BRUSSELS — The European Parliament’s centrist political groups are backing down on a threat to vote against a key part of the EU’s long-term budget, following concessions made by the European Commission. After weeks of pressure from the political groups, the Commission on Sunday evening proposed several changes to its plan for the next seven-year EU budget in an effort to avert an all-out rebellion during a vote on Thursday, according to a document seen by POLITICO. The presidents of the Commission and Parliament — Ursula von der Leyen and Roberta Metsola — and Danish Prime Minister Mette Frederiksen, whose country holds the rotating presidency of the Council of the EU, spoke Monday to discuss the budget plan. The center-right European People’s Party, the Socialists and Democrats, the liberals of Renew Europe, and the Greens had on Oct. 30 sent a letter to the Commission demanding changes to the proposal — especially the way it deals with EU cash for regions and for farmers — and threatening to refuse to engage in negotiations if those changes were not made. Hours after the Commission changed its plans, those groups are now backing down. “Victory for the European Parliament in defending farmers and regions in the next long-term EU budget,” Siegfried Mureșan, the EPP’s lead negotiator on the budget, wrote on social media on Monday. A Renew Europe official, granted anonymity to speak freely, told POLITICO that the group “will not ask for a resolution rejecting national plans to be tabled for a vote in the plenary this week.” Lawmakers and officials from S&D and Greens also indicated that the resolution is unlikely to come to fruition, despite some misgivings about the Commission’s proposed compromise. “There is nothing substantial to answer the main demands of the [European Parliament’s] letter,” Jean-Marc Germain, a Socialist lawmaker who works on the budget file, told POLITICO. The French MEP added that he still supports rejecting a major part of the Commission’s budget proposal — although several colleagues privately admitted that any resolution seeking to bring down the proposals is unlikely to pass without the support of EPP and Renew. COMPROMISE PLEASES EU COUNTRIES The Commission’s changes also have to be backed by national capitals, which are generally reluctant to give concessions to the Parliament early in the negotiating process. Frederiksen did not oppose the Commission’s suggested changes during the meeting with Metsola and von der Leyen, according to an official with knowledge of the talks.  A senior EU diplomat, granted anonymity to speak freely, said on Monday that “I don’t have many issues with the content of the [Commission’s] paper.” The proposals “overlap significantly with positions expressed by member states in Council,” the diplomat added. This is a significant dial-down from previous threats by the Council that caving in to Parliament’s demands could have thrown a spanner into the negotiations. “The Commission forced the Danish presidency to accept these changes over the weekend” to avert Parliament’s rejection, said an EU official with knowledge of the discussions. Parliament is opposed to the Commission’s plan to pool funds for regions and farmers into one single pot, which makes up around half of the total budget, as many MEPs claim that this will cut Parliament and regional leaders out of decision-making and hand too much power to national governments. To address these complaints, the Commission on Sunday proposed a “rural target” that would compel governments to spend 10 percent of the amount of money in the national plans on agriculture. The Commission has also suggested giving regional leaders more power to determine how the money is being spent ― including by giving them a seat at the table in key planning meetings between national governments and Commission officials. Finally, the Commission suggested giving Parliament a bigger role in deciding how the EU’s public funding is being spent. In a further concession, the Commission on Monday morning sent an updated document, seen by POLITICO, in which it used language that is more aligned with Parliament’s position. It described the suggested compromises as “proposals in the legal text,” as requested by Parliament.

