BRUSSELS — The European Commission will look into loosening state aid rules and capping the price of gas to help member countries deal with the energy crisis triggered by the Iran war, according to a letter sent by Commission President Ursula von der Leyen. The letter, dated March 16 and obtained by POLITICO, singles out a number of main ways countries could combat higher energy costs, which have risen sharply as a result of the U.S.-Iraeli war with Iran. The letter comes ahead of a meeting of European leaders in Brussels on Thursday. Since the war broke out last month, effectively shutting off the Strait of Hormuz through which a fifth of the world’s oil supply transits, EU countries have been debating a broad range of responses to a looming energy crunch. Proposed measures have ranged from the modest and technical, such as relaxing rules to allow governments to compensate households and businesses for rising energy costs; to the radical and controversial, such as scrapping the EU’s most important climate laws. One option proposed in Monday’s letter is to relax state aid rules to permit national capitals to redistribute profits generated by gas-fired plants to support consumers and businesses facing rising bills, the letter says. Another potential change would allow countries to cap the price of gas.  Von der Leyen said both of these policies had been used after Russia’s invasion of Ukraine in 2022 and stressed that the Commission would determine on a case-by-case basis whether they would be deployed again. “The design of these emergency mechanisms should in any case avoid internal market distortions, preserve long-term investment signals for clean energy and preclude excessive additional demand for gas,” she said.  The Commission will also “further strengthen” a mechanism that allows countries to compensate 80 percent of the carbon price paid under the Emissions Trading System, the EU’s flagship carbon pricing mechanism, von der Leyen added.   The letter also stresses that measures ought to be “targeted and temporary” — an apparent rebuke to countries that have sought to dismantle key climate policies that they blame for higher prices.  The Commission president added that the Commission would also look into simplifying rules for companies to buy electricity through power purchase agreements. It will also propose a new law to “ensure that grid users receive the right incentives to make optimal use of existing grid infrastructure, as this will avoid unnecessary and costly grid expansions,” she said. 

BRUSSELS — The European Commission is under pressure from a growing chorus of member countries to deploy emergency measures to tackle soaring energy costs triggered by the war in the Persian Gulf. Italy, Austria, Slovenia and Slovakia are among the nations openly pushing Brussels for a stronger answer to the crisis, with at least two other countries privately expressing frustration with the Commission’s slow response. Oil and gas prices have soared since the U.S.-Israeli war with Iran began 11 days ago, with oil passing $100 a barrel in the first week of the war before settling at $88 on Tuesday. But the Commission has refrained from formally deploying any EU-wide powers, and on Tuesday the bloc’s energy chief Dan Jørgensen said there was no immediate risk to supply. Instead, the Commission has highlighted existing long-term plans to diversify supply, reduce demand for fossil fuels and expand homegrown renewables. On Tuesday it also called on member countries to reduce energy bills by cutting domestic energy taxes. However, countries with fewer resources — and greater electoral pressures — are growing impatient and are seeking to push the Commission to invoke EU-wide emergency powers the bloc used after the energy crisis triggered by Russia’s invasion of Ukraine in 2022. Those powers include relaxing state aid rules to allow subsidies for struggling consumers and businesses, coordinating demand reduction, and imposing a price cap on gas.  There have also been numerous calls to suspend the Emissions Trading System, including from Italy — though the EU’s clean transition chief Teresa Ribera ruled that out on Tuesday. Italy’s finance minister, Giancarlo Giorgetti, was the first to challenge the Commission’s cautious stance, calling on Brussels to wield those post-Ukraine tools at a meeting of finance ministers on Monday. Italians face the fourth-highest energy costs in Europe, thanks to the country’s continued reliance on expensive imported gas. That dependence risks exacerbating any increase in electricity prices resulting from the ongoing conflict at a time when Prime Minister Giorgia Meloni is trying desperately to reduce household bills. “Italy is very worried about the impact on inflation because of the inefficient energy mix we have,” said one Italian official, who was granted anonymity to speak openly. For that reason, the official added, it’s “better to bring forward actions to avoid inflation … and you cannot spend money in a pre-electoral year.” Italy wants a “unified” response given its “strong industry,” said Raffaele Nevi, a senior lawmaker in Forza Italia, a center-right party in Meloni’s coalition that supports Rome’s stance.  Nevi sent POLITICO a statement in which he emphasized that measures should be coordinated across borders to avoid “imbalances” that would arise if EU countries with varying levels of financial firepower responded to the crisis individually.  Robert Fico called for “concrete proposals” in lieu of “general statements or phrases.” | Simona Granati/Corbis via Getty Images A number of other countries are also waiting on the Commission to unveil concrete proposals, either at a coming summit of energy ministers next Monday or at a summit of European leaders later this month, according to three EU diplomats and one senior ministerial official in Slovenia.  That puts the ball squarely in the Commission’s court — and represents a subtle dig at the wait-and-see approach the EU executive has emphasized thus far.  “It’s not 10-year plans that will work” but short-term measures, said the Slovenian official, while acknowledging that the EU’s slow decision-making process makes agreement on such measures “very difficult.”   Immediate measures Slovenia will ask for on Monday include taxing windfall profits made by energy companies — first proposed in 2022 —  and coordinating to refill Europe’s dangerously low gas reserves, according to the official. Slovakia’s prime minister, Robert Fico, similarly called for “concrete proposals” in lieu of “general statements or phrases” following a meeting with Commission President Ursula von der Leyen on Tuesday. He said he hoped for tangible policies at the summit of the European Council later this month.  Austria also wants more concrete measures, a government spokesperson confirmed. Such measures may nevertheless set up a clash with other member states that prefer a market-driven approach. Countries with more fiscal firepower and more renewables are less likely to agree to emergency measures that could distort fine-tuned local market incentives, or redistribute resources to other countries.  These countries would prefer to use domestic legislation to address any serious increase in energy costs, according to multiple diplomats familiar with continental politics.  “We don’t want too much commitment here  — we’re not fans on emergency regulations, we’re fans of market solutions,” said one diplomat from a Northern European country. If the energy situation really deteriorated, the country might support EU-wide measures, the person added. “But we don’t like it.” Another diplomat, who broadly supports concrete measures, cautioned that measures should be both short- and long-term, given that Europe faced some of the world’s steepest energy costs even before the war in Iran. “There’s some worry that if things were to settle down somehow, that this attention for energy prices is lost — momentum needs to be kept,” the person said. A Commission spokesperson said “important discussions are ongoing,” adding that the Commission president would “present our assessment and options” at next week’s meeting of EU leaders.

