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

LONDON — The wait is finally over. After weeks of briefings, speculation, and U-turns, Chancellor Rachel Reeves has set out her final tax and spending plans for the year ahead. As expected, there is plenty for policy wonks to chew over. To make your lives easier, we’ve digested the headline budget announcements on energy, financial services, tech, and trade, and dug deep into the documents for things you might have missed.  ENERGY  The government really wants to bring down bills: Rachel Reeves promised it would be a cost-of-living budget, and surprised no one with a big pledge on families’ sky-high energy bills. She unveiled reforms which, the Treasury claims, will cut bills by £150 a year — by scrapping one green scheme currently paid for through bills (the Energy Company Obligation) and moving most of another into general taxation (the Renewables Obligation). The problem is, the changes will kick in next year at the same time bills are set to rise anyway. So will voters actually notice? The North Sea hasn’t escaped its taxes: Fossil fuel lobbyists were desperate to see a cut in the so-called Windfall Tax, which, oil and gas firms say, limits investment and jobs in the North Sea. But Rachel Reeves ultimately decided to keep the tax in place until 2030 (even if North Sea firms did get a sop through rules announced today, which will allow them to explore for new oil and gas in areas linked to existing, licensed sites.) Fossil fuel lobbyists, Offshore Energies UK, were very unimpressed. “The government was warned of the dangers of inaction. They must now own the consequences and reconsider,” it said. FINANCIAL SERVICES Pension tax changes won’t arrive for some time: The widely expected cut in tax breaks for pension salary sacrifice is set to go ahead, but it will be implemented far later than thought. The thresholds for exemption from national insurance taxes on salary sacrifice contributions will be lowered from £60,000 to £2,000 in April 2029, likely to improve forecasts for deficit cuts in the later years of the OBR’s forecasts. The OBR has a markets warning: The U.K.’s fiscal watchdog warned that the price-to-earnings ratio among U.S. equities is reminiscent of the dotcom bubble and post-pandemic rally in 2021, which were both followed by significant market crashes. The OBR estimated a global stock market collapse could cause a £121 billion hike in U.K. government debt by 2030 and slash U.K. growth by 0.6 percent in 2027-28. Even if the U.K. managed to stay isolated from the equity collapse, the OBR reckons the government would still incur £61 billion in Public Sector Net Financial Liabilities. Banks back British investments: British banks and investment houses have signed an agreement with the Treasury to create “invest in Britain” hubs to boost retail investment in U.K. stocks, a plan revealed by POLITICO last week. Reeves also finally tabled a cut to the tax-free cash ISA allowance: £12,000 from spring 2027 (the amount and timings also revealed by POLITICO last week), down from £20,000, with £8,000 slated for investments only. Over-65s will keep the full tax-free subscription amount. Also hidden in the documents was an upcoming consultation to replace the lifetime ISA with a “new, simpler ISA product to support first-time buyers to buy a home.” No bank tax: Banks managed to dodge a hike in their taxes this time, despite calls from the IPPR for a windfall-style tax that could have raised £8 billion. The suggestions (which also came from inside the Labour Party) were met with an intense lobbying effort from the banks, both publicly and privately. By the eve of the budget, City figures told POLITICO they were confident taxes wouldn’t be raised, citing the high rate of tax they already pay and Reeves’ commitment to pushing for growth through the financial services industry. TECH ‘Start, scale, stay’ is the new mantra:  Startup founders and investors were in panic mode ahead of the budget over rumored plans for an “exit tax” on wealthy individuals moving abroad, but instead were handed several wins on Wednesday, with Reeves saying her aim was to “make Britain the best place in the world to start up, to scale up and to stay.” She announced an increase in limits for the Enterprise Manage Scheme, which incentivizes granting employees share options, and an increase to Venture Capital Trust (VCT) and Enterprise Investment Scheme (EIS) thresholds to facilitate investment in growing startups. A further call for evidence will also consider “how our tax system can better back entrepreneurs,” Reeves announced. The government will also consider banning non-compete clauses — another long-standing request from startups. Big Tech will still have to cough up: A long-standing commitment to review a Digital Services Tax on tech giants was quietly published alongside the budget, confirming it will remain in place despite pressure from the Trump administration. The government will ‘Buy British’ on AI: Most of the government’s AI announcements came ahead of the budget — including plans for two new “AI Growth Zones” in Wales, an expansion of publicly owned compute