Hungary’s surging opposition is demanding Prime Minister Viktor Orbán explain a “bailout package” he hinted at securing from U.S. President Donald Trump.   Orbán, a longtime Trump ally, traveled to Washington last week to meet with the American leader. As he returned to Budapest, the populist-nationalist Hungarian premier told his delegation the U.S. had agreed to provide Budapest a “financial shield.” “Certain Brussels instruments that could be used against Hungary can now be considered ineffective … The notion […] that the Hungarian economy can be strangled from the financing side, can now be forgotten,” he said, according to local media, adding, “We have resolved this with the Americans.”  After 15 years in charge, Orbán faces potential defeat in next spring’s national election — and the specter of financial assistance from Washington closely echoes Trump’s recent blockbuster move to save another ideological ally, Javier Milei in Argentina. Orbán’s remarks, which allude to EU money due to Hungary but frozen because of concerns about backsliding on the rule of law, triggered questions Monday from Péter Magyar, leader of Hungary’s opposition, which is leading the ruling Fidesz party in the polls. “Why was such a ‘financial shield’ necessary? Is there a near-state bankruptcy situation? What would Viktor Orbán spend the trillions of forints in American loans on? Why is he indebting his fellow citizens instead of bringing home the 8 trillion forints in EU funds owed to Hungarians?” Magyar demanded in a post on social media. In a separate missive, he added, “Why did Orbán secretly negotiate a huge bailout package?”  EU ESTRANGEMENT Hungarian media outlet Válasz Online reported that Trump and Orbán may have committed to a currency swap between their countries’ central banks — similar to the $20 billion exchange-rate stabilization agreement Argentina inked with the U.S. last month — essentially, a bailout package for Budapest.  If so, it would be the second time Trump provided financial assistance for a right-wing ally ahead of a crucial election, after he approved the bailout package for Milei, the chainsaw-wielding libertarian president of Argentina. That intervention, organized by Treasury Secretary Scott Bessent, included direct U.S. purchases of Argentine pesos and a $20 billion currency-swap agreement giving Buenos Aires access to dollars. Bessent also announced plans to marshal an additional $20 billion in private financing, though that money has yet to appear. There are differences, too, though, which make any Washington-Budapest arrangement more difficult to understand. Hungary’s central bank does not have dollar swap arrangements with the U.S. Federal Reserve, nor does Hungary have a formal backstop — basically, an agreement to help financially in times of fiscal disaster — with the Fed.  By contrast, it does have a swap arrangement for euros with the European Central Bank, and it could also turn to the International Monetary Fund if the ECB were unable, or unwilling, to help. Spokespeople for the White House and U.S. Treasury didn’t immediately respond to a request for comment. Donald Trump’s relationships with Budapest and Buenos Aires reveal clear parallels. | Roberto Schmidt/Getty Images Much of this is currently academic because Hungary is, to put it mildly, in a far better economic position than Argentina — it doesn’t even need a bailout. Hungary, like many EU countries, has weak growth, but the main threats to its financial stability under Orbán’s leadership relate to the potential for estrangement from the EU. ARGENTINA PARALLELS The U.S.’s Argentina intervention was a success, politically, for Milei, whose party won a decisive victory on Oct. 27 in midterm elections allowing him to press ahead with his radical economic overhaul of the country. Trump celebrated the outcome, saying the effort had “made a lot of money for the United States.” Bessent likewise said the U.S. investment had “turned a profit.” But the administration has released no details about the full scope of U.S. involvement or the returns it claims to have earned. Trump’s rescue package has drawn political backlash in the U.S. from both Democrats and even some Republicans, who blasted the administration’s assistance for Argentina as a bailout for a political ally that may boost wealthy hedge funds while risking U.S. taxpayer dollars on a chronically bankrupt country. Bessent said the Argentina intervention was aimed at countering China’s growing clout across Latin America and, more broadly, reasserting American economic power in the Western Hemisphere, comparing the U.S. effort in Argentina to an “economic Monroe Doctrine.”  Trump’s relationships with Budapest and Buenos Aires reveal clear parallels, and an effort to prop up key partners in regions where many leaders are not naturally allied with the U.S. president’s MAGA agenda. The White House also sided with Orbán over the Hungarian leader’s refusal to stop purchasing Russian oil despite a European push to wean off Moscow’s exports, exempting Hungary from U.S. sanctions on Russian energy for one year following his meeting with Trump. Further financial backing from Washington could embolden Orbán, a frequent thorn in the EU’s side, to take even stronger anti-Brussels positions. Seb Starcevic reported from Brussels. Michael Stratford reported from Washington, D.C.