BRUSSELS ― The European Commission proposed several changes to its next seven-year EU budget in an effort to avert a rebellion in the European Parliament, according to a document seen by POLITICO. By giving ground on sensitive issues, the powerful EU executive is aiming to neutralize a threat by a majority of EU Parliament lawmakers to reject its €1.8 trillion plan to fund the EU. The Commission’s move comes hours before a crucial virtual meeting on Monday between Commission President Ursula von der Leyen, European Parliament President Roberta Metsola and Danish Prime Minister Mette Frederiksen, whose country holds the rotating presidency of the Council of the EU. Monday’s gathering is a last-ditch attempt to broker a compromise in the face of increasingly tense relations between Parliament and Commission. The new budget requires Parliament’s approval before it comes into force in 2028. The Commission proposing changes to its own budget proposal is highly unusual ― and is a response to pressure from key parties in Parliament, including the center-right European People’s Party and the left-leaning Progressive Alliance of Socialists and Democrats. WHAT ARE THE PROPOSED CHANGES? Parliament is opposed to the Commission’s MFF plan over important changes to regional and agricultural payments, which make up around half of the total budget. A majority of MEPs claim that the proposed reforms will cut Parliament and regional leaders out of decision-making and hand too much power to national governments. To address these complaints, the Commission on Sunday proposed a “rural target” that would compel governments to spend 10 percent of the total amounts of the national plans on agriculture. This is in addition to the €300 billion in direct funding for farmers already included in the original proposal in July. “It’s more or less what we asked for,” said a senior lawmaker who is involved in the discussions. Another point of contention is the Commission’s proposal to merge the regional and agricultural budget into a single cash pot handled by national governments ― who would get significant leeway over how to spend the money. The Commission’s move comes hours before a crucial virtual meeting between Ursula von der Leyen, European Parliament President Roberta Metsola and Danish Prime Minister Mette Frederiksen. | Johnathan Nackstrand/Getty Images This has sparked outrage among mayors and regional leaders, who fear they will have no say regarding the funds. In order to fix this issue, the EU executive has now suggested giving regional leaders more power to determine how the money is being spent ― including by giving them a seat at the table in key planning meetings between national governments and Commission officials. In a further concession, the Commission proposed guarantees to reduce the risk of national governments cutting payments to more developed regions. This comes on top of a €218 billion guarantee for payments to poorer areas in July. Finally, the Commission suggested giving Parliament a bigger role in deciding how the EU’s public funding is being spent. The proposed changes will prove controversial with national capitals, who are currently amending the Commission’s proposal and generally oppose giving early concessions to Parliament. Bartosz Brzeziński contributed to this report.

BRUSSELS ― The European Parliament’s four centrist groups are to demand Commission President Ursula von der Leyen make major changes to her plan for the EU’s next seven-year budget, according to the draft of a letter seen by POLITICO. In an escalation of tensions between politicians across the mainstream spectrum and the head of the bloc’s executive, the groups will threaten to reject a key part of the 2028-2034 budget unless their conditions are met. The draft of the letter, which is still being finalized, asks the Commission to overhaul its proposal, published in July, to meet the views of von der Leyen’s own center-right European People’s Party (EPP), the center-left Socialists and Democrats (S&D), the liberal Renew Europe group and the Greens. This quartet forms a majority in the European Parliament, which must approve the budget. Lawmakers oppose the Commission’s “national plans,” an idea to pool funds for farmers and regions — which make up around half of the total EU budget, worth €1.8 trillion — into single pots managed by the bloc’s 27 governments. This is a change from the current system, where regions play a crucial role in handling the funding. “As the current proposal on the [national plans] does not take our core requests into consideration, it cannot constitute a basis for negotiations,” the draft says. “We therefore look forward to seeing our key requests meaningfully reflected in an amended proposal of the European Commission, which would allow the negotiations with the European Parliament to move forward.” The letter is designed to increase pressure on the EU executive to make concessions after weeks of stalled negotiations. If no agreement is reached, the four political groups will put forward a resolution rejecting the national plans part of the budget in the full plenary session of Parliament starting Nov. 12. RURAL DEVELOPMENT The Commission argues that this model will allow governments to spend the EU’s money according to their specific needs and create a stronger link between payments and governments’ economic reforms. But lawmakers say the plan would expand the power of central governments at the expense of regions, which have traditionally played a key role in handling EU funds. One of the most significant demands from the political groups is that the Commission allocate specific funding to rural development and all regions — something that’s not included in the current budget proposal. MEPs are also calling on the EU executive to overhaul its cash-for-reforms model, which, in their view, creates an “inherent democratic deficit.” Parliament also wants greater power to decide and scrutinize how the EU’s public funding is allocated over the seven-year period. Political groups already agreed this month to add a debate on the architecture of the EU’s long-term budget, known as the Multiannual Financial Framework, to the full session of Parliament on Nov. 12. If no agreement is reached, the four political groups will put forward a resolution rejecting the national plans part of the budget in the full plenary session of Parliament starting Nov. 12. | Thierry Monasse/Getty Images That date also marks the cutoff for Parliament and the Commission to agree on changes to the national plans. The Socialists and liberals had already said they were ready to reject the EU budget proposal, but the EPP had not yet confirmed it would also officially do so, despite many of its lawmakers in the past weeks indicating it was likely.  Away from the Parliament, EU governments are currently haggling over the budget proposal in deliberations expected to stretch until early 2027. At that point, Parliament will negotiate the spending plan with national capitals and vote on it before it’s scheduled to come into force in 2028.