infrastructure — meaning the only new announcements on the day were a relatively minor “digital adoption package” and a commitment to overhaul procurement processes to benefit innovative tech firms. But the real point of interest on AI came in the OBR’s productivity forecasts, which said that despite the furor over AI, the technology’s impacts on productivity would be smaller than previous waves of technology, providing just a 0.2 percentage point boost by 2030. The government insists digital ID will ultimately lead to cost savings. | Andrea Domeniconi/Getty Images OBR delivers a blow to digital ID: The OBR threw up another curveball, estimating the cost of the government’s digital ID scheme at a whopping £1.8 billion over the next three years and calling out the government for making “no explicit provision” for the expense. The government insists digital ID will ultimately lead to cost savings — but “no specific savings have yet been identified,” the OBR added. TRADE  Shein and Temu face new fees: In a move targeted at online retailers like Shein and Temu, the government launched a consultation on scrapping the de minimis customs loophole, which exempts shipments worth less than £135 from import duties. These changes will take effect from March 2029 “at the latest,” according to a consultation document. Businesses are being consulted on how the tariff should be applied, what data to collect, whether to apply an additional administration fee, as well as potential changes to VAT collection. Reeves said the plans would “support a level-playing field in retail” by stopping online firms from “undercutting our High Street businesses.”  Northern Irish traders get extra support: Also confirmed in the budget is £16.6 million over three years to create a “one-stop shop” support service to help firms in Northern Ireland navigate post-Brexit trading rules. The government said the funding would “unlock opportunities” for trading across the U.K. internal market and encourage Northern Ireland to take advantage of access to EU markets.  There’s a big question mark over drug spending: Conspicuously absent was any mention of NHS drug spending, despite U.K. proposals to raise the cost-effectiveness threshold for new drugs by 25 percent as part of trade negotiations with the U.S., suggesting a deal has not yet been finalized. The lack of funding was noted as a potential risk to health spending in the Office for Budget Responsibility’s Economic and Fiscal Outlook, which was leaked ahead of the budget. 

The next time your favorite veggie burger quietly rebrands itself as a “plant-based patty,” you now know who to thank: Céline Imart. The grain farmer from southern France, now a first-term lawmaker in the European Parliament, slipped a ban on meaty names for plant-based, fermented and lab-grown foods into an otherwise technical measure. Inside the Parliament, it caused a minor earthquake. Her own group leader, German conservative Manfred Weber, publicly dismissed it as “unnecessary.” The group’s veteran agriculture voice, Herbert Dorfmann, voted against it. Diplomats from several capitals shrugged it off as “silly” or “just stupid.” And yet, as negotiations with EU governments begin, the amendment that everyone assumed would die in the first round is still standing — not because it has a powerful constituency behind it, but because almost no one is expending political capital to bury it. That alone says something about where Europe’s food politics are drifting. A FIGHT ABOUT MORE THAN LABELS Imart insists the amendment isn’t an attack on innovation, but a gesture of respect toward the farmers she represents. “A steak is not just a shape,” she told POLITICO in an interview. “People have eaten meat since the Neolithic. These names carry heritage. They belong to farmers.” She argues some shoppers genuinely confuse plant-based and meat products, despite years of EU surveys showing consumers largely understand what a “veggie burger” is. Her view, she argues, is shaped by what she hears at home. “Maybe some very intelligent people never make mistakes at the supermarket,” she said, referring to Weber and Dorfmann. “But a lot of people in my region do. They don’t always see the difference clearly.” In rural France, where livestock farming remains culturally central, Imart’s argument resonates. Across Europe, similar anxieties simmer. Farmers say they feel squeezed by climate targets, rising costs and what they see as moralizing rhetoric about “healthy and sustainable diets.” The EU once flirted with promoting alternative proteins as part of its Green Deal ambitions. Agriculture Commissioner Christophe Hansen has spent most of the year soothing farm anger, not pushing dietary change. | Thierry Monasse/Getty Images Today, that political moment has mostly waned. References to “protein diversification” appear in draft strategies only to be scrubbed from the final text. Public support remains dwarfed by the billions the Common Agricultural Policy funnels to animal farming each year. Agriculture Commissioner Christophe Hansen has spent most of the year soothing farm anger, not pushing dietary change. This helps explain why an idea