BERLIN — German Defense Minister Boris Pistorus will spend next week touring the Indo-Pacific with a passel of corporate chiefs in tow to make deals across the region. It’s part of an effort to mark a greater impact in an area where Berlin’s presence has been minor, but whose importance is growing as Germany looks to build up access to natural resources, technology and allies in a fracturing world. “If you look at the Indo-Pacific, Germany is essentially starting from scratch,” said Bastian Ernst, a defense lawmaker from Chancellor Friedrich Merz’s Christian Democrats. “We don’t have an established role yet, we’re only just beginning to figure out what that should be.” Pistorius leaves Friday on an eight-day tour to Japan, Singapore and Australia where he’ll be aiming to build relations with other like-minded middle powers — mirroring countries from France to Canada as they scramble to figure out new relationships in a world destabilized by Russia, China and a United States led by Donald Trump. “Germany recognizes this principle of interconnected theaters,” said Elli-Katharina Pohlkamp, visiting fellow of the Asia Programme at the European Council on Foreign Relations. Berlin, she said, “increasingly sees Europe’s focus on Russia and Asia’s focus on China and North Korea as security issues that are linked.” The military and defense emphasis of next week’s trip marks a departure from Berlin’s 2020 Indo-Pacific guidelines, which laid a much heavier focus on trade and diplomacy. Pistorius’ outreach will be especially important as Germany rapidly ramps up military spending at home. Berlin is on track to boost its defense budget to around €150 billion a year by the end of the decade and is preparing tens of billions in new procurement contracts. But not everything Germany needs can be sourced in Europe. Australia is one of the few alternatives to China in critical minerals essential to the defense industry. It’s a leading supplier of lithium and one of the only significant producers of separated rare earth materials outside China. Australia also looms over a key German defense contract. Berlin is considering whether to stick with a naval laser weapon being developed by homegrown firms Rheinmetall and MBDA, or team up with Australia’s EOS instead. That has become a more sensitive political question in Berlin. WELT, owned by POLITICO’s parent company Axel Springer, reported that lawmakers had stopped the planned contract for the German option, reflecting wider concern over whether Berlin should back a domestic system or move faster with a foreign one. That means what Pistorius sees in Australia could end up shaping a decision back in Germany. TALKING TO TOKYO Japan offers something different — not raw materials but military integration, logistics and technology.  Pohlkamp said the military side of the relationship with Japan is now “very much about interoperability and compatibility, built through joint exercises, mutual visits, closer staff work, expanded information exchange and mutual learning.” She described Japan as “a kind of yardstick for Germany,” a country that lives with “an enormous threat perception” not only militarily but also economically, because it is surrounded by pressure from China, North Korea and Russia.  The Japan-Germany Acquisition and Cross-Servicing Agreement took effect in July 2024, giving the two militaries a framework for reciprocal supplies and services and making future port calls for naval vessels, exercises and recurring cooperation easier to sustain.  Pohlkamp said what matters most to Tokyo are not headline-grabbing deployments but “plannable, recurring contributions, which are more valuable than big, one-off shows of force.” But that ambition only goes so far if Germany’s presence remains sporadic. Bundeswehr recruits march on the market square to take their ceremonial oath in Altenburg on March 19, 2026. | Bodo Schackow/picture alliance via Getty Images Berlin has sent military assets to the region for training exercises in recent years — a frigate in 2021, combat aircraft in 2022, army participation in 2023, and a larger naval mission in 2024. But as pressure grows on Germany to beef up its military to hold off Russia, along with its growing presence in Lithuania and its effort to keep supplying Ukraine with weapons, the attention given to Asia is shrinking. The government told parliament last year it sent no frigate in 2025, plans none in 2026 and has not yet decided on 2027. Germany’s current military engagement in the Indo-Pacific consists of a single P-8A Poseidon maritime patrol aircraft, sent to India in February as part of the Indo-Pacific Deployment 2026 exercises.  Germany, according to Ernst, is still “relatively blank” in the region. What it can contribute militarily remains narrow: “A bit of maritime patrol, a frigate, mine clearance.” Pohlkamp said Germany’s role in Asia is still being built “in small doses” and is largely symbolic. But what matters is whether Berlin can turn occasional visits and deployments into something steadier and more predictable. The defense ministry insists that is the point of Pistorius’s trip. Ministry spokesperson Mitko Müller said Wednesday that Europe and the Indo-Pacific are “inseparably linked,” citing the rules-based order, sea lanes, international law and the role of the two regions in global supply and value chains.  The new P-8A Poseidon reconnaissance aircraft stands in front of a technical hangar at Nordholz airbase on Nov. 20, 2025. | Christian Butt/picture alliance via Getty Images The trip is meant to focus on the regional security situation, expanding strategic dialogue, current and possible military cooperation, joint exercises including future Indo-Pacific deployments, and industrial cooperation. That explains why industry is traveling with Pistorius.  Müller said executives from Airbus, TKMS, MBDA, Quantum Systems, Diehl and Rohde & Schwarz are coming along, suggesting Berlin sees the trip as a chance to widen defense ties on the ground. But any larger German role in Asia would have to careful calibrated to avoid angering China — a key trading partner that is very wary of European powers expanding their regional presence. “That leaves Germany trying to do two things at once,” Pohlkamp said. “First, show up often enough to matter, but not so forcefully that it gets dragged into a confrontation it is neither politically nor militarily prepared to sustain.”

