When Italy’s Prime Minister Giorgia Meloni attended her first European leaders’ summit in Brussels in December 2022, few would have expected her to become one of the most effective politicians sitting around the table four years later.   In fact, few would have expected that she’d still be there at all, as Italian leaders are famously short-lived. Remarkably, her right-wing Brothers of Italy party looks as rock solid in polls as it did four years ago, and she now has her eye on the record longest term for an Italian premier — a feat she is due to accomplish in September. A loss in what is set to be a nail-biting referendum on the bitter and complex issue of judicial reform on March 22 and 23 would be her first major set back — and would puncture the air of political invincibility that she exudes not only in Rome but also in Brussels. Meloni has thrived on the European stage, and has become adept at using the EU machinery to her advantage. Only in recent months, she has made decisive interventions on the EU’s biggest dossiers, such as Russian assets, the Mercosur trade deal and carbon markets, leveraging Italy’s heavyweight status to win concessions in areas like farm subsidies. Profiting from France’s weakness, Meloni is also establishing a strong partnership with German Chancellor Friedrich Merz — a double act between the EU’s No. 1 and No. 3 economies — to mold the bloc’s policies to favor manufacturing and free trade. CRASHING DOWN TO EARTH For a few more days, at least, Meloni looks like a uniquely stable and influential Italian leader. Nicola Procaccini, a Brothers of Italy MEP very close to Meloni and co-chair of the European Conservatives and Reformists (ECR) group, called the government’s longevity a “real novelty” in the European political landscape. “Until recently, Italy couldn’t insert itself into the dynamics of those that shape the European Union — essentially the Franco-German axis — because it lacked governments capable of lasting even a year,” said the MEP. “Giorgia Meloni is not just a leader who endures; she is a leader who shapes decisions and influences the direction to be taken.” But critics of the prime minister said a failure in the referendum would mark a critical turning point. Her rivals would finally detect a chink in her armor and move to attack her record, particularly on economic weaknesses at home. The unexpected, new message to other EU leaders would be clear: She won’t be here for ever. Brando Benifei, an MEP in Italy’s center-left opposition Democratic Party, conceded that other EU leaders saw her as the leader of a “ultra-stable government.” But, if she were to lose the referendum, he argued “she would inevitably lose that aura.” “Everyone remembers how it ended for Renzi’s coalition after he lost his referendum,” Benifei added, in reference to former Democratic Party Prime Minister Matteo Renzi who resigned after his own failed referendum in 2016. MACHIAVELLIAN MELONI Meloni owes much of her success on the EU stage to canny opportunism. At the beginning of the year, she slyly spotted an opportunity — suddenly wavering on the Mercosur trade deal, which Rome has long supported — to win extra cash for farmers that would please her powerful farm unions at home. She held off from actually killing the agreement, something that would have lost her friends among other capitals. German Chancellor Friedrich Merz and Italy’s Prime Minister Giorgia Meloni at a signing ceremony during an Italy-Germany Intergovernmental Summit in Rome on Jan. 23, 2026. | Pool photo by Michael Kappeler/AFP via Getty Images The Italian leader “knows how to read the room very well,” said one European diplomat, who was granted anonymity to discuss European Council dynamics.   Teresa Coratella, deputy head of the Rome office at the think tank European Council on Foreign Relations, said Meloni had  “a political cunning” that allowed her to build “variable geometries,” allying with different European leaders by turn based on the subject under discussion. One of her first victories came on migration in 2023. She was able to elevate the issue to the top level of the European Council, and even managed to secure a visit by European Commission President Ursula von der Leyen to Tunisia, eventually resulting in the signing of a pact on the issue. Others wins followed.  Last December, with impeccable timing, Meloni unexpectedly threw her lot in with Belgium’s Prime Minister Bart De Wever at the last minute, scuppering a plan to fund Ukraine’s defenses with Russian frozen assets, instead pushing for more EU joint debt. Italian diplomats said that Meloni is a careful student, showing up to summits always having read the relevant documents, and having asking the apposite questions. That wasn’t always the case with former Italian prime ministers.  They said her choice of functionaries — rewarding competence over and above political affiliation — also helps. These include her chief diplomatic consigliere Fabrizio Saggio and Vincenzo Celeste, ambassador to the EU. Neither is considered close politically to Meloni.   Her biggest coup, though, has been shunting aside France as Germany’s main European partner on key files, with her partnership with Merz even being dubbed “Merzoni.” ROLLING THE DICE Meloni’s strength partly explains why she dared call the referendum. Italy’s right has for decades complained that the judiciary is biased to the left. It’s a feud that goes back to the Mani Pulite (Clean Hands) anti-corruption drive in the 1990s that pulverized the political elite of that time, and the constant court cases against playboy premier and media tycoon Silvio Berlusconi, father of the modern center-right. The proposal in the plebiscite is to restructure the judiciary. But it’s a high-stakes gamble, and why she called it seems something of a puzzle. The reforms themselves are highly technical — and by the government’s own admission won’t actually speed up Italy’s notoriously long court cases.    Prime Minister of Italy, Giorgia Meloni attends the European Council meeting on June 26, 2025 in Brussels. | Pier Marco Tacca/Getty Images Instead, the vote has turned into a more general vote of confidence in Meloni and her government. The timing is tough as Italians widely dislike her ally U.S. President Donald Trump and fear the war in Iran will drive up their already high power prices. Still, she is determined not to suffer Renzi’s fate and insists she will not step down even if she loses the referendum.  Asked at a conference on Thursday whether a loss would make Rome appear less stable in its dealings with other European capitals, Foreign Minister Antonio Tajani was adamant that the referendum has “absolutely nothing to do with the stability of the government.” “This government will last until the day of the next national elections,” he added. A victory on Monday will put the wind in her sails before the next general elections, which have to be held by the end of 2027. It would also set the stage for other reforms that Meloni wants to enact: a move to a more presidential system, with a direct election of the prime minister, making the role more like the French presidency.  But a loss would galvanize the opposition — split between the populist 5Star Movement, and the traditional center-left Democratic Party. The danger is her rivals would round on her particularly over the economy. Even counting for the fact Italy has benefitted from the largest tranche of the Covid-era recovery package — growth has been sluggish, consistently below 1 percent, falling to 0.5 percent in 2025.  “We have a situation in which the country is increasingly heading toward stagnation and we have to ask ourselves what would have happened if we had not had the boost of the Recovery Fund,” said Enrico Borghi, a senator from Italia Viva, Renzi’s party. Procaccini, however, defended her, both on employment and growth. “It could be better,” he conceded. “But we are still talking about growth, unlike countries that in this historical phase are recording a decline, as in the case of Germany.”