dismissed as fringe suddenly doesn’t feel fringe at all. Imart’s amendment taps directly into a broader mood: Defend the farmer first; innovation can wait. BOOM AND BACKLASH The industry caught in the crossfire is no longer niche. Retail sales of meat and dairy alternatives reached an estimated €6-8 billion last year, with Germany alone accounting for nearly €2 billion. Fermentation-based dairy substitutes are attracting investment, and even though cultivated meat isn’t yet authorized in the EU, it has already become a regulatory flash point. But the sector remains tiny beside the continent’s livestock economy, and is increasingly buffeted by political headwinds. After two years of farmer protests and fatigue over climate and environmental reforms, national governments have closed ranks around traditional agriculture. Countries like Austria, Italy and France have warned that novel foods could undermine “primary farm-based production.” Hungary went even further this week, voting to ban the production and sale of cultivated meat altogether. For alternative protein companies, the irony is hard to miss. They see their products as both a business opportunity and part of the solution to the food system’s climate and environmental footprint, most of which comes from animal farming. Yet they say politics are now moving in the opposite direction. “Policymakers are devoting so much attention to unnecessary restrictions that would harm companies seeking to diversify their business,” said Alex Holst of the Good Food Institute Europe, an interest group for plant-based and cultivated alternatives. He argued that familiar terms like “burger” and “sausage” help consumers understand what they’re buying, not mislead them. WHY THE NAMING BAN WON’T DIE The political climate explains why Imart’s idea suddenly resonates. But Brussels lawmaking procedure explains why it might survive. At the negotiating table, national governments are consumed by the Parliament’s more disruptive ideas on market intervention and supply management, changes they fear could distort markets and limit the authorities’ flexibility to act. Compared with those fights, a naming ban barely registers. Especially in an otherwise technical reform of the EU’s Common Market Organisation, a piece of legislation normally reserved for agricultural specialists focused on crisis reserves and market tools. That gives the amendment unusual space. Several diplomats privately complained it sits awkwardly outside the scope of the original European Commission proposal. But not enough to coordinate a pushback. The Commission, meanwhile, has signaled it can “live with” stricter naming rules, having floated narrower limits in its own post-2027 market plan. That removes what might have been the decisive obstacle. Retail sales of meat and dairy alternatives reached an estimated €6-8 billion last year. | Jens Kalaene/Getty Images Even translation quirks, like the fact that “filet,” “filete” and “fillet” can mean different things across languages, haven’t slowed it. Imart shrugged those off: “It’s normal that texts evolve. That’s the point of negotiation.” Whether the naming ban makes it into the final law will depend on the coming weeks. But the fact it is even in contention, after being mocked, dismissed and rejected inside Imart’s own political family, is telling. In today’s Brussels, appeals to heritage and identity land more softly than calls for food system innovation. In that climate, that’s all even a fringe idea needs to survive.

LONDON — Chancellor Rachel Reeves is preparing to unveil a new agreement with major investment groups at next week’s budget in a bid to get more Brits plowing their money in British companies. Officials in the U.K. Treasury have asked investment houses, including Hargreaves Lansdown, AJ Bell, and Vanguard, to sign a new compact before Friday for Reeves to announce at her Nov. 26 budget. It would see them offering a package of British-focused stocks to retail savers through online “invest in Britain hubs.” The move comes as Reeves continues to try and get retail investors to put their cash into British stocks to boost the country’s stagnant economy. The government believes investing in equities will help British companies grow, while also giving savers a better return on their money.  Three investment firm bosses with knowledge of the agreement’s draft wording said it included a new proposal for the companies to create dedicated “invest in Britain” sections on their websites or trading platforms to offer “U.K.-focussed ready-made portfolios” to consumers. The Treasury’s plan stops short of reviving a controversial “British ISA” plan created by Jeremy Hunt as top finance minister in the last conservative government. The Labour government’s option relies on consumer choice to make it easier for savers to find funds part- or entirely-invested in the U.K. It is currently unclear how many firms have signed up to the agreement with the budget looming next week. The Treasury intends for its changes to the ISA landscape — set to be announced at the budget — to be in place by April 2027, not next spring as some industry stakeholders had thought.