Nearly two years ago, Argentina’s newly appointed punk-haired President Javier Milei stood up on a podium in front of global elites in Davos and accused them of letting their societies drift into socialism and poverty. He went on to argue that the “main leaders of the Western world have abandoned the model of freedom for different versions of what we call collectivism,” and that all market failures were by-products of state intervention. This week, however, Davos had the last laugh: U.S. Treasury Secretary Scott Bessent threw Milei a $20 billion lifeline to help Argentina defend a currency that is collapsing despite nearly two years of shock therapy programs that had had supply-side economists and investors in raptures. “Argentina faces a moment of acute illiquidity,” Bessent posted on X. “The international community — including the IMF — is unified behind Argentina and its prudent fiscal strategy, but only the United States can act swiftly. And act we will.” The rescue act, which many have described as a country-to-country bailout, is an abrupt departure from the usual playbook of international financial diplomacy, an unusually direct intervention in a sphere normally reserved for multilateral institutions. In a strong signal that this was the result of political will, rather than financial apparatchiks just trying to keep the system stable, the money will be directly extended by the Treasury, rather than by the Federal Reserve, in the form of a currency swap. It stands to entangle the fate of the U.S. economy intimately with that of resource-rich Argentina, and tie the Trump administration directly to Milei’s shock therapy programs. At the same time, it reasserts U.S. influence in a region that China has increasingly penetrated through growing trade ties. For Europe, the corollary is that access to dollar liquidity, the essential backstop of the world financial system for nearly a century, is being politicized, and may increasingly depend on how closely its policies align with those of the U.S. “Europe should be concerned about the politicization of the swaps,” one former New York Federal Reserve official told POLITICO. The episode “underscores the need for the rest of the world to prepare for dealing with a dollar crunch without the Fed[to turn to],” added the official, who was granted anonymity to speak freely. CHAINSAW ECONOMIC MASSACRE Milei was explicitly elected in 2023 on the promise that he would take a chainsaw to Argentine government excesses. Positioning himself as the defender of freedom, once in office, he initiated a bold economic agenda focused on radical deregulation, welfare cuts, and liberalization. Within months, the country’s welfare bill had been slashed by nearly half, with the government balancing the books (before interest payments) for the first time since 2008. But it was Milei’s initial move in December 2023 to devalue the official peso exchange rate by nearly 50 percent that rocked markets the most. The hope was to better align the peso with its black market (i.e., real) rate before slowly introducing a floating exchange rate, with sliding bands. Throughout, the International Monetary Fund, the world’s lender of last resort for countries, championed Milei’s policies, which allowed Argentina to return to capital markets earlier than expected. “The agreed ambitious stabilization plan is centered on the establishment of a strong fiscal anchor that ends all central bank financing of the government,” the lender cooed in January 2024. EGG ON THE IMF’S FACE? Except things didn’t go exactly as planned. Rather than stabilize, the peso just kept depreciating, especially after Trump’s tariff announcement in April destabilized global markets. The declines threatened to make imports more expensive for ordinary Argentinians just as Milei’s disinflationary successes were beginning to become entrenched. The road to that point evolved predictably enough. In the immediate aftermath of Milei’s great devaluation, inflation hit 25.5 percent, spiking to 276 percent by February 2025. But, as social welfare cuts began to bite, inflation predictably turned into disinflation. By June 2024, monthly price rises had slowed to 5 percent, and by July-August, inflation had hit single digits for the first time in years. The International Monetary Fund (IMF) and independent observers were quick to credit Milei’s strict fiscal surplus, monetary tightening, and peso stabilization. But by April, the peso’s soft float was proving increasingly challenging to defend. Trump’s “Liberation Day” tariffs, which set a baseline rate of 10 percent for all countries, had hit Argentina’s export-dependent economy hard. Capital started to flow out amid fears that a global slowdown would crush demand for its agricultural and mineral exports. The Argentinian central bank moved to defend the peso, burning through scarce dollar reserves. Markets began to doubt that Milei’s agenda would survive, fearing that a sharp, uncontrolled depreciation would rekindle inflation just as prices were calming down. To avert a currency crisis, Argentina turned to the IMF and was granted $20 billion through the agency’s Extended Fund Facility (EFF). But despite an initial positive impact on the peso, the depreciation picked up speed again. From the perspective of both the IMF and the U.S., the failure of Milei’s reforms stood not just to unravel Argentina once again, but to delegitimize the ideological foundations of the free-market system he had touted as infallible if deployed correctly. PROXY ECONOMIC WAR WITH CHINA As confidence in Milei’s program faltered, focus shifted to whether the U.S. would make dollar support conditional on the cancellation of a pre-existing $18 billion swap line with Beijing. U.S. Special Envoy for Latin America Mauricio Claver-Carone publicly dubbed the facility “extortionate.” In September, Bessent confirmed negotiations between the U.S. and Argentina for a direct dollar swap line, reinforcing speculation that the U.S. was trying to supplant Chinese influence in the region. The news had an immediate positive effect on the peso, breaking its fall. After peaking at over 1,475 pesos, the dollar was back at 1,421 by late Friday in Europe, helped by news that a dollar-support package from Washington was imminent. How long-lasting that effect will be is yet to be determined. For now, Bessent and the IMF appear resolute that it’s just a matter of time until Milei’s policies will deliver the stability they’ve been promising. Rather than framing the U.S. swapline as a bailout, Bessent is treating the intervention as a trading play. “This is not a bailout at all, there’s no money being transferred,” he told Fox News on Thursday. Under a swap line, two parties agree to exchange up to a certain amount of their currencies, on the understanding that it will be reversed at some time in the future. “The ESF has never lost money, it’s not going to lose money here,” Bessent went on, arguing that the peso is “undervalued”. He added that Milei remains a great U.S. ally who is committed to getting China out of Latin America, and said the U.S. was going “to use Argentina as an example.” Not everyone is convinced that Milei’s policies will deliver the goods. “They’ve done this over and over and over again,” said Steve Hanke, a professor at Johns Hopkins University and a veteran of various currency reform and stabilization packages. He argued that the package will provide “a little bit of a temporary band aid, but it won’t last very long.”

