for enhanced European defense capabilities, including a stronger defense market, joint procurement of military equipment, and new strategic initiatives to boost readiness. The party also stressed the need for better protection against cyberattacks and hybrid threats, and robust measures to counter disinformation campaigns targeting EU institutions and societies. On migration and border security, the EPP backs tougher asylum admissibility rules, faster returns, and strengthened external borders, including reinforced Frontex operations and improved digital systems like the Entry/Exit System.  The party also urged a Demographic Strategy for Europe amid the continent’s shrinking and aging population. The text, initiated by Croatian Democratic Union (HDZ), member of the EPP, wants to see demographic considerations integrated into EU economic governance, cohesion funds, and policymaking, while boosting family support, intergenerational solidarity, labor participation, skills development, mobility and managed immigration.  Demographic change is “the most important issue, which is not really intensively discussed in the public discourse,” Weber said. “That’s why we want to highlight this, we want to underline the importance.” 

BEIJING — Keir Starmer wants to take the U.K. deeper into the European Union single market — if Brussels will let him. Speaking to reporters during a visit to China, the British prime minister said he wanted to “go further” in aligning with the European market where it is “in our national interest.” In May last year Starmer effectively agreed to take the U.K. back into Brussels’ orbit in two sectors: agriculture and electricity. Those agreements, which are currently being finalized, will see the U.K. follow relevant EU regulations — in exchange for more seamless market access. Seemingly buoyed by a positive reception and a smaller than anticipated Brexiteer backlash, Starmer is now doubling down. “I think the relationship with the EU and every summit should be iterative. We should be seeking to go further,” the prime minister told reporters. “And I think there are other areas in the single market where we should look to see whether we can’t make more progress. That will depend on our discussions and what we think is in our national interest. “But what I’m indicating here is — I do think we can go further.” The comments are a significant rhetorical shift for the Labour leader, whose 2024 election manifesto promised that “there will be no return to the single market” — as well as the customs union or free movement. While the Labour government has softened on the single market in office, it has arguably hardened on the customs union. Starmer told reporters that “the place to look is the single market, rather than the customs union,” arguing that joining the latter would require unpicking trade deals struck under Britain’s newly independent trade policy. GOING SWISS? While EU officials say they are always open to concrete U.K. proposals, rejoining the single market sector-by-sector might not be entirely straightforward. Brussels agreed to British access for agriculture and electricity in part because of pressure from European industry, which will arguably benefit from the new arrangements as much as the British side. But the dynamic is different in other sectors, where some European firms have been able to thrive at the expense of their locked-out British competitors. There will also be debates in Brussels about where the bloc should draw the line in granting single market access to a country that does not accept the free movement of people — a requirement other states like Norway and Switzerland must respect. Officials are also wary that the EU-U.K. relationship may come to resemble the worst aspects of the Swiss one, a complicated mess of agreements which is subject to endless renegotiation and widely disliked in Brussels. CHEMICAL ATTRACTION The prime minister would not elaborate on which sectors the U.K. should seek agreements with the EU on, stating only that “we’re negotiating with the EU as we go into the next summit.” British officials say that for now they are focused on negotiating the agreements promised at last May’s meeting. One senior business representative in Brussels, granted anonymity because their role does not authorize them to speak publicly, said alignment in sectors including chemicals, cosmetics, and medical devices could be advantageous to businesses on both sides of the English Channel. As well as the agreements on electricity and agriculture, the U.K. and EU last May agreed a security agreement to cooperate more closely on defense, and to link their emissions trading systems to exempt each other from their respective carbon border taxes. They also agreed to establish a youth mobility scheme, which will see young people get visas to live abroad for a limited period. Starmer reiterated the U.K.’s position that “there has got to be a cap” on the number of people who can take advantage of the scheme and “there has got to be a duration agreed.” “And it will be a visa-led scheme. All of our schemes are similar to that. We are negotiating,” he added. Dan Bloom reported from Beijing. Jon Stone reported from Brussels.