President Donald Trump is demanding that the Federal Reserve immediately lower borrowing costs. But the war in the Middle East has now made any interest rate cuts much less likely in 2026 — not just in the U.S. but around the world. With oil prices surging past $100 a barrel and Gulf shipping routes disrupted by Iran, governments and investors are bracing for a repeat of the 2022 energy shock from Russia’s invasion of Ukraine. And from Washington to Frankfurt, and London to Tokyo, the world’s central banks are likely to strike a more wary tone on inflation while assessing the fallout during a flurry of policy meetings taking place this week. The effective closure of the Strait of Hormuz, a channel through which roughly a fifth of global oil passes, is pushing up costs not only for energy and transportation, but also for other key goods that are shipped through the waterway. The result could be a toxic mix for central banks: higher prices and lower employment, two problems they’re not equipped to address simultaneously. “My best guess, but spoken with no conviction at all, is that this gets sorted out somehow in the next few weeks, and by the middle of the year, oil prices have come back down a fair amount,” said William English, a former top staffer at the Fed who is now a professor at Yale University. “But there’s a real risk, of course, that things go on for longer and are more damaging. And in that case, all bets are off.” The specter of a prolonged global energy crunch could dash the hopes of consumers, businesses and investors worldwide for rate cuts this year — and in some cases, throw those plans in reverse. No immediate moves are likely except in Australia, which raised its target rate by a quarter-point on Tuesday. But markets have already repriced their bets on what comes next from monetary policymakers. Indeed, if the Fed does cut rates later this year, it might be one of the few major central banks that does so, given that other economies like Europe are more exposed to higher energy costs than the U.S. Before the war, investors saw a chance of cuts from the Fed, the European Central Bank and the Bank of England. Now they’re pricing in an altogether tighter policy stance: at least one ECB rate hike this year, a 60 percent chance of a BoE increase, fewer and later cuts from the Fed and more urgency in raising rates from the Bank of Japan. Central bankers will prefer to wait until they get a better gauge of the economic repercussions from the conflict because “the shock could turn out to be negligible or very large,” said EFG chief economist Stefan Gerlach. But few doubt the need for strong messaging as central banks are wary of repeating 2022, when energy price shocks combined with the after-effects from Covid and fiscal stimulus to morph into the worst inflation spike in half a century. “There will be a significant contingent worrying about upside inflation risks in light of the 2022 experience,” J.P. Morgan economist Greg Fuzesi said ahead of the ECB’s policy-making council’s meeting on Thursday. The Iran conflict is further complicating efforts by Trump to demonstrate to voters that the GOP is addressing cost-of-living concerns before this year’s midterm elections. Already, the war has caused a surge in politically salient gas prices and erased some of the progress toward more affordable mortgage rates. And it’s further muddied the picture for a central bank that the president has been pressing hard to take decisive action toward rate cuts. Now, when Chair Jerome Powell and other Fed officials meet on Wednesday, they’re expected to be more open to the idea of rate increases later this year, though that’s still not the likeliest outcome. As Yale’s English pointed out, higher costs might ultimately increase the case for rate cuts if they slow the economy significantly. “With the higher oil prices and the shock to the global economy, the likelihood of overheating seems reduced now, so that’s one of the reasons you might be comfortable waiting through some period of higher inflation,” rather than hiking rates in response, English said. “This might be enough to push the economy into real weakness, and in that case, they might well have to cut.” But if households and businesses start to worry about a new acceleration in inflation and start expecting higher prices, that dynamic can be self-fulfilling and might call for rate hikes. Hawkish policymakers are already signaling the ECB won’t hesitate this time. “A reaction by the ECB is potentially closer than many people think,” Peter Kažimír, Slovakia’s central bank governor, told Bloomberg last week. “We will be ready to act if needed.” President Christine Lagarde pledged to ensure that consumers “don’t suffer the same inflation increases like those we saw in 2022 and 2023.” Back then, the ECB was slow to react, helping inflation surge past 10 percent. Economists say today’s backdrop looks very different: In 2022, rates were near or below zero, balance sheets were bloated and fiscal policy was highly expansionary. “When inflation rose, it did so in an environment of strong demand supported by both fiscal and monetary stimulus,” said Gerlach. Now, tighter monetary and fiscal policy should limit the risk of energy shocks spilling through the economy into second-round effects. Still, Barclays analyst Silvia Ardagna says that if medium-term inflation expectations “deteriorate significantly,” she expects “the ECB to act more swiftly than in 2022, but to tighten policy gradually.” Nick Kounis, of Dutch bank ABN AMRO, also sees a more hawkish tone. “Uncertainty on the conflict is high, but if the current situation persists through to the April meeting, a hike becomes a distinct possibility,” he said. Many analysts say the first obvious central bank casualty of the war is likely to be the Bank of England, which was widely expected to cut this week but is now seen firmly on hold. That’s because the U.K. still hasn’t quite gotten on top of the inflation that was unleashed four years ago. Andrew Benito, an economist with hedge fund Point72 in London, reckons that the inevitable increase in fuel prices and household energy bills alone will add a full percentage point to headline inflation by summer, with “second-round” impacts on other prices pushing it even further away from the BoE’s target. That, says Deutsche Bank’s Sanjay Raja, will force the bank into some “uncomfortable trade-offs”: The U.K. economy has already slowed over the last year due to global trade uncertainty and various government tax hikes to close the budget deficit. Hiking rates when the economy is already struggling could risk needlessly making things worse. But any sign of complacency could be disproportionately punished by the markets, given that the BoE performed worse than any other major central bank during the last inflation shock (the headline rate peaked at over 11 percent). Raja expects BoE Governor Andrew Bailey to highlight the differences with 2022 — when inflation was accelerating rather than slowing — as one reason not to overreact to today’s price spike. However, he expects that Bailey, like the ECB and others, will talk tough about not letting business and households develop an inflationary mindset again. More important will be the Bank of Japan’s decisions and press conference on Thursday, due to the outsized influence of Japanese interest rates on global financial markets. For decades, Japan kept interest rates low and printed money furiously to escape deflation. As long as it did so, Japanese and foreign investors borrowed yen cheaply to throw at higher-yielding markets such as the U.S. Now, however, the BoJ’s concerns have finally switched from deflation to inflation, and BoJ Governor Kazuo Ueda is now in a hurry to “normalize” policy. Its key interest rate, at 0.75 percent, is the lowest in the developed world outside Switzerland. But Japan, too, faces a big headwind from higher energy