France is in shambles. The crisis that kicked off the week — the resignation of Prime Minister Sébastien Lecornu and his newly appointed ministers after just 14 hours — is still in motion, with Macron set to name a replacement for Lecornu on Friday, according to his office. But bigger questions remain about what comes next. Should Lecornu’s successor also fail, it will force Macron to consider some very unpalatable options. He could yet resign, two years before the end of his term — a move he has repeatedly rejected. Or, he could dissolve parliament and call for a snap round of elections, which could well vault the far right closer to power than ever before. Here’s what to know as the drama continues to unfold. WHAT SPARKED THIS LATEST POLITICAL CRISIS? Honestly, it might’ve been a tweet. It’s a running joke in Parisian political circles right now, but there’s a bit of truth to the gallows humor. On Sunday evening, key ministers in Lecornu’s cabinet were unveiled, and most of them were holdovers from his predecessor’s government — which was toppled last month — and the two most prominent new faces had previously held ministerial posts during Macron’s tenure. Opposition parties who had expressed openness to working with Lecornu on a budget for next year and potential minority coalition partners were furious. They had made it clear they were looking for signals that Lecornu would be doing things differently after he promised a “break” from Macron’s previous governments. Bruno Retailleau, who leads a conservative party that was a key coalition partner of recent minority governments, expressed his displeasure in a post on X and said his party would be charting a path forward the next morning. The next morning, Macron’s office announced that he had accepted the resignation of Lecornu and his government after a grand total of 14 hours on the job. WHAT DOES THIS MEAN FOR THE NATIONALIST FAR-RIGHT? Let’s start with Marine Le Pen and her far-right party, the National Rally, because they’re sitting pretty right now. Le Pen has long embraced a Trumpian refrain that the mainstream political parties are inept and out of touch, so a situation like this helps prove her point. The National Rally continues to climb in the polls and should be considered a frontrunner for any potential snap elections or the next presidential election in 2027, which Macron is constitutionally barred from running in. To understand the dynamics at play, you’ve got to rewind to June 9, 2024, when Macron’s centrist camp was drubbed at the hands of the far right in European elections. Call it eternal optimism, call it hubris, call it dogged determination, but whatever it is, it’s driven Emmanuel Macron’s political fortunes into the gutter. | Kristian Tuxen Ladegaard Berg/Getty Images European votes are sort of like the U.S. midterms. They don’t draw high turnout and often serve as a protest vote. Plus, polling had predicted a National Rally victory. The victory wasn’t a surprise. Macron’s response was. He announced that evening he would dissolve parliament and call new snap elections as quickly as possible, gambling that a high-stakes domestic vote would block the far right’s seemingly unstoppable rise. What he ended up with was a hung parliament roughly divided into three equal blocks. Most have proven willing to engage in the type of coalition-building exercises common in other European countries like Italy and Germany, despite repeated calls from Macron to do so. The first prime minister to try to navigate the fractured legislature, Michel Barnier, lasted about three months before being kicked to the curb over his plans to slash the budget by billions to rein in runaway public spending. His predecessor, François Bayrou, lasted nine months but got the boot over his own unpopular budget, which included plans to ax two public holidays. Lecornu took over for Bayrou in early September, and now here we are. WHY ARE THE MARKETS SPOOKED? Markets are concerned that France, the eurozone’s second largest economy, has become so ungovernable that it can’t even pay its bills. France borrowed heavily during the pandemic and is now sitting on €3.4 trillion worth of debt and looking at a projected budget deficit of 5.4 percent of gross domestic product this year. Everyone agrees the current path isn’t sustainable, but cutting spending is particularly difficult in France, where people remain deeply attached to the country’s generous social welfare system. Paris is also committed to spending on reindustrialization, transitioning to green energy and rebuilding its military capabilities in the wake of Russia’s invasion of Ukraine and fears of American military retrenchment. Something’s gotta give. The two prime ministers who preceded Lecornu both proposed shaving billions off the budget to balance the books, and — to make a long story short — each were shown the door for their troubles. Lecornu came into office prioritizing the budget and, during his 27-day-long tenure, did not find enough common ground for a budget compromise before his resignation. WHY DOES THIS POSE A THREAT BEYOND FRANCE’S BORDERS? Remember about 15 years ago when everyone in Europe was freaking out over sovereign debt crises in Greece and Portugal? That would be child’s play compared to France, the world’s seventh-largest economy, collapsing under the weight of its own debt. The concern now, as it was in 2010, is that because all these countries share a common currency, the euro, the risk of financial contagion is high. Most economists agree Paris has a better handle on its financial affairs than either Lisbon or Athens did, and won’t need a bailout in the imminent future. France can still borrow from financial markets at reasonable, albeit increasingly higher, rates, and is not in immediate danger of being unable to pay its debts. Marine Le Pen has long embraced a Trumpian refrain that the mainstream political parties are inept and out of touch. | Alain Jocard/Getty Images There’s also a precedent issue in Brussels. European Union rules require member states to keep budget deficits below 3 percent of GDP, a limit France continues to run afoul of. Paris has submitted a plan to Brussels to get back on track by 2029, but it’s highly unlikely lawmakers will pass a budget in time this year to stick to that timeline. If France continues to flout the 3 percent figure themselves, other EU member states might start having second thoughts about playing by the rules themselves. HOW MUCH OF THIS TURMOIL IS ABOUT MACRON, AND WHAT DOES IT MEAN FOR HIS POLITICAL FUTURE? This is squarely about Macron. He’s spent the 15 months since the snap election trying to defy parliamentary arithmetic by appointing prime ministers from a minority coalition made up of centrists and conservatives. The odds never seemed good, but Macron kept trying. His office said this evening that he’ll choose Lecornu’s replacement in the next 48 hours, and who he picks will be telling. It’s helpful to know a bit about Macron’s personality here. People close to the French president like to describe him as the gambler who leaves the casino with his pockets empty but convinced he’ll beat the house on the next try. Call it eternal optimism, call it hubris, call it dogged determination, but whatever it is, it’s driven Macron’s political fortunes into the gutter. And key allies are starting to jump ship, including three previous prime ministers. One, presidential candidate Edouard Phillipe, called on him to resign. Gabriel Attal, who now heads Macron’s political party, said he “no longer understands” what the president is doing. A third, Elisabeth Borne, called for the suspension of his flagship law raising the retirement age — despite having rammed the law through the legislature during her tenure leading the government. A centrist politician known to have their finger on the pulse told my colleague Anthony Lattier that many lawmakers from Macron’s camp think he’s trying to sow chaos so Le Pen’s National Rally can come to power — which would offer him the chance to swoop in as a savior who could take down the far-right during the presidential election in 2032. (Macron can’t run in the next election in 2027 because he’s barred from standing in more than two consecutive elections, but there’s nothing stopping him after that.)

LONDON — Thought writing a 10,000-word dissertation was tricky? Try managing Britain’s embattled university sector.  As students pack their bags, sort their kitchenware and prepare for the time of their lives at campuses across the U.K., university officials face the headache of keeping their struggling institutions economically viable — all while politicians take potshots at them. “The underlying financial settlement for universities is not really sustainable,” warned Universities UK International Director Jamie Arrowsmith, an organization representing 141 universities.  International students provide significant income to the sector by paying considerably higher tuition fees than domestic students. However, Labour’s bid to slash migration levels means international students are in the firing line. It’s a stark contrast from Tony Blair’s New Labour government in the 2000s, which was “actively encouraging the growth of the international student population,” according to Labour peer and former Universities Minister Margaret Hodge. She recalled writing to Blair espousing how this expansion would increase the U.K.’s soft power: “If you wanted to create good diplomatic connections and promote peace across the world, those student relationships paid off fantastically.” A string of policy changes has left institutions searching elsewhere for cash, as Prime Minister Keir Starmer focuses on disadvantaged British youngsters. A white paper due this fall will outline specific higher education reforms, including calls for universities to contribute more to economic growth. The sector warns it could all be undermined if the government keeps discouraging overseas students from coming to Britain. PULLING UP THE LADDER  Britain’s universities have an enviable reputation. The QS World University Rankings in June put 17 U.K. universities in the top 100, while a London Economics report calculated higher education contributed more than £265 billion in the 2021/22 academic year. It’s little wonder students across the globe want to study here. Anxious about populist parties like Reform UK, Tory and Labour governments have seen fewer foreign students as a way to get numbers down. | Richard Baker / In Pictures via Getty Images But while international students starting in 2021/22 brought net economic benefits of £37.4 billion, they’re also counted in immigration figures — and that’s a headache for the government. Anxious about populist parties like Reform UK, Tory and Labour administration have seen fewer foreign students as a way to get numbers down.  They were banned from bringing family members on all but post-graduate research routes back in January 2024. That decision by then-Conservative PM Rishi Sunak followed 135,788 visas being granted to dependents of foreign students in 2022, nearly nine times the 2019 figure. Arrowsmith said he understood why the policy was introduced, but warned it had hit “the U.K.’s attractiveness” to prospective foreign students, particularly when “other countries have had more open and welcoming policies over the last three to four years.” Home Office figures in October 2024 showed the effect — with an 89 percent drop in visa applications for dependents between July to September 2023 and the same period in 2024. Tory peer and former Universities Minister, David Willetts, said he understood concerns about dependents, but thought it should be made clearer to voters that students are only temporary migrants. “My constituents, when I was an MP, who worried about migration, were worried about [people] coming to Britain to settle, to use the NHS,” he said. “They weren’t worried about a Chinese student doing physics for a couple of years.” Fellow Tory peer and former Universities Minister Jo Johnson concurred, saying people were more concerned with illegal immigration. “They’re a very special category of immigration that’s more akin to tourism or temporary visitors.”  Now, Labour is wearing Conservative clothing.  The Home Office marked the new academic term this week by directly contacting tens of thousands of foreign students, warning them not to outstay their visas and telling them they “must leave”  if they have “no legal right to remain.”  The immigration white paper published this May also planned to reduce the graduate visa — where international students can remain in the U.K. after finishing their qualification — from two years to 18 months in most cases. Ministers have also mooted a levy on fees universities receive from foreign students to reinvest in domestic training. A graduation student sits outside Senate House at Cambridge University. | Joe Giddens/PA Images via Getty Images Johnson, however, said the Treasury didn’t like raising money for a specific purpose, meaning the Department for Education “may be being rather optimistic” in assuming revenue would go towards skills.  Hodge was similarly sceptical: “If it were linked to encouraging international students, but recognizing there might be a cost to public services, I think I’d feel more comfortable,” she said. “At the moment, I’m not sure that it’s anything else other than raising more money.” The moves have also upset the main higher education union. “Unfortunately, the government remains wedded to a funding model that leaves international students propping up U.K. higher education,” said University and College Union (UCU) General Secretary Jo Grady in a statement to POLITICO. She added: “Their fees are essential to the financial stability of the sector, so it is economically illiterate that Labour has refused to lift the Tories’ visa restrictions.”  STRAPPED FOR CASH Though Education Secretary Bridget Phillipson insisted the government will “always welcome international students where they meet the requirements to study,” some have taken the hint — and given the U.K. a pass.  In 2023/24, 732,285 overseas students studied at U.K. higher education providers, a 4 percent drop from the 2022/23 record high and the first fall since 2012/13. The number of student visas granted also fell from its record in 2022 of 484,000 by 5 percent in 2023 and 14 percent in 2024. The drop-off was particularly acute among EU students. After Brexit, European students weren’t eligible for home student status, meaning they paid international fees and couldn’t acquire a student loan.  This led to a 50 percent drop in accepted applicants for U.K. undergraduate study from EU countries in 2021/22, which continued to fall the following two years.  Universities still need to pay their bills.  In 2022/23, U.K. higher education providers had an income of £50 billion, of which 52 percent came from tuition fees — international students paid 43 percent of that figure.  The decline “has … been increasingly difficult,” said Arrowsmith, stressing “one of the main sources of funding that was helping to mitigate the reduction in resource is … no longer quite as stable.”  Education Secretary Bridget Phillipson insisted the government will “always welcome international students where they meet the requirements to study.” | Andy Rain/EPA While international fees rose without any cap, domestic tuition fees were frozen from 2017 until this fall at £9,250. Despite rising to £9,535, the hike in employers’ national insurance contributions hampered extra savings — forcing universities to tighten their purse strings. A Universities UK survey of 60 institutions in May found 49 percent closed courses to reduce costs, up from 24 percent in spring 2024. In the same month, the Office for Students, which regulates higher education, forecast a third consecutive year of financial decline in 2024/25.  “Inflation has been particularly high,” argued Arrowsmith, “That really exacerbated the situation,” particularly when there were “increased expectations” on academic research. It’s little surprise the House of Commons’ Education Committee is investigating potential insolvency within higher education institutions.  The Department for Education reiterated that the independence of universities meant they must ensure sustainable business models. But Willetts and Hodge disagreed on whether increasing domestic fees would improve the situation. Willetts “would love to see a healthy, proper increase in the fees” to put universities “in a stronger position” rather than relying on overseas students. However, Hodge said the “incredibly expensive” university experience was “almost getting to the cost of going to bloody Eton” and the debt was “putting working-class kids off.” OUT OF THE IVORY TOWERS  To show young people university isn’t their only option, the government launched Skills England and funded a growth and skills levy supporting apprenticeships.  But universities don’t think this should come at the expense of international students. And it seems the public agrees. British Future research found 54 percent of people thought international students enhanced the reputation of U.K. universities overseas, while 61 percent thought the government should increase or keep the amount of overseas students the same. Domestic students were supportive, too. “British students appreciated the opportunity of studying with students from other countries,” said Willetts. “It enriched the experience.” Education wonks believe focusing too much on domestic skills could come back to bite ministers — and excessive policy changes prevents what international students, and employers, want most of all: clarity. “They need certainty and stability if they’re going to make decisions,” argued Arrowsmith, stressing frequent alterations under different administrations made “prospective students think twice [about Britain] as a destination.”  The UCU echoed this and felt Britain should be open for business.  “We are also calling on universities to join us in the fight for a more open border policy that will protect the sector, help contribute tens of billions of pounds to the economy, enrich our society and bolster the U.K.’s global standing,” said Grady. A government spokesperson said: “We recognize the valuable contributions which genuine international students make to the economy and the university sector and we want them to continue to come to the U.K.” But they argued: “We are simply tightening the rules so those wishing to stay in the U.K. must find a graduate-level job within 18 months, which is fair for both students and to British workers and taxpayers.”

PARIS — François Bayrou is set to be booted out as France’s prime minister on Monday, but that doesn’t necessarily spell the end of the long political road of the canny, three-time presidential candidate. Does the 74-year-old from the Pyrenees have one more shot at the Elysée Palace in him? Is he the centrist unifier who could stop the far-right National Rally from coming to power in 2027 and reshaping Europe’s political landscape under Marine Le Pen or Jordan Bardella? When asked by reporters, he tends to observe knowingly: “That’s not how the game is played.” Bayrou is undaunted by his current poor showing in the polls. As he sees it, the pieces will only start to click in the winter of late 2026. “The criterion,” he believes, “is that in their kitchen, around family meals, at the earliest at Christmas, in February or in March, there are people who say: This one can do it.” For now, Bayrou seems unlikely to be that “one.” He is set to lose a vote of no confidence next week after failing to push through a raft of severe budget cuts he says are vital to stop France, the EU’s second-largest economy, from pitching into a Greek-style debt crisis. Bayrou’s logic is that he will ultimately be vindicated as a principled prophet on the dangers of overspending. Should his dire warnings prove prescient, every family forced to scrimp on presents for their children in 2026 or on festive staples like champagne and oysters next Christmas will see Bayrou as the guru who “told you so.” Even so, he has a lot of ground to claw back in terms of popularity. The big presidential showdown in the spring of 2027 may still be far off, but other former centrist prime ministers, namely Édouard Philippe and Gabriel Attal, currently look better placed for the race. Bayrou’s standing has not been helped by an ugly scandal this year featuring revelations that his daughter — unbeknown to him — was one of multiple children abused at a Catholic school near the city of Pau, his southwestern bastion in the Pyrenees. PYRENEAN POLITICS Bayrou, a former mayor of Pau, is proud of his regional heritage and rural origins. His father, a farmer, was crushed to death by a hay wagon. But his béarnais charm conceals the fact that Bayrou is a veteran political operator — and a strong proponent of a classical education — who has survived for decades through his talent for gauging France’s political fickle political winds. A former teacher, Bayrou draws inspiration from (and wrote a book about) Henri IV, the famously pragmatic king and fellow Pau native who converted from the Protestant faith to Catholicism to save France from the bloodshed of the wars of religion. François Bayrou, a former mayor of Pau, is proud of his regional heritage and rural origins. | Pool photo by Thibaud Moritz via EPA Bayrou was unafraid to throw his support behind the Socialist François Hollande and burn bridges with center-right President Nicolas Sarkozy before the 2012 presidential election, which Sarkozy lost. That winning bet helped him become the face of French centrism in the months that followed. Bayrou was also one of the earliest supporters of a virtually unknown young economy minister named Emmanuel Macron, who spurned the Socialist Party in 2016 to create his own centrist movement in a long-shot bid for the presidency. He has even been known to boast that Macron wouldn’t have won the presidency without his support.   Having failed to win the top job in 2002, 2007 and 2012, Bayrou surely has only one chance left. His strategy now is to depart his PM role showing he was prepared to go down fighting on a point of principle — the need to balance the books being one that he has stressed for years. Faced with the same intractably divided parliament that doomed his predecessor, Michel Barnier, as he tries to pass his budget reforms, Bayrou is confronting his fate rather than having it imposed upon him. Or, in the words of one ministerial adviser overheard moments after Bayrou announced his plans: “It’s better to die by suicide than suffer in agony.”  Bayrou will be hoping his self-immolation can set the stage for a phoenix-like resurrection.   All it would take is a dash of economic calamity.  MR. ANTI-DEBT  Since the founding of the Fifth Republic in 1958, only Jacques Chirac has succeeded in using the French premiership as a springboard to the presidency. Prime ministers tend to leave office worse off than they started, wrung dry of political capital by powerful presidents who lean on them to do the dirty work of legislating.   But Bayrou’s career-long warnings about profligate public spending could come to fruition. “He wants to be Mr. Anti-Debt,” said one high-ranking ally of the president who was granted anonymity to candidly discuss the current state of French politics.  It’s still a sheer climb. Bayrou is historically unpopular, with one poll late last month showing just 19 percent of respondents had a favorable opinion of him. He’ll need to contend with criticism that he was all talk and failed to address issues relating to French debt while holding positions of authority. Europe’s increasing disdain for career politicians and its preference for upstart populists won’t help either. Surveys show that Le Pen’s far-right National Rally, already the single largest opposition party in France’s more powerful lower house of parliament, is the most popular political movement in the country.   Bayrou’s machinations aren’t a secret within the gilded walls of the Elysée. Some of Macron’s allies question whether the prime minister is exaggerating the threat posed by France’s sky-high budget deficit for political reasons.  While there’s wide agreement that France needs to get its books in order, not everyone is concerned that Paris will need to turn to the International Monetary Fund or the European Central Bank for a bailout in the short term. ECB chief Christine Lagarde said in an interview Monday that the situation is worrying but not yet dire.  Macron himself reportedly tried to downplay the crisis at a meeting with his ministers last week, and believes the government could survive if it found a way to bring the center-left Socialists back into the fold, despite their anger with Bayrou over retirement reforms. Markets are jittery and borrowing costs are rising, but not drastically. Whether the economy runs into a real storm will determine whether Bayrou sees out his career at the center of power in Paris, or back home in Pau. Paul de Villepin contributed reporting.   

BRUSSELS ― The European Commission is devising a scheme to transfer almost €200 billion in Russian immobilized assets to rebuild Ukraine at the end of the war. Brussels is testing the appetite of national capitals for moving the assets into riskier investments that could generate more profits for Ukraine and amp up pressure on Russia as it refuses to stop the fighting, several officials told POLITICO. Supporters also see the scheme as a step toward potentially seizing the assets and handing them over to Ukraine as a punishment for Russia’s refusal to pay post-war compensation. “We are advancing the work on the Russian frozen assets to contribute to Ukraine’s defense and reconstruction,” the Commission President Ursula von der Leyen said on Thursday, in her strongest remarks so far on the subject. Crucially, this option would fall short of immediately confiscating the assets, which a majority of EU countries oppose due to financial and legal concerns. Talks will come to a head on Saturday when the EU’s 27 foreign ministers debate the option for the first time during an informal gathering in Copenhagen, Denmark. During the discussion, ministers should look at “further options for the use of revenues stemming from Russian immobilized sovereign assets,” according to a preparatory note seen by POLITICO. With Ukraine facing an estimated €8 billion budget shortfall in 2026, EU countries are looking for new ideas to continue funding the war-battered country amid squeezed domestic budgets and no room to issue EU-wide debt. Despite its economic predicament, Europe faces increased pressure to step up in the face of U.S. disengagement from Ukraine and faltering attempts by President Donald Trump to reach a peace deal. “We hear that it’s more difficult to raise money [from national finances or the EU budget],” said Kerli Veski, the undersecretary for legal and consular affairs at the Estonian foreign ministry. “[But] we have those assets there and the logical question is how can we and why don’t we use those assets.” THE CONFISCATION CAMP Baltic countries bordering Russia and several others have long been pushing on the EU to confiscate the assets altogether. Within the Commission, Latvian Economy Commissioner Valdis Dombrovskis and Estonian Foreign Policy Chief Kaja Kallas have been advancing this idea. Within the Commission, Estonian Foreign Policy Chief Kaja Kallas has been advancing this idea. | Jonathan Raa/NurPhoto via Getty Images But this option continues to be met with resistance from Western European countries, including Germany, Italy and Belgium. The latter is particularly exposed to the legal and financial risks because it hosts Euroclear, the financial institution that holds the bulk of the Russian assets.   As a compromise, G7 countries in 2024 agreed to funnel a total of €45 billion in profits generated by investing the assets to Ukraine, while leaving the underlying assets untouched. Nevertheless, the EU’s €18 billion share of the loan will be entirely paid out by the end of the year ― prompting calls to generate additional revenues within a short timeframe. As a workaround, the Commission’s lawyers are looking into transferring the assets into a “special purpose vehicle” backed by a number of EU and potentially foreign countries. Officials compared the mooted new fund to the European Stability Mechanism (ESM), a money pot to bail out countries that is only backed by eurozone members and was set up outside the EU treaties. The potential fund for Ukraine would also be open to G7 countries, including the U.K. and Canada, that are in favor of confiscating the assets, said an EU official, although the details are still being hammered out. Overall, this new structure would give the EU greater control to hand over the assets to Ukraine when the time is right. Under the current rules, a single country can effectively hand the assets back to Moscow by vetoing the renewal of sanctions, which comes up for a vote every six months. Hungary’s pro-Russia and pro-Trump government is seen as the likeliest to take this course. Shifting the funds to a new body with potentially no unanimity requirements would stave off Hungary’s threat. BUY LOW, SELL HIGH Transferring the assets into a new fund would also allow them to be placed in riskier investments capable of generating higher returns for Ukraine. That would be a change from the current rulebook, which compels Euroclear to invest the assets with the Belgian central bank, which offers the lowest risk-free rate of return available. Skeptics, including Euroclear CEO Valérie Urbain, worry, however, that EU taxpayers would have to bear the brunt of any losses resulting from the riskier operations. To share the legal and financial burden, Belgium wants other EU countries to assume liability for the assets under the Commission’s proposed plan. “Belgium is not alone here. We need to support and be taking part in mitigating that risk,” said Veski. “It’s not a question of letting Belgium deal with it [while] we watch from the sideline.” The Belgian government has recently warmed to the Commission’s plan, said an EU official and a senior non-Belgian diplomat, while countries farther away from Russia, such as Spain, are also backing the idea. Jacopo Barigazzi contributed reporting.