LONDON — The British aristocracy has always seen talking about money as a little bit grubby. But the scandalized Prince Andrew is forcing the issue front and center. King Charles’ transgressive younger brother is facing torrid headlines over his friendship with pedophile Jeffrey Epstein. And the revelation in The Times this week that he appears to be living rent-free in a vast lodge is prompting a barrage of wider questions about the way Britain’s royals are funded. In the House of Commons Wednesday, Britain’s center-left Prime Minister Keir Starmer did nothing to tamp down opposition calls for an inquiry into whether taxpayer interests are being protected when it comes to Andrew, who stepped back from Royal duties in 2019 and gave up key titles just last week. “It is important, in relation to all Crown properties, that there is proper scrutiny,” Starmer said. On Thursday, Geoffrey Clifton-Brown, chair of the House of Commons Public Accounts Committee — parliament’s public spending watchdog — said he would be requesting more information on Andrew’s Royal Lodge agreement.  The scandal has sent questions about royal finances rocketing up the U.K. political agenda, just months before a scheduled review of a key part of the arrangement, known as the Sovereign Grant, kicks off. Andrew’s living arrangements are part of “much, much wider problem” with a system of royal finances, which is still mired in secrecy, said Margaret Hodge, the U.K. government’s anti-corruption czar. PAYING FOR THE PRIVILEGE  How the U.K. government covers the cost of the monarchy — expenses like royal engagements, staffing costs and the upkeep of grand residences such as Buckingham Palace — has long been a subject of debate. The current system — known the Sovereign Grant — was brought in by then-Prime Minister David Cameron in 2012. It links public funding of the monarch to the profits of the Crown Estate. The Crown Estate is essentially a portfolio of assets that was owned and managed by monarchs pre-1760 and is now run as a business whose revenue is returned to the U.K. Treasury. It generates significant revenue, which has been bolstered in recent years by lucrative wind farm deals with developers. In the wake of the Andrew revelations, Clifton-Brown said his committee would decide next year whether to “undertake any work” on the Crown Estate accounts. King Charles’ transgressive younger brother is facing torrid headlines over his friendship with pedophile Jeffrey Epstein. | Eric Reid/EPA Charles and Prince William also receive an income from two vast inherited estates — the Duchy of Lancaster and Duchy of Cornwall respectively. This money, according to their own websites, is used to support themselves and their families, and their philanthropic work.  They also have their own investments and inherited wealth — which include private residences in Balmoral, Scotland, and in Sandringham, Norfolk.  Charles and William are not legally liable for income tax, capital gains tax or inheritance tax. But they pay certain taxes voluntarily under an agreement the late Queen Elizabeth II made with the Treasury. As part of this agreement, the government agrees not to publish any information about their tax bill. Because some assets, such as the official residences, the Royal Archives, the Royal Collection of paintings and other works of art are not sold to provide income or capital for the personal use of the king, and pass from one sovereign to the next, it would be inappropriate for inheritance tax to be paid on them, the agreement argues. A former senior official involved in past decisions about royal finances said this system had been designed to ensure the British monarchy, which still has public support, is “not placed in a position of subservience” to the government of the day. It is also meant to allow the royals the “same principle of confidentiality” as other British citizens. But that same former official, granted anonymity to speak candidly, warned there was a “quid pro quo” to that.  “The public will acquiesce in these arrangements if it is seen that the members of the royal family conduct themselves in a way that is, although privileged, not extravagant, and not flagrant. Things break down if there are members of the royal family who aren’t keeping that side of the bargain,” the former official added.  Senior royals are acutely conscious of the sensitivities around the way they’re funded. William is reported to be mindful of the cost of the monarchy and will assess the “footprint” of the institution, The Times reported in June. But Hodge, an ex-public accounts committee chair who has long probed royal finances, believes the system needs much wider reform. She said the Royal Lodge deal for Andrew looked “rotten.” This matters to the taxpayer, she argued. Financial reports on both Duchies are published, but they remain private estates and Hodge believes this makes for “muddy territory.” “In my view, they are public [funds] because they were given by the state to the royal family for the purpose of sustaining themselves,” she said of the arrangement. “I think we need transparency.”

BRUSSELS ― The far-right Patriots for Europe is taking legal action after the European Parliament suspended access to millions of euros in public funds over alleged misspending. In two separate cases, the Patriots party is contesting rulings by the Parliament and the EU’s party watchdog that resulted in it losing access to more than €4 million in funds, arguing the decisions were illegitimate and the product of bias and lack of impartiality. The far-right political family, home to France’s Marine Le Pen and Hungary’s Viktor Orbán, has consistently complained of being sidelined from EU policymaking and key positions of power since the 2024 European elections, where it surged to become the third-largest group in Parliament. Mainstream politicians have kept the Patriots at arm’s length under the so-called cordon sanitaire — an informal pact to avoid cooperation with factions on the far right and far left. Now, the Patriots are also accusing EU officials of sabotaging their access to public cash earmarked for political parties. “There is a problem with certain agents of the administration of the Parliament,” said Belgian MEP Gerolf Annemans, honorary president of the Patriots party. The Patriots scored its first win on Wednesday when the European Court of Justice annulled a sanction by the party watchdog, the APPF, which had required the party to pay a €47,000 fine. The sanction came after the party wrongly referred to one of its lawmakers as being part of its board in a social media post, which the APPF took as a sign the party had lied in its entry to the authority’s register — a serious offense that could lead to all public funding for the party being withheld. The APPF ruling enabled the European Parliament to cut the Patriots party off from accessing €4 million of EU funding in 2023, documents obtained by POLITICO show. That meant a substantial cut to the party’s available budget for the 2024 elections — where other European political parties carried their 2023 funds over for the following year. Wednesday’s court ruling will allow the Patriots to try to claim part of these funds back — and will likely bolster the party’s claims of bias from the Parliament’s administration. EQUAL TREATMENT In a separate lawsuit filed mid-July, the Patriots accused the Parliament of bias and lack of impartiality after it ruled the party had misspent funds in a campaign in Czechia. The Parliament’s Bureau, composed of MEPs and tasked with taking decisions on administrative issues, ruled the Patriots should pay for that campaign with their own money and give back the EU funds spent on it, which came to €228,000. The decision violated “the principles of equal treatment and non-discrimination, as it deemed similar campaigns by other parties to be reimbursable,” the Patriot’s case document, seen by POLITICO, read. The far-right political family, home to France’s Marine Le Pen and Hungary’s Viktor Orbán, has consistently complained of being sidelined from EU policymaking and key positions of power since the 2024 European elections. | Wojtek Radwanski/Getty Images They also argue that the decision was not impartial, as the Bureau is composed mostly of center-right, liberal and left-wing lawmakers, with no far-right MEPs from the Patriots present to defend the case. On top of that, they contend the Parliament violated their rights to defense as it censored big chunks of the letter the Patriots had sent to the bureau to defend themselves. In the first version of the letter, the Patriots compared their campaign with that of another EU party. In the letter that the administration circulated in the bureau, the justification was redacted. ‘VERY GOOD LAWYERS’ The Parliament refused to comment on the ongoing judicial proceedings. The APPF “remains committed to protecting integrity of European democracy” in accordance with its obligations under EU law, it said after the ruling. These two lawsuits follow threats of a separate challenge from the Patriots group — a distinct legal entity from the Patriots party, which represents the far-right camp in Parliament. At the beginning of September, the Parliament’s budgetary control committee recommended the administration seek the reimbursement of €4.3 million from the group in reparations for alleged misspending by the now-defunct far-right Identity and Democracy. The ID group dissolved in the summer of 2024, with many of its members and staff joining the new Patriots. “We will fight it in court if necessary,” said a Patriots group official, granted anonymity to speak about sensitive matters. “We have very good lawyers, and we are sure we are right.”

PARIS — President Emmanuel Macron’s allies don’t seem to have any good answers as to what happens after the almost certain fall of the government of Prime Minister François Bayrou in the Sept. 8 parliamentary vote of confidence. The names of Armed Forces Minister Sébastien Lecornu and Justice Minister Gérald Darmanin are emerging in the chatter as potential successors to the poisoned chalice of the premiership, but what would a new recruit really solve? A new PM will be ensnared in exactly the same quagmire. French politics will still be too internally riven to pass vital deficit-slashing reforms, despite Bayrou’s Cassandra-like warnings that France could be headed toward a Greek-style debt crisis if it sits on its hands and doesn’t implement an unpopular €43.8 billion budget squeeze. So how about another snap election? If Macron calls one, the political landscape could still be mired in exactly the same impasse — but the blame after a vote would more obviously fall on him rather than on his prime minister. And all that time, the financial markets will be running out of patience regarding France’s ability to put its books in order. All in all, a state of shock grips elected officials, aides and advisers from the various parties that support France’s minority government. “It’s a tough blow for the president,” said one minister’s political adviser who, like others in this piece, was granted anonymity to speak candidly about the political chaos. They noted that a day of mass protests, potentially shutting the country down, was in the offing only two days after Bayrou’s expected exit. “A political crisis on Sept. 8, a social crisis on Sept. 10. That’s a regime crisis, isn’t it?” NEW MAN FOR THE MATIGNON Macron’s centrists seem to be clutching at straws. The first signals coming out of the Elysée Palace seemed to indicate the president is not considering dissolving parliament and going for another election. Instead, Macron is thought to be considering tapping the young, center-right Lecornu to lead the government. Someone close to Macron said Justice Minister Darmanin, who has long eyed the premiership, is also a candidate, but doesn’t want to inherit what appears to be a suicide mission. Bother Lecornu and Darmanin originally hailed from the conservative Les Républicains party and have been with Macron since 2017. Lecornu is closer to the president, and Macron almost nominated him before Bayrou imposed himself as premier. He’s seen as more biddable, while Darmanin is highly ambitious and more independent-minded. They noted that a day of mass protests, potentially shutting the country down, was in the offing only two days after Francois Bayrou’s expected exit. | Pool Photo by Thibaud Moritz via EPA An individual close to Lecornu said the 39-year-old privately boasts of enjoying a privileged relationship with Marine Le Pen’s far-right National Rally, while at the same time insisting he could lead a coalition government of both the right and the left.  But will that relationship with the National Rally help him succeed in the bloody budget arena where both Bayrou and former Prime Minister Michel Barnier failed? Many centrists say no: Nothing indicates that either Le Pen or the socialists have any intention of supporting him any more than they did Bayrou. “There is no scenario, no new casting choice that can resolve the crisis,” the ministerial adviser said. For the conservative Les Républicains supporting Bayrou’s minority government, the suggestion of Lecornu is yet another example of an unfailingly optimistic president who refuses to accept defeat. Macron himself reportedly tried to downplay the crisis at Wednesday’s weekly meeting of the Council of Ministers. “He can’t help trying to regain control,” said a dejected member of Les Républicains. “It’s his natural inclination.” Even a technocratic government of experts to solve the budget mess — a rather Italian-sounding fix — would need to navigate a splintered National Assembly filled with lawmakers looking head to key municipal elections next year and the presidential election in 2027. UNAPPETIZING ELECTION Sending the French back to the ballot box, however, also carries its own set of risks for a president worried about his legacy. It was, after all, the surprise snap vote following European elections last summer that shunted France into its current deadlock and irrevocably damaged Macron’s reputation. Polling shows voters could easily deliver another hung parliament in any election in the coming weeks or months. “The worst for him is a dissolution that doesn’t work, because then he’s the one who gets the boot,” another ministerial adviser said. Someone close to Emmanuel Macron said Justice Minister Darmanin, who has long eyed the premiership, is also a candidate, but doesn’t want to inherit what appears to be a suicide mission. | Mohammed Badra/EPA That doesn’t mean it’s impossible, however. Before Monday, Macron had repeatedly ruled out calling new elections before the end of his term, but the Elysée insists he will not deprive himself of a constitutional power . “Mystery is part of the presidential strategy,” said a close associate of Macron. BAYROU FOR PRESIDENT Bayrou’s camp, meanwhile, remains stunned by the speed at which his fate was sealed by opposition lawmakers — especially the far right — and is struggling to convince people the situation is under control. One individual in the prime minister’s entourage said he hoped Le Pen and the National Rally would reconsider their position after 48 hours. The hope was that Bayrou’s team could do the dirty work of balancing France’s books before 2027 while also avoiding the danger of a legislative election in which Le Pen would be barred from running due to her embezzlement conviction. Bayrou for now appears to be waging a battle in the court of public opinion, giving a flurry of speeches and interviews in the hope of leaving the Matignon Palace, the prime ministerial residence, with his head held high.  It has the air of a campaign strategy for 2027, and Bayrou has long aspired to the Elysée. “At least he will have earned his stripes as a presidential candidate,” one Macron supporter said.

PARIS — On a sunny July morning in the French capital, a pair of investigating judges and some 20 law enforcement officers in bulletproof vests stormed into the unassuming headquarters of the National Rally, wedged between a frozen food store and a building cloaked in scaffolding. France’s far-right powerhouse had found itself in the crosshairs of the French justice system, which was probing allegations the party had funded several campaigns in part through illegal loans. Those runs included Marine Le Pen’s presidential bid and legislative elections in 2022; the 2024 European election, led by party president and rising star Jordan Bardella; and the surprise snap elections that followed. The raid came at a moment of both immense promise and immense peril for the National Rally. The party has never been more popular, and stands a realistic chance of winning the presidency when the next election is held in 2027, according to opinion polls. But it remains dogged by legal troubles. In March, Le Pen was handed an embezzlement conviction that threatens to keep her off the ballot in the next presidential contest barring a successful appeal. The raid, which took place on July 9, was one of three incidents publicized that week. The day before saw the European Public Prosecutor’s Office announce an inquiry into the alleged misuse of funds by the now-defunct Identity and Democracy group in the European Parliament, to which the National Rally belongs. Before the week was out, reports emerged that French authorities had questioned the hyper-liberal, anti-immigrant billionaire Pierre-Edouard Stérin last year as part of a probe to determine whether he had illegally funded local campaigns of the far-right party. (Stérin has denied any wrongdoing.) The National Rally has increasingly adopted a Trumpian “witch hunt” defense as the cases pile up, but the explanation comes down to money. Despite exploding in popularity in recent years, National Rally leaders have repeatedly complained that the party can’t get loans from French banks. A 2019 parliamentary report found that most financial institutions don’t want to do business with Le Pen and Bardella’s movement due to its “image or reputation,” its modest real estate portfolio (and thus limited collateral), and its frequent run-ins with law enforcement. It’s an unfortunate financial Catch-22 for the French far right. Without access to traditional sources of financing, the National Rally is forced to employ creative schemes that draw the attention of French authorities. The ensuing investigations in turn further dissuade banks from getting into business with the party. Bardella told French newswire Agence France-Presse after the July raid that “no French bank wanted to lend money to the National Rally to finance its election campaigns,” and that the party should therefore not be blamed for “financing itself and taking out loans that are perfectly legal.” President Emmanuel Macron’s upstart political party faced the same problem before his shock victory in 2017, being forced to rely on fundraising to compensate for the absence of financial guarantees or a political track record that might have reassured creditors. But after he won the Elysée, banks were more comfortable with playing ball. A 2019 parliamentary report found most financial institutions don’t want to do business with Le Pen and Bardella’s movement due to its “image or reputation.” | Teresa Suarez via EPA Renaissance, as the party is now known, was able to buy — and then sell for a reported €31 million — prime real estate in the heart of Paris for its headquarters. The National Rally, by contrast, rents far more modest offices in a building ill-befitting one of France’s most popular political parties, in an upscale but aging neighborhood on the western edge of the city. GO FUND YOURSELF The most notorious public instance of the National Rally’s efforts to seek alternative financing was the €6 million loan Le Pen secured from a Russian bank in 2014, which became a major political liability. In recent years, however, the National Rally has relied on small-scale fundraising schemes, at least one of which fell foul of French campaign finance laws designed to prevent too much money from entering politics. The National Rally last year exhausted its final appeal and was definitively found guilty of having overcharged its candidates for “kits” containing campaign material, which were then reimbursed with public funds, during the 2012 legislative elections. The July 9 raid was conducted by officers looking for evidence to support the allegation that the National Rally may have received illicit loans from supporters or financiers. While political parties in France are allowed to receive loans from individuals, those loans cannot be granted on a “regular basis,” per electoral law, so as to not serve the function of a banker without proper authorization. Romain Rambaud, a law professor at the University of Grenoble who specializes in French election law, said it was “likely” that the National Rally initially relied on individual loans “because they had trouble getting loans from banks.” French political parties feeling heat from the justice system and having their headquarters raided is nothing new. In recent years both the center-right Democratic Movement, Prime Minister François Bayrou’s party, and Macron’s centrist Renaissance were raided in relation to probes into alleged financial wrongdoing. The Democratic Movement was later fined €300,000 for having partaken in a scheme to embezzle funds from the European Parliament. The investigation into Renaissance, which involves consulting firm McKinsey’s alleged role in Macron’s presidential campaigns, has to date not led to charges. DEVELOPMENTAL CRISIS The National Rally’s treasurer, Kévin Pfeffer, did not respond to POLITICO’s interview requests for this story after the raid. However a high-ranking party official, who was not authorized to speak publicly, acknowledged that Le Pen’s party may have faced both “a developmental crisis” and an “overzealous” French justice system. The July 9 raid was conducted by officers in search of evidence that the National Rally may have received illicit loans from supporters or financiers. | Teresa Suarez/EFE via EPA French public campaign financing reimburses part of candidates’ expenses if they meet certain vote thresholds, depending on the election, in order to promote fairness and limit private influence in elections. Political parties in France also receive public funding based on the number of votes they receive in legislative elections and the number of elected representatives, and elected officials will often give back part of their earnings to the outfit they represent. The National Rally official said the party is still learning how to handle the influx of public money that comes with electoral success. “We went from having four MPs [before 2022] to over 120 [since 2024], [so] there’s probably some elements which escape our radar,” the official said. “It’s not always obvious focusing on getting ready to govern the country while sorting out administrative affairs.” Rambaud, however, noted that some of the alleged illegal behavior came after the far-right party had scored key victories and could therefore benefit from public subsidies. “It seems institutionalized now, even though they have access to state funding” he said. “That raises questions about the system in place — whether some people are using it to gain influence within the party or pay off debts. Why continue financing this way when public money is now available?”

Andi Hoxhaj is a lecturer in law and the director of the European Law LLM pathway program at King’s College London. He is the author of “EU Anti-Corruption Report: A Reflexive Governance Approach.” In 2023, the EU proposed an anti-corruption directive in response to multiple scandals, including Qatargate, Huawei and the Uber Files. The proposal also attempted to address recent backsliding on rule of law, as well as the fact that several EU members have dropped in Transparency International’s Corruption Perceptions Index rankings. Highlighting how corruption continues to plague the EU, the directive’s goal is to standardize the definition of corruption offenses and establish common penalties across the bloc. And to date, in accordance with EU procedure, the proposed bill was presented by European Commission in 2023, and the EU Parliament and Council of the EU amended and agreed on most of its content. But as of late June, negotiations have been at a deadlock due to three proposals in the directive’s text, which have been the subject of disagreement between members countries. The main sticking point is over the offense of “abuse of office” by public officials, with opponents demanding its reclassification from a criminal to an administrative offense. Simply put, the anti-corruption directive is at a critical juncture. Questions is, will the bloc finally step up, or will it be business as usual? Italy and Germany are currently leading the dissent, with support from Hungary, Luxembourg and the Netherlands. Their argument is that the provision is vague, overly broad and open to misuse, as it could be used to target and charge public officials in order to create a public show of fighting corruption. They also argue it may discourage officials from working for public administration or approving publicly funded projects for fear of facing criminal prosecution. Italy itself abolished the offense of abuse of office in 2024, after it had been part of its criminal law for almost a century. So, the provision’s inclusion in the EU directive would require its reinstatement in their state law. Moreover, the reasoning behind Italy’s decriminalization was that the law hindered decision-making at the local and central levels of government, with officials afraid of being charged for allocating public resources. It had also become a politically driven instrument of prosecutorial harassment, with recent figures showing just nine in 5,000 criminal cases resulted in convictions. Some other EU members support this perspective, but the truth is, changing the law to an administrative offense would make it easier for public officials to engage in clientelism, nepotism and outright corruption, potentially opening the door to more white-collar crime and muddying the waters on possible conflicts of interest. Right now, the Parliament considers the decriminalization of abuse of office to be a redline, crucial to the bloc’s efforts to consistently combat corruption. This is a major issue in the EU, and until now, it has repeatedly failed to introduce robust legislation to target the problem, let alone effectively enforce it. That’s why on June 2, 57 civil society organizations published an open letter urging EU leaders to demonstrate genuine political will, setting a higher standard for integrity and accountability across the bloc. They are correct: The EU could make real progress against corruption with this legislation. Whereas a watered-down directive would send the wrong message both to its citizens and the world — particularly to candidate countries, where the EU has made fighting corruption a key precondition for membership. Or is it one law for the EU, another for EU hopefuls? The bloc last assessed the impact of corruption in 2014, estimating it costs more than €120 billion a year, with some studies estimating it might be up to €179 billion. And yet, most nongovernmental anti-corruption organizations and indicators suggest corruption is still on the rise in the EU. For example, during the Covid-19 pandemic, nearly all (25 out of 27) EU members “saw an increase in tenders with only one bidder — a crucial sign that the tender may have been rigged in favor of the bidding companies.” By contrast, Albania’s Special Prosecutor’s Office against Corruption and Organized Crime (SPAK) has charged nearly all its public officials — including former presidents, prime ministers, ministers and mayors — with abuse of office. And it did so under a criminal provision modeled after the former Italian criminal law on abuse of power, as advocated by the EU. Meanwhile, the U.S.’s suspension of the Foreign Corrupt Practices Act and dissolution of its kleptocracy units — a major retreat in the county’s global efforts to address corruption — only makes the need for the EU to recognize its role on the world stage more urgent. EU members must demonstrate true leadership, and challenge the message they’re currently sending: that the EU isn’t serious about fighting corruption within its own walls, while it’s happy to take the moral high ground elsewhere, whether that be in accession talks with Ukraine or considering Albania’s and Montenegro’s EU membership. EU members must rise to the occasion, adopting a robust anti-corruption directive that will impact the bloc and beyond without further delay.

BRUSSELS — As Europe prepares to enter a new technology race, the hurdles it faces to beat out the U.S. and China are all too familiar. After rapidly falling behind in the global rush to artificial intelligence, Brussels has a fresh chance at an economic success story in the emerging field of quantum technology. But in a new strategy to be released Wednesday, the EU will warn that promising homegrown quantum tech risks being snatched up to make money abroad as the bloc continues to lag in turning research into “real-market opportunities,” according to a draft seen by POLITICO. “Europe attracts only five percent of the global private quantum funding, compared to over 50 percent captured by the U.S. and 40 percent by China,” the undated draft read. Governments and technology companies — most notably in the U.S. — are plowing billions into the quantum wave, which would be revolutionary because quantum computers would surpass the problem-solving capacities of current computers by vast orders of magnitude, revolutionizing industries from communications to drug development. Europe is the global leader in the number of scientific publications on the technology. “Europe has been falling behind [when it] comes to the technology in many sectors. This sector is something where we are several years ahead of other countries,” said Juha Vartiainen, co-founder of the Finnish quantum computing company IQM. But in the race to commercialize that research, Europe risks falling behind quickly, ranking only third in patents filed, behind the U.S. and China. To many, it’s déjà vu. Europe is generally best in class in the research that precedes revolutionary technologies, as it was in artificial intelligence. But the U.S. and China leapfrogged the continent in building the companies to deploy mass-market applications. A major point of debate is whether Europe will give its quantum industry free rein. Quantum computers are considered sensitive technology since they are expected to break the digital encryption that protects data and communications from being surveilled and stolen — making the technology a matter of national security. Several European governments have already imposed export restrictions. CASH FLOW PROBLEMS U.S. tech giant IBM recently announced it expects to have the first workable quantum computer by 2029 — adding urgency to the timeline for Europe to get its house in order. For decades, Europe has failed to overcome its fragmented financial market and pool funding on the scale that the U.S. and China can provide. Efforts to overcome the barriers to investment through a bloc-wide capital markets union have yielded no significant outcomes. U.S. tech giant IBM recently announced it expects to have the first workable quantum computer by 2029 — adding urgency to the timeline for Europe to get its house in order. | Anna Szilagyi/EPA The strategy notes significantly more investment will be needed to roll out reliable technology that is widely adopted by several industries. “Raising a scale-up in Europe is super difficult, because we lack the European instruments, the European venture capital … large enough to support that,” said Enrique Lizaso, CEO of Spanish software company Multiverse Computing, which is crossing quantum-inspired software applications with artificial intelligence. Multiverse last month raised €189 million in a funding round that included both U.S.-based and European investors. Lizaso said that if Europe wants to help scale its companies it must be prepared to invest €100 million per company, “which is what you’re going to have from the U.S.” According to IQM’s Vartiainen, “we would need to have funding levels which are significantly larger than they have been so far.” In an interview Tuesday, the EU’s tech commissioner Henna Virkkunen said that Brussels and the capitals have jointly funded quantum technology with €11 billion. “Now it’s important, because we are quite fragmented, that we are putting different dots together,” she said. PICKING WINNERS Both Brussels and EU capitals have rolled out public funding plans to complement private funding, but the industry fears these are insufficient and lack focus. Europe’s approach has been to be “technology-neutral” and fund several strands of quantum technology, Vartiainen said, but spreading out funding can dilute its impact. Europe should follow the U.S. example of unlocking larger investments for focused “challenges,” he said. Under a program led by the U.S. government’s DARPA defense research agency, 18 companies have been selected as part of a larger bid to come up with an error-free quantum computer by 2033. Those companies could reportedly tap up to $300 million if they pass all the stages. The EU’s draft strategy promises to launch “two grand challenges” between 2025 and 2027, with one focused on quantum computing and another on quantum navigation systems in “critical environments.” Another way for governments to support companies to commercialize the technology would be if they are the primary buyers of technology, which then lowers the bar for the industry to follow suit. Some industry voices have warned that the EU’s approach to regulating AI offers a cautionary tale. | Etienne Laurent/EPA The draft strategy said the Commission would “support innovation-oriented procurement schemes,” but didn’t offer much detail on how it would do so. Companies are adamant on what they don’t want from Brussels: regulation and restrictions on quantum technology, like restrictions on the export of the technology. Some industry voices have warned that the EU’s approach to regulating AI offers a cautionary tale. Worried about the potential harms of the technology, the EU rolled out the world’s first AI rulebook, only to quickly backtrack to focus on AI innovation and commercial success. “We cannot afford to regulate what is not yet mature,” said Cecilia Bonefeld-Dahl, director general of DigitalEurope, one of Brussels’ leading tech lobbies. “Otherwise, Europe risks losing the quantum race.”