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

The Trump administration is weighing new tactics to drive regime change in Cuba, including imposing a total blockade on oil imports to the Caribbean country, three people familiar with the plan said Thursday. That escalation has been sought by some critics of the Cuban government in the administration and backed by Secretary of State Marco Rubio, according to two of the three people, who were granted anonymity to discuss the sensitive discussions. No decision has been made on whether to approve that move, but it could be among the suite of possible actions presented to President Donald Trump to force the end of Cuba’s communist government, these people added. Preventing shipments of crude oil to the island would be a step-up from Trump’s statement last week that the U.S. would halt Cuba’s imports of oil from Venezuela, which had been its main crude supplier. But there are ongoing debates within the administration about whether it is even necessary to go that far, according to all three people. The loss of Venezuelan oil shipments — and the resale of some of those cargoes that Havana used to obtain foreign currency — has already throttled Cuba’s laggard economy. A total blockade of oil imports into Cuba could then spark a humanitarian crisis, a possibility that has led some in the administration to push back against it. The discussions, however, show the extent to which people inside the Trump administration are considering deposing leaders in Latin America they view as adversaries. “Energy is the chokehold to kill the regime,” said one person familiar with the plan who was granted anonymity to describe the private discussions. Deposing the country’s communist government – in power since the Cuban revolution in 1959 – is “100 percent a 2026 event” in the administration’s eyes, this person added. The effort would be justified under the 1994 LIBERTAD Act, better known as the Helms-Burton Act, this person added. That law codifies the U.S. embargo on Cuban trade and financial transactions. Cuba’s embassy in Washington did not respond to a request for comment. A White House spokesperson did not address a question on whether the administration was considering blocking all oil imports into Cuba. Cuba imports about 60 percent of its oil supply, according to the International Energy Agency. It was heavily dependent on Venezuela for those imports until the Trump administration started seizing sanctioned shipments from that country. Mexico has more recently become the main supplier as Venezuelan crude shipments have dried up. Mexico, however, charges Cuba for imported oil and its shipments are not expected to fully ameliorate Cuba’s worsening energy shortage. Since the U.S. operation that captured Venezuelan leader Nicolás Maduro, the administration has turned its attention on Cuba, arguing that the island’s economy is at its weakest point, making it ripe for regime change soon. Trump and Secretary of State Marco Rubio, the son of Cuban immigrants, have each voiced their optimism that the island’s communist government will fall in short time given the loss of Venezuela’s economic support. Toppling the communist regime in Cuba would fulfill a nearly seven-decade political project for Cuban exiles in Miami, who have pushed for democracy on the island since Fidel Castro took power after ousting the dictatorship of Fulgencio Batista in 1959. Rubio has long been an advocate for tough measures against Havana in the hopes of securing the fall of the regime. Conditions on the island have indeed worsened, triggering blackouts and shortages of basic goods and food products. But the regime has weathered harsh U.S. sanctions — and the sweeping trade embargo — for decades and survived the fall of the Soviet Union after the Cold War. Meanwhile, concerns remain that the sudden collapse of the Cuban government would trigger a regional migration crisis and destabilize the Caribbean. Critics of the Cuban government will likely celebrate the proposal if implemented by the White House. Hawkish Republicans had already embraced the idea of completely blocking Cuba’s access to oil. “There should be not a dime, no petroleum. Nothing should ever get to Cuba,” said Sen. Rick Scott (R-Fla.) in a brief interview last week.

urope has spent the last week rummaging around for leverage that would force U.S. President Donald Trump to back off his threats to seize Greenland from Denmark. While Trump now says he will not be imposing planned tariffs on European allies, some politicians think they’ve found the answer if he changes his mind again: boycott the 2026 FIFA World Cup. The quadrennial soccer jamboree, which will be hosted in the U.S., Mexico and Canada this summer, is a major soft-power asset for Trump — and an unprecedented European boycott would diminish the tournament beyond repair. “Leverage is currency with Trump, and he clearly covets the World Cup,” said Adam Hodge, a former National Security Council official during the Biden administration. “Europe’s participation is a piece of leverage Trump would respect and something they could consider using if the transatlantic relationship continues to swirl down the drain.” With Trump’s Greenland ambitions putting the world on edge, key political figures who’ve raised the idea say that any decision on a boycott would — for now, at least — rest with national sport authorities rather than governments. “Decisions on participation in or boycott of major sport events are the sole responsibility of the relevant sports associations, not politicians,” Christiane Schenderlein, Germany’s state secretary for sport, told AFP on Tuesday. The French sport ministry said there are “currently” no government plans for France to boycott. That means, for the moment, a dozen soccer bureaucrats around Europe — representing the countries that have so far qualified for the tournament — have the power to torpedo Trump’s World Cup, a pillar of his second term in office like the 2028 Olympics in Los Angeles. (Another four European countries will be added in spring after the European playoffs are completed.) While they may not be household names, people like Spain’s Rafael Louzán, England’s Debbie Hewitt and the Netherlands’ Frank Paauw may now have more leverage over Trump than the European Commission with its so-called trade bazooka. “I think it is obvious that a World Cup without the European teams would be irrelevant in sports terms — with the exceptions of Brazil and Argentina all the other candidates in a virtual top 10 will be European — and, as a consequence, it would also be a major financial blow to FIFA,” said Miguel Maduro, former chair of FIFA’s Governance Committee. Several of the European soccer chiefs have already shown their willingness to enter the political fray. Norwegian Football Federation president Lise Klaveness has been outspoken on LGBTQ+ issues and the use of migrant labor in preparations for the 2022 World Cup. The Football Association of Ireland pushed to exclude Israel from international competition before the country signed the Gaza peace plan in October. “Football has always been far more than a sport,” Turkish Football Federation President Ibrahim Haciosmanoglu, whose team is still competing for one of the four remaining spots, wrote in an open letter to his fellow federation presidents in September calling for Israel’s removal. Trump attempted Wednesday in Davos to cool tensions over Greenland by denying he would use military force to capture the massive, mineral-rich Arctic island. But during the same speech he firmly reiterated his desire to obtain it and demanded “immediate negotiations” with relevant European leaders toward that goal. Later in the day, in a social media post, Trump said he reached an agreement with NATO on a Greenland framework. His Davos remarks are unlikely to pacify European politicians across the political spectrum who want to see a tougher stance against the White House. “Seriously, can we imagine going to play the World Cup in a country that attacks its ‘neighbors,’ threatens to invade Greenland, destroys international law, wants to torpedo the UN, establishes a fascist and racist militia in its country, attacks the opposition, bans supporters from about 15 countries from attending the tournament, plans to ban all LGBT symbols from stadiums, etc.?” wondered left-wing French lawmaker Eric Coquerel on social media. Influential German conservative Roderich Kiesewetter also told the Augsburger Allgemeine news outlet: “If Donald Trump carries out his threats regarding Greenland and starts a trade war with the EU, I find it hard to imagine European countries participating in the World Cup.” Russia’s World Cup in 2018 faced similar calls for a boycott over the Kremlin’s illegal annexation of Ukraine’s Crimean peninsula, as did Qatar’s 2022 tournament over the Gulf petromonarchy’s dismal human rights record. While neither mooted boycott came to pass — indeed, the World Cup and the Olympics haven’t faced a major diplomatic cold shoulder since retaliatory snubs by countries for the Moscow 1980 and Los Angeles 1984 Summer Olympics — Trump’s seizure of Greenland would put Europe in a position with no recent historical parallel. Neither FIFA, the world governing body that organizes the tournament, nor four national associations contacted by POLITICO immediately responded to requests for comment. Tom Schmidtgen and Ferdinand Knapp contributed to this report.

Former European Central Bank President and ex-Italian Prime Minister Mario Draghi has been awarded the International Charlemagne Prize of Aachen, as the EU grapples with how to stay relevant in a harsher global order. Organizers announced the 2026 winner Monday, citing Draghi’s “historic services” to European integration and his renewed role in shaping the bloc’s economic future. He will be formally awarded at a ceremony on May 14. The timing of the award is deliberate. Europe risks becoming “a pawn in the game of other powers” unless it can secure its sovereignty, the prize committee warned, adding that competitiveness and economic strength are essential for a sovereign Europe. “Mario Draghi holds a key role in strengthening Europe’s economy, and his 2024 Draghi Report outlines the plans needed to ensure competitiveness, growth, and stability in the European Union,” it said. The Draghi report, which calls for “radical change” to EU decision-making, sends a clear message: Europe can no longer rely on crisis management alone. “This new world is not kind to us,” Draghi warned last year. “It does not wait for slow, collective rituals.” The prize committee urged EU governments and the Commission to implement Draghi’s recommendations “immediately,” framing the report as a blueprint for survival rather than another Brussels white paper. The Charlemagne Award honors individuals or institutions that have made an outstanding contribution to European unity, peace and integration. Recent winners include Ukrainian President Volodymyr Zelenskyy and the Ukrainian people, Chief Rabbi Pinchas Goldschmidt and the Jewish communities in Europe, and European Commission President Ursula von der Leyen. Draghi was an inevitable candidate, ever since he pledged to do “whatever it takes” as ECB president at the height of the sovereign debt crisis in 2012. The pledge is often credited with ensuring the survival of the single currency. A year after stepping down as ECB president 2019, Draghi, 78, was tapped by President Sergio Mattarella to form a “government of national unity” following the collapse of Italy’s Giuseppe Conte-led government.  His success leading Italy through the Covid-19 crisis and engineering an economic rebound was so striking that The Economist named Italy its 2021 “Country of the Year,” crediting Draghi’s leadership.