prices because of its dependence on imports, and Gregor Hirt, chief investment officer for Multi Asset at Allianz Global Investors, argues that the BoJ will hesitate before raising rates again. The trouble with waiting and seeing is that the yen has already lurched lower, prompting alarm in Washington and sparking rumors of possible intervention to support it. “In order to stop further weakness, the BoJ may have to move up a rate hike to stabilize the currency,” Hirt said. Meanwhile, the war has presented the Swiss National Bank, which has kept interest rates at zero since June 2025, with a different kind of conundrum. One risk is that a global “flight to safety” drives the Swiss franc to even greater heights against the euro and others. That could make so many imports cheaper that the overall inflation rate could turn negative. Alternatively, the boost in energy prices could have the same malign impact on inflation as it will elsewhere. “The SNB will probably prefer to wait and see which of the two effects will have the greater impact on inflation prospects before acting in one direction or the other,” said ING economist Charlotte de Montpellier, who expects the Swiss central bank to stay on hold. That response, shot through with varying degrees of nervousness, looks likely to be the dominant one this week. But things will look very different if the war situation hasn’t improved by the next round of meetings.

Dr. Daniel Steiners This is not an obituary for Germany’s economic standing. It is an invitation to shift perspective: away from the language of crisis and toward a clearer view of our opportunities — and toward the confidence that we have more capacity to shape our future than the mood indicators might suggest. For years, Germany seemed to be traveling along a self-evident path of success: growth, prosperity, the title of export champion. But that framework is beginning to fray. Other countries are catching up. Parts of our industrial base appear vulnerable to the pressures of transformation. And global dependencies are turning into strategic vulnerabilities. In short, the German model of success is under strain. Yet a glance at Europe’s economic history suggests that moments like these can also contain enormous potential — if strategic thinking and decisive action come together. One example, which I find particularly striking, takes us back to 1900. At the time, André and Édouard Michelin were producing tires in a relatively small market, when the automobile itself was still a niche product. They could have focused simply on improving their product. Instead, they thought bigger; not in silos, but in systems. With the Michelin Guide, they created incentives and orientation for greater mobility: workshop directories, road maps, and recommendations for hotels and restaurants made travel more predictable and attractive. What began as a service booklet for motorists gradually evolved into an entire ecosystem — and eventually into a globally recognized benchmark for quality. > In times of change, those who recognize connections and are willing to shape > them strategically can transform uncertainty into lasting strength. What makes this example remarkable is that the real innovation did not lie in the tire itself or merely even a clever marketing idea to boost sales. It lay in something more fundamental: connected thinking and ecosystem thinking. The decision to see mobility as a broad space for value creation. It was the courage to break out of silos, to recognize strategic connections, to deepen value chains — and to help define the standards of an emerging market. That is precisely the lesson that remains relevant today, including for policymakers. In times of change, those who recognize connections and are willing to shape them strategically can transform uncertainty into lasting strength. Germany’s industrial health economy is still too often viewed in public debate in narrowly sectoral terms — primarily through the lens of health care provision and costs. Strategically, however, it has long been an industrial ecosystem that spans research, development, manufacturing, digital innovation, exports and highly skilled employment. Just as Michelin helped shape the ecosystem of mobility, Germany can think of health as a comprehensive domain of value creation. The industrial health economy: cost driver or engine of growth? Yes, medicines cost money. In 2024, Germany’s statutory health insurance system spent around €55 billion on pharmaceuticals. But much of that increase reflects medical progress and the need for appropriate care in an aging society with changing disease patterns. Innovative therapies benefit both patients and the health system. They can improve quality and length of life while shifting treatment from hospitals into outpatient care or even into patients’ homes. They raise efficiency in the system, reduce downstream costs and support workforce participation. > In short, the industrial health economy is not merely part of our health care > system. It is a key industry, underpinning economic strength, prosperity and > the financing of our social security systems. Despite public perception, pharmaceutical spending has remained remarkably stable for years, accounting for roughly 12 percent of total expenditures in the statutory health insurance system. That figure also includes generics — medicines that enter the ‘world heritage of pharmacy’ after patent protection expires and remain available at low cost. Truly innovative, patent-protected medicines account for only about seven percent of total spending. Against these costs stands an economic sector in which Germany continues to hold a leading international position. With around 1.1 million employees and value creation exceeding €190 billion, the industrial health economy is among the largest sectors of the German economy. Its high-tech products, bearing the Made in Germany label, are in demand worldwide and contribute significantly to Germany’s export surplus. In short, the industrial health economy is not merely part of our health care system. It is a key industry, underpinning economic strength, prosperity and the financing of our social security systems. Its overall balance is positive. The central question, therefore, is this: how can we unlock its untapped potential? And what would it mean for Germany if we fail to recognize these opportunities while economic and innovative capacity increasingly shifts elsewhere? Global dynamics leave little room for hesitation Governments around the world have long recognized the strategic importance of the industrial health economy — for health care, for economic growth and for national security. China is demonstrating remarkable speed in scaling and implementing biotechnology. The United States, meanwhile, illustrates how determined industrial policy can look in practice. Regulatory authorities are being modernized, approval procedures accelerated and bureaucratic barriers systematically reduced. At the same time, domestic production is being strategically strengthened. Speed and market size act as magnets for capital — especially in a sector where research is extraordinarily capital-intensive and requires long-term planning security. When innovation-friendly conditions and economic recognition of innovation meet a large, well-funded market, global shifts follow. Today roughly 50 percent of the global pharmaceutical market is located in the United States, about 23 percent in Europe — and only 4 to 5 percent in Germany. This distribution is no coincidence; it reflects differences in economic and regulatory environments. At the same time, political pressure is growing on countries that benefit from the American innovation engine without offering an equally attractive home market or recognizing the value of innovation in comparable ways. Discussions around a Most Favored Nation approach or other trade policy