Dora Meredith is the director of ODI Europe. John Clarke is a former senior trade negotiator for the European Commission and former head of the EU Delegation to the WTO and the U.N. He is a fellow at Maastricht University and the Royal Asiatic Society, and a trade adviser for FIPRA public affairs. The EU rarely gets second chances in geopolitics. Yet last week, the European Parliament chose to throw one away. By voting to refer the long-awaited trade agreement with the Mercosur bloc to the Court of Justice of the EU for a legal opinion — a process that may take up two years — lawmakers dealt a serious blow to Europe’s credibility at a moment when speed and reliability matter more than ever. After more than two decades of negotiations, this deal was meant to signal that Europe could still act decisively in a world of intensifying geopolitical competition. As European Commission President Ursula von der Leyen argued this month, it was the ultimate test of Europe’s continued relevance on the world stage. Oblivious to this, the Parliament’s decision reinforces the perception that the bloc is unable to follow through, even when an agreement is finally within reach. It is, by any reasonable measure, a strategic own goal. The consequences of this go well beyond trade. Mercosur governments spent years negotiating this free trade agreement (FTA) in good faith, navigating Europe’s hesitation, shifting demands and inconsistent political signals. Understandably, they are now interpreting the referral to the court as a political move. For partners already hedging their bets in an increasingly contested global landscape, it reinforces doubts over whether Europe can be relied on. Meanwhile, for Europe, the true damage is to a deeper truth it all too often obscures: That its real power comes from the ability to make such agreements and then implement them seriously, consistently and at scale. The EU–Mercosur agreement isn’t just another trade deal. It was designed as a framework for long-term economic, political and strategic partnership with a region where Europe’s influence has been steadily eroding. It offers comprehensive market access in goods and services, clearer investment rules, access to critical materials, structured political dialogue and a cooperation-based approach to managing disputes. Taken together, it is meant to anchor Europe more firmly in South America at a time when others, most notably China, have moved faster and with fewer constraints. And while that level of ambition hasn’t disappeared with the Parliament’s vote, it has been put at serious risk. Over the years, much of the criticism surrounding the Mercosur deal has focused on sustainability. Indeed, if eventually passed, this will be the litmus test for whether the EU can translate its values into influence. And to that end, the deal makes a wide set of previously voluntary commitments legally binding, including the implementation of the Paris climate targets and adherence to international conventions on labor rights, human rights, biodiversity and environmental protection. However, it does so through dialogue-based enforcement rather than automatic withdrawal in the face of noncompliance — an approach that reflects the political realities in both Brussels and the Mercosur countries. This has disappointed those calling for tougher regulation, but it highlights an uncomfortable truth: Europe’s leverage over sustainability outcomes doesn’t come from pretending it can coerce partners into compliance but from sustained engagement and cooperation. That was a red line for Mercosur governments, and without it there would be no agreement at all. The deal’s novel “rebalancing mechanism” sits within this logic, as it allows Mercosur countries to suspend concessions if future unforeseen EU regulations effectively negate promised market access. Critics fear this provision could be used to challenge future EU sustainability measures, but Mercosur countries see it as a safeguard against possible unilateral EU action, as exemplified by the Deforestation Regulation. Moreover, in practice, such mechanisms are rarely used. Plus, its inclusion was the price of securing an additional sustainability protocol. Most crucially, though, none of this will resolve itself through legal delay. On the contrary, postponement weakens Europe’s ability to shape outcomes on the ground. Research from Brazil’s leading climate institutes shows that ambitious international engagement strengthens domestic pro‑environment coalitions by increasing transparency, resources and political leverage. Absence, by contrast, creates space for actors with far lower standards. South American and EU leaders join hands following the signing of the now-delayed Mercosur agreement, Jan. 17, 2026., Paraguay. | Daniel Duarte/AFP via Getty Images The same logic applies to the deal’s economic dimension. The Commission rightly highlights the headline figures: Billions of euros in tariff savings, expanded market access, secure access to critical minerals and growing trade. According to a recent study by the European Centre for International Political Economy, each month of delay represents €3 billion in foregone exports. But these numbers matter less than what lies beneath them: Europe will be gaining all this while offering limited concessions in sensitive agricultural sectors; and Mercosur countries will be gaining access to the world’s largest single market — but only if they can meet demanding regulatory and environmental standards that could strain domestic capacity. Again, the real power lies in the deal’s implementation. If managed well, such pressures can drive investment, modernize standards and reduce dependence on raw commodity exports as Latin American think tanks have argued. This transition is precisely what the EU’s €1.8 billion Global Gateway investment package was designed to support. And delaying the agreement delays that as well. The Parliament’s decision isn’t just a procedural setback — it damages Europe’s greatest strength at a time when hesitation carries real cost. It also creates an immediate institutional dilemma for the Commission. Despite the judicial stay, the Commission is legally free to apply the agreement provisionally, but this is a difficult call: Apply it and enter a firestorm of criticism about avoiding democratic controls that will backfire the day the Parliament finally gets to vote on the agreement; or accept a two-year delay and postpone the deal’s economic benefits possibly indefinitely — Mercosur countries aren’t going to hold out forever. If it is going to recover, over the coming months Europe has to do everything possible to demonstrate both to its Mercosur partners and the wider world that this delay doesn’t amount to disengagement. This means sustained political dialogue, credible commitments on investment and cooperation — including the rollout of the Global Gateway — as well as a clear plan for the deal’s implementation the moment this legal process concludes. Two years is an eternity in today’s geopolitical climate. If Europe allows this moment to pass without course correction, others won’t wait. The deal might be imperfect, but irrelevance is far worse a fate. Europe must be much bolder in communicating that reality — to the world and, perhaps more urgently, to its own public.