Andrej Babiš built his fortune making fertilizer. But another, lesser-known arm of his business empire has helped bring more than 170,000 children into the world across Europe. The Czech prime minister’s name is rarely attached to FutureLife, one of Europe’s largest IVF clinic networks, spanning 60 clinics in 16 countries from Prague to Madrid to Dublin. But is just one part of a commercial empire that spans nitrogen-based fertilizers and industrial farms, assisted reproduction, online lingerie stores and more. And the Czech leader holds this portfolio while sitting at the table negotiating EU budgets, health rules and industrial policy. Yet in Brussels, nobody can answer a deceptively simple question: Which of the companies associated with Babiš receives EU money — and how much? “We might be giving him money and we don’t even know,” said Daniel Freund, a German Green lawmaker who led the European Parliament’s inquiries into Babiš during his first term as Czechia’s prime minister from 2017 to 2021. In 2021, the Parliament overwhelmingly adopted a resolution condemning Babiš over conflicts of interest involving EU subsidies and companies he founded. Under EU rules, member countries are responsible for checking conflicts of interest and reporting on who ultimately benefits from EU funds. But there is no single EU-wide register linking ultimate beneficial owners to all EU payments — making cross-border oversight difficult. The issue has resurfaced as Babiš returns to power and once again takes a seat among other EU heads of state and government in the European Council. In that exclusive body, he helps negotiate the bloc’s long-term budget, agricultural subsidies and other funding frameworks that shape the sectors in which his companies might operate. For years, debates over Babiš’s conflicts of interest have revolved around a single name — Agrofert, the agro-industrial empire that EU and Czech auditors found had improperly received over €200 million in EU and national agricultural subsidies. The payment suspensions and repayment demands continue: This week, Czech authorities halted some agricultural subsidies to Agrofert pending a fresh legal review of the company’s compliance with conflict-of-interest rules. Babiš has consistently rejected accusations of wrongdoing. His office said he “follows all binding rules” and that “there is no conflict of interests at the moment,” adding that Agrofert shares are managed by independent experts and that he “is not and will never be the owner of Agrofert shares.” In a parliamentary debate earlier this month, he dismissed the controversy as politically motivated, accusing opponents of having “invented” the conflict-of-interest issue because they were unable to defeat him at the ballot box. But critics argue that the renewed focus on Agrofert obscures a far broader commercial footprint. “Agrofert is only half of the problem,” said Petr Bartoň, chief economist at Natland, a private investment group based in Prague. “The law does not say ‘thou shalt not benefit from companies called Agrofert.’ It says you must not benefit from any companies subsidized by or receiving public money.” The concern, critics argue, arises from the sheer number of companies and sectors with which Babiš remains associated. THE INVISIBLE PILLAR Separate from Agrofert sits Hartenberg Holding, a private-equity vehicle Babiš co-founded with financier Jozef Janov in 2013. He holds a majority stake in the fund through SynBiol, a company he fully owns and which, unlike Agrofert, has not been transferred into any trust arrangement. With assets worth around €600 million, Hartenberg invests in health care, retail, aviation and real estate. Yet it has attracted only a fraction of the scrutiny directed at the agricultural holding, according to Lenka Stryalová of the Czech public-spending watchdog Hlídač státu. “Alongside Agrofert, there is a second, less visible pillar of Babiš’s business activities that is not currently intended to be placed into blind trusts,” she said. That pillar includes FutureLife, whose 2,100 specialists help individuals and couples conceive across Czechia, Slovakia, the U.K., Ireland, Romania, the Netherlands, Spain, Italy and Estonia. The clinics operate in a policy-sensitive space shaped primarily by national health reimbursement systems and insurance rules, rather than decisions taken directly in Brussels. Those systems, however, function within a broader EU regulatory framework governing cross-border care and state aid. Hartenberg owns 50.1 percent of FutureLife. The company said in a statement that Babiš has no operational role, no board seat and no decision-making authority. It added that FutureLife clinics operate like other health care providers and, where applicable, are reimbursed by national public health insurance systems under the same rules as other providers. Like thousands of other companies, some FutureLife entities received pandemic-era wage support under Czechia’s Covid relief programs. There is no evidence of any irregularity in those payments.  