instruments are moving in precisely that direction — and they affect Europe and Germany directly. For Germany, the implications are clear. Those who want to attract investment must strengthen their competitiveness. Those who want to ensure reliable health care must appropriately reward new therapies. Otherwise, these global dynamics will inevitably affect both the economy and health care at home. Already today, roughly one in four medicines introduced in the United States between 2014 and 2023 is not available in Europe. The gap is even larger for gene and cell therapies. The primacy of industrial policy: from consensus to action — now Germany does not lack potential or substance. We still have a strong industrial base, a tradition of invention, outstanding universities and research institutions, and a private sector willing to invest. Political initiatives such as the coalition agreement, the High-Tech Agenda and plans for a future strategy in pharmaceuticals and medical technology provide important impulses, which I strongly welcome. > A fair market environment without artificial price caps or rigid guardrails is > the strongest magnet for private capital, long-term investment and a resilient > health system. But programs must now translate into a coherent action plan for growth. We need innovation-friendly and stable framework conditions that consider health care, economic strength and national security together — as a strategic ecosystem, not as separate silos. The value of medical innovation must also be recognized in Germany. A fair market environment without artificial price caps or rigid guardrails is the strongest magnet for private capital, long-term investment and a resilient health system. Faster approval procedures, consistent digitalization and a determined reduction of bureaucracy are essential if speed is once again to become a competitive advantage and a driver of innovation. Germany can reinvent itself, of that I am convinced. With courage, strategic determination and an ambitious push for innovation. The choice now lies with us: to set the right course and unlock the potential that is already there.

PARIS — The campaign to elect the new mayor of Paris is taking a dark turn in its final stretch, as allegations that the outgoing center-left administration failed to act on reports of child abuse in public schools threaten to derail former Deputy Mayor Emmanuel Grégoire’s candidacy. A bombshell report from French public radio earlier this week alleged that three lawsuits had been filed against a Parisian kindergarten employee for purported rapes against minors. According to the report, the employee had already been targeted by complaints for alleged cases of screaming and physical abuse against children in another city-run kindergarten — but the administration transferred him to another school instead of suspending him. Several other reports containing similar allegations have emerged over the past few months. The leading center-right candidate, Rachida Dati, who has turned these reports into one of her campaign’s core issues, said on Thursday that members of her group in the city council had “alerted” Grégoire as early as 2015. At that time, the Socialist candidate was the deputy mayor of Paris in charge of public employment. “[Grégoire] said ‘move along, there’s nothing to see here’,” Dati said in an interview with CNews Thursday. She accused the outgoing administration of having “given sexual predators a second chance.” Grégoire, who early in his campaign said he had also been a victim of child abuse, has pushed back against attempts to hold him responsible for possible oversights. “I haven’t been at City Hall for almost two years,” said Grégoire, who dropped his role as deputy mayor for a seat in the French parliament in 2024. “I am no longer in charge and have never been in charge of this matter,” he added in an interview with FranceInfo on Thursday. Last month, current Paris Mayor Anne Hidalgo acknowledged that her administration had made “mistakes” in handling these cases — but she accused her right-wing opponents of weaponizing the issue. Dati, known for her political showmanship, brought out a man who claimed that his five-year-old daughter had been abused in a city-run facility as she unveiled her platform in February. She has pledged to vigorously enforce laws that prohibit an adult worker from being alone with a child in schools and to increase background checks for new recruits. Grégoire’s platform includes similar promises. The first round of the election will take place on Sunday. Grégoire is currently leading in the polls, but the outcome will remain uncertain until the runoff on March 22. With so little time remaining before the vote, Grégoire’s camp is hoping that voters have already picked their preferred candidate and that the latest reports will “not sway any votes,” said an official backing the Socialist Party candidate who was granted anonymity to speak candidly. But Dati, who is hosting her first and only campaign rally Thursday evening in Paris, is unlikely to let up on the matter with less than 10 days remaining for her to make the case that she should be the next mayor of Paris.

LONDON — Global Counsel started the year riding high. The public affairs agency had just posted its best-ever financial results, could boast of staff in multiple countries, and was in the process of expanding its international operations. In a matter of weeks, the lobby shop’s 16-year legacy had been all-but wiped out, and it had collapsed into administration under the weight of the Epstein scandal. Co-founder Peter Mandelson, the former U.K. ambassador to Washington and one of the commanding figures of British politics over the past four decades, is facing fresh revelations over his links to convicted sex offender Jeffrey Epstein. Despite frantic efforts to distance itself from Mandelson, the influence business he masterminded was forced to fold. POLITICO spoke to more than half a dozen members of staff and former clients since the agency announced it was going into administration last Thursday. They paint a picture of a dramatic and sudden disintegration which left more than 100 staffers in London, Brussels and Washington scrambling to find new jobs. Many were granted anonymity to speak openly about their experience. NEVER SEEN HIM Staff insist Mandelson — who founded Global Counsel in 2010 after Labour lost power — had very little to do with the firm when the latest documents on his contact with Epstein dropped at the end of January. Among them were emails suggesting Mandelson leaked sensitive information to Epstein when serving as business secretary. He is now subject to a police investigation. Mandelson’s lawyers Mishcon de Reya say he is cooperating with the police investigation, and his overriding priority is to “clear his name.” “There was a feeling of bewilderment initially because it seemed blindingly obvious to us that [Mandelson] was out of the picture,” a senior staff member said. “But the reporting, or maybe more the response from people to the reporting, made it sound like he was still sitting in on pitches and approving our expenses.” The former Labour heavyweight’s association with the firm had long been seen as a major asset — particularly as Labour’s Keir Starmer prepared for power, backed by Mandelson ally Morgan McSweeney. But Mandelson formally stepped back from any day-to-day involvement with Global Counsel when he became U.K. ambassador to Washington in December 2024. When he was sacked from the post by Starmer last September over previous revelations about his links to Epstein, the firm announced his 21 percent stake would be sold. He would be barred from drawing financial benefits, and his shares would be reclassified so he would no longer have a say over business decisions. But the senior staff member quoted above said a failure to complete the divestment process quickly, given the complex legal and financial process involved, meant it was “impossible to argue there was clear blue water” from Mandelson. Mandelson was sacked from the ambassador post by Keir Starmer last September over previous revelations about his links to Epstein. | Rick Friedman/Corbis via Getty Images This was particularly frustrating for staff members who said they had never seen Mandelson in the flesh. Even those with years of service said he had only been present a handful of times. ‘BLOWN OUT OF PROPORTION’ Matters were also complicated by the appearance of Global Counsel co-founder Benjamin Wegg-Prosser — then still the company’s chief executive —in the Epstein emails released by the U.S. Department of Justice. He was copied into conversations about the business between Mandelson and Epstein, and directly emailed Epstein with a draft statement the company had prepared seeking to downplay links between Mandelson and the convicted sex offender. Global Counsel was approached for comment about the Wegg-Prosser emails at the time they were released, but they declined to comment. POLITICO was unable to reach Wegg-Prosser for comment ahead of the publication of this article. Wegg-Prosser’s involvement was simply “one of those circumstances where you’re asked to do something by your chairman and you do that,” a Global Counsel director said. His role, they argued, had been “blown significantly out of proportion” by media reporting. “Anyone that works in public affairs will know that a meeting is a meeting, and you’re never always going to know who that person is.” In an attempt to put a lid on the growing crisis, Wegg-Prosser announced his departure from Global Counsel on Feb. 6, just hours before the firm confirmed it had finally completed the divestment of Mandelson’s shares. But it wasn’t enough. An associate director of the agency said Wegg-Prosser’s exit came as a “real shock” to staff, and argued that his links had been “seriously overblown” by the media. Wegg-Prosser’s “principled” decision to step down, they suggested, may have instead “perversely” fueled an erroneous impression that the links between Epstein and the firm were deeper than the reality. NOT JUST HEADLINES Staff initially hoped the Mandelson backlash would be limited to a series of gruesome headlines. But those hopes were dashed when a host of household names — including Tesco, Bank of America and Barclays — called time on their relationship with the firm. Some major clients did stick by the embattled agency, including banking giant Santander. Samir Dwesar, the bank’s senior public affairs and public policy manager told POLITICO the staff “don’t deserve this,” but predicted the “consummate professionals, who have deep expertise in their areas” would “all be snapped up pretty quickly.” Another public affairs professional at a company which employed Global Counsel said there had been “no discussions” about ending their contract. “Our assessment was that Global Counsel’s leadership had taken the correct decisions under incredibly difficult circumstances,” they said. “We were confident they’d get through it.” Many staff believed the same when they gathered for the all-hands meeting at the firm’s London HQ last Thursday — only to be told that not only was Global Counsel to close, but that administrators had been appointed to oversee the company’s affairs. A note to staff from Chief Executive Rebecca Park said “the decision to wind up the UK business affects all of GC. We will be discussing separately with each country office how the process will work for them.” Staff present for the London HQ announcement soon decamped to local bars to digest the news and drown their sorrows. | Daniel Sorabji/AFP via Getty Images “I think for a lot of people, it was a shock,” the same director at the firm quoted above said. “We’d amazingly retained a significant number of clients. In terms of business, that’s not easy, particularly when you’re politically exposed. So I think there should be a big thanks to them and the loyalty they showed as well.” The associate director quoted above said staff had sought solace in the survival of  business lobby group the Confederation of British Industry, which weathered its own storm of sexual misconduct claims. A mass exodus of members, and the icing of Whitehall meetings by government ministers wary of association with the group, was overcome under new leadership. “Maybe I was naïve, but lots of business leaders and politicians are brought down by scandals that leave their companies or parties bruised, and they still survive,” the associate director quoted above said. “I’d started to believe that might be the case with us too.” Staff present for the London HQ announcement soon decamped to local bars to digest the news and drown their sorrows. Some who had dialed in from half-term holidays had to return to their families knowing they’d just lost their livelihoods. Everyone — from decade-long veterans to new joiners — was affected. There remains a sense of genuine anger and grief among staff, who say their time at Global Counsel was among the most rewarding of their careers. While some had begrudgingly started job-hunting when the scandal first broke, others had opted to stay given a belief that the firm was entirely disconnected from Mandelson’s historic behavior. “I spent the weekend speaking to my partner, my parents, and my closest friends about what to do,” the associate director quoted above said of the days after the scandal broke. “I looked through some of the emails [in the Epstein files] and felt physically nauseous. I didn’t want to have even a microscopic link to what I was reading about, but at the same time I didn’t see that reflected whatsoever in the culture or people at Global Counsel.” The lingering question for many is whether the collapse could have been prevented. The failure to divest Mandelson’s shares left a tangible legal link, but a second associate director said frequent references to Mandelson in Global Counsel media coverage meant people outside the operation saw him as “central to its DNA” — even if that was not the experience of those working there. NEW HORIZONS Park, who stepped up as CEO following Wegg-Prosser’s departure, was praised by some of the staff for how she handled the final days of the crisis. Staff POLITICO spoke to highlighted efforts she had overseen to try and secure new jobs for those out of work. There is even more urgency to find a new job for those staff whose visas are linked to their work at the firm. Under U.K. laws they will have just 60 days to find new employment or face having their visas revoked. It has left some Global Counsel staff at risk of losing their immigration status, along with family members listed as their dependents. One staff member left in that situation said the change to their visa status meant they are no longer entitled to unemployment benefits or other public funds. With the firm entering into the administration process, other staff also lost access to enhanced parental pay packages. Despite initial fears that staff at the agency would be stained by their association, several of those who spoke to POLITICO have already secured new jobs. One staff member at rival firm FGS Global said it the lobbying agency is planning a hiring spree, with as many as two dozen ex-Global Counsel staff being lined up for new gigs. Those are expected to include a raft of senior staffers who’d been working on financial services and private equity briefs. “I think people do recognize that this is an insane opportunity from a talent perspective, just given how [Global Counsel] was respected and the people that were there, I think they genuinely are recognized as top of the class in the field,” the ex-Global Counsel director quoted above said. This reporting first appeared in POLITICO London Influence, a weekly newsletter on lobbying, campaigning and influence in Westminster and beyond.

LONDON — Britain’s pubs are in distress. The beer-loving Nigel Farage has spied an opening. The Reform UK leader and his chief whip Lee Anderson are set to unveil a raft of new policies Tuesday meant to support struggling publicans — and punch a Labour bruise. It comes days after Chancellor Rachel Reeves — under pressure from a highly-organized pubs industry — was forced to U-turn on plans from her budget and announce a three-year relief package for the U.K.’s ailing hospitality sector. Farage isn’t alone — the government’s other rivals are setting out pub-friendly policies too, and are helping to push the plight of the British boozer up the political agenda.  But it’s the latest populist move by the right-wing outfit, whose leader often posts pictures from the pub on social media and has carefully cultivated an ale-drinking man-of-the people persona, to capture the attention of an electorate increasingly soured on Labour’s domestic efforts. ‘GENUINE PISS ARTIST’ Reform will on Tuesday lift the lid on a five-point plan to “save Britain’s pubs,” promising a slew of tax cuts for the sector — including slashing sales tax VAT to 10 percent, scrapping the employer National Insurance increase for the hospitality sector, cutting beer duty by 10 percent, and phasing out business rates for pubs altogether. The party will also pledge to change “beer orders” regulation, which sees large pub companies lock landlords into contracts that force them to buy beer from approved suppliers at much higher prices than the open market. Reform says the plan would be funded through social security changes — reinstating a two-child cap on universal credit, a move the party claims would save around £3 billion by 2029-30. “Labour has no connection to how real life works,” Farage said earlier this month as he lambasted government plans to lower the drink drive limit. One of the British pub industry’s biggest names thinks Farage could have a genuine opening with voters on this front. The Reform boss has “got the massive advantage in that he’s a genuine piss artist,” Tim Martin, the outspoken owner of the British pub chain JD Wetherspoons, said. “He genuinely likes a sherbet, which, when it comes to pubs, people can tell that, whereas I don’t think [they do] with the other party leaders,” he said. The pub boss recounted watching as Farage “whacked down two pints and had two cigarettes” ahead of an appearance on BBC Question Time in which Martin also featured, as other politicians hovered over their briefing notes. The dangers of upsetting the pub industry have not been lost on Labour’s political opponents. | Ben Stansall/AFP via Getty Images Green MP Siân Berry is less impressed with Farage’s pub shtick, however. She accuses him of “playing into a stereotype of pubs as spaces for older white men to sit and drink.” “Most people who run a pub business these days know that it needs to be a family space,” she said. SHOW US THE POLICY Either way, Farage is exploiting an opening left by Labour, which riled up some pubs with its planned shake-up of business rates. “When the Labour government came in, the pub industry was already weak — and they piled on more costs,” said Wetherspoons’ boss Martin. Since Labour won power in 2024 Reeves has also hiked the minimum wage employers must pay their staff, increased employer national insurance contributions, and raised beer duties. While the industry cautiously welcomed Reeves’ business rate U-turn last month, they say there’s still more to do. “This will make a significant difference, as three quarters of pubs are now going to see their bills staying the same or going down,” Andy Tighe, the British Beer and Pub Association (BBPA)’s strategy and policy director, said of the U-turn — but “it doesn’t solve everything,” he added. “For most operators, it’s those big sorts of taxes around business rates, VAT, duty, employment-related taxes that make the real difference, ultimately, to how they think about the future,” he said.  A U.K. Treasury spokesperson said: “We are backing Britain’s pubs — cutting April’s business rates bills by 15 percent followed by a two year freeze, extending World Cup opening hours and increasing the Hospitality Support Fund to £10 million to help venues. “This comes on top of capping corporation tax, cutting alcohol duty on draught pints and six cuts in interest rates, benefiting businesses in every part of Britain,” they added. ALSO PITCHING The dangers of upsetting the pub industry have not been lost on Labour’s political opponents. Politicians of all stripes are keen to engage with the industry, Tighe says. “Pubs matter to people and that’s why I think political parties increasingly want to ensure that the policies that they’re putting forward are pub-friendly,” he said.  Polling found that nearly half (48 percent) of Farage’s supporters in 2024 think pubs in their local area have deteriorated in recent years. | Henry Nicholls/AFP via Getty Images The Tories say they will abolish business rates for pubs, while the Liberal Democrats have pledged to cut their VAT by 5 percent. The Greens’ Berry also wants to tackle alcohol advertising which she says pushes people to drink at home. “A pub is a different thing in a lot of ways, it is more part of the community — drinking second,” the left-wing party’s representative said. “I think the evidence base for us is not to be anti-pub, but it might be against advertising alcohol.” Industry bigwigs like Martin have consistently argued that pubs are being asked to compete with supermarkets on a playing field tilted against them.  “They must have tax equality with supermarkets, because they can’t compete with supermarkets, which are much stronger financial institutions than pubs,” he said, citing the 20 percent VAT rate on food served in pubs — and the wider tax burden pubs face.  GLOOMY OUTLOOK The plight of the local boozer appears to be occupying British voters too. Polling from the think tank More in Common conducted in August 2025 found almost half of Brits (44 percent) go to the pub at least once a month — and among people who voted Labour in 2024 that rises to 60 percent. The same polling found nearly half (48 percent) of Farage’s supporters in 2024 think pubs in their local area have deteriorated in recent years — compared to 31 percent of Labour voters. “Reform voters are more likely than any other voter group to believe that their local area is neglected,” Louis O’Geran, research associate at More in Common, said. “These tangible signs of decline — like boarded up pubs and shops — often come up in focus groups as evidence of ‘broken Britain’ and drive support for Reform,” he added.  The job now for Farage, and his political rivals, is to convince voters their local watering hole is safe in their hands.

The Trump administration suffered a rare defeat at the Supreme Court on Friday, as the justices turned down an emergency request to halt a lawsuit over the government’s effort to bar immigration judges from speaking publicly about their work. In a brief order, the high court suggested it might step into the dispute in the future, but allowed the litigation to continue to play out in the lower courts. “At this stage, the Government has not demonstrated that it will suffer irreparable harm without a stay,” the unsigned, one-paragraph order said. No justice noted any dissent from the ruling. The ruling sullies the Trump administration’s near-perfect record at the Supreme Court this year on emergency appeals filed on the so-called shadow docket. Two weeks ago, Solicitor General D. John Sauer urged the high court to take immediate action to head off “disruptive” and “destabilizing uncertainty” caused by an appeals court ruling in June that suggested federal government employees might be able to press lawsuits in federal court because of turmoil at a federal agency that oversees employment-related disputes. The justices said the Trump administration is free to come back to the Supreme Court for emergency relief if federal officials were ordered to testify or turn over records to the National Association of Immigration Judges. The judges’ union filed suit in 2020 over a policy enacted during the first Trump administration that prohibited immigration judges from public comments about their work. Previously, judges were free to discuss those issues, if they made clear they were not speaking on behalf of the Justice Department, which runs the immigration courts. An attorney for the union, Ramya Krishnan, lauded the high court’s decision. “The Supreme Court was right to reject the government’s request for a stay of proceedings,” said Krishnan, a lawyer with the Knight First Amendment Institute. “The restrictions on immigration judges’ free speech rights are unconstitutional and it’s intolerable that this prior restraint is still in place.” Spokespeople for the Justice Department did not respond to a request for comment.

One trillion US dollars of gross domestic product (GDP) has been surpassed. Poland has entered the ranks of the world’s 20 largest economies, symbolically ending a phase of chasing the West that has lasted more than three decades. The Polish Development Fund’s (PFR) new strategy seeks to address the challenge of avoiding the medium-level development trap and transitioning from the role of subcontractor to that of investor. This year marks a turning point in Polish economic history. After years of transformation, reforms and overcoming civilizational deficits, Poland has reached a point that the generation of ‘89 could only dream of. GDP crossed the symbolic barrier of US$1 trillion, and we proudly enter the exclusive club of the world’s 20 largest economies. Diversified Polish exports are breaking records, and innovative companies are conquering global markets. Sound like a happy ending? Not necessarily. Via PFR Investing for future generations Poland’s past success invites tougher challenges in a brutal world. The cheap labor growth model is dead; demographics are relentless. PFR analyses highlight declining employment as a core issue — without bold changes, stagnation looms. Piotr Matczuk, PFR president, says Poland needs an impetus for resilience, innovation and growth. PFR’s 2026-2030 strategy is that roadmap, urging a shift to high gear. On Dec. 10, it unveiled investments for future generations. Geopolitics enters the balance sheet PFR’s strategy marks a paradigm shift: integrating economics with security. Business now anchors state security, with “economic and defence resilience” as a core pillar — viewing security spending as essential insurance, not cost. > The PFR’s strategy is clear: the competitiveness of the Polish economy depends > directly on access to cheap and clean energy. PFR has invested in WB Electronics, Poland’s defense leader in command systems and drones. It expands beyond arms via dual-use tech: algorithms, encrypted communications and autonomous drones often from civilian startups. This spring’s PFR Deep Tech program backs venture capital (VC) for scaling these firms; IDA targets innovations for logistics, cybersecurity and future defense. The focus is Poland’s technological sovereignty. Controlling key security links — from ammo to artificial intelligence — ensures economic maturity resilient to geopolitical shocks. > Poland needs a boost to our resilience, innovation and growth rate. That is > why the new strategy emphasizes investment in new technologies, infrastructure > and the financial security of Poles. We want the PFR to be a catalyst for > change and a partner of choice — an institution that invests for future > generations, sets quality standards in development financing and supports > Polish entrepreneurs in boosting their international presence. > > Piotr Matczuk, President, PFR Piotr Matczuk, President, PFR / Via PFR Energy: to be or not to be for the industry If defense is the shield, then energy is the bloodstream. The PFR’s strategy is clear: the competitiveness of the Polish economy depends directly on access to cheap and clean energy. Without accelerating the transformation, Polish companies, instead of increasing their share in foreign markets, may lose their position. This is why the fund wants to enter the game as an investor where the risks are high, but the stakes are even higher — into an investment gap that the commercial market alone will not fill.  The concept of local content, in other words the participation of domestic companies in the supply chain, is key to the new strategy. This is where the circle closes. The Baltic Hub is not just a container terminal. Investment in the T5 installation terminal is the foundation, as the Polish offshore will not be built with the appropriate participation of a domestic port. This is a classic example of how the PFR works: building ‘hard’ infrastructure that becomes a springboard for a whole new sector of the economy.  The end of being a subcontractor: capital emancipation Taking inspiration from, among others, France’s Tibi Initiative, in mid-November 2025 the Polish minister of finance and economy, Andrzej Domański, announced the Innovate Poland program. The PFR plays a leading role in what will be the largest initiative in the history of the Polish economy to invest in innovative projects. Thanks to cooperation with Bank Gospodarstwa Krajowego (BGK), PZU and the European Investment Fund, Innovate Poland is already worth 4 billion złoty, and the program multiplier may reach as much as 3-4. The combined development and private capital will be invested by experienced VC and private equity funds. The aim is to further Poland’s economic development — driven by innovative companies that make a profit. In the first phase, it is expected to finance up to 250 companies at various stages of development. Via PFR The expansion of Polish companies abroad is also part of the effort for advancement in the global hierarchy. Their support is one of the pillars of the new PFR strategy. For three decades, Poland has played the role of the assembly plant of Europe — solid, cheap and hard-working. However, the highest margins, flowing from having a global brand and market control, went overseas. Polish companies need to stop being anonymous subcontractors and become owners of assets in foreign markets.  Here, the PFR acts as financial leverage. The support for the Trend Group is a prime example of this maturing process. This is a transaction with a symbolic dimension: it reverses the investment vector of the 1990s, when German capital was consolidating Polish assets. Today, it is Polish entities that are increasingly becoming leaders in offering industrial solutions in the European Union. > Polish companies need to stop being anonymous subcontractors and become owners > of assets in foreign markets. However, these ambitions extend beyond the Western direction. The strategy strongly emphasizes Poland’s role in the future reconstruction of Ukraine and the consolidation of the Central and Eastern European region. The involvement of the PFR in the operations of the Euvic Group on the Ukrainian IT market is a good example. In the digital world, big players have more power, and the PFR strives to ensure that the decision-making centers of those growing giants remain in Poland. Most importantly, Polish businesses are no longer alone in this struggle. The strategy institutionalizes the concept of ‘Team Poland’. In this initiative, the PFR provides capital; BGK, a state development bank, offers debt solutions; the KUKE, an insurance company, insures the risk; and the Polish Investment and Trade Agency provides promotional support. Acting like a one-stop shop, all these institutions enable Polish capital to compete as a partner in the global league. This is part of the Polish government’s modern economic diplomacy strategy, led by Domański. Capital for generations. From an employee to a stakeholder in the economy  All grand plans need fuel. Mature economies like the Netherlands and the United Kingdom harness citizens’ savings via capital markets. PFR’s strategy boldly demands Poland’s success create generational wealth: turning the average Kowalski from an employee into a stakeholder. Diagnosis is brutal: Poles save little (6.38 percent compared with the EU’s 14.32 percent in Q1 2024) and inefficiently, favoring low-interest deposits. Employee Capital Plans (PPK) drive cultural change. Hard data demonstrate this: 67 percent average returns over five years crush traditional savings. It’s a virtuous cycle — PPK capital feeds stock markets, finances company growth and loops profits back to future pensioners. An architect, not a firefighter  The new PFR strategy for 2026-30 is a clear signal of a paradigm shift. The company, which many Polish entrepreneurs still see as a firefighter extinguishing the flames of the pandemic with billions from the Anti-Covid Financial Shields, is definitively taking off its helmet and putting on an engineer’s hard hat. It is shifting from interventionist to creator mode, abandoning the role of ‘night watchman’ of the Polish economy to that of its ‘chief architect’. This is an ambitious attempt to establish an institution in Poland that not only provides capital, but also actively shapes the country’s economic landscape, setting the direction for development for decades to come.

Listen on * Spotify * Apple Music * Amazon Music Kaum zurück aus Afrika, muss Kanzler Friedrich Merz in Berlin in den Ring: Beim Arbeitgebertag trifft er auf seinen aktuell lautesten Kritiker, JU-Chef Johannes Winkel. Es geht um die Zukunft der Rente. Rasmus Buchsteiner analysiert, ob ein neues Rentenpaket den Aufstand der Jungen stoppen kann und warum Merz heute jedes Wort auf die Goldwaage legen muss. Im 200-Sekunden-Interview: Philipp Türmer. Der Juso-Vorsitzende hält dagegen. Er nennt die Pläne der Jungen Union „langweilig“, fordert eine Einbeziehung von Selbstständigen, Beamten und Politikern in die Rentenkasse und erklärt, warum die Koalition trotz des Streits nicht platzen wird. Außerdem: In Washington tobt ein Machtkampf um die Ukraine-Politik. Jonathan Martin berichtet über den Riss bei den Republikanern zwischen den „Traditionalisten“ um Marco Rubio und dem Trump-Lager um J.D. Vance. Das Berlin Playbook als Podcast gibt es jeden Morgen ab 5 Uhr. Gordon Repinski und das POLITICO-Team liefern Politik zum Hören – kompakt, international, hintergründig. Für alle Hauptstadt-Profis: Der Berlin Playbook-Newsletter bietet jeden Morgen die wichtigsten Themen und Einordnungen. Jetzt kostenlos abonnieren. Mehr von Host und POLITICO Executive Editor Gordon Repinski: Instagram: @gordon.repinski | X: @GordonRepinski. Legal Notice (Belgium) POLITICO SRL Forme sociale: Société à Responsabilité Limitée Siège social: Rue De La Loi 62, 1040 Bruxelles Numéro d’entreprise: 0526.900.436 RPM Bruxelles info@politico.eu www.politico.eu

BERLIN — German Chancellor Friedrich Merz urged Ukrainian President Volodymyr Zelenskyy to curb the flow of young Ukrainian men to Germany and ensure they stay to defend their country. “In a lengthy telephone conversation today, I asked the Ukrainian president to ensure that young men in particular from Ukraine do not come to Germany in large numbers — in increasing numbers — but that they serve their country,” Merz said Thursday. “They are needed there.” His comments come amid growing concerns in Germany — particularly within Merz’s conservative ranks — that public support for the Ukrainian cause could wane if young male Ukrainians are seen to be avoiding military service by coming to Germany. Following the relaxation of Ukrainian exit rules over the summer, the number of young Ukrainian men aged 18 to 22 entering Germany rose from 19 per week in mid-August to between 1,400 and 1,800 per week in October, according to German media reports citing the German interior ministry.   Markus Söder, Bavaria’s conservative premier and an ally of Merz, proposed restrictions on the EU’s so-called Temporary Protection Directive if Kyiv doesn’t voluntarily reduce arrivals. The rules provide Ukrainians with an automatic protected status.       Germany is one of Ukraine’s staunchest allies within the EU. The country has hosted over 1.2 million Ukrainian refugees since Russia’s full-scale invasion in 2022 and is its biggest donor in military aid after the U.S. in absolute numbers. Members of Merz’s ruling coalition fear that the growing presence of young Ukrainian men in Germany will be turned into a political flash point by members of the far-right Alternative for Germany (AfD) party, who criticize the government’s ongoing support for Kyiv. The ascending AfD, now polling first, has long demanded a stop to welfare payments to Ukrainians. Around 490,000 Ukrainian citizens of working age receive long-term unemployment benefits in Germany, according to data from the country’s employment agency. Merz’s coalition — which is under increasing fiscal pressure and generally wants to reduce welfare spending — is working on a draft law that would cut the right to such benefits for Ukrainians and encourage work. “In Germany, the transfer payments for these refugees will be such that the incentives to work are greater than the incentives in the transfer system,” Merz said Thursday. In the same phone conversation, Merz also urged Zelenskyy to sort out the country’s corruption problems as Kyiv faces the fallout of a massive scandal involving kickbacks — another development that German officials fear could undermine public support for the embattled country.