AOSTA, Italy — The 380,000 wheels of Fontina PDO cheese matured each year are tiny in number compared to the millions churned out by more famous rivals — but that doesn’t make the creamy cheese any less important to producers in Valle d’Aosta, a region nestled in the Italian Alps.  Fontina’s protected designation of origin (PDO) provides consumers at home and abroad a “guarantee of quality and of a short supply chain,” explained Stéphanie Cuaz, of the consortium responsible for protecting the cheese from cheap copycats, as she navigated a hairpin turn on the way to a mountain pasture. With fewer than a hundred cows, a handful of farm hands and a small house where milk is transformed into cheese, the pasture at the end of the winding road feels far away from global trade tussles its flagship product is embroiled in. The EU’s scheme to protect the names of local delicacies from replicas produced elsewhere has proved controversial in international trade negotiations. For instance, in 2023, free trade talks with Australia were swamped by complaints from its cheese producers railing against EU demands that they refrain from using household names like “Mozzarella di Bufala Campana” and “Feta.”  Fontina was caught in the crossfire, having been included in the list of names the EU wants protected Down Under. Fontina DOP Alpeggio is a variant of the cheese produced during the summer months using milk from cows grazing in alpine pastures up to 2,700 meters above sea level | Lucia Mackenzie/POLITICO. No such protections exist in the U.S., where in the state of Wisconsin alone, there are a dozen “fontina” producers, one of which won bronze at the World Cheese Awards in 2022.  Europe’s small-time food producers find themselves in a bind: their protected status is vital for promoting their traditional products abroad, but charges of protectionism have soured some trade negotiations. Nonetheless, many of the bloc’s trading partners clearly see the benefits of the system, baking in similar protections for their own products into trade deals. PROTECTION VS PROTECTIONISM Fontina cheese can only be labeled as such if several strict criteria are met. Cows of certain breeds need to be fed with hay of a certain caliber and, crucially, every step of the cheesemaking process must take place within the region’s borders.   For Cuaz, who grew up on a dairy farm in Doues, a small town of around 500 people perched on the valley side, the protection of the Fontina name is vital to keep farming alive and sufficiently paid in the region. Tucked up against the French and Swiss borders, Valle d’Aosta is Italy’s least populated region, home to just over 120,000 inhabitants speaking a mixture of Italian, French and the local Valdôtain dialect. Fontina — which with its distinctive nutty flavor can be enjoyed on a charcuterie board, in a fondue, or encased in a veal chop — is one of over 3,600 foods, wines, and spirits registered under the EU’s geographical indications (GI) system. This protects the names of products that are uniquely linked to a specific region. The idea is to make them easier to promote and keep small producers competitive. In the EU alone, GI products bring in €75 billion in annual revenue and command a price that’s 2.23 times higher than those without the status, the bloc’s Agriculture Commissioner Christophe Hansen proclaimed earlier this year. He called the scheme a “true EU success story.” The GI system is predominantly used in gastronomic powerhouses like Italy and France, and Hansen hopes to promote uptake in the eastern half of the bloc.  Italy has the most geographical indications in the world, accounting for €20 billion in turnover, the country’s Agriculture Minister Francesco Lollobrigida pointed out, describing the system as an “extraordinary value multiplier.” ‘NOTHING MORE THAN A TRADE BARRIER’ While several trading partners apparently share the enthusiasm of Hansen and Lollobrigida  — the EU’s trade agreements with countries from South Korea to Central America and Canada include protections for selected GIs — others view the protections as, well, protectionist. The U.S. has long been the system’s most vocal critic, with the Trade Representative’s annual report on intellectual property protection calling it out as “highly concerning” and “harmful.” Washington argues that the rules undermine existing trademarks and that product names like “fontina,” “parmesan” and “feta” are common and shouldn’t be reserved for use by certain regions. That reflects the U.S. dairy industry’s resentment towards Europe’s GIs: Krysta Harden, U.S. Dairy Export Council president, argued they are “nothing more than a trade barrier dressed up as intellectual property protection.” Meanwhile, the National Milk Producers’ Federation blames the scheme, at least in part, for the U.S. agri-food trade deficit.  American opposition to the system doesn’t stop at its own trade relationship with the EU. The U.S. Trade Representative’s Office also accused the EU of pressuring trading partners to block certain imports and vowed to combat the bloc’s “aggressive promotion of its exclusionary GI policies.” DOUBLING DOWN Unfazed by the criticism, Hansen continues to tout geographical indications as vital in the EU’s ongoing trade negotiations with other countries.  