A new EU-backed study sheds light on the gender gap in investments across Europe, with a particular focus on deep tech — a category of innovation that is central to Europe’s long-term competitiveness, security and economic resilience. Deep tech refers to companies built on scientific breakthroughs and advanced engineering, often emerging from research laboratories and universities. These include firms working in areas such as artificial intelligence, advanced materials, semiconductors, robotics, quantum technologies, climate and energy systems, health and biotech, and industrial technologies. Unlike many consumer-facing digital startups, deep-tech companies typically require long development timelines, specialized talent and significant upfront capital before reaching market. For the EU, deep tech is strategic. It underpins the green and digital transitions, strengthens industrial leadership, and reduces dependence on external technologies in critical areas such as energy, health and security. Ensuring that talent can access capital in these sectors is therefore not only a question of fairness — it is a question of Europe’s ability to compete globally. > Gender equality isn’t just a fairness goal. It’s a competitiveness goal. > Europe can’t afford to waste talent — especially in deep tech. > > Katerina Svíčková, Head of Gender Sector, DG RTD, European Commission Two objectives: Measure the gap — and understand how to close it The project was designed around two complementary goals. First, to identify and consolidate data that can be used to measure the gender investment gap in a consistent and transparent way across Europe. Second, to engage directly with founders, investors and policymakers to understand why the gap persists — and what could help bridge it, particularly in deep tech. While gender-disaggregated data exist, they are often fragmented, based on different definitions or not publicly comparable. This makes it difficult for policymakers, investors and ecosystem actors to assess progress or design targeted interventions. A prototype repository: The Gender Gap in Investments Dashboard A central output of the project is the Gender Gap in Investments Dashboard, developed by Dealroom. The dashboard is a prototype repository that already presents a clear picture of the current state of the gender investment gap using Dealroom data. It brings together information on company founding teams and venture funding outcomes across Europe in a single, accessible interface. The dashboard is not an endpoint. It is designed as a foundation that can, over time, incorporate additional data sources, improve coverage, and offer a more nuanced view of how gender, sector, funding stage and geography interact. The long-term ambition is to support the development of a credible, shared European data infrastructure on gender and investment. What the data show: Deep tech remains highly skewed Even at this early stage, the dashboard reveals persistent imbalances. Across Europe, startups with at least one woman founder raise just 14.4 percent of all venture capital (VC) rounds and 12 percent of total VC funding. In deep tech, the imbalance is even starker. Around 80 percent of deep-tech companies are founded by all-male teams, which receive nearly 90 percent of venture funding. > Investing through diverse teams helps unlock deal flow that would otherwise > remain invisible. > > Ulrike Kostense, Investment Principal, Invest-NL Given the capital intensity of deep tech, these disparities matter. Who receives early and follow-on funding today shapes which technologies Europe brings to scale tomorrow. Listening to the ecosystem: Evidence beyond the numbers To complement the data work, the project placed strong emphasis on qualitative research and ecosystem engagement. Over 11 months, the team conducted: * 81 in-depth interviews with founders, investors, fund managers, public banks and EU policymakers * 12 ecosystem events across Europe, engaging more than 1,000 participants Across countries and sectors, participants consistently pointed to structural barriers, including difficulties accessing early and scale-up capital, credibility gaps in fundraising — particularly in deep tech — fragmented support landscapes, and limited diversity in investment decision-making roles. From insight to action: Priorities for Europe Drawing on both the data and the ecosystem input, the report highlights several areas for action: * Build a permanent European data hub on gender and investment, starting with the Dealroom dashboard and gradually adding more public and private data sources. * Make investment data easier to compare