FRANKFURT — A fight over the top job at the central bank is pitting the two big beasts of Slovak politics against each other, setting the stage for turbulent months ahead. Prime Minister Robert Fico is trying to force out the current governor of the National Bank of Slovakia, Peter Kažimír, and install his current finance minister, Ladislav Kamenický, four people familiar with the matter told POLITICO. However, Kažimír, supported by President Peter Pellegrini and his ruling coalition Hlas party, is clinging to the position — despite a recent and controversial conviction for bribery. The struggle forms the backdrop to crucial negotiations this fall over how to reduce the second-worst budget deficit in the eurozone and avoid EU sanctions. It will be a key test of Fico’s political skills and Slovakia’s credibility in the financial markets. The task would be hard enough on its own, but is being complicated by a bitter personal feud between Kažimír and Fico. The prime minister considers Kažimír a “traitor” for having fragmented his Smer party five years ago together with Pellegrini. Kamenický and representatives for Smer did not reply to a request for comment. In a statement to POLITICO Kažimír stressed his ongoing commitment to his role, noting he was “fully dedicated to leading and developing the National Bank of Slovakia.” He added that his post offered him “a unique opportunity to strengthen trust in an institution that is essential and irreplaceable for our country.” THE INCUMBENT Although Kažimír’s term as governor officially ended on June 1, he has kept his powers due to a 2016 law that says the sitting governor can remain in office until a successor is appointed. Fico wants him out, but Hlas — a party founded by Pellegrini, Kažimír and other dissidents from Smer in 2020 and which is now Smer’s coalition partner — continues to back Kažimír, calling him “the most qualified choice from a professional standpoint.” Hlas also claims that the current coalition agreement gives it the right to name the next governor, who also sits on the Governing Council of the European Central Bank. Fico is banking on the stigma of a bribery conviction, handed down to Kažimír just before his term ended, eventually forcing Hlas to drop its support for him. A judge found that while Kažimír was finance minister in 2016, he offered a bribe to a tax official to hasten the tax audits of companies owned by an acquaintance. The judge sentenced him to pay a €200,000 fine or serve a year in prison. Kažimír has always maintained his innocence and has called the charges politically motivated, noting in a recent op-ed that the judge had offered him immunity if he gave the authorities anything on Fico or Pellegrini to build a case against them. He is currently appealing to the Supreme Court, which is expected to rule within a year, according to six people POLITICO contacted who were granted anonymity to speak freely about sensitive legal and political issues. Prime Minister Robert Fico is trying to install his current finance minister, Ladislav Kamenický, as governor of the National Bank of Slovakia, Peter Kažimír. | Thierry Monasse/Getty Images The court ruling has caused some awkwardness for central bank employees, who dislike the optics of working for a convicted criminal, three people who personally know Kažimír said. But, they added, Kažimír’s reputation as “a good manager” who has worked hard to modernize the institution has also offset some of that stigma. “[Even] people who never voted for Smer and who are really embarrassed by the conviction would like him to stay, because as a governor he’s much better than Kamenický,” said one of them, a former member of parliament. OLD GRUDGES RUN DEEP The roots of the struggle date back seven years to a time when Fico’s third administration was falling apart following the murder of a journalist who had been investigating potential ties between the government and the ‘ndrangheta mafia from Calabria, a region in southwest Italy. Kažimír at the time enjoyed a reputation in European policy circles for the tough attitude he had shown as finance minister from 2012 to 2019 toward Greece’s requests for a bailout amid its sovereign debt crisis. In order to secure his future, Kažimír struck a gentleman’s agreement with then-National Bank Governor Jozef Makúch to give the latter a second term at the central bank on the condition Makúch would make way for Kažimír before the 2020 elections, which Smer was on course to lose, two former officials from the Slovak central bank told POLITICO. The position of governor is the highest-paid public-sector role in the country and until then had been reserved for technocrats. EU law also makes it virtually impossible for a government to remove the central bank governor. After Smer suffered a debacle in the 2020 Slovak parliamentary election, finishing second with 18.3 percent and being swept from government, a group of Smer parliamentarians followed Pellegrini in quitting the party to form Hlas. While Fico saw Kažimír’s fingerprints all over the rift, the former member of parliament told POLITICO Kažimír had not played an active role. “He was like the strategic [person] in the background. You know, the advisor.” The deadlock may endure for some time, however. With Smer still the largest party in the current parliament, Kažimír’s bid for reappointment is unlikely to win parliamentary approval. At the same time, Fico is unlikely to push for Kamenický to replace him until the budget for next year is adopted, four people familiar with the matter said. Smer has been polling behind opposition liberal party Progressive Slovakia for nearly a year, and will have to spread the pain of deficit reduction adroitly to stand any chance of extending its hold on power. Meanwhile, doubts abound concerning Kamenický’s fitness for the role — and not just related to his proximity to Fico. “He is not really interested in public finance or central banking. He prefers to paint,” said one of the former central bank officials in a nod to the minister’s passion for the visual arts. The two parties could conceivably strike a deal to help smooth budget negotiations, three of the people said. But such horse-trading has already trashed the bank’s reputation, one complained. “This was never the case in the past,” the former official said. “It’s the first time Slovakia experiences something like this.”

BRUSSELS ― Carlos Cuerpo wants eurozone members to wake up and lead Europe to financial union. The 44-year-old Spanish economy minister — who on Friday entered the race to head up the powerful group of eurozone countries known as the Eurogroup — is calling for a major shake-up of a body he says has become all talk and no action. “Going forward, the Eurogroup should be more about decisions,” Cuerpo, a socialist, said in an interview with POLITICO, where he outlined his proposal for sweeping changes to the body. Cuerpo argued that groups of countries ― as opposed to all the EU’s 27 states ― should lead the way to integrate Europe’s financial markets, a long-held ambition in Brussels that has repeatedly struggled to get off the ground. “If you cannot go in terms of reducing fragmentation from 27 to one, you might have to go in different steps and reduce the fragmentation by putting groups of countries together.” This is a major rupture from the incumbent Eurogroup President Paschal Donohoe, whom critics accuse of prioritizing broad consensus over actual decisions in his two terms in office. To everyone’s surprise, in October, Cuerpo launched a “coalition of the willing” ― known as the European Competitiveness Lab ― to finally make progress on a decades-old project to create U.S.-style financial markets in Europe. The EU’s biggest countries ― Germany, France, Italy, Poland, Luxembourg, the Netherlands and Spain ― have signed up to the initiative, boosting Cuerpo’s leadership credentials. He said he will empower this scheme if he’s elected as Eurogroup president. “I expect that all 27 member states would be members of the competitiveness lab at some point.” The Spaniard, however, faces an uphill battle to defeat Donohoe in next Monday’s secret vote by the eurozone’s 20 finance ministers. While many officials praised Cuerpo’s soft skills and “encyclopedic knowledge” of the European economy, others feel alienated by his more radical ideas, such as doubling the size of the EU budget or issuing common debt for defense. Donohoe is the odds-on favorite to secure a third term as he hails from the powerful center-right European People’s Party and appeals to small countries who will tip the balance of the election. Lithuanian socialist Finance Minister Rimantas Šadžius, is unlikely to make it past the first round of voting, according to several officials. | Oliver Hoslet/EPA The third candidate, Lithuanian socialist Finance Minister Rimantas Šadžius, is unlikely to make it past the first round of voting, according to several officials with knowledge of the voting procedures. A simple majority — 11 votes — is necessary to be elected as president. THE EUROGROUP’S MIDLIFE CRISIS The Eurogroup is a club of 20 eurozone ministers who meet every month to coordinate economic policy. During its heyday, it steered the eurozone through the rumble-tumble of the sovereign debt crisis, but lost influence as the euro area stabilized and a more inclusive EU-wide group of 27 finance ministers gained power. The Eurogroup has become a “bland working group” or a “think tank,” according to two EU diplomats, who, like others in the story, were granted anonymity to speak freely. A group of countries — including Spain — have questioned the usefulness of holding monthly meetings in Brussels in an informal report that was seen as mildly critical toward Donohoe’s presidency. Faced with this criticism, Cuerpo said he wants to breathe new life into stalled Eurogroup projects such as creating an EU-wide financial and banking union and strengthening the role of the euro. “We need to be very efficient in coming up with deliverables, otherwise we might be late to the party,” compared to other foreign countries. “Eurogroup needs to have a voice for these new times that actually requires us to face new challenges and call for a revamped Eurogroup.” THE ITALIAN VETO One of the thorniest issues is Italy’s veto over a plan to use money from the European Stability Mechanism — a bailout fund for countries introduced during the eurozone crisis — to rescue failing banks. Populist parties in Italy oppose ratifying the reform over the ESM’s lingering association with strict bailout conditions during the eurozone meltdown. Rome, however, is open to using these funds to provide cheap loans for defense — something that Cuerpo has endorsed in the past. In a sign of détente, Cuerpo said that “we have to help Italy help us on this [ratifying the ESM],” although he shied away from questions on using these funds for defense. “[We need] to provide the right narrative, which is sometimes also an important element around how the ESM can help us going forward in these new challenges as well.” This story has been updated to reflect Carlos Cuerpo’s formal job title as minister of economy, trade and business.