But health care is only one corner of the portfolio. Through Hartenberg, Babiš-linked capital also flows into everyday retail life. Astratex, a Czech-founded online lingerie retailer that began as a catalogue business before moving fully online in 2005, now operates localized e-shops across roughly 10 European markets and generates tens of millions of euros in annual revenue. Hartenberg acquired a controlling stake in 2018, marking one of the fund’s early expansions into cross-border digital retail. In Czechia, shoppers may also encounter Flamengo florist stands, a network of around 200 outlets selling bouquets, potted plants and funeral flower arrangements inside supermarkets and shopping malls. Hartenberg acquired a majority stake in the chain in 2019, backing its expansion and push into online delivery. Other online businesses linked to Babiš include sports equipment, and wool and textile retailers. Through Hartenberg, Babiš has also invested in urban development and real estate. Hartenberg was an early majority investor in the project company behind Prague’s Císařská vinice, a premium hillside development of villas and apartments near Ladronka park, partnering with developer JRD to finance construction. JRD Development Group said the project company is now 100 percent owned by JRD and that neither Babiš nor companies linked to him hold any direct or indirect ownership interest. The firm added that the development has not received EU funds or other public financial support. None of the Hartenberg businesses have ever been accused of misusing EU subsidies. But the long-running “Stork’s Nest” case, first investigated more than a decade ago and still unresolved, shows how difficult it can be to follow Babiš’s business web. The alleged fraud involved a €2 million EU subsidy provided in 2008 to the 31-room Čapí Hnízdo (Stork’s Nest) recreational and conference center in central Czechia, then part of Babiš’s Agrofert conglomerate. Prosecutors have accused Babiš and his associates of manipulating the center’s ownership and concealing his control of the business in order to obtain the subsidy. Babiš has always denied wrongdoing, telling POLITICO in 2019 that the case was politically motivated. He was acquitted in 2023, but an appeals court later overturned that verdict and ordered a retrial, which remains pending. Today, the resort itself is no longer part of Agrofert. It is owned by Imoba, a company fully controlled by Babiš’s SynBiol, the same holding that controls Hartenberg. Hartenberg itself holds no stake in Stork’s Nest. Taken together, Babis’ non-Agrofert portfolio spans health care reimbursement systems, online retail regulation, aviation safety oversight, real estate and city-planning decisions across multiple EU jurisdictions. In theory, a Czech consumer could encounter Babiš-linked companies at nearly every stage of life: the fertilizer on the fields that grow the wheat, the bread on the supermarket shelf, the bouquet for the wedding, the apartment in Prague and even the clinic that helps bring the next generation into the world. And at the end, perhaps, the flowers once more. WHY BRUSSELS CAN’T KEEP TRACK During Babiš’s previous term, the European Commission concluded that trust arrangements he put in place did not eliminate his effective control over Agrofert. A leaked legal document reported by POLITICO this month has since renewed accusations that his latest trust setup does not fully address those concerns either. Babiš rejects that interpretation, saying the arrangement complies with Czech and EU law and insisting he has done “much more than the law required” to distance himself from the company. The Commission said it does not maintain a consolidated list of companies ultimately owned or controlled by Babiš across member countries. Nor does it hold a comprehensive accounting of EU funds received by companies linked to him beyond Agrofert. Instead, responsibility for collecting beneficial ownership data lies primarily with national authorities implementing EU funds. The Commission can audit how member countries manage conflicts of interest and take measures to protect the EU budget if needed, but it does not itself aggregate that information across borders. The Commission confirmed to POLITICO that it has asked Czech authorities to explain how conflicts of interest are being prevented in relation to companies under Babiš’s control beyond Agrofert. Czech Regional Development Minister Zuzana Mrázová on Thursday acknowledged receiving the Commission’s letter earlier this month, saying it will be answered in line with applicable legislation and adding that, in her view, the prime minister has done everything necessary to comply with Czech and EU law. “From my perspective, there is no conflict of interest,” she said. Freund argues that the corporate complexity has become a problem in its own right. “The tracking of beneficial owners or beneficial recipients of EU funds is at the moment very difficult or sometimes even impossible,” said the EU lawmaker. Part of the difficulty lies in Europe’s fragmented ownership registers, which exist on paper across the EU but don’t speak the same language or even list the same owners. Freund described them as “inconsistent,” with some national databases listing Babiš in connection with certain companies while others do not. Babiš’s defenders argue that his steps regarding Agrofert go beyond what Czech law strictly requires. Critics counter that the law was never written with billionaires running multi-sector empires in mind and that resolving the conflict of interest identified by auditors in relation to Agrofert does not settle the wider concerns raised by the scale of his business interests. “For some reason, the perception has been created that once Agrofert is resolved, that resolves the conflict of interest,” Bartoň said. “As if the president were the arbiter of what needs and needs not be dealt with.” In reality, many companies owned through Hartenberg and Synbiol structures continue to operate in areas shaped by public spending, regulation and political decisions without being part of any divestment or trust arrangement. Those assets “still not only [pose] conflict of interest,” said Bartoň, but they are “not even in the process of being dealt with.” From fertilizer to fertility to funeral flowers, the structure is easy enough to trace in everyday life. It is far harder to trace on paper. Ketrin Jochecová contributed to this report.