and understand, by using shared definitions and reporting standards across EU and national funding programs. * Close the gap between early support and growth funding, so that startups — especially deep-tech companies that take longer to develop — are not lost before they can scale. * Use public investment to shape the market, drawing on the EU’s role as a major investor — including the European Innovation Council (EIC) and its investment arm, the EIC Fund, which provide public funding and equity to high-potential startups — to attract private capital and set better incentives. * Improve connections across the ecosystem, helping founders find the right funding routes and reach key decision-makers. A foundation for long-term change The central conclusion of the study is clear: Europe does not lack women innovators — it lacks the systems needed to measure, fund and scale them consistently. By combining a shared data foundation with direct engagement across the ecosystem, the project lays the groundwork for more informed policymaking, better investment decisions and a stronger, more inclusive European deep-tech ecosystem. Final Report: Gender Gap in InvestmentsDownload -------------------------------------------------------------------------------- Disclaimer POLITICAL ADVERTISEMENT * The sponsor is EISMEA – European Innovation Council and SME Executive Agency * The ultimate controlling entity is EISMEA – European Innovation Council and SME Executive Agency More information here.

MUNICH, Germany — U.S. officials have countered Europe’s push for technology sovereignty from America with a clear message: It’s China you should worry about, not us. The European Union is rolling out a strategy to reduce its reliance on foreign technology suppliers. Donald Trump’s return to office has put the focus on American cloud giants, companies like Elon Musk’s Starlink and X and others — with European officials increasingly concerned that Washington has too much control over Europe’s digital infrastructure. As political leaders and security and intelligence officials met in Germany for the Munich Security Conference, Washington sought to calm nerves. The idea that Trump can pull the plug on the internet is not “a credible argument,” the United States’ National Cyber Director Sean Cairncross told an audience Thursday. Europe and the U.S. “face the same sort of threat and the same threat actors,” said Cairncross, who advises Trump on cybersecurity policy. Rather than weaning off America, wean off China, he said: “There is a clean tech stack. It is primarily American. And then there is a Chinese tech stack.” Claiming that U.S. tech is as risky as Chinese tech is “a giant false equivalency,” according to Cairncross. “Personal data doesn’t get piped to the state in the United States,” he said, referencing concerns that the Beijing government has laws requiring firms to hand over data for Chinese surveillance and espionage purposes. The attempt to quell concerns is notable even if it may not change the direction of travel in Europe. The European Commission wants to boost homegrown technology with a “tech sovereignty” package this spring. It presented a cybersecurity proposal in January that, if approved, could be used to root out suppliers that pose security risks — including from America. “We want to ensure that we don’t have risky dependencies when it comes to critical sectors,” the Commission’s Executive Vice President Henna Virkkunen told POLITICO in an interview in Munich on Friday. “We see this in AI, quantum technologies and semiconductors — we must have a certain level of capacity ourselves.” Europe’s attempt to pivot away from U.S. dependencies, while not new, has gained support in past months as the transatlantic alliance creaked. The POLITICO Poll conducted in February showed far more people described the U.S. as an unreliable ally than a reliable one across four countries, including half the adults polled in Germany and 57 percent in Canada. “The leadership claim of the U.S. is being challenged, perhaps already lost,” German Chancellor Friedrich Merz told the conference Friday. REBALANCING ACT Europe is still working out what a forceful attempt to build technology sovereignty would look like, as it reforms everything from industrial policy programs to procurement rules and data and cybersecurity requirements on companies and governments. Top European cyber officials in Munich told POLITICO that technological sovereignty does not mean cutting ties with trusted partners. Vincent Strubel, director of France’s cybersecurity agency ANSSI, said sovereignty means avoiding being bound by rules set elsewhere. “It’s