LONDON — Canadian Prime Minister Mark Carney left Beijing and promptly declared the U.S.-led “world order” broken. Don’t expect his British counterpart to do the same. Keir Starmer will land in the Chinese capital Wednesday for the first visit by a U.K. prime minister since 2018. By meeting President Xi Jinping, he will end what he has called an “ice age” under the previous Conservative administration, and try to win deals that he can sell to voters as a boost to Britain’s sputtering economy. Starmer is one of a queue of leaders flocking to the world’s second-largest economy, including France’s Emmanuel Macron in December and Germany’s Friedrich Merz next month. Like Carney did in Davos last week, the British PM has warned the world is the most unstable it has been for a generation. Yet unlike Carney, Starmer is desperate not to paint this as a rupture from the U.S. — and to avoid the criticism Trump unleashed on Carney in recent days over his dealings with China. The U.K. PM is trying to ride three horses at once, staying friendly — or at least engaging — with Washington D.C., Brussels and Beijing.  It is his “three-body problem,” joked a senior Westminster figure who has long worked on British-China relations. POLITICO spoke to 22 current and former officials, MPs, diplomats, industry figures and China experts, most of whom were granted anonymity to speak frankly. They painted a picture of a leader walking the same tightrope he always has surrounded by grim choices — from tricky post-Brexit negotiations with the EU, to Donald Trump taking potshots at British policies and freezing talks on a U.K.-U.S. tech deal. Starmer wants his (long-planned) visit to China to secure growth, but be cautious enough not to compromise national security or enrage Trump. He appears neither to have ramped up engagement with Beijing in response to Trump, nor reduced it amid criticism of China’s espionage and human rights record. In short, he doesn’t want any drama. “Starmer is more managerial. He wants to keep the U.K.’s relationships with big powers steady,” said one person familiar with planning for the trip. “You can’t really imagine him doing a Carney or a Macron and using the trip to set out a big geopolitical vision.” An official in 10 Downing Street added: “He’s clear that it is in the U.K.’s interests to have a relationship with the world’s second biggest economy. While the U.S. is our closest ally, he rejects the suggestion that means you can’t have pragmatic dealings with China.” He will be hoping Trump — whose own China visit is planned for April — sees it that way too. BRING OUT THE CAVALRY Starmer has one word in his mind for this trip — growth, which was just 0.1 percent in the three months to September. The prime minister will be flanked by executives from City giants HSBC, Standard Chartered, Schroders and the London Stock Exchange Group; pharmaceutical company AstraZeneca; car manufacturer Jaguar Land Rover; energy provider Octopus; and Brompton, the folding bicycle manufacturer. The priority in Downing Street will be bringing back “a sellable headline,” said the person familiar with trip planning quoted above. The economy is the overwhelming focus. While officials discussed trying to secure a political win, such as China lifting sanctions it imposed on British parliamentarians in 2021, one U.K. official said they now believe this to be unlikely. Between them, five people familiar with the trip’s planning predicted a large number of deals, dialogues and memorandums of understanding — but largely in areas with the fewest national security concerns. These are likely to include joint work on medical, health and life sciences, cooperation on climate science, and work to highlight Mandarin language schemes, the people said.  Officials are also working on the mutual recognition of professional qualifications and visa-free travel for short stays, while firms have been pushing for more expansive banking and insurance licences for British companies operating in China. The U.K. is meanwhile likely to try to persuade Beijing to lower import tariffs on Scotch whisky, which doubled in February 2025. A former U.K. official who was involved in Britain’s last prime ministerial visit to China, by Theresa May in 2018, predicted all deals will already be “either 100 or 99 percent agreed, in the system, and No. 10 will already have a firm number in its head that it can announce.” THREADING THE NEEDLE Yet all five people agreed there is unlikely to be a deal on heavy energy infrastructure, including wind turbine technology, that could leave Britain vulnerable to China. The U.K. has still not decided whether to let Ming Yang, a Chinese firm, invest £1.5 billion in a wind farm off the coast of Scotland. And while Carney agreed to ease tariffs on Chinese electric vehicles (EVs), three of the five people familiar with the trip’s planning said that any deep co-operation on EV technology is likely to be off the table. One of them predicted: “This won’t be another Canada moment. I don’t see us opening the floodgates on EVs.” Britain is trying to stick to “amber and green areas” for any deals, said the first person familiar with the planning. The second of the five people said: “I think they‘re going for the soft, slightly lovey stuff.” Britain has good reason to be reluctant, as Chinese-affiliated groups have long been accused of hacking and espionage, including against MPs and Britain’s Electoral Commission. Westminster was gripped by headlines in December about a collapsed case against two men who had been accused of spying for China. Chinese firm Huawei was banned from helping build the U.K.’s 5G phone network in 2020 after pressure from Trump. Even now, Britain’s security agencies are working on mitigations to telecommunications cables near the Tower of London. They pass close to the boundary of China’s proposed embassy, which won planning approval last week. Andrew Small, director of the Asia Programme at the European Council on Foreign Relations, a think tank working on foreign and security policy, said: “The current debate about how to ‘safely’ increase China’s role in U.K. green energy supplies — especially through wind power — has serious echoes of 5G all over again, and is a bigger concern on the U.S. side than the embassy decision.”  Starmer and his team also “don’t want to antagonize the Americans” ahead of Trump’s own visit in April, said the third of the five people familiar with trip planning. “They’re on eggshells … if they announce a new dialogue on United Nations policy or whatever bullshit they can come up with, any of those could be interpreted as a broadside to the Trump administration.” All these factors mean Starmer’s path to a “win” is narrow. Tahlia Peterson, a fellow working on China at Chatham House, the international affairs think tank, said: “Starmer isn’t going to ‘reset’ the relationship in one visit or unlock large-scale Chinese investment into Britain’s core infrastructure.” Small said foreign firms are being squeezed out of the Chinese market and Xi is “weaponizing” the dependency on Chinese supply chains. He added: “Beijing will likely offer extremely minor concessions in areas such as financial services, [amounting to] no more than a rounding error in economic scale.” Chancellor Rachel Reeves knows the pain of this. Britain’s top finance minister was mocked when she returned with just £600 million of agreements from her visit to China a year ago. One former Tory minister said the figure was a “deliberate insult” by China. Even once the big win is in the bag, there is the danger of it falling apart on arrival. Carney announced Canada and China would expand visa-free travel, only for Beijing’s ambassador to Ottawa to say that the move was not yet official. Despite this, businesses have been keen on Starmer’s re-engagement.  