The EU’s long-awaited trade accord with the Latin American Mercosur bloc is heading toward ratification and includes GI protections for both sides. Speaking in Brazil last month, Hansen went out of his way to praise his hosts for protecting canastra, a highland cheese, and cachaça, a sugarcane liquor, against imitations.  Fifty-eight of the GIs protected under the agreement are Italian, Lollobrigida told POLITICO. This protects Italy’s reputation for high-quality food, he said, and ensures “that Mercosur citizens receive top-quality products.” The EU recently concluded a deal with Indonesia which will protect more than 200 EU products, and a geographical indication agreement is actively being discussed in talks on a free-trade deal with India that both sides hope to wrap up this year. As negotiations with Australia pick up once again, the issue of GI cheeses is expected to return to the spotlight. The U.S. pushback on GIs in other countries has fallen on deaf ears, argued John Clarke, the EU’s former lead agriculture negotiator. He criticized detractors for peddling “specious arguments which bear no relationship to intellectual property rights.” American claims that some terms are universally generic are “illegitimate” and ultimately “very unsuccessful,” in Clarke’s view. “They came too late to the party,” he said, “and their arguments were not very convincing from a legal point of view.” CULTURE AND COMMERCE  The uptake of GIs in other countries demonstrates the additional value the schemes can bring for rural communities and cultural heritage, Clarke posited.  In Valle d’Aosta, the GI system “keeps people and maybe also young farmers linked to this region,” argued Cuaz, adding that young people leaving rural areas in favor of urban centers is a real problem for her region. From tournaments to find the “Queen” of the herd that are a highlight of summer weekends to the “Désarpa” parade marking the end of the season as cows return to the valley from their Alpine pastures, Fontina cheese production keeps traditions alive in the tiny region every year. The dairy industry even plays a role in making use of abandoned copper mines, where thousands of cheese wheels mature annually. Thousands of cheese wheels are matured the Valpelline warehouse, built in the tunnels of a former copper mine. | Lucia Mackenzie/POLITICO. Supporters of the GI scheme also point to the food and wine tourism opportunities it offers. Les Cretes vineyard, winery and tasting room represent one such success story.  The flavors imbued into traditional and native grape varieties by the soil of the Valle d’Aosta’s high-altitude vineyards justify its inclusion as a geographically protected product, explained Monique Salerno, who has worked for the family business for 15 years and is in charge of tastings and events. The premium price on the local wines is vital to keep the producers competitive, given that the steep vines need to be picked by hand, she added. The business expanded in 2017, building a tasting room to draw tourists to Aymavilles, the town with a population of just over 2,000 that houses much of the vineyard. TARIFF TROUBLE While American critics have, in Clarke’s view, “lost the war on terroir,” Europe’s small-time food producers are not immune to the rollercoaster of tit-for-tat tariffs that have dominated recent EU-U.S. trade negotiations.  Like the vast majority of European products heading to the U.S., cheese is subject to a 15 percent blanket tariff. In the meantime, however, organizational mishaps led to some temporary doubling of tariffs on Italian cheeses, angering major producers.  The whole saga has caused uncertainty, said Ermes Fichet, administrative manager of the Milk and Fontina Producers’ Cooperative.  The Les Cretes vineyard on the slopes surrounding Aymavilles. | Lucia Mackenzie/POLITICO The U.S. is Fontina’s largest overseas market, accounting for around 60 percent of direct exports. However, producers aren’t fearing for their livelihoods, yet, as most Fontina cheese isn’t exported at all: an estimated 95 percent of wheels are sent to distributors in Italy. Rather, the impact of U.S. trade policy is long term. The American market would in theory be able to absorb all of Fontina’s production, Fichet explains, but the sale of similar cheeses at lower prices there makes it difficult to expand market share.  According to figures released by the USDA’s statistics service, over 5.1 million kilos of “fontina” cheese was produced in Wisconsin alone in 2024. That comes out to a higher volume than the 3.1 million kilos of GI-certified Fontina originating in Valle d’Aosta annually.  And looking elsewhere isn’t an easy option for the small-time cheese makers, even if future trade agreements include GI recognition. While markets in countries like Saudi Arabia are growing, they would never close the gap left by U.S. producers if trade ties worsen, said Fichet.  Responding to the foreign detractors, he highlighted the benefits from the scheme at home. Fontina DOP “allows us to maintain the agricultural reality of certain places … it’s an extra reason to try to help those who are committed to carrying on with a product that is, let’s say, the little flower of the Valle d’Aosta.”