Czechia’s farm payment authority said today that it will review whether Prime Minister Andrej Babiš’s steps to sever ties with his agriculture empire, Agrofert, are legal. Babiš pledged in December to divest from Agrofert, one of Central Europe’s largest agri-food and chemicals groups, in order to avoid conflicts of interest in both Prague and Brussels — and to comply with a condition set by Czech President Petr Pavel, who required the move before approving Babiš’s government. “The State Agricultural Intervention Fund (SZIF), following the transfer of shares of the Agrofert group into the trust fund (RSVP Trust), requested an independent legal analysis from an external law firm,” said SZIF, a fund responsible for distributing EU Common Agricultural Policy payments in Czechia, including subsidies to Agrofert, in a press release. “The analysis is intended to assess whether the legal arrangement through RSVP Trust is in compliance with national and European legislation,” the agency said, adding that there is no set deadline to complete it. Babiš’s solution to place Agrofert in a trust fund — a step he formally completed last week — has come under renewed scrutiny after a leaked legal document suggested that ownership would transfer to his children not after his death, as he had previously claimed, but once his political career ends. The Czech opposition and Transparency International argue that under this setup, Babiš would continue to hold major personal and family stakes in Agrofert throughout his life, potentially steering his decisions both in Czechia and at the EU level. It’s a scenario the EU already knows well. Back when Babiš first served as prime minister from 2017 to 2021, he similarly placed Agrofert into trust funds. Yet in 2021, both Czech courts and the European Commission found that he still retained influence over them and was therefore in violation of EU conflict of interest rules. In a separate matter, SZIF is also reviewing how to handle the €280 million that Agrofert received during Babiš’s first term. The agriculture ministry, under former minister Marek Výborný, said in October 2025 that it would begin recovering the funds, but the process has not moved since then. “No decision has been made requiring us to return any subsidies. In fact, at this time we are not aware of any decision having been issued. We are convinced that we are entitled to the subsidies we applied for,” Pavel Heřmanský, Agrofert spokesperson, told POLITICO. Babiš’s office did not respond to a request for comment. The Czech agriculture ministry declined to comment.

BRUSSELS — Chinese goods continue to flood into the European Union as the bloc’s manufacturing base struggles to cope. The EU’s trade deficit in goods with China widened to €359.3 billion in 2025, up nearly a fifth from €304.5 billion in 2024, according to data published by Eurostat on Friday. The figure is the total value of all goods imported from China, minus the goods exported to the country. The widening deficit was the driven both by a 6.3 percent increase in imports from China, and a 6.5 percent decline in EU exports to China. The widening deficit exposes Europe’s inability to compete in industries ranging from basic chemicals to cars. In 2025, China’s global trade surplus in goods hit a record of nearly $1.2 trillion — with Donald Trump’s U.S. tariffs redirecting its export glut to more open economies like Europe. China has been on an inexorable economic ascent since joining the World Trade Organization in 2001. Neither the 2008 financial crisis, nor the recent deflation of a vast real estate bubble, has been enough to knock it off course. While Chinese businesses used to occupy the bottom of the value chain — assembling electronics, producing basic chemicals, or manufacturing low-end consumer goods — they’ve steadily moved to the technology frontier. Chinese champions operate in everything from electric vehicles to artificial intelligence and robotics. EU leaders are alert to the threat. Speaking at an EU industry summit in Antwerp on Wednesday, French President Emmanuel Macron called on the European Commission to act more swiftly to erect trade protections when China uses subsidies to give an unfair leg-up to its industry. “We have a big issue today. We are too slow,” said the French leader talking about the Commission’s lengthy probe into Chinese electric vehicles that resulted in the imposition of duties in late 2024. It was useless, Macron said, if the European Commission takes two years to find out that a Chinese company was relying on state aid to undercut its European competitors. “I mean, thank you, happy I was right, but it’s over. So we have to accelerate much more swiftly the process for these inquiries, clearly,” Macron added. France’s High Commission for Strategy and Planning estimates that a quarter of the country’s exports are “directly threatened” by Chinese competition. For Germany, that number rises to a third. The advisory body has recommended that the EU retaliate with a weaker euro — which would give exporters a boost — and across-the-board tariffs. Chinese Vice Premier He Lifeng seemed to offer an olive branch at the World Economic Forum in Switzerland last month. In a speech made in the wake of U.S. President Donald Trump’s threat to annex Greenland, He promised that China would uphold the international trade order and “open its door still wider to the world.” He also said that the government would move to fix economic imbalances that had sapped domestic demand and added to the export glut. But policymakers, both in EU capitals and the Berlaymont, are skeptical that China is serious about any shift toward household consumption. French Finance Minister Roland Lescure said this week that Chinese officials have been “saying the right things” with talk of “rebalancing of the Chinese economy with more consumption.” But, he told reporters: “We feel that so far, there’s been a lot of talk, but not many results yet.” It’s an attitude shared by top Commission trade official Joanna Szychowska who, at a conference last month, said the EU should not “all of a sudden become friends with China today because we have a shift in U.S. policy.” “China is very much focused on transactions. Now we have to ask ourselves the question of what transactions we can make — so what is our leverage, what is our strength?” added Szychowska, who is director for Asia, services and digital trade. Additional reporting by Zia Weise and Geoffrey Smith.