Rain Newton-Smith, director-general of the Confederation of British Industry, said firms are concerned about the dependence on Chinese rare earths but added: “If you map supply chains from anywhere, the idea that you can decouple from China is impossible. It’s about how that trade can be facilitated in the best way.” EMBASSY ROW Even if Starmer gets his wins, this visit will bring controversies that (critics say) show the asymmetry in Britain’s relationship with China. A tale of two embassies serves as a good metaphor.  Britain finally approved plans last week for China’s new outpost in London, despite a long row over national security. China held off formally confirming Starmer’s visit until the London embassy decision was finalized, the first person familiar with planning for the trip said. (Others point out Starmer would not want to go until the issue was resolved.) The result was a scramble in which executives were only formally invited a week before take-off. And Britain has not yet received approval to renovate its own embassy in Beijing. Officials privately refer to the building as “falling down,” while one person who has visited said construction materials were piled up against walls. It is “crumbling,” added another U.K. official: “The walls have got cracks on them, the wallpaper’s peeling off, it’s got damp patches.” British officials refused to give any impression of a “quid pro quo” for the two projects under the U.K.’s semi-judicial planning system. But that means much of Whitehall still does not know if Britain’s embassy revamp in Beijing will be approved, or held back until China’s project in London undergoes a further review in the courts. U.K. officials are privately pressing their Chinese counterparts to give the green light. One of the people keenest on a breakthrough will be Britain’s new ambassador to Beijing Peter Wilson, a career diplomat described by people who have met him as “outstanding,” “super smart” and “very friendly.”  For Wilson, hosting Starmer will be one of his trickiest jobs yet. The everyday precautions when doing business in China have made preparations for this trip more intense. Government officials and corporate executives are bringing secure devices and will have been briefed on the risk of eavesdropping and honeytraps. One member of Theresa May’s 2018 delegation to China recalled opening the door of what they thought was their vehicle, only to see several people with headsets on, listening carefully and typing. They compared it to a scene in a spy film. Activists and MPs will put Starmer under pressure to raise human rights issues — including what campaigners say is a genocide against the Uyghur people in Xinjiang province — on a trip governed by strict protocol where one stray word can derail a deal.  Pro-democracy publisher Jimmy Lai, who has British nationality, is facing sentencing in Hong Kong imminently for national security offenses. During the PM’s last meeting with Xi in 2024, Chinese officials bundled British journalists out of the room when he raised the case. Campaigners had thought Lai’s sentencing could take place this week. All these factors mean tension in the British state — which has faced a tussle between “securocrats” and departments pushing for growth — has been high ahead of the trip. Government comments on China are workshopped carefully before publication. Earlier this month, Foreign Secretary Yvette Cooper told POLITICO her work on Beijing involves looking at “transnational repression” and “espionage threats.” But when Chancellor Rachel Reeves met China’s Finance Minister He Lifeng in Davos last week to tee up Starmer’s visit, the U.K. Treasury did not publicize the meeting — beyond a little-noticed photo on its Flickr account. SLOW BOAT TO CHINA Whatever the controversies, Labour’s China stance has been steadily taking shape since before Starmer took office in 2024. Labour drew inspiration from its sister party in Australia and the U.S. Democrats, both of which had regular meetings with Beijing. Party aides argued that after a brief “golden era” under Conservative PM David Cameron, Britain engaged less with China than with the Soviet Union during the Cold War. The result of Labour’s thinking was the policy of “three Cs” — “challenge, compete, and cooperate.” A procession of visits to Beijing followed, most notably Reeves last year, culminating in Starmer’s trip. His National Security Adviser Jonathan Powell was involved in planning across much of 2025, even travelling to meet China’s top diplomat, Wang Yi, in November. Starmer teed up this week’s visit with a December speech arguing the “binary” view of China had persisted for too long. He promised to engage with Beijing carefully while taking a “more transactional approach to pretty well everything.”  The result was that this visit has long been locked in; just as Labour aides argue the London embassy decision was set in train in 2018, when the Tory government gave diplomatic consent for the site. Labour ministers “just want to normalize” the fact of dealing with China, said the senior Westminster figure quoted above. Newton-Smith added: “I think the view is that the government’s engagement with eyes wide open is the right strategy. And under the previous government, we did lose out.” But for each person who praises the re-engagement, there are others who say it has left Britain vulnerable while begging for scraps at China’s table. Hawks argue the hard details behind the “three Cs” were long nebulous, while Labour’s long-awaited “audit” of U.K.-China relations was delayed before being folded briefly into a wider security document. “Every single bad decision now can be traced back to the first six months,” argued the third person familiar with planning quoted above. “They were absolutely ill-prepared and made a series of decisions that have boxed them into a corner.” They added: “The government lacks the killer instinct to deal with China. It’s not in their DNA.” Luke de Pulford, a human rights campaigner and director of the Inter-Parliamentary Alliance on China, argued the Tories had engaged with China — Foreign Secretary James Cleverly visited in 2023 — and Labour was simply going much further. “China is pursuing an enterprise to reshape the global order in its own image, and to that end, to change our institutions and way of life to the extent that they’re an obstacle to it,” he said. “That’s what they’re up to — and we keep falling for it.” END OF THE OLD ORDER? His language may be less dramatic, but Starmer’s visit to China does have some parallels with Canada. Carney’s trip was the first by a Canadian PM since 2017, and he and Xi agreed a “new strategic partnership.” Later at Davos, the Canadian PM talked of “the end of a pleasant fiction” and warned multilateral institutions such as the United Nations are under threat. One British industry figure who attended Davos said of Carney’s speech: “It was great. Everyone was talking about it. Someone said to me that was the best and most poignant speech they’d ever seen at the World Economic Forum. That may be a little overblown, but I guess most of the speeches at the WEF are quite dull.” The language used by Starmer, a former human rights lawyer devoted to multilateralism, has not been totally dissimilar. Britain could no longer “look only to international institutions to uphold our values and interests,” he said in December. “We must do it ourselves through deals and alliances.” But while some in the U.K. government privately agree with Carney’s point, the real difference is the two men’s approach to Trump. Starmer will temper his messaging carefully to avoid upsetting either his Chinese hosts or the U.S., even as Trump throws semi-regular rocks at Britain. To Peterson, this is unavoidable. “China, the U.S. and the EU are likely to continue to dominate global economic growth for the foreseeable future,” she said. “Starmer’s choice is not whether to engage, but how.” Esther Webber contributed reporting.

Europe isn’t doomed to inexorable decline — and in fact is doing better than most people realize, said the IMF’s Kristalina Georgieva. Much of the European Union’s policymaking bubble has been gripped with despair since the bloc’s weakness was exposed during a recent confrontation with the U.S. over Greenland. While U.S. President Donald Trump eventually backed down, the European military response — sending a symbolic handful of soldiers to the North Atlantic island — underlined that had the White House really wanted to seize Greenland, Europeans would have had no choice but to accede. But in an interview with POLITICO, Georgieva, managing director of the International Monetary Fund, said the pessimism was misplaced. In an end-of-year shortlist of top-performing economies put together by the Economist, she noted, the top 10 included seven EU countries, with Portugal in the top spot. The Iberian economy has recorded steady growth while comfortably paying down its debt in the past few years. That’s a fact, she said, that should be celebrated. “Europeans — we are modest people. We don’t brag,” the IMF head stated. She recalled how a U.S. colleague had recently done “something marginal.” “He said ‘oh, let’s look at this. I’m great. I’m fantastic,’” Georgieva recounted. “In Europe you do something great and you say ‘not too bad.’ In this world we are in now, you have to brag a little, exude confidence.” Even before the Greenland standoff, a sense of despair had settled over the top echelons of European economic decision-making. Mario Draghi, former head of the European Central Bank, warned that the bloc faced “slow agony” if it didn’t reform. Georgieva acknowledged the increasingly sharp-elbowed way in which countries now operate — one that leaves little room for multilateral organizations like her own IMF. In a speech earlier on Monday she acknowledged that the world had become “multipolar” — code for a new era of jostling geopolitical blocs that has replaced unilateral American dominance. Speaking to POLITICO, Georgieva said that “geopolitical factors play an increasingly bigger role in defining the world economy.” On Greenland, she said the fact that “allies find it more difficult to retain their sense of common purpose” was a “significant change.” But she insisted that the “destiny of Europe is in the hands of Europeans.” The IMF’s list of advice to reform the EU’s economy echoes Draghi’s own, contained in his competitiveness report from 2024: They include strengthening the single market, cutting regulations on businesses, and integrating the continent’s fragmented energy and financial systems. Mario Draghi, former head of the European Central Bank, warned that the bloc faced “slow agony” if it didn’t reform. | Olivier Matthys/EPA Georgieva said it was “paramount” for the EU to press ahead with reform. “Get your own house in order,” she said. Three of the Economist shortlist’s best-performing countries — Ireland, Portugal and Greece — were put under IMF supervision at the height of the eurozone crisis. There, they had to agree to painful adjustments known as structural reform programs, which included tax hikes and brutal cuts to public services. In the case of Greece in particular, those structural reforms resulted in a sharp increase in unemployment and poverty levels; gross domestic product per capita is still not at its pre-crisis level. But, said Georgieva, their current success is proof that countries, and the EU as a whole, can change their economic trajectories. Asked whether Europe should consider retaliating against U.S. aggression by selling off assets like government bonds, a suggestion included in a recent analyst report from Deutsche Bank, the senior official urged caution. “I would say that the smooth functioning of the international monetary system is of value to all countries,” she said. “Disturbing that smooth functioning of the international monetary system with the same token can bring negative impact.” The Bulgarian boss of the Washington, D.C.-based fund did, however, back a deeper pool of joint EU debt — an idea favored by Draghi but regarded with suspicion by frugal countries like Germany and the Netherlands. As for the disbursement of $8.1 billion in IMF funds to Ukraine to help the country meet its financing needs, Georgieva said she was aiming to hold an IMF board meeting in the second half of `February at which the board could approve the program and start paying out funds. Though the amount is relatively small — less than a tenth of the €90 billion that the EU has agreed to lend to Ukraine — IMF approval is a signal of confidence for financial markets. The IMF chief also said that a meeting “is scheduled” with U.S. Treasury Secretary Scott Bessent regarding the situation in Venezuela, and that it would happen in the “nearest future.” The IMF stopped working with Venezuela in 2019. The fund estimates that the South American country’s economy, battered by U.S. sanctions and plagued by mismanagement, has shrunk to a third of its previous largest size. Since the U.S. captured Venezuelan President Nicolás Maduro at the start of the year, it has floated the possibility of allowing Venezuela to access IMF financing again.

It seems impossible to have a conversation today without artificial intelligence (AI) playing some role, demonstrating the massive power of the technology. It has the potential to impact every part of business, and European policymakers are on board. In February 2025, Ursula von der Leyen, the European Commission president, said, “We want Europe to be one of the leading AI continents … AI can help us boost our competitiveness, protect our security, shore up public health, and make access to knowledge and information more democratic.” Research from Nokia suggests that businesses share this enthusiasm and ambition: 84 percent of more than 1,000 respondents said AI features in the growth strategy of their organization, while 62 percent are directing at least 20 percent of ICT capex budgets toward the technology. However, the equation is not yet balanced. Three-quarters of survey respondents state that current telecom infrastructure limits the ability to deliver on those ambitions. Meanwhile, 45 percent suggest these limitations would delay, constrain or entirely limit investments. There is clearly a disconnect between the ambition and the ability to deliver. At present, Europe lags the United States and parts of Asia in areas such as network deployment, related investment levels and scale. > If AI does not reach its full potential, EU competitiveness will suffer, > economic growth will have a ceiling, the creation of new jobs will have a > limit and consumers will not see the benefits. What we must remember primarily is that AI does not happen without advanced, trusted and future-proofed networks. Infrastructure is not a ‘nice to have’ it is a fundamental part. Simply put, today’s networks in Europe require more investments to power the AI dream we all have. If AI does not reach its full potential, EU competitiveness will suffer, economic growth will have a ceiling, the creation of new jobs will have a limit and consumers will not see the benefits. When we asked businesses about the challenge of meeting AI demands during our research, the lack of adequate connectivity infrastructure was the fourth common answer out of 15 potential options. Our telecom connectivity regulatory approach must be more closely aligned with the goal of fostering AI. That means progressing toward a genuine telecom single market, adopting a novel approach to competition policy to allow market consolidation to lead to more investments, and ensuring connectivity is always secure and trusted. Supporting more investments in next-generation networks through consolidation AI places heavy demands on networks. It requires low latency, high bandwidth and reliability, and efficient traffic management. To deliver this, Europe needs to accelerate investment in 5G standalone, fiber to enterprises, edge data centers and IP-optical backbone networks optimized for AI. > As industry voices such as Nokia have emphasized, the networks that power AI > must themselves make greater use of automation and AI. Consolidation (i.e. reducing the number of telecom operators within the national telecom markets of EU member states) is part of the solution. Consolidation will allow operators to achieve economies of scale and improve operating efficiency, therefore encouraging investment and catalyzing innovation. As industry voices such as Nokia have emphasized, the networks that power AI must themselves make greater use of automation and AI. Policy support should therefore extend to both network innovation and deployment. Trust: A precondition for AI adoption Intellectual property (IP) theft is a threat to Europe’s industrial future and only trusted technology should be used in core functions, systems and sectors (such as energy, transport and defense). In this context, the underlying connectivity should always be secure and trusted. The 5G Security Toolbox, restricting untrusted technology, should therefore be extended to all telecom technologies (including fiber, optics and IP) and made compulsory in all EU member states. European governments must make protecting their industries and citizens a high priority. Completing the digital single market Although the single market is one of Europe’s defining projects, the reality in telecoms — a key part of the digital single market — is still fragmented. As an example, different spectrum policies create barriers across borders and can limit network roll outs. Levers on top of advanced connectivity To enable the AI ecosystem in Europe, there are several different enabling levers European policymakers should advance on top of fostering advanced and trusted connectivity: * The availability of compute infrastructure. The AI Continent Action Plan, as well as the IPCEI Compute Infrastructure Continuum, and the European High-Performance Computing Joint Undertaking should facilitate building AI data centers in Europe.   * Leadership in edge computing. There should also be clear support for securing Europe’s access to and leadership in edge solutions and building out edge capacity. Edge solutions increase processing speeds and are important for enabling AI adoption, while also creating a catalyst for economic growth. With the right data center capacity and edge compute capabilities available, European businesses can meet the new requirements of AI use cases.  * Harmonization of rules. There are currently implications for AI in several policy areas, including the AI Act, GDPR, Data Act, cybersecurity laws and sector-specific regulations. This creates confusion, whereas AI requires clarity. Simplification and harmonization of these regulations should be pursued.  * AI Act implementation and simplification. There are concerns about the implementation of the AI Act. The standards for high-risk AI may not be available before the obligations of the AI act enter into force, hampering business ambitions due to legal uncertainty. The application date of the AI Act’s provisions on high-risk AI should be postponed by two years to align with the development of standards. There needs to be greater clarity on definitions and simplification measures should be pursued across the entire ecosystem. Policies must be simple enough to follow, otherwise adoption may falter. Policy needs to act as an enabler, not a barrier to innovation.  * Upskilling and new skills. AI will require new skills of employees and users, as well as creating entirely new career paths. Europe needs to prepare for this new world.  If Europe can deliver on these priorities, the benefits will be tangible: improved services, stronger industries, increased competitiveness and higher economic growth. AI will deliver to those who best prepare themselves. We must act now with the urgency and consistency that the moment demands. -------------------------------------------------------------------------------- Author biography: Marc Vancoppenolle is leading the geopolitical and government relations EU and Europe function at Nokia. He and his team are working with institutions and stakeholders in Europe to create a favorable political and regulatory environment fostering broadband investments and cross sectoral digitalization at large. Vancoppenolle has over 30 years of experience in the telecommunication industry. He joined Alcatel in 1991, and then Alcatel-Lucent, where he took various international and worldwide technical, commercial, marketing, communication and government affairs leadership roles. Vancoppenolle is a Belgian and French national. He holds a Master of Science, with a specialization in telecommunication, from the University of Leuven complemented with marketing studies from the University of Antwerp. He is a member of the DIGITALEUROPE Executive Board, Associate to Nokia’s CEO at the ERT (European Round Table for Industry), and advisor to FITCE Belgium (Forum for ICT & Media professionals). He has been vice-chair of the BUSINESSEUROPE Digital Economy Taskforce as well as a member of the board of IICB (Innovation & Incubation Center Brussels).

European Commission President Ursula von der Leyen warned Washington to keep its hands off Greenland and said Europe’s response to U.S. President Donald Trump’s threats would be “unflinching.” In a wide-ranging speech at the World Economic Forum in Davos, von der Leyen said the self-ruling Danish territory’s sovereignty is “non-negotiable,” despite Trump’s repeated promises to purchase or annex it. “Our response will be unflinching, united and proportional,” von der Leyen said, adding the EU would show “full solidarity” with Greenland and was planning a “massive” increase in European investments in the island. Trump vowed over the weekend to inflict punishing tariffs on six EU countries, the U.K. and Norway over their opposition to his Greenland grab. He said an additional 10 percent tariff would enter into force on Feb. 1 unless Europe hands over the Arctic island.  The EU is internally divided on how best to respond to the American president’s saber-rattling, with France requesting the EU deploy its Anti-Coercion Instrument, or trade bazooka, to cut off U.S. firms from the bloc’s single market, while other capitals have urged restraint and dialogue.  In a veiled rebuke to Trump, von der Leyen singled out “the people of the United States” as Europe’s friends, calling on Washington to respect the trade deal it struck with the EU last summer in Scotland, which set a tariff ceiling of 15 percent on most European exports.  “In politics as in business: a deal is a deal. And when friends shake hands, it must mean something,” she said, adding Trump’s proposed new tariffs were a “mistake.” And with Trump dramatically rewriting the transatlantic alliance, “Europe needs to adjust to the new security architecture and realities that we are now facing,” von der Leyen said, adding the “old order” is dead. Von der Leyen also used the speech to display the EU’s network of friends across the world, at a time when Washington is withdrawing from the multilateral order.  Adapting to the new order means forming a raft of new trade alliances, from the Mercosur bloc in South America, which last weekend finalized a trade deal with the EU to create a sprawling free-trade zone, to Mexico, Indonesia and India, she argued. Brussels and New Delhi still have “work to do,” von der Leyen conceded, just as the two sides are supposed to shake hands when she travels to India in the coming days.  “But we are on the cusp of a historic trade agreement,” she said, describing it as the “mother” of all trade deals. “The point is that the world has changed permanently,” von der Leyen said. “We need to change with it.”

LONDON — U.S. President Donald Trump’s trade negotiators are pushing for the U.K. to adopt American standards in a move that would derail Britain’s post-Brexit relationship with the European Union, two people familiar with the talks have told POLITICO. The U.S. is also pushing hard for the recognition of American accreditation bodies in the U.K., three other people with knowledge of the demands confirmed. The joint moves would have knock-on effects for safety-critical sectors like food, forensics, manufacturing and NHS testing, experts fear. “It’s this invisible infrastructure that no one really knows about but which keeps everyone safe — and that’s now under threat,” a person briefed on the talks told POLITICO. They, like others cited in this piece, were granted anonymity to speak freely. American negotiators have turned up the heat in trade talks with the recent suspension of the Technology Prosperity Deal, amid frustration over the pace of wider negotiations. U.K. negotiating asks on steel and Scotch whisky tariffs have also gone unanswered. Trump threatened a fresh wedge in the relationship over the weekend, vowing to impose tariffs on Britain and other European allies pushing back at his desire for the United States to own Greenland. The standards push comes as the Trump administration hollows out American watchdogs, with sweeping cuts to the Food and Drug Administration and the dismantling of the Consumer Product Safety Commission. While food standards remain a red line for the U.K. government, some figures familiar with the talks fear the U.K. could cave in on other U.S. demands. “My concern is that these red lines that have been red lines from the outset and for years are under increasing threat of being breached,” the person cited above said.   British negotiators have so far refused to back down, but U.S. negotiators “keep circling back” on these issues, another person who was briefed on the talks by both governments said. Peter Holmes, an expert on standards from the UK Trade Policy Observatory at the University of Sussex, warned that accepting U.S. demands could lead to a “race to the bottom” with the U.K. regarded as a “wild west market” internationally. A U.K. government spokesperson said: “Our historic agreement with the U.S. has already delivered for the pharma, aerospace and auto sectors, while our deal with the EU will see the removal of trade barriers including SPS, saving hundreds of millions on U.K. exports.” “We have and always will be clear that we will uphold our high food, animal welfare and environmental standards in trade deals, and negotiations will continue with both the EU and U.S. on strengthening our trading relationship,” the spokesperson added. The U.K. says it will uphold its high food, animal welfare and environmental standards in trade deals. | Geography Photos/Universal Images Group via Getty Images A spokesperson for the United States Trade Representative said the claims came from “anonymous and irrelevant sources” with “no insight into the trade discussions between the U.S. and U.K.”  The spokesperson did not contest any specific aspects of this report. They added that the two nations had successfully implemented “numerous aspects of the U.S.-U.K. EPD,” including “mutually expanding access of U.S. and U.K. beef in each other’s markets.”  “The U.S. and U.K. continue to work together constructively on finalizing remaining aspects of the EPD, including the U.K. commitment to ‘improve market access for agricultural products’ from the United States,” the spokesperson said. IMPACT ON BREXIT RESET TALKS Giving in to the U.S. demands would upset Britain’s ability to trade more closely with the EU as part of ongoing Brexit “reset” negotiations with the bloc that include alignment on food standards and carbon emissions in manufacturing. The U.K. government has “very clear red lines around all of this because they are going to do certain things with the EU,” the second person quoted above explained. “You would have thought these matters had already been well ventilated and resolved,” the person added, explaining that in talks the U.S. side “keep saying ‘why can’t you do more food standards? Why aren’t you coming closer on our side of it? Are you really sure what you’re doing with the EU is the right thing to do?’” Negotiations with the U.S. are “pretty much [in] stasis at the moment,” the same person continued. As London’s Brexit reset talks with the EU progress this year, “the possibility to have the kinds of changes that the U.S. is putting forward become much diminished when those agreements with the EU start to get over the line.” RECOGNITION OF ACCREDITATION BODIES Multiple people briefed on the trade talks claim the U.S. proposals go beyond the terms of the original U.K.-U.S. Economic Prosperity Deal agreed last May between U.S. President Donald Trump and Britain’s Prime Minister Keir Starmer.  In addition to headline commitments to cut tariffs on cars, steel and pharmaceuticals, the wide-ranging deal included a promise to address “non-tariff barriers,” including a pledge to treat conformity assessment bodies — such as testing labs and certification groups from the other nation — in a way that is “no less favorable” than the treatment of its own.  This is an increasingly common commitment in U.K. trade deals and typically means that accreditation bodies would have the power to accredit a whole range of certification and testing providers from the other country. However, U.S. negotiators are now pushing for the recognition of disparate American accreditation bodies, which would give them the authority to approve certification, testing and verification organizations in the U.K., three people briefed on the talks confirmed. Accepting this demand would mean that the U.K.’s national accreditation body, UKAS, would no longer meet the basic requirements of membership in the European Co-operation for Accreditation, under which national accreditation bodies recognize each other’s accreditations.  U.K. Prime Minister Keir Starmer says he wanted the U.K. to seek “even closer alignment” with the EU. | Leon Neal/Getty Images This would put the proposed U.K.-EU agrifood deal and plans to link U.K. and EU Emissions Trading Schemes “at massive risk,” should those deals require the EU to recognize U.K. emissions verification bodies and food control laboratories, the first person cited above explained. An industry figure familiar with the ETS linkage talks said an acceptance of the changes would amount to a “watering down” of the entire carbon pricing system, adding that “every single company falling under UK ETS” would be “absolutely furious.” It could also jeopardize any future alignment with the EU in other areas such as manufactured goods, a second industry figure briefed on the negotiations said.  The U.K. government has indicated a willingness to go even further in its relationship with the EU, with U.K. Prime Minister Keir Starmer saying he wanted the U.K. to seek “even closer alignment” with the single market.  Beyond plans outlined in the Common Understanding last May, “there are other areas where we should consider if it’s in our interests to … align with the single market,” he told the BBC in a recent interview. “Now that needs to be considered on an issue-by-issue, sector-by-sector basis, but we’ve already done it with food and agriculture, and that will be implemented this year.” ‘RACE TO THE BOTTOM’ The U.S. operates a decentralized standards system in which accreditation is carried out by a competitive network of organizations, most of which are commercial. This is in direct contrast to the U.K.’s current model of accreditation, whereby a single, non-profit accreditation body, UKAS, oversees certification and product testing in the public interest. The UK Trade Policy Observatory’s Peter Holmes warned that adopting the U.S. system could lead to a “race to the bottom”, with UKAS pitted against American accreditation bodies. “They might have to cut corners and give up their legally-required public service obligations,” he said.  Accepting U.S. accreditation bodies would make the U.K. a “wild west market where you can’t trust anything that’s on sale in the U.K.,” he added. The U.K. government has repeatedly rejected the possibility of changes to British standards, including the possibility of accepting American chlorine-washed chicken and hormone-treated beef.  “We will not compromise on food standards,” Trade Minister Chris Bryant said in an interview with CNBC this month. “That is the beginning and end of everything I have to say on that subject. Food standards are really important. There is no compromise for us to strike there.”