LONDON — Britain’s financial watchdogs have been on a crypto journey — with a little help from Donald Trump.  The Bank of England publishes its long-awaited rules for stablecoin Monday. Two years after the central bank’s Governor Andrew Bailey dismissed the virtual currency — a theoretically more stable form of crypto — as “not money,” its rulebook is now expected to get a cautious welcome from an industry that’s been lobbying hard for a rethink. It would mark quite a shift from the U.K. central bank. Stablecoins “are not robust and, as currently organized, do not meet the standards we expect of safe money in the financial system,” Bailey told a City of London audience in 2023.  Now his top officials herald a “fabulous opportunity.”  The Bank chief’s initial position — that he doesn’t see stablecoins as a substitute for commercial bank money — has put him at odds with the U.K. Treasury, which is on an all-consuming mission to get the sluggish British economy moving. Chancellor Rachel Reeves wants the U.K. “at the forefront of digital asset innovation.”  The United States crypto lobby, fresh from several wins stateside, spied an opportunity. Exploiting those divisions — and pointing to a more gung-ho approach from Trump’s U.S. — has allowed firms to push for a British regime that more closely aligns with their own.  Monday could be a very good day at the office.  TREADING CAREFULLY Stablecoins are a type of cryptocurrency pegged to a real asset, like the dollar, with the largest and best-known offering being Tether. They’re seen as a more palatable version of crypto, and are used by investors to buy other cryptocurrencies, or allow cross-border payments.  The pro-stablecoin camp says their development is necessary to improve payments and overseas transactions for businesses and consumers, particularly as cash usage declines and sending money abroad remains clunky and expensive. If done well, a stablecoin could maintain a reliable store of value and be a viable alternative to cash.  Stablecoins (USDT) are a type of cryptocurrency pegged to a real asset. | Silas Stein/picture alliance via Getty Images Those more cautious, including the BoE, warn there are risks for the wider financial system including undermining public confidence in money and payments if something goes wrong.  And stablecoins are not immune to things going wrong: In 2022, the Terra Luna token lost 99 percent of its value, along with its sister token TerraUSD, a stablecoin which went from being pegged to the dollar on a $1-1 TerraUSDbasis, to being valued at $0.4. Tether also fell during that time to $0.95.  Other central bankers seem to agree with Bailey’s early caution. The Bank for International Settlements, a central bank body, issued a stark warning on stablecoins in June, saying they “fall short” as a form of sound money.  There are also concerns such coins are used to skirt money-laundering laws, with anti-money laundering watchdog the Financial Action Task Force, warning that most on-chain illicit transactions involved stablecoins. The EU has tough regulation in place for digital assets. The bloc prioritizes tighter control over the market than the U.S., with stricter rules on capital and operations.  That’s in stark contrast to the U.S., which passed its own stablecoin regulation — the GENIUS act — earlier this year, which is much more industry-friendly. Donald Trump, whose family is building its own crypto empire, has described stablecoins as “perhaps the greatest revolution in financial technology since the birth of the Internet itself.”  That’s put post-Brexit Britain in a bind: align with the EU, the U.S., or go it alone?  “The U.K. is a bit caught,” a former Bank of England official who now works in digital assets said. They were granted anonymity, like others in this article, to speak freely. “It doesn’t have the luxury of completely creating a bespoke regime. It can do, but essentially, no one’s going to care.” AMERICAN PUSH For a Labour government intent on deregulating for growth, aligning with the U.S. was immediately a more attractive proposition.  