BRUSSELS — After decades spent lambasting European politicians, Michael O’Leary is now targeting Donald Trump and Elon Musk. In less than a week, the outspoken Ryanair boss slammed both the U.S. president and his on-again, off-again supporter Musk. The latter hit back on social media, launching a feud and threatening to buy the Irish airline just to fire O’Leary, a proposal the airline CEO called “Twitshit.” Everyone involved is a seasoned infotainment warrior — they’ve all used outrageous attacks and language to further their financial and political goals. But this fight is putting O’Leary into a different league; his targets are a lot richer and more powerful than his normal punching bags of European Commission President Ursula von der Leyen, officials from Spain, the Netherlands and Belgium or UK Reform leader Nigel Farage. After telling POLITICO that Trump was “a liar” and taking aim at the U.S. president’s foreign policy and tariffs he said were harming business, O’Leary told Irish radio that Musk was “an idiot” in response to the world’s richest man calling him “misinformed” about the cost of installing Starlink systems on its fleet. Ryanair has publicly ruled out installing Starlink across its more than 600 Boeing 737s, arguing the external antennas would increase drag and fuel consumption. O’Leary’s keenness to scrap with Trump and Musk contrasts sharply with the approach taken by most of his fellow CEOs, who often balk at crossing the powerful. But insulting politicians and rivals is part of O’Leary’s DNA. He’s also insulated from blowback because his airline doesn’t fly to the U.S.; because it’s one of Boeing’s largest customers; and because Ryanair is protected against a hostile Musk acquisition by EU rules mandating that airlines have to be majority-owned by EU shareholders. The online scuffle escalated quickly, with Musk calling O’Leary “a retarded twat” and O’Leary telling Musk on Wednesday “to join the back of a very, very, very, very long queue of people who already think I’m a ‘retarded twat,’ including my four teenage children.” The airline said it was “launching a Great Idiots seat sale especially for Elon and any other idiots.” So far, Trump hasn’t responded to needling from O’Leary. But the dissing contest is more than a casual brawl among tycoons. It reflects what O’Leary has been doing for a long time in Europe: offending anyone who crosses his path, getting public attention and selling more tickets. After days of mutual insults between the flamboyant airline chief and his quasi-equivalent in the space industry with come-and-go ties to the White House, O’Leary offered Musk “a free ride air ticket, to thank him for the wonderful boost in publicity which has seen our bookings rise significantly.” “They’re up about 2 or 3 percent in the last five days,” he added at a press conference in Dublin. The company’s shares were also up over 2 percent on Wednesday. “O’Leary’s complaint about Starlink was an absolutely classic Michael O’Leary complaint: operationally driven, cost-based, almost certainly technically correct, quite probably an attempt to negotiate the price down by Musk,” said Andrew Charlton, managing director of the Aviation Advocacy consultancy. O’Leary confirmed on Wednesday that he had been in talks for over a year with Starlink and its rivals Amazon and Vodafone to provide Wi-Fi on Ryanair planes at no extra cost to passengers. This is just the latest cost-cutting crusade taken by the Irish businessman, who spent the first weeks of the new year threatening to slash flights to and from Belgium over a ticket tax increase of less than €10. “He’s the Trump of aviation, the same kind of idiot,” said Toto Bongiorno, a former union leader from Belgium’s now-defunct flag carrier, Sabena. “He’s the guy who once said he was going to allow standing seats on planes. He’s the one who said people would have to pay to use the [onboard] toilets at some point,” Bongiorno told the Belgian TV channel LN24. “He invented a different way of doing aviation.” CURSING DOESN’T COST In a market previously dominated by flag carriers that offered larger seats and free luggage, drinks and snacks — but also charged higher prices and occasionally received state aid from governments — Ryanair and other low-cost European airlines, such as easyJet and Wizz Air, have gained market share thanks to cheaper airfares and minimal extras. However, O’Leary built Ryanair not only by slashing costs at the expense of the passenger experience; he also harangued European leaders, demanding fewer rules and lower taxes. Von der Leyen is often referred to as “Derlayed-Again” by Ryanair due to her alleged failure to guarantee the right of airlines to overfly countries affected by air traffic controller strikes. After Ryanair was fined by Spain’s Minister for Consumer Affairs Pablo Bustinduy for unfair practices, O’Leary called him “a crazy Spanish communist minister” and showed a cardboard cutout of Bustinduy dressed as a clown and wearing an apron with the words “I raise prices.” Now it’s Trump’s turn. “If Trump threatens Europe with tariffs, Europe should respond in like measure and Trump will chicken out. He generally does,” O’Leary said on Wednesday. 

Pedro Sánchez is the prime minister of Spain. It’s no secret the world is going through a time of turbulence. The principles that held it together for decades are under threat; disinformation is spreading freely; and even the foundations of the welfare state — which brought us the longest period of prosperity in human history — are now being questioned by a far-right transnational movement challenging our democratic systems’ ability to deliver collective solutions and social justice. In the face of this attack, Europe stands as a wall of resistance. The EU has been  — and must remain — a shelter for the values that uphold our democracies, our cohesion and our freedom. But let’s be honest, values don’t put a roof over your head. And at any rate, these values are fading fast in the face of something as concrete and urgent as the lack of affordable housing. If we do not act, Europe risks becoming a shelter without homes. The figures are clear: The housing crisis is devastating the standard of living across Europe. Between 2010 and 2025, home prices rose by 60 percent, while rental prices went up by nearly 30 percent. In countries like Estonia or Hungary, prices have tripled. In densely populated or high-tourism cities, families can spend over 70 percent of their income on rent. And individuals with stable jobs in Madrid, Lisbon or Budapest can no longer afford to live where they work or where they grew up. Meanwhile, 93 million Europeans — that’s one in five — are living at risk of poverty or social exclusion. This isn’t just the perception of experts or institutions: Around half of Europeans consider housing to be an “urgent and immediate problem.” Housing, which should be a right, has become a trap that shapes peoples’ present, suffocates their future and endangers Europe’s cohesion, economic dynamism and prosperity. The roots of this problem may differ from country to country, but two facts are undeniable and shared throughout our continent: First, the need for more houses, which we’ve been falling behind on for years. For nearly two decades now, residential construction in the EU has fallen short of demand. After a period of strong growth in the 1990s and early 2000s, the 2008 financial crisis triggered a collapse in housing investment, and the sector never fully recovered. The pandemic only widened this gap, halting permits, delaying materials and worsening labor shortages that further stalled construction. Second, and just as urgent, is that we must ensure both new construction and existing housing stock serve their true purpose: upholding the fundamental right to decent and affordable housing. Because as we continue to fall short of guaranteeing this basic right, homes are increasingly being diverted to fuel speculation or serve secondary uses like tourist rentals. In fact, according to preliminary European Parliament data, there were around 4 million short-term rental listings on digital platforms across the EU in 2025. In my home country, cities like Madrid and València have witnessed the displacement of residents from their historic centers, which are transforming into theme parks for tourists. For nearly two decades now, residential construction in the EU has fallen short of demand. | David Zorrakino/Getty Images At the same time, housing is increasingly being treated as a financial asset instead of a social good. In Ireland, investment funds have acquired nearly half of all newly built homes since 2017, while in Sweden, institutional investors now control 24 percent of all private rental apartments. Just as no one would dare justify doubling the price of a bowl of rice for a starving child, we cannot accept turning the roofs meant to shelter people into a vehicle for speculation — and citizens overwhelmingly share in this view. Seventy-one percent of Europeans believe that the places they live would benefit from more controls on property speculation, like taxing vacant rentals or regulating short-term rentals. This is what the EU stands for: When it’s a choice between profit and people, we choose people. That choice can’t wait any longer. Thankfully, with yesterday’s Affordable Housing Plan, the European Commission is starting to move on housing, taking steps that Spain has long advocated. Brussels now increasingly recognizes the scale of this emergency and acknowledges that specific market conditions may require differentiated national and local responses. This will help consolidate a shared policy understanding regarding housing-stressed areas and strengthen the case for targeted measures — which may include, among others, restrictions on short-term rentals. Crucially, the plan also stresses the need for EU financing to boost housing supply. The time for words is over. We need urgent action. A growing outcry over housing is resonating across Europe, and our citizens need concrete solutions. Any failure to act with ambition and urgency risks turning the housing crisis into a new driver of Euroskepticism. After World War II, Europe was built on two founding promises: securing peace and delivering well-being. Honoring that legacy today means taking decisive action by massively increasing flexible funding to match the scale of the housing crisis, and guaranteeing member countries can swiftly implement the legal tools needed to adopt bold regulatory measures on short-term rentals and address the impact of nonresident buyers on housing access. The true measure of our union isn’t just written in treaties. It must be demonstrated by ensuring every person can live with dignity and have a place to call home. Let us rise to that promise — boldly, together and without delay.

From Lisbon to Tallinn, Europeans are overwhelmed by soaring home prices. This week, Brussels intends to do something about it. “This is a real crisis,” said European Commissioner for Housing Dan Jørgensen in an interview with POLITICO, ahead of the approval of the bloc’s first-ever Affordable Housing Plan. “And it’s not just enough to talk about it.” To that end, the package will seek to free up public cash for the construction of new homes, track speculation in the housing market, and give regional and local governments tools to rein in the short-term rentals contributing to the housing shortage. “The plan will be a mix of concrete actions at the EU level and recommendations that member states can apply,” Jørgensen said, adding that the European Commission wants to give national, regional and local governments ways to make real changes on the ground — while not overstepping its role in an area over which it has no official competence. “This is a real problem affecting millions of people, and the inaction is playing right into the playbook of right-wing populists,” Jørgensen noted, citing the ultranationalist parties that have stoked discontent over sky-high home prices to score major victories in countries like the Netherlands and Portugal. “Normally the EU has not played a big role here,” he added. “That needs to change.” CASH, TOOLS AND TRANSPARENCY The most concrete action set to be announced this week is a revision of state aid rules to make it easier for national governments to build affordable housing. Member countries have long complained they can only use public cash to provide homes for low-income families. Reflecting the fact that even middle-class earners are now struggling to pay for shelter, the new regulations will allow funds to be used for all groups priced out of the housing market. The package will also give national, regional and local authorities tools to target the tourist flats exacerbating the housing shortage in cities like Barcelona, Florence and Prague. “I’m not on the side of the people who call for banning short-term rentals,” Jørgensen clarified, adding that such platforms have offered travelers the ability to experience Europe differently, and provided some families with a needed source of income. But the model has grown at a rate “no one could have imagined, with short-term rentals accounting for 20 percent of homes in some very stressed areas,” he noted. It has turned into a “money machine instead of what it was intended to.” The commissioner stressed that national, regional and local leaders would ultimately be the ones deciding whether to use the tools to rein in short-term rentals. “We’re not going to force people to do anything,” he said. “If you think the status quo is fine, you can keep things as they are.” In another first, a more abstract section of the package will also aim to address speculation in the housing market. “This is a real crisis,” said European Commissioner for Housing Dan Jørgensen in an interview with POLITICO. | Lilli Förter/Getty Images While insisting he’s “not against people making money,” Jørgensen said Europe’s housing stock was being treated like “gold or Bitcoin and other investments made for the sole purpose of making money” — an approach that ignores the vital role of shelter for society at large. “Having a roof over your head, a decent house … is a human right,” he argued. As an initial step, this week’s package will propose the EU track speculation and determine the scope of the problem. However, Jørgensen acknowledged that using the resulting data for concrete action to tackle the market’s financialization might prove difficult. “While no one is really arguing this problem doesn’t exist, there’s a political conflict over whether it’s a good or a bad thing.” But regulation is essential for the proper functioning of the internal market, he added. THE COMPETENCE QUESTION The Commission’s housing package will also include a new construction strategy to cut red tape and create common standards, so that building materials manufactured at competitive prices in one member country can be easily used for housing projects in another. Additionally, there will be a bid to address the needs of the over a million homeless Europeans, many of whom aren’t citizens of the countries in which they are sleeping rough. “We want to look at what rights they have and how these are respected,” Jørgensen said. “We’re talking about humans with needs, people who deserve our help and compassion.” The commissioner explained the complexity of the housing crisis had required a “holistic” approach that led him to work in tandem with Executive Vice Presidents Teresa Ribera and Roxana Mînzatu, as well as internal market boss Stéphane Séjourné and tech chief Henna Virkkunen, among others. He also stressed the package didn’t constitute a power grab on the Commission’s part, and that national, regional and local governments are still best positioned to address many aspects of the crisis. “But,” he said, “there are areas where we haven’t done anything in which we can do something.” While much of the plan will consist of recommendations member countries won’t be required to implement, Jørgensen warned against ignoring them. The Commission is providing solutions, he said, and “policymakers need to answer to their populations if they don’t do something that’s pretty obvious they could do.” “Normal citizens will use every opportunity to make their demands known, be it in local, national or European elections,” Jørgensen explained. “I’m respectfully telling decision-makers all over Europe that either they take this problem seriously, or they accept that they’ll have to hand over power to the populists.”

Europe’s security does not depend solely on our physical borders and their defense. It rests on something far less visible, and far more sensitive: the digital networks that keep our societies, economies and democracies functioning every second of the day. > Without resilient networks, the daily workings of Europe would grind to a > halt, and so too would any attempt to build meaningful defense readiness. A recent study by Copenhagen Economics confirms that telecom operators have become the first line of defense in Europe’s security architecture. Their networks power essential services ranging from emergency communications and cross-border healthcare to energy systems, financial markets, transport and, increasingly, Europe’s defense capabilities. Without resilient networks, the daily workings of Europe would grind to a halt, and so too would any attempt to build meaningful defense readiness. This reality forces us to confront an uncomfortable truth: Europe cannot build credible defense capabilities on top of an economically strained, structurally fragmented telecom sector. Yet this is precisely the risk today. A threat landscape outpacing Europe’s defenses The challenges facing Europe are evolving faster than our political and regulatory systems can respond. In 2023 alone, ENISA recorded 188 major incidents, causing 1.7 billion lost user-hours, the equivalent of taking entire cities offline. While operators have strengthened their systems and outage times fell by more than half in 2024 compared with the previous year, despite a growing number of incidents, the direction of travel remains clear: cyberattacks are more sophisticated, supply chains more vulnerable and climate-related physical disruptions more frequent. Hybrid threats increasingly target civilian digital infrastructure as a way to weaken states. Telecom networks, once considered as technical utilities, have become a strategic asset essential to Europe’s stability. > Europe cannot deploy cross-border defense capabilities without resilient, > pan-European digital infrastructure. Nor can it guarantee NATO > interoperability with 27 national markets, divergent rules and dozens of > sub-scale operators unable to invest at continental scale. Our allies recognize this. NATO recently encouraged members to spend up to 1.5 percent of their GDP on protecting critical infrastructure. Secretary General Mark Rutte also urged investment in cyber defense, AI, and cloud technologies, highlighting the military benefits of cloud scalability and edge computing – all of which rely on high-quality, resilient networks. This is a clear political signal that telecom security is not merely an operational matter but a geopolitical priority. The link between telecoms and defense is deeper than many realize. As also explained in the recent Arel report, Much More than a Network, modern defense capabilities rely largely on civilian telecom networks. Strong fiber backbones, advanced 5G and future 6G systems, resilient cloud and edge computing, satellite connectivity, and data centers form the nervous system of military logistics, intelligence and surveillance. Europe cannot deploy cross-border defense capabilities without resilient, pan-European digital infrastructure. Nor can it guarantee NATO interoperability with 27 national markets, divergent rules and dozens of sub-scale operators unable to invest at continental scale. Fragmentation has become one of Europe’s greatest strategic vulnerabilities. The reform Europe needs: An investment boost for digital networks At the same time, Europe expects networks to become more resilient, more redundant, less dependent on foreign technology and more capable of supporting defense-grade applications. Security and resilience are not side tasks for telecom operators, they are baked into everything they do. From procurement and infrastructure design to daily operations, operators treat these efforts as core principles shaping how networks are built, run and protected. Therefore, as the Copenhagen Economics study shows, the level of protection Europe now requires will demand substantial additional capital. > It is unrealistic to expect world-class, defense-ready infrastructure to > emerge from a model that has become structurally unsustainable. This is the right ambition, but the economic model underpinning the sector does not match these expectations. Due to fragmentation and over-regulation, Europe’s telecom market invests less per capita than global peers, generates roughly half the return on capital of operators in the United States and faces rising costs linked to expanding security obligations. It is unrealistic to expect world-class, defense-ready infrastructure to emerge from a model that has become structurally unsustainable. A shift in policy priorities is therefore essential. Europe must place investment in security and resilience at the center of its political agenda. Policy must allow this reality to be reflected in merger assessments, reduce overlapping security rules and provide public support where the public interest exceeds commercial considerations. This is not state aid; it is strategic social responsibility. Completing the single market for telecommunications is central to this agenda. A fragmented market cannot produce the secure, interoperable, large-scale solutions required for modern defense. The Digital Networks Act must simplify and harmonize rules across the EU, supported by a streamlined governance that distinguishes between domestic matters and cross-border strategic issues. Spectrum policy must also move beyond national silos, allowing Europe to avoid conflicts with NATO over key bands and enabling coherent next-generation deployments. Telecom policy nowadays is also defense policy. When we measure investment gaps in digital network deployment, we still tend to measure simple access to 5G and fiber. However, we should start considering that — if security, resilience and defense-readiness are to be taken into account — the investment gap is much higher that the €200 billion already estimated by the European