Political leaders stepped up demands for new EU sanctions against the regime in Iran, in response to the violent suppression of mass protests across the country.  “Europe needs to act — and fast,” European Parliament President Roberta Metsola told POLITICO. “We will support any future measures taken at EU level.”  Metsola, German Chancellor Friedrich Merz and Irish Prime Minister Micheál Martin are among those who want Brussels to escalate sanctions against Tehran. The EU’s executive in Brussels is reviewing options and promised to come forward with a plan. Proposals under discussion include designating the Islamic Revolutionary Guard Corps as a terrorist organization and tougher measures against regime figures responsible for the violence.  Authorities in Tehran have sought to quell an uprising that has spread across more than 100 towns and cities in Iran since Dec. 28. The protests began as demonstrations against the dire economic situation, with rampant inflation and a plunging currency making daily life almost impossible for millions of Iranians. But they quickly grew into a nationwide uprising demanding, in many cases, the overthrow of the ayatollahs’ authoritarian regime. Accurate data is difficult to verify, after the regime shut off internet communications, but an Iranian official claimed around 2,000 people may have been killed, including security personnel, according to Reuters. Many thousands of protesters have been arrested.  “Political signals, support and solidarity are important — but we need to show that we are serious,” Metsola said. The EU must demonstrate it is watching the unfolding crisis, listening to the calls of those demonstrating against the regime, and most importantly “acting,” she added. “If we do not stand up and call out these injustices, we let all these brave people in Iran, [who] are marching for justice, down. We cannot let this happen.”  Metsola has announced she is banning all Iranian diplomats and officials from entering any of the European Parliament’s buildings or offices. She then set out her criteria for new sanctions. “Measures must be effective and targeted, ensuring that those responsible — politically, militarily or judicially — are held accountable,” Metsola said. “We need to make sure that these sanctions are far-reaching and hard-hitting, sending an unmistakable message that human rights violations will not be tolerated.” The German chancellor also indicated his team was working on a fresh EU package of sanctions. “The regime’s violence against its own people is not a sign of strength, but of weakness. It must end immediately,” Merz posted on X. “To underscore this message, we are working on further EU sanctions.” The European Commission has been weighing up further action. On Tuesday, Commission President Ursula von der Leyen promised plans for a new wave of sanctions would come soon.  “The rising number of casualties in Iran is horrifying,” she wrote on X. “Further sanctions on those responsible for the repression will be swiftly proposed. We stand with the people of Iran who are bravely marching for their liberty.” U.S. President Donald Trump announced any country doing business with Iran would face a 25 percent American tariff. He has promised to come to the aid of protesters and is weighing up options including potential military strikes.

LONDON — Reza Pahlavi was in the United States as a student in 1979 when his father, the last shah of Iran, was toppled in a revolution. He has not set foot inside Iran since, though his monarchist supporters have never stopped believing that one day their “crown prince” will return.  As anti-regime demonstrations fill the streets of more than 100 towns and cities across the country of 90 million people, despite an internet blackout and an increasingly brutal crackdown, that day may just be nearing.   Pahlavi’s name is on the lips of many protesters, who chant that they want the “shah” back. Even his critics — and there are plenty who oppose a return of the monarchy — now concede that Pahlavi may prove to be the only figure with the profile required to oversee a transition.  The global implications of the end of the Islamic Republic and its replacement with a pro-Western democratic government would be profound, touching everything from the Gaza crisis to the wars in Ukraine and Yemen, to the oil market.  Over the course of three interviews in the past 12 months in London, Paris and online, Pahlavi told POLITICO how Iran’s Supreme Leader Ayatollah Ali Khamenei could be overthrown. He set out the steps needed to end half a century of religious dictatorship and outlined his own proposal to lead a transition to secular democracy. Nothing is guaranteed, and even Pahlavi’s team cannot be sure that this current wave of protests will take down the regime, never mind bring him to power. But if it does, the following is an account of Pahlavi’s roadmap for revolution and his blueprint for a democratic future.  POPULAR UPRISING  Pahlavi argues that change needs to be driven from inside Iran, and in his interview with POLITICO last February he made it clear he wanted foreign powers to focus on supporting Iranians to move against their rulers rather than intervening militarily from the outside.  “People are already on the streets with no help. The economic situation is to a point where our currency devaluation, salaries can’t be paid, people can’t even afford a kilo of potatoes, never mind meat,” he said. “We need more and more sustained protests.” Over the past two weeks, the spiraling cost of living and economic mismanagement have indeed helped fuel the protest wave. The biggest rallies in years have filled the streets, despite attempts by the authorities to intimidate opponents through violence and by cutting off communications. Pahlavi has sought to encourage foreign financial support for workers who will disrupt the state by going on strike. He also called for more Starlink internet terminals to be shipped into Iran, in defiance of a ban, to make it harder for the regime to stop dissidents from communicating and coordinating their opposition. Amid the latest internet shutdowns, Starlink has provided the opposition movements with a vital lifeline. As the protests gathered pace last week, Pahlavi stepped up his own stream of social media posts and videos, which gain many millions of views, encouraging people onto the streets. He started by calling for demonstrations to begin at 8 p.m. local time, then urged protesters to start earlier and occupy city centers for longer. His supporters say these appeals are helping steer the protest movement. Reza Pahlavi argues that change needs to be driven from inside Iran. | Salvatore Di Nolfi/EPA The security forces have brutally crushed many of these gatherings. The Norway-based Iranian Human Rights group puts the number of dead at 648, while estimating that more than 10,000 people have been arrested. It’s almost impossible to know how widely Pahlavi’s message is permeating nationwide, but footage inside Iran suggests the exiled prince’s words are gaining some traction with demonstrators, with increasing images of the pre-revolutionary Lion and Sun flag appearing at protests, and crowds chanting “javid shah” — the eternal shah. DEFECTORS Understandably, given his family history, Pahlavi has made a study of revolutions and draws on the collapse of the Soviet Union to understand how the Islamic Republic can be overthrown. In Romania and Czechoslovakia, he said, what was required to end Communism was ultimately “maximum defections” among people inside the ruling elites, military and security services who did not want to “go down with the sinking ship.”  “I don’t think there will ever be a successful civil disobedience movement without the tacit collaboration or non-intervention of the military,” he said during an interview last February.  There are multiple layers to Iran’s machinery of repression, including the hated Basij militia, but the most powerful and feared part of its security apparatus is the Islamic Revolutionary Guard Corps. Pahlavi argued that top IRGC commanders who are “lining their pockets” — and would remain loyal to Khamenei — did not represent the bulk of the organization’s operatives, many of whom “can’t pay rent and have to take a second job at the end of their shift.”  “They’re ultimately at some point contemplating their children are in the streets protesting … and resisting the regime. And it’s their children they’re called on to shoot. How long is that tenable?” Pahlavi’s offer to those defecting is that they will be granted an amnesty once the regime has fallen. He argues that most of the people currently working in the government and military will need to remain in their roles to provide stability once Khamenei has been thrown out, in order to avoid hollowing out the administration and creating a vacuum — as happened after the 2003 U.S.-led invasion of Iraq.  Only the hardline officials at the top of the regime in Tehran should expect to face punishment.  In June, Pahlavi announced he and his team were setting up a secure portal for defectors to register their support for overthrowing the regime, offering an amnesty to those who sign up and help support a popular uprising. By July, he told POLITICO, 50,000 apparent regime defectors had used the system.  His team are now wary of making claims regarding the total number of defectors, beyond saying “tens of thousands” have registered. These have to be verified, and any regime trolls or spies rooted out. But Pahlavi’s allies say a large number of new defectors made contact via the portal as the protests gathered pace in recent days.  REGIME CHANGE In his conversations with POLITICO last year, Pahlavi insisted he didn’t want the United States or Israel to get involved directly and drive out the supreme leader and his lieutenants. He always said the regime would be destroyed by a combination of fracturing from within and pressure from popular unrest.  He’s also been critical of the reluctance of European governments to challenge the regime and of their preference to continue diplomatic efforts, which he has described as appeasement. European powers, especially France, Germany and the U.K., have historically had a significant role in managing the West’s relations with Iran, notably in designing the 2015 nuclear deal that sought to limit Tehran’s uranium enrichment program.  But Pahlavi’s allies want more support and vocal condemnation from Europe. U.S. President Donald Trump pulled out of the nuclear deal in his first term and wasted little time on diplomacy in his second. He ordered American military strikes on Iran’s nuclear facilities last year, as part of Israel’s 12-day war, action that many analysts and Pahlavi’s team agree leaves the clerical elite and its vast security apparatus weaker than ever.  U.S. President Donald Trump pulled out of the nuclear deal in his first term and wasted little time on diplomacy in his second. | Pool photo by Bonnie Cash via EPA Pahlavi remains in close contact with members of the Trump administration, as well as other governments including in Germany, France and the U.K. He has met U.S. Secretary of State Marco Rubio several times and said he regards him as “the most astute and understanding” holder of that office when it comes to Iran since the 1979 revolution.  In recent days Trump has escalated his threats to intervene, including potentially through more military action if Iran’s rulers continue their crackdown and kill large numbers of protesters.  On the weekend Pahlavi urged Trump to follow through. “Mr President,” he posted on X Sunday. “Your words of solidarity have given Iranians the strength to fight for freedom,” he said. “Help them liberate themselves and Make Iran Great Again!” THE CARETAKER KING  In June Pahlavi announced he was ready to replace Khamenei’s administration to lead the transition from authoritarianism to democracy.   “Once the regime collapses, we have to have a transitional government as quickly as possible,” he told POLITICO last year. He proposed that a constitutional conference should be held among Iranian representatives to devise a new settlement, to be ratified by the people in a referendum.  The day after that referendum is held, he told POLITICO in February, “that’s the end of my mission in life.”  Asked if he wanted to see a monarchy restored, he said in June: “Democratic options should be on the table. I’m not going to be the one to decide that. My role however is to make sure that no voice is left behind. That all opinions should have the chance to argue their case — it doesn’t matter if they are republicans or monarchists, it doesn’t matter if they’re on the left of center or the right.”  One option he hasn’t apparently excluded might be to restore a permanent monarchy, with a democratically elected government serving in his name.  Pahlavi says he has three clear principles for establishing a new democracy: protecting Iran’s territorial integrity; a secular democratic system that separates religion from the government; and “every principle of human rights incorporated into our laws.” He confirmed to POLITICO that this would include equality and protection against discrimination for all citizens, regardless of their sexual or religious orientation.  COME-BACK CAPITALISM  Over the past year, Pahlavi has been touring Western capitals meeting politicians as well as senior business figures and investors from the world of banking and finance. Iran is a major OPEC oil producer and has the second biggest reserves of natural gas in the world, “which could supply Europe for a long time to come,” he said.  “Iran is the most untapped reserve for foreign investment,” Pahlavi said in February. “If Silicon Valley was to commit for a $100 billion investment, you could imagine what sort of impact that could have. The sky is the limit.”  What he wants to bring about, he says, is a “democratic culture” — even more than any specific laws that stipulate forms of democratic government. He pointed to Iran’s past under the Pahlavi monarchy, saying his grandfather remains a respected figure as a modernizer.  “If it becomes an issue of the family, my grandfather today is the most revered political figure in the architect of modern Iran,” he said in February. “Every chant of the streets of ‘god bless his soul.’ These are the actual slogans people chant on the street as they enter or exit a soccer stadium. Why? Because the intent was patriotic, helping Iran come out of the dark ages. There was no aspect of secular modern institutions from a postal system to a modern army to education which was in the hands of the clerics.”   Pahlavi’s father, the shah, brought in an era of industrialization and economic improvement alongside greater freedom for women, he said. “This is where the Gen Z of Iran is,” he said. “Regardless of whether I play a direct role or not, Iranians are coming out of the tunnel.”  Conversely, many Iranians still associate his father’s regime with out-of-touch elites and the notorious Savak secret police, whose brutality helped fuel the 1979 revolution. NOT SO FAST  Nobody can be sure what happens next in Iran. It may still come down to Trump and perhaps Israel.  Anti-regime demonstrations fill the streets of more than 100 towns and cities across the country of 90 million people. | Neil Hall/EPA Plenty of experts don’t believe the regime is finished, though it is clearly weakened. Even if the protests do result in change, many say it seems more likely that the regime will use a mixture of fear tactics and adaptation to protect itself rather than collapse or be toppled completely.  While reports suggest young people have led the protests and appear to have grown in confidence, recent days have seen a more ferocious regime response, with accounts of hospitals being overwhelmed with shooting victims. The demonstrations could still be snuffed out by a regime with a capacity for violence.  The Iranian opposition remains hugely fragmented, with many leading activists in prison. The substantial diaspora has struggled to find a unity of voice, though Pahlavi tried last year to bring more people on board with his own movement.  Sanam Vakil, an Iran specialist at the Chatham House think tank in London, said Iran should do better than reviving a “failed” monarchy. She added she was unsure how wide Pahlavi’s support really was inside the country. Independent, reliable polling is hard to find and memories of the darker side of the shah’s era run deep. But the exiled prince’s advantage now may be that there is no better option to oversee the collapse of the clerics and map out what comes next. “Pahlavi has name recognition and there is no other clear individual to turn to,” Vakil said. “People are willing to listen to his comments calling on them to go out in the streets.”

HOW DO BULGARIANS FEEL ABOUT JOINING THE EURO? The Balkan nation is sharply divided about bidding farewell to the lev.  Text by BORYANA DZHAMBAZOVA Photos by DOBRIN KASHAVELOV in Pernik, Bulgaria Bulgaria is set to adopt the EU’s single currency on Jan. 1, but polling shows the Balkan nation is sharply divided on whether it’s a good thing. POLITICO spoke to some Bulgarians about their fears and hopes, as they say goodbye to their national currency, the lev. Their comments have been edited for length. ANTON TEOFILOV, 73 Vendor at the open-air market in Pernik, a small city 100 kilometers from Sofia What do you think about Bulgaria joining the eurozone? We are a different generation, but we support the euro. We’ll benefit hugely from joining the eurozone. It will make paying anywhere in the EU easy and hassle-free. It would be great for both the economy and the nation. You can travel, do business, do whatever you want using a single currency — no more hassle or currency exchanges. You can go to Greece and buy a bottle of ouzo with the same currency. What do you think will change in your everyday life once the euro replaces the lev? I don’t expect any turbulence — from January on we would just pay in euros. No one is complaining about the price tags in euros, and in lev at the moment. Are you more hopeful or worried about the economic impact of switching to the euro? Why? The lev is a wonderful thing, but its time has passed; that’s just how life works. It will be much better for the economy to adopt the euro. It will be so much easier to share a common currency with the other EU countries. Now, if you go to Greece, as many Bulgarians do, you need to exchange money. After January – wherever you need to make a payment – either going to the store, or to buy produce for our business, it would be one and the same. What would you like politicians and institutions to do to make the transition easier for ordinary people? The state needs to explain things more clearly to those who are confused. We are a people who often need a lot of convincing, and on top of that, we’re a divided nation. If you ask me, we need to get rid of half the MPs in Parliament – they receive hefty salaries and are a burden to taxpayers, like parasites, without doing any meaningful work. Do you think joining the eurozone will bring Bulgaria closer to Europe culturally or politically? There are 27 member states, and we will become one with them. There will be no difference between Germany and us—we’ll be much closer to Europe. I remember the 1990s, when you needed to fill out endless paperwork just to travel, let alone to work abroad. I spent a year working in construction in Germany, and getting all the permits and visas was a major headache. Now things are completely different, and joining the eurozone is another step toward that openness. Advertisement PETYA SPASOVA, 55 Orthopedic doctor in Sofia What do you think about Bulgaria joining the eurozone? It worries me a lot. I don’t think this is the right moment for Bulgaria to join the eurozone. First, the country is politically very unstable, and the eurozone itself faces serious problems. As the poorest EU member state, we won’t be immune to those issues. On the contrary, they will only deepen the crisis here. The war in Ukraine, the growing debt in Germany and France … now we’d be sharing the debts of the whole of Europe. We are adopting the euro at a time when economies are strained, and that will lead to serious disruptions and a higher cost of living. I don’t understand why the state insists so strongly on joining the eurozone. I don’t think we’re ready. What do you think will change in your everyday life once the euro replaces the lev? Even now, when you go to the store and look at the price of bread or other basic foods, we see prices climbing. I’m afraid many people will end up living in extreme poverty. We barely produce anything; we’re a country built on services. When people get poorer, they naturally start consuming less. I’m not worried about myself or my family. We live in Sofia, where there are more job opportunities and higher salaries. I’m worried about people in general. Every day I see patients who can’t even afford the travel costs to come to Sofia for medical check-ups. Are you more hopeful or worried about the economic impact of switching to the euro? Why? I’m extremely worried. I don’t want to relive the economic crisis of the 90s, when the country was on the verge of bankruptcy. What would you like politicians and institutions to do to make the transition easier for ordinary people? No one cares what people think. Many countries held referendums and decided not to join the eurozone. I don’t believe our politicians can do anything at this point. I’m not even sure they know what needs to be done. Do you think joining the eurozone will bring Bulgaria closer to Europe culturally or politically? I feel offended when I hear this question. We’ve been part of Europe for a very long time, long before many others. We can exchange best practices in culture, science, education, and more, but that has nothing to do with the eurozone. Joining can only bring trouble. I remember years ago when I actually hoped Bulgaria would enter the eurozone. But that was a different Europe. Now things are deteriorating; the spirit of a united Europe is gone. I don’t want to be part of this Europe. Advertisement SVETOSLAV BONINSKI, 53 Truck driver from Gabrovo, a small city in central Bulgaria What do you think about Bulgaria joining the eurozone? I’m against Bulgaria joining the eurozone. We saw how Croatia and Greece sank into debt once they adopted the euro. I don’t want Bulgaria to go down the same path. Greece had to take a huge loan to bail out its economy. When they still had the drachma, their economy was strong and stable. After entering the eurozone, many big companies were forced to shut down and inflation went through the roof. Even the German economy is experiencing a downturn.. What do you think will change in your everyday life once the euro replaces the lev? I worry that there will be speculation and rising inflation. Five years ago, I used to buy cigarettes in Slovakia at prices similar to Bulgaria. Now I can’t find anything cheaper than €5 per pack. They saw their prices rise after the introduction of the euro. We’ll repeat the Slovakia scenario. Are you more hopeful or worried about the economic impact of switching to the euro? Why? We can already feel that things won’t end well — prices have gone up significantly, just like in Croatia. I’m afraid that even in the first year wages won’t be able to compensate for the rise in prices, and people will become even more impoverished. I expect the financial situation to worsen. Our government isn’t taking any responsibility for that. What would you like politicians and institutions to do to make the transition easier for ordinary people? I hope they will make an effort. We are completely ill-equipped to adopt the euro—all the stats and figures the government presents are lies. We must wait until the country is ready to manage the euro as a currency. We’re doing fine with the lev. We should wait for the economy to grow and for wages to catch up with the rest of Europe. The only thing the state could do to ease the process is to step down. The current government is interested in entering the eurozone only to receive large amounts of funding, most of which they will probably pocket themselves. The Bulgarian lev is very stable, unlike the euro, which is quite an unstable currency. All the eurozone countries are burdened with trillions in debt, while those outside it are doing quite well. Do you think joining the eurozone will bring Bulgaria closer to Europe culturally or politically? I don’t think so. We’ve been part of Europe for a long time. The only difference now will be that Brussels will tell us what to do and will control our budget and spending. Brussels will be in charge from now on. No good awaits us. Elderly people won’t receive decent pensions and will work until we drop dead. Advertisement NATALI ILIEVA, 20 Political science student from Pernik What do you think about Bulgaria joining the eurozone? I see it as a step forward for us. It’s a positive development for both society and the country. I expect that joining the eurozone will help the economy grow and position Bulgaria more firmly within Europe. For ordinary people, it will make things easier, especially when traveling, since we’ll be using the same currency. What do you think will change in your everyday life once the euro replaces the lev? The transition period might be difficult at first. I don’t think the change of currency will dramatically affect people’s daily lives – after all, under the currency board, the lev has been pegged to the euro for years. Some people are worried that prices might rise, and this is where the state must step in to monitor the situation, prevent abuse, and make the transition as smooth as possible. As part of my job at the youth center, I travel a lot in Europe. Being part of the eurozone would make travel much more convenient. My life would be so much easier! I wouldn’t have to worry about carrying euros in cash or paying additional fees when withdrawing money abroad, or wondering: Did I take the right debit card in euros? Are you more hopeful or worried about the economic impact of switching to the euro? Why? I’m more concerned that the issue will be politicized by certain parties to further polarize society. Joining the eurozone is a logical next step – we agreed to it by default when we joined the bloc in 2007. There is so much disinformation circulating on social media that it’s hard for some people to see the real facts and distinguish what’s true from what’s not. What would you like politicians and institutions to do to make the transition easier for ordinary people? The state needs to launch an information campaign to make the transition as smooth as possible. Authorities should explain what the change of currency means for people in a clear and accessible way. You don’t need elaborate language to communicate what’s coming, especially when some radical parties are aggressively spreading anti-euro and anti-EU rhetoric. Do you think joining the eurozone will bring Bulgaria closer to Europe culturally or politically? Yes, I think it will help the country become better integrated into Europe. In the end, I believe people will realize that joining the eurozone will be worth it. Advertisement YANA TANKOVSKA, 47 Jewelry artist based in Sofia What do you think about Bulgaria joining the eurozone? If you ask me, the eurozone is on the verge of collapse, and now we have decided to join? I don’t think it’s a good idea. In theory, just like communism, the idea of a common currency union might sound good, but in practice it doesn’t really work out. I have friends working and living abroad [in eurozone countries], and things are not looking up for regular people, even in Germany. We all thought we would live happily as members of the bloc, but that’s not the reality. What do you think will change in your everyday life once the euro replaces the lev? I expect the first half of next year to be turbulent. But we are used to surviving, so we will adapt yet again. Personally, we might have to trim some expenses, go out less, and make sure the family budget holds. I make jewelry, so I’m afraid I’ll have fewer clients, since they will also have to cut back. Are you more hopeful or worried about the economic impact of switching to the euro? Why? I’m terribly worried. The state promises there won’t be a jump in prices and that joining the eurozone won’t negatively affect the economy. But over the past two years the cost of living has risen significantly, and I don’t see that trend reversing. For example, in the last three years real estate prices have doubled. There isn’t a single person who isn’t complaining about rising costs. What would you like politicians and institutions to do to make the transition easier for ordinary people? There is nothing they can do at this point. Politicians do not really protect Bulgaria’s interests on this matter. The issue is not only about joining the eurozone but about protecting our national interests. I just want them to have people’s well-being at heart. Maybe we need to hit rock bottom to finally see meaningful change. Do you think joining the eurozone will bring Bulgaria closer to Europe culturally or politically? Not really. That’s up to us, not to Europe. I just want Bulgarian politicians to finally start creating policies for the sake of society, not just enriching themselves, to act in a way that would improve life for everyone. Advertisement KATARINA NIKOLIC, 49, AND METODI METODIEV, 53 Business partners at a ‘gelateria’ in Sofia What do you think about Bulgaria joining the eurozone? Metodi: For a small business like ours, I don’t think it will make much difference, as long as the transition to the new currency is managed smoothly. I can only see a positive impact on the economy if things are done right. I’m a bit saddened to say farewell to the Bulgarian lev — it’s an old currency with its own history — but times are changing, and this is a natural step for an EU member. Katarina: I have lived in Italy which adopted the euro a long time ago. Based on my experience there, I don’t expect any worrying developments related to price increases or inflation. On the contrary, joining the eurozone in January can only be interpreted as a sign of trust from the European Commission and could bring more economic stability to Bulgaria. I also think it will increase transparency, improve financial supervision, and provide access to cheaper loans. What do you think will change in your everyday life once the euro replaces the lev? Metodi:  I don’t think there will be any difference for our business whether we’re paying in euros or in leva. We’ve been an EU member state for a while now and we’re used to working with both local and international suppliers. It will just take some getting used to switching to one currency for another. But we are already veterans — Bulgarian businesses are very adaptive — from dealing with renominations and all sorts of economic reforms. I’m just concerned that it might be challenging for some elderly people to adapt to the new currency and they might need some support and more information. Katarina: For many people, it will take time to get used to seeing a new currency, but they will adapt. For me, it’s nothing new. Since I lived in Italy, where the euro is used, I automatically convert to euros whenever Metodi and I discuss business. Are you more hopeful or worried about the economic impact of switching to the euro? Why? Metodi: The decision has already been taken, so let’s make the best of it and ensure a smooth transition. I haven’t exchanged money when traveling in at least 10 years. I just use my bank card to pay or withdraw cash if I need any. Katarina: I remember that some people in Italy also predicted disaster when the euro was introduced, and many were nostalgic about the lira. But years later, Italy is still a stable economy. I think our international partners will look at us differently once we are part of the eurozone. Advertisement What would you like politicians and institutions to do to make the transition easier for ordinary people? Metodi: I think the authorities are already taking measures to make sure prices don’t rise and that businesses don’t round conversions upward unfairly. For example, we may have to slightly increase the price of our ice cream in January. I feel a bit awkward about it because I don’t want people to say, “Look, they’re taking advantage of the euro adoption to raise prices.” But honestly, we haven’t adjusted our prices since we opened three years ago. I’m actually very impressed by how quickly and smoothly small businesses and market sellers have adopted double pricing [marking prices in lev and euros]. I know how much work that requires, especially if you’re a small business owner. Katarina: It’s crucial that the state doesn’t choke small businesses with excessive demands but instead supports them. I believe that helping small businesses grow should be a key focus of the government, not just supervising the currency swap. My hope is that the euro will help the Bulgarian economy thrive. I love Bulgaria and want to see it flourish. I’m a bit more optimistic than Metodi, I think the best is yet to come. Do you think joining the eurozone will bring Bulgaria closer to Europe culturally or politically? Metodi: I think so. Despite some criticism, good things are happening in the country, no matter who is in power. We need this closeness to truly feel part of Europe. Katarina: The euro is a financial and economic instrument. Adopting it won’t change national cultural identity, Bulgarians will keep their culture. I’m a true believer in Europe, and I think it’s more important than ever to have a united continent. As an Italian and Serbian citizen, I really appreciate that borders are open and that our children can choose where to study and work. In fact, our gelateria is a great example of international collaboration: we have people from several different countries in the team.

EU governments pursued additional privacy safeguards to ensure people’s payment habits are kept under wraps as part of a legislative framework for minting a virtual extension of euro banknotes and coins. The Council of the EU rubberstamped its negotiating position for a digital euro on Friday afternoon after clinching a deal earlier this week, as reported by POLITICO. The onus is now on members of the European Parliament to agree on a legal text so that both sides can begin legislative negotiations next year. The digital euro was the European Central Bank’s answer to Meta’s (failed) plan to launch its own virtual currency, called Diem, for its 3 billion users. Since Diem’s demise, ECB policymakers have pitched the project as a vital strategy to reduce the bloc’s reliance on U.S. credit card giants, Mastercard and Visa, for cross-border payments. EU shoppers would be able to pay with the virtual currency, backed by the central bank, across the bloc in the form of plastic or a smartphone app. The spread of Big Brother-style conspiracy theories, meanwhile, has forced policymakers to take extra precautions to reassure the public that authorities will not use the digital euro to snoop on people’s payment habits. “You cannot disregard” the concern of “many millions of citizens,” Fernando Navarrete, the center-right MEP shepherding the bill through the Parliament, told POLITICO in November. “In China, it’s explicit that they wanted to build [a digital yuan] in order to increase control over the people. I’m scared of this.” Navarrete, who hails from the European People’s Party, is highly skeptical of the initiative but is comfortable with the notion of an offline version of the digital euro that protects people’s privacy. “I’m not saying it will be used” for snooping, “but they know that the technology has potential,” he said. On the contrary, consumer groups have praised the initiative, assuming the digital euro is safe, free, and private. Banks are far less enthusiastic. Especially, as they’ll be on the hook for distributing basic digital euro services to their clients at no extra cost — a bill that could amount to over €5 billion over four years, according to ECB estimates. Bankers’ protests aside, the biggest obstacle facing the digital euro is countering conspiracy theories that the authorities will use the ECB’s project to control the populace — despite reassurances from the European Commission and the ECB. The Commission’s original proposal and the ECB’s envisioned design for the project already prevent the central bank from matching people’s digital euro accounts with citizens’ personal data. That wasn’t enough for some countries, in particular Belgium and the Netherlands, which fear the project could be politically weaponized. The final text has even strengthened privacy safeguards, making it explicit that central banks “shall not be in a position to lift these [segregation] measures during any processing of the data.” APPEASING THE BANKS Mindful of the crucial role that banks will play in getting digital euros into citizens’ virtual wallets, EU governments have tried to make the project more palatable for the industry. The key to pleasing bankers is ensuring they make money from the initiative. Once the digital euro is minted, banks can charge shopkeepers a fee for processing transactions at the cashier. These fees would be capped at the average cost of international and domestic debit cards for at least five years until the overall cost of distributing the digital euro becomes more stable. Then, new fees can be calculated. The bankers aren’t convinced, however. The Council’s bid to get banks “a ‘fair’ remuneration,” while making digital euro payments “cheaper for merchants and consumers,” is a ‘squaring the circle problem’ [that] cannot be solved,” Tobias Tenner, head of digital finance at the German banks association, said. “At least if one takes the huge necessary investments [for banks] into account.”

The discussion surrounding the digital euro is strategically important to Europe. On Dec. 12, the EU finance ministers are aiming to agree on a general approach regarding the dossier. This sets out the European Council’s official position and thus represents a major political milestone for the European Council ahead of the trilogue negotiations. We want to be sure that, in this process, the project will be subject to critical analysis that is objective and nuanced and takes account of the long-term interests of Europe and its people. > We do not want the debate to fundamentally call the digital euro into question > but rather to refine the specific details in such a way that opportunities can > be seized. We regard the following points as particularly important: * maintaining European sovereignty at the customer interface; * avoiding a parallel infrastructure that inhibits innovation; and * safeguarding the stability of the financial markets by imposing clear holding limits. We do not want the debate to fundamentally call the digital euro into question but rather to refine the specific details in such a way that opportunities can be seized and, at the same time, risks can be avoided. Opportunities of the digital euro:  1. European resilience and sovereignty in payments processing: as a public-sector means of payment that is accepted across Europe, the digital euro can reduce reliance on non-European card systems and big-tech wallets, provided that a firmly European design is adopted and it is embedded in the existing structures of banks and savings banks and can thus be directly linked to customers’ existing accounts. 2. Supplement to cash and private-sector digital payments: as a central bank digital currency, the digital euro can offer an additional, state-backed payment option, especially when it is held in a digital wallet and can also be used for e-commerce use cases (a compromise proposed by the European Parliament’s main rapporteur for the digital euro, Fernando Navarrete). This would further strengthen people’s freedom of choice in the payment sphere. 3. Catalyst for innovation in the European market: if integrated into banking apps and designed in accordance with the compromises proposed by Navarrete (see point 2), the digital euro can promote innovation in retail payments, support new European payment ecosystems, and simplify cross-border payments. > The burden of investment and the risk resulting from introducing the digital > euro will be disproportionately borne by banks and savings banks. Risks of the current configuration: 1. Risk of creating a gateway for US providers: in the configuration currently planned, the digital euro provides US and other non-European tech and payment companies with access to the customer interface, customer data and payment infrastructure without any of the regulatory obligations and costs that only European providers face. This goes against the objective of digital sovereignty. 2. State parallel infrastructures weaken the market and innovation: the European Central Bank (ECB) is planning not just two new sets of infrastructure but also its own product for end customers (through an app). An administrative body has neither the market experience nor the customer access that banks and payment providers do. At the same time, the ECB is removing the tried-and-tested allocation of roles between the central bank and private sector. Furthermore, the Eurosystem’s digital euro project will tie up urgently required development capacity for many years and thereby further exacerbate Europe’s competitive disadvantage. The burden of investment and the risk resulting from introducing the digital euro will be disproportionately borne by banks and savings banks. In any case, the banks and savings banks have already developed a European market solution, Wero, which is currently coming onto the market. The digital euro needs to strengthen rather than weaken this European-led payment method. 3. Risks for financial stability and lending: without clear holding limits, there is a risk of uncontrolled transfers of deposits from banks and savings banks into holdings of digital euros. Deposits are the backbone of lending; large-scale outflows would weaken both the funding of the real economy – especially small and medium-sized enterprises – and the stability of the system. Holding limits must therefore be based on usual payment needs and be subject to binding regulations. -------------------------------------------------------------------------------- Disclaimer POLITICAL ADVERTISEMENT * The sponsor is Bundesverband der Deutschen Volksbanken und Raiffeisenbanken e.V. , Schellingstraße 4, 10785 Berlin, Germany * The ultimate controlling entity is Bundesverband der Deutschen Volksbanken und Raiffeisenbanken e.V. , Schellingstraße 4, 10785 Berlin, Germany More information here.

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