Warnings came from the City of London, Britain’s financial powerhouse, that the government would need to embrace crypto and stablecoin for the U.K. to become a global player. Domestic financial services firms wrote to the government calling for it to align its regime with the U.S., talking up “once-in-a-generation opportunity” to establish the future rules for digital assets.   “Securities are getting tokenized,” said one former Treasury official, now working in the private sector. “Bank deposits are getting tokenized. If we don’t build a regime that is permissive enough [to make the U.K. attractive], then the City’s relevance will diminish as a consequence.”  For the pro-crypto brigade, the BoE has been the main hurdle in achieving a U.S.-style, free-market stablecoin rulebook. Reform UK leader Nigel Farage, whose party is currently leading in the polls, accused Bailey of behaving like a “dinosaur.  For the pro-crypto brigade, the BoE has been the main hurdle in achieving a U.S.-style, free-market stablecoin rulebook. | Niklas Helle’n/AFP via Getty Images “The Bank’s really got itself into a twist on this one. From what I understand from people who have been at the Bank, this is coming from the top,” said the former BoE employee quoted above.  “Andrew Bailey has made it publicly clear for some many months now that he is sceptical about the two new alternative forms of money, which is stablecoins and central bank digital currencies,” said a financial services firm CEO.  In recent weeks, however, Bailey and his colleagues have softened their rhetoric as well as indicating a relaxed policy is forthcoming.  Sarah Breeden, Bailey’s deputy governor for financial stability, has repeatedly said any limits on stablecoin will be temporary, and recent reports suggest there will be carve-outs for certain firms. Other BoE officials have also backed away from tougher rules on the assets which must be used to underpin the value of a stablecoin.  A second former BoE employee, who now works in the fintech industry, said Bailey was “under a huge amount of pressure, from the government and the industry. He is worried about looking like he is just anti-innovation.”  The BoE declined to comment. The Treasury did not respond to a request for comment. US interest  A state visit by Trump to the U.K. this fall appeared to help shift the debate.   In late September, the Trump administration and the British government agreed to explore ways to collaborate on digital asset rules.  Treasury Secretary Scott Bessent and Reeves announced that financial regulators and officials from the U.S. and U.K. would convene a “Transatlantic Taskforce for Markets of the Future.”  During Trump’s visit, Bessent held a financial services roundtable in London with key figures from industry. “There was a steady slate of crypto attendees there, and the discussion predominantly focused on stablecoins,” said the former Treasury official.  “Rachel Reeves met Scott Bessent and seems to have been told, actually, we’d like you to be much more supportive of … digital assets,” the financial services CEO added.   The U.K. Treasury has been “pretty proactive” in taking meetings with crypto firms and traditional finance firms interested in crypto, in the New York consulate and British embassy in Washington, added the former Treasury official.   The BoE too met with the crypto industry and U.S. politicians, with Breeden at the helm of discussions while she was in the U.S. in October for IMF-World Bank meetings, in an effort to better understand U.S. stablecoin rules.  Last month saw a major olive branch.  A Bailey-penned op-ed in the Financial Times saw the Bank chief recognize stablecoins’ “potential in driving innovation in payments systems both at home and across borders.”   Going further still, Breeden told a crypto conference just this month that synchronization between the U.S. and the U.K. on stablecoin marks a “fabulous opportunity.”  She has heavily indicated there will be more than a slight American influence when she announces the proposals on Nov. 10. “It’s a fabulous opportunity, to reengineer the financial system with these new technologies,” Breeden told the Nov. 5 crypto conference.  “I think a lot of people have observed that it was the U.S. crypto firms that really pushed the dial on getting political will, whereas British firms haven’t been able to secure that,” the former Treasury official said.