Commission. Europe’s strategic choice The momentum for stronger European defense is real — but momentum fades if it is not seized. If Europe fails to modernize and secure its telecom infrastructure now, it risks entering the next decade with a weakened industrial base, chronic underinvestment, dependence on non-EU technologies and networks unable to support advanced defense applications. In that scenario, Europe’s democratic resilience would erode in parallel with its economic competitiveness, leaving the continent more exposed to geopolitical pressure and technological dependency. > If Europe fails to modernize and secure its telecom infrastructure now, it > risks entering the next decade with a weakened industrial base, chronic > underinvestment, dependence on non-EU technologies and networks unable to > support advanced defense applications. Europe still has time to change course and put telecoms at the center of its agenda — not as a technical afterthought, but as a core pillar of its defense strategy. The time for incremental steps has passed. Europe must choose to build the network foundations of its security now or accept that its strategic ambitions will remain permanently out of reach. -------------------------------------------------------------------------------- Disclaimer POLITICAL ADVERTISEMENT * The sponsor is Connect Europe AISBL * The ultimate controlling entity is Connect Europe AISBL * The political advertisement is linked to advocacy on EU digital, telecom and industrial policy, including initiatives such as the Digital Networks Act, Digital Omnibus, and connectivity, cybersecurity, and defence frameworks aimed at strengthening Europe’s digital competitiveness. More information here.

BRUSSELS — The European Commission will provide a financial band-aid next year to Baltic nations suffering collateral economic damage from EU sanctions against Russia. The region is being hit particularly hard because of falls in tourism and investment, along with the collapse of cross-border trade. Regions Commissioner Raffaele Fitto is leading the plan, which aims to kickstart the economies of Finland and its Baltic neighbors, according to diplomats and Commission officials who were granted anonymity to speak freely. The intended recipients are also heading to Brussels with a lengthy wish list, hoping Fitto’s plan will reignite their economies. Their concerns will take center stage during a summit of leaders from Eastern European countries in Helsinki on Dec. 16. “We want to have special attention to our region — the eastern flank, including Lithuania — because we see the negative impact coming from the geopolitical situation,” Lithuania’s Europe minister, Sigitas Mitkus, said in an interview with POLITICO earlier this month. “Sometimes it’s difficult to convince [investors] that … we have all the facilities in place.” But skeptics warn that any immediate financial support Fitto can provide will be meager, given the scale of the challenge and with the bloc’s seven-year budget running low. The EU has agreed 19 sanction packages against Moscow in a bid to cripple the Russian war economy, which has bankrolled the Kremlin’s invasion of Ukraine since February 2022. In doing so, Finland, Estonia, Latvia, and Lithuania have all taken a hit. While the threat of a Kremlin invasion has deterred tourists and investors, the sanctions have choked off cross-border trade with Russia, and everything has been made worse by skyrocketing inflation after the pandemic. Dwindling housing prices have also made it more difficult for businesses to provide collateral to secure loans from banks. “People who had cross-border connections with some economic consequences have lost them,” Jürgen Ligi, Estonia’s finance minister, told POLITICO. A native of Tartu on Estonia’s eastern flank, Ligi has witnessed these problems first-hand as he owns a house only four kilometers from the Russian border. “Estonia’s economy has suffered the most from the war [which caused] problems with investments and jobs,” Ligi added. According to the Commission’s latest forecast, Estonia is expected to grow by only 0.6 percent in 2025 — well below the EU average — even though economic activity is expected to pick up in 2026 and 2027. The EU has agreed 19 sanction packages against Moscow in a bid to cripple the Russian war economy, which has bankrolled the Kremlin’s invasion of Ukraine since February 2022. | Sefa Karacan/Getty Images In another sign of financial strain, Finland breached the Commission’s spending rules in 2025 due to excessive spending and an economic slowdown caused by the war. “We will be acknowledging the difficult economic situation Finland is facing, including the geopolitical and the closure of the Russian border,” EU Economy Commissioner Valdis Dombrovskis, said on Tuesday. SCRAPING THE BARREL But Fitto’s options could be limited until the bloc’s new seven-year budget, known as the multi-annual financial framework (MFF), is in place by 2028. “My sense is that the communication won’t come with fresh money but with ideas that can be pursued in the next MFF,” said an EU diplomat who was granted anonymity to discuss upcoming legislation. Mindful of dwindling resources in the EU’s current cash pot, Lithuania’s Mitkus is demanding that Baltic firms get preferential access to the EU’s new funding programs from 2028 — something that is currently lacking in the Commission’s budget proposal from July. Officials from the frontline states are exploring other options. These include Brussels loosening state aid rules so they can subsidize struggling firms, and getting the European Investment Bank to provide guarantees to companies that want to invest in the region. While the upcoming strategy will draw attention to these problems, officials privately admit that it’s unlikely to mobilize enough cash to solve them immediately. “It will build the narrative that in the next MFF you can do something for [pressing issues for Eastern regions such as] drones production,” said the EU diplomat quoted above. But until 2028, “I don’t expect any new money.”