about identifying what leverage non-European countries may have based on the technology they provide,” Strubel said in an interview. “It’s not about being friendly or unfriendly with any country — it’s about recognizing that we [currently] have no say in how that leverage might be used.” Claudia Plattner, head of Germany’s cybersecurity agency BSI, said, “We need to become more independent. We need to strengthen our local and European industries … We need to become digitally successful — that is essential to economic strength and to security.” The BSI plans to test sovereign cloud offerings from several large tech companies, including AWS and Google. The testing will examine whether European services can operate independently from parent systems and will help inform Germany’s national cloud strategy. Critics of Europe’s efforts to turn away from the U.S. say it is bound to lead to worse security. Christopher Ahlberg, the CEO of threat intelligence firm Recorded Future, said he understood that things like military command and control must remain national, “but if you start choosing sub-par cyber products just to achieve sovereignty, you’re going to be target No. 1 because threat actors will discover the vulnerabilities.” COMMON GROUND ON CHINA While tensions persist over the U.S.’s dominant position, Washington and European capitals have common ground when it comes to caution over Chinese tech. The EU is drafting legal requirements to cut out Chinese tech from critical supply chains including telecom networks, energy grids, security systems and railways. That move drew the ire of the Chinese government, which called it “blatant protectionism.” Many of the measures mirror what U.S. authorities have done in the past decade. “The U.S. understands what national security is. They don’t want to hear: ‘The U.S. is a threat.’ But they understand resilience,” said Sébastien Garnault, a prominent French cyber policy consultant. Trump “is putting America first, and the same goes in cyberspace,” Cairncross said. But, he added, “we don’t want it to be America alone. We want that partnership.” Laurens Cerulus contributed reporting.

MUNICH — Europe must be able to strike back in cyberspace, as the strategy to deter adversaries is no longer enough, the EU executive’s tech and security chief told POLITICO. “It’s not enough that we are just defending … We also have to have offensive capacity,” the European Commission’s Executive Vice President Henna Virkkunen said in an interview on the sidelines of the Munich Security Conference on Friday. For years, European capitals have held back from stating publicly that they support offensive cyber operations — known as “hacking back” — because of fears that such operations could trigger retaliation and escalation from countries like Russia, China and others. But the tide is turning, as EU states including Germany, Latvia and others warm to the idea of conducting offensive cyber operations. The European Commission also mentioned the need for both defensive and offensive cyber capabilities in its defense white paper in December. Virkkunen said the Commission is also identifying critical areas and industries where Europe wants more control over its data. It is part of a broader push to reduce dependence on foreign technology and build a homegrown tech and cyber industry in Europe. “We don’t want to have risky dependencies in any critical fields,” she said. “That doesn’t mean we plan to do everything on our own. When we don’t have certain capacities ourselves, we are very willing to work with like-minded partners to build resilient supply chains.”

Listen on * Spotify * Apple Music * Amazon Music Mit über 108 Milliarden Euro Wehretat erlebt Deutschland einen historischen Wendepunkt in der Verteidigungspolitik. Für Kanzler Friedrich Merz gehören Wirtschaftswende, Wettbewerbsfähigkeit und Rüstung zusammen. Aber kommt die „Zeitenwende“ auch in der Realwirtschaft an? Wo bremsen Bürokratie, europäische Konflikte und politische Kontrolle? In dieser Premierenfolge analysieren Joana Lehner und Jürgen Klöckner die drei größten Probleme für die Rüstungsindustrie. Im Policy-Talk ist Sven Kruck zu Gast. Er ist der Co-CEO von Deutschlands erfolgreichstem Drohnenhersteller Quantum Systems. Kruck spricht darüber, wie Rüstungsgeschäfte eingefädelt werden, zum Beispiel jetzt auf der Münchner Sicherheitskonferenz. Er erklärt, wie er den Wettbewerb mit den etablierten Konzernen wie Airbus oder Rheinmetall erlebt. Außerdem ordnet er ein, warum höhere Verteidigungsausgaben noch keine strategische Klarheit bedeuten. Und: Chris Lunday, der für POLITICO über Sicherheits- und Verteidigungspolitik berichtet, gibt Einblicke darin, welche persönliche Rolle Verteidigungsminister Boris Pistorius bei Rüstungsdeals spielt. „Power & Policy“ zeigt jede Woche, wo und wie die Entscheidungen in der Wirtschaftspolitik fallen. Jürgen Klöckner und Joana Lehner von POLITICO sprechen mit Top-Entscheidern und liefern Off-the-Record-Einblicke aus der Redaktion und Machtzentren. Präzise Analysen, lange bevor Gesetze beschlossen sind. Der Podcast für alle in Wirtschaft und Politik, die einen Wissensvorsprung brauchen — immer donnerstags. Für Policy-Profis: Abonnieren und die Pro-Newsletter Industrie & Handel, Energie & Klima und Gesundheit. Jetzt kostenlos testen. Fragen und Feedback gern an powerandpolicy@politico.eu. **(Anzeige) Eine Nachricht von Fuchs & Cie.: Bei Fuchs & Cie. zählen Leistung und Erfolg. Im Interesse unserer Klienten und ihrer Themen. Deswegen jetzt bewerben. Gerne mit einem Hintergrund aus den Bereichen Defence, Finance, Data oder Energy. Bewerbung per Mail an karriere@fuchs-cie.de. Wir verstärken unsere Teams in Berlin, München und Frankfurt.** POLITICO Deutschland – ein Angebot der Axel Springer Deutschland GmbH Axel-Springer-Straße 65, 10888 Berlin Tel: +49 (30) 2591 0 ⁠information@axelspringer.de⁠ Sitz: Amtsgericht Berlin-Charlottenburg, HRB 196159 B USt-IdNr: DE 214 852 390 Geschäftsführer: Carolin Hulshoff Pol, Mathias Sanchez Luna

PARIS — French President Emmanuel Macron made an energetic appeal for Europe to launch a joint borrowing scheme and boost investment in strategic sectors, framing it as a economic necessity if the continent is to keep up with the United States and China. In an interview with six European media outlets published Tuesday, Macron said Europe must seize on the unity it showed during its transatlantic rift with Washington over the Trump administration’s threat to annex Greenland. “We think it’s over. But don’t believe it for a single second,” Macron said, arguing that Europe must continue to stand firm and united against any threats from the White House. Macron predicted that Europe is going to need to get tough with Washington over European digital regulation and with Beijing as Chinese companies continue to flood Europe with cheap goods. “The U.S. will, in the coming months — that’s certain — attack us over digital regulation,” Macron said. Given Europe faces a constricted budget to confront those challenges, French president argued that to finance its future, it is “the moment to launch a common borrowing capacity, for these eurobonds for the future.” Macron argued the moment was especially right with diminishing faith in the stability of the U.S. dollar. “The global market … is more and more afraid of the American greenback. It’s looking for alternatives. Let’s offer it European debt,” he said.  Macron also denied in the interview that the long-troubled Future Combat Air System (FCAS) project between France, Germany and Spain was on the verge of collapse. “I believe that things must move forward,” Macron said. An Elysée official told reporters on Thursday that joint borrowing could cover sectors spanning from AI, to quantum, defense, space, semiconductors and robotics. The official said France could find allies in its call for more joint debt, arguing that Nordic countries could be open to that option when it comes to defense while southern countries would be interested in it to finance investments in new technologies.  “Europe today has become an adjustment market for China and an object of coercion for the United States,” said the same official. “If we stick to the traditional European recipes, we will see the acceleration of the slow death” foreseen by former Italian Prime Minister Mario Draghi. But it’s unclear how much traction the call will gain, given that Macron’s term ends next year and his influence is on the wane in Brussels. EU leaders have in the past agreed on joint borrowing in extraordinary circumstances, such as to finance a loan for Ukraine and to help with the pandemic recovery. But a permanent facility for joint borrowing has long been viewed with skepticism by Europe’s frugal nations, who are worried about assuming the risks of highly indebted countries — like France itself. Still, the French president is forging ahead with his sales pitch, which also includes enforcing European preference in public tenders and local content rules: first on Wednesday at a summit in Antwerp with European industry, then at an informal gathering of EU leaders on Thursday in the Belgian countryside.  German Chancellor Friedrich Merz and Italian Prime Minister Giorgia Meloni, however, are pushing a much softer and less radical agenda.

LONDON — As governments around the world scramble to stay ahead in the frantic world of artificial intelligence, the U.K. is betting big on the next computing breakthrough: quantum. A national research program dating back over a decade has made the U.K. a leader in harnessing the properties of quantum physics to build computers capable of carrying out calculations in a fraction of the time taken by conventional machines. The program has given birth to several leading startups attempting to turn experimental efforts into large-scale, reliable computers that could give their owners an immense economic and national security advantage. Winning that race is a top priority for No. 10 Downing Street, which has identified quantum as one of six frontier technologies crucial to “U.K. security and sovereignty.” In a sign of its importance, Britain’s quantum prowess formed a central plank of the country’s technology partnership with the U.S. U.K. officials pointed to the industry as proof that the deal was not one-sided. Now, the government is preparing to significantly increase support for a small number of the most promising quantum startups, after Technology Secretary Liz Kendall said the U.K. must do “fewer things better.” According to six people familiar with discussions, the government plans to dedicate the bulk of a £670 million commitment for quantum computing to just a handful of startups, with payments tied to reaching certain technical milestones. Prime Minister Keir Starmer is expected to announce the plan early in the new year, two of the people said, though both cautioned that plans remain subject to change. “We are determined to unlock quantum’s benefits for society and the economy,” a spokesperson for the Department for Science, Innovation and Technology said, noting that the U.K. had backed “one of the largest commitments made to this technology of any government in the world.”  BIGGER BETS The U.K.’s early recognition of quantum’s potential has seen it capture 18 percent of global funding in the sector since 2020, according to a study by the Royal Academy of Engineering.  But there are fears that its lead could slip, with the U.S., China, Canada, Denmark, France and Germany all investing heavily, and some U.K. startups saying they are forced to look abroad to raise enough capital. A $1.1 billion takeover of leading British startup Oxford Ionics by U.S. rival IonQ this summer has only sharpened concerns, although the company plans to retain the U.K. as its R&D hub.  Winning that race is a top priority for No. 10 Downing Street, which has identified quantum as one of six frontier technologies crucial to “U.K. security and sovereignty.” | Mark Kerrison/Getty Images Jakob Mökander, director of science and technology policy at the Tony Blair Institute and co-author of a report warning that the U.K. risked squandering its lead in quantum, said: “Now is the time to make bets on promising startups that can grow into national champions.”  That’s been the key message in discussions between the sector and government officials on next steps, according to the people above.  “It is crunch time for quantum computing in the U.K. right now,” said Sebastian Weidt, founder of Universal Quantum.  Despite being based in the south of England, Weidt said the company has received more support from overseas, including a €67 million contract in Germany. France has also awarded €500 million to just five startups.  In contrast, Weidt said the U.K. has failed to move beyond small grants, arguing it needs to become a better customer of its “sovereign” companies or risk ceding “the great quantum computing foundations the U.K. has built over decades … to foreign players.”  “We need to see now more ambition, and we need to see more pace,” Gerald Mullally, CEO of Oxford Quantum Circuits, said, stressing that the U.K. must “act at a level of scale that is competitive relative to what we’re seeing in other nations.” LESS IS MORE Quantum computing is precisely the type of “critical sector where the U.K. has a global competitive edge” that the government should be getting behind, Ed Bussey, CEO of Oxford Science Enterprises, which backs university spin-outs, said. The industry now expects the government to put money where its mouth is, the people cited above said, with one suggesting a handful of companies could get up to £50 million each under the initiative. Procurement and government investment could also be forthcoming.  In recent weeks, the government committed to “leverage its procurement budgets to drive innovation,” including to “act as an early buyer for the best new technologies to de-risk investment, create demand, and pave the way to market.” As part of a “strategic reset,” the U.K.’s research and development funding agency UKRI will also become more “choiceful” in allocating £7 billion for scale-ups over the next four years to companies in areas where the U.K. has genuine international advantage, its CEO Ian Chapman has said. In a new five-year strategy, the British Business Bank also vowed to increase investment and take on greater risk “to support the most strategically important scale-up companies to stay in the U.K.”

BRUSSELS — The EU has struck a political agreement to overhaul the bloc’s foreign direct investment screening rules, the Council of the EU announced on Thursday, in a move to prevent strategic technology and critical infrastructure from falling into the hands of hostile powers. The updated rules — the first major plank of European Commission President’s Ursula von der Leyen’s economic security strategy — would require all EU countries to systematically monitor investments and further harmonize the way those are screened within the bloc. The agreement comes just over a week after Brussels unveiled a new economic security package. Under the new rules, EU countries would be required to screen investments in dual-use items and military equipment; technologies like artificial intelligence, quantum technologies and semiconductors; raw materials; energy, transport and digital infrastructure; and election infrastructure, such as voting systems and databases. As previously reported by POLITICO, foreign entities investing into specific financial services must also be subject to screening by EU capitals. “We achieved a balanced and proportionate framework, focused on the most sensitive technologies and infrastructures, respectful of national prerogatives and efficient for authorities and businesses alike,” said Morten Bødskov, Denmark’s minister for industry, business and financial affairs. It took three round of political talks between the three institutions to seal the update, which was a key priority for the Danish Presidency of the Council of the EU. One contentious question was which technologies and sectors should be subject to mandatory screening. Another was how capitals and the European Commission should coordinate — and who gets the final say — when a deal raises red flags. Despite a request from the European Parliament, the Commission will not get the authority to arbitrate disputes between EU countries on specific investment cases. Screening decisions will remain firmly in the purview of national governments. “We’re making progress. The result of our negotiations clearly strengthens the EU’s security while also making life easier for investors by harmonising the Member States’ screening mechanism,” said the lead lawmaker on the file, French S&D Raphaël Glucksmann. “Yet more remains to be done to ensure that investments bring real added value to the EU, so that our market does not become a playground for foreign companies exploiting our dependence on their technology. The Commission has committed to take an initiative; it must now act quickly,” he said in a statement to POLITICO. This story has been updated.

Andrea Dugo is an economist at the European Centre for International Political Economy. In the late 1400s, Italy was the jewel of Europe. Venice ruled the seas; Florence dominated art and finance; and Milan led in trade and technology. No corner of the Western world was more advanced. Yet, within decades, both its political independence and economic primacy were gone. Europe today risks a similar fate. Once the envy of the world, the bloc’s lead has eroded. The EU isn’t just politically divided, it’s also falling behind in industries that will define the rest of this century. Young talent is fleeing for the U.S. and Asia, while its economy increasingly resembles an open-air museum of past achievements. Whether in growth, technology, industry or living standards, Europe is in jeopardy of becoming a province in a world defined by others. And it stands to learn from Italy’s decline. The warning signs are unmistakable: Since 2008, the EU’s GDP expanded by just 18 percent, while the U.S. grew twice as fast and China grew nearly three times bigger. Tourism across the continent is still booming, of course, but the millions chasing their Instagram-able escapes aren’t enough to offset stagnation, and also bring costs. The bloc’s fall in living standards echoes Renaissance Italy as well. Around 1450, Italy’s income per person was 50 percent higher than Holland’s. A century later, the Dutch were 15 percent richer, and by 1650, they were nearly twice as rich. Modern Europe is slipping even faster than that. In 1995, Germany’s GDP per capita was 10 percent higher than America’s, whereas today, the U.S. is 60 percent higher. At this pace, Germany’s prosperity levels could shrink to a third of its transatlantic partner’s within a generation. Much like in Renaissance Italy, this economic malaise reflects a deep technology gap. Once the queen of the seas, Venice clung to old technology and paid the price. Its galleys, superb in calm Mediterranean waters, were no match for the ocean-going caravels that carried Spain and Portugal across the world. Modern Europe is now doing the same: On artificial intelligence, the EU invests barely 4 percent of what the U.S. does. Today, OpenAI is valued at $500 billion, while Europe’s biggest AI startup Mistral is worth just $15 billion. And though it pioneered the science in quantum, Europe trails behind in commercialization — a single U.S. startup, IonQ, raised more capital than all the bloc’s quantum firms combined. Even when it comes to batteries, Sweden’s much-touted Northvolt collapsed in March, only to be snapped up by a Silicon Valley startup. Traditional industries are faltering too. Taken together, Germany’s top three carmakers are worth just an eighth of Tesla. Ericsson and Nokia, once world leaders in mobile network technology, lag behind Asian rivals in 5G. And France’s Arianespace, once dominant in satellite launches, now hitches rides on tech billionaire Elon Musk’s rockets. The problem isn’t invention, though — it’s scale. Despite its top engineers and universities, nearly 30 percent of the bloc’s unicorns have transferred to the U.S. since 2008, taking its most entrepreneurial spirits with them. It seems the continent sparks ideas, while America fuels them and profits — yet another pattern that mirrors Italy, which supplied talent as others built empires. Its greatest explorers like Columbus, Cabot, Vespucci and Verrazzano had also trained at home, only to sail under foreign flags. The prescriptions are known. Former Italian Prime Minister Mario Draghi detailed them in his report on the EU’s future. | Thierry Monasse/Getty Images The fundamental issue in both cases is political. Like Italy’s warring city-states in the 1500s, today’s Europe is divided and feeble. Capitals quarrel over energy, debt, migration and industrial policy; a common defense strategy remains only an aspiration; and ambitious plans for joint technology spending or deeper capital markets get drowned in debate. This disunity is what doomed Italy as it fell prey to foreign powers that eventually carved up the peninsula. And the bloc’s current divisions leave it similarly vulnerable to global competitors, as Washington dictates defense; Russia menaces the continent’s east; China dominates supply chains; and Silicon Valley rules the digital economy. But is this all fated? Not necessarily. The EU has built institutions Renaissance Italy could never have dreamed of: a single market, a currency, a parliament. It still hosts world-class research institutions and excels in advanced manufacturing, pharmaceuticals, aerospace, green energy and design. The continent can still lead — but only if it acts. Sixteenth-century Italy had no such chance. Geography trapped it in the Mediterranean while trade routes shifted to the Atlantic, and commerce stagnated. New naval technologies left its fleets behind, and its brightest minds sought their fortunes abroad. But Europe faces no such limit. Nothing is stopping it other than its own political timidity and fractiousness. The bloc needs to accept costs now in order to avoid the greatest of costs later: irrelevance. It needs to invest heavily in frontier technologies like AI, quantum, space and biotech, while also building real defense and creating deep capital markets so that start-ups can scale up at home. The prescriptions are known. Former Italian Prime Minister Mario Draghi detailed them in his report on the EU’s future. What’s missing is political will. Once Europe’s beating heart, Italy eventually became a land of visitors rather than innovators. And history’s lesson is clear: Its culture endured, but its power withered. The EU still has time to avoid that destiny. Europeans can either wake up or resign themselves to becoming a continent of monuments and echoing memories.

BRUSSELS — The European Commission is in talks with eight of Europe’s top investors to involve them in a fund to support homegrown companies working on critical technologies. Representatives from the private investors are in Brussels on Tuesday to discuss their involvement, according to a planning note seen by POLITICO. The fund has been in the works since the spring and will combine EU money with private investment to fill a late-stage financing gap for European tech startups — buying stakes to support companies ranging from artificial intelligence to quantum. It could range from €3 billion to €5 billion, depending on how much investors contribute. The investors invited to meet with the Commission on Tuesday are Danish investment company Novo Holdings, the Export and Investment Fund of Denmark, Spanish CriteriaCaixa and Santander, Italian Intesa Sanpaolo, Dutch pension fund APG Asset Management, Swedish Wallenberg Investments, and Polish Development Bank Gospodarstwa Krajowego, according to the planning note. The fund will focus on “strategic and enabling technologies,” the note read, including advanced materials, clean energy, artificial intelligence, semiconductors, quantum technology, robotics, space and medical technologies. The Commission is seeking to address the issue of companies struggling to scale in Europe. Many turn to investors from the U.S. or elsewhere for late-stage financing, after which they often relocate. The goal of the fund is to make sure that startups that have completed their early funding rounds can “secure scaleup financing while maintaining their headquarters and core activities in Europe,” the note said.  The fund follows an earlier effort to take direct equity stakes in companies through the European Innovation Council Fund. Investments under the EIC Fund are capped at €30 million, while the new fund would invest €100 million or more. The fund will launch in April. Other investors could still come in at a later date. In November, the Commission plans to begin the search for an investment adviser — a process that should be wrapped up by January, according to the planning note.