LONDON — The U.K. government is going all-out to get Brits putting their money in stocks and shares. The timing could definitely be better. Lead policymakers and City of London analysts are increasingly warning of an artificial intelligence-fueled correction in equities just as the U.K.’s top finance minister prepares a major new policy to push Britain’s savers into the stock market. Chancellor Rachel Reeves has made upping retail participation in stocks and shares a high priority, launching a campaign earlier this year to unite financial firms in an advertising blitz extolling the benefits of investing. At next month’s budget, she’s expected to push changes to the tax system that would encourage investors to swap their steady, tax-free cash savings products for a stocks and shares ISA. With AI stocks soaring, it’s caused some raised eyebrows in the City. AI stocks in the U.S. account for roughly 44 percent of the S&P 500 market capitalization, and Nvidia just became the first company in history to become worth $5 trillion. The meteoric rise in has led some experts to warn there’s only one way out: The bubble will burst. “It would, unfortunately, be poetic timing if a major correction arrives just as the government is trying to get more people into investing,” said Chris Beauchamp, chief market analyst at IG. ATLANTIC INFLUENCE This week, City broker Panmure Liberum found that 38 percent of the U.S. stock market’s value is based in a “speculative component” that AI companies will continue to build out data centers and spend billions more on chips — by no means a sure bet. “While this capital spending could deliver substantial productivity gains that might eventually spread to the broader market, there is still no clear evidence that this is happening and is difficult to forecast the size of an eventual impact,” said Panmure analyst Susana Cruz in a research note. The “Magnificent Seven” group of tech giant composed around 20 percent of the S&P 500 at the end of 2022, but now make up more than a third of it, having tripled in size over just three years. The American index’s price-to-book ratio (meaning a company’s market cap compared to assets and liabilities) is at an all-time high, with 19 of the 20 valuation metrics tracked by Bank of America more expensive than the historical average. Despite the vast valuations, an infamous MIT study published earlier this year found that 95 percent of companies using generative AI were getting zero return. In early October, the Bank of England’s committee which monitors risks to financial stability warned of a “sudden correction” in markets, saying that “equity valuations appear stretched” as valuation metrics reached levels comparable to the peak of the dotcom bubble that unfolded in the early millennium, when the Nasdaq fell 77 percent from its peak, wiping trillions of the stock market. It took 15 years for the index to recover. The U.K. central bank’s warning came a month after global body, the Bank for International Settlements, issued a similar caution. Kristalina Georgieva, head of the International Monetary Fund, has also drawn comparisons with the dotcom bubble. Even Jamie Dimon, chief executive of U.S. banking giant JP Morgan, has said he’s seriously worried about a market correction. Over most periods investment beats cash, as long as individuals are willing to lock their money away for several years. Savers could have doubled their money over the last decade by putting their cash in the stock market rather than keeping it in a savings account, according to Schroders. Nvidia is up 13 percent this month alone — rather than an index fund which tracks hundreds of stocks, they stand to lose a lot of money if things go sour. | Jung Yeon-Je/Getty Images “No one can time the market, definitely not a bulky institution like the government,” Oliver Tipping, analyst at investment bank Peel Hunt, said. “Big picture, the government is right to try to stimulate more retail investment.” But if an individual decides to put their hard-earned savings into stocks they perceive as doing particularly well — Nvidia, for example, is up 13 percent this month alone — rather than an index fund which tracks hundreds of stocks, they stand to lose a lot of money if things go sour. “If you think about your average Joe, they’re not going to go into a safe index fund, they’ll put all of their money in Nvidia or Facebook and could get in at the wrong time,” one financial analyst, granted anonymity to speak freely, said.  Yet even an index fund, like a global equities tracker, is made up of close to 20 percent of the “Magnificent Seven” companies, due to the massive size of the American stock market compared to the rest of the world. While these funds have suffered significant drops in the past — U.S. President Donald Trump’s threat of tariffs in April caused a drop of 10 percent in a week — they have then recovered over a period of months or years. That’s good news for investors willing to wait for the market to correct any possible downturn — but if retail investors panic and withdraw their funds at the first sign of a loss, they could end up with less money than they put in, possibly wiping out emergency savings. “There is clearly a risk here that government is pushing people to invest when maybe they don’t have enough of a cash buffer in order to do that, that you’re going to be setting up problems for the long term, and it’ll be interesting to see who’s on the hook for paying that compensation,” said Debbie Enver, head of external affairs at the Building Societies Association. ONCE BITTEN, TWICE SHY City analysts also express concern that investors entering the stock market for the first time could be forever turned off from shifting their cash over to equities if an immediate correction is nigh. Only 8 percent of wealth held by U.K. adults is in stocks and funds, four times lower than in the U.S., according to data from asset manager Aberdeen. “There is no doubt that the government would find it much harder to drive retail investment in a period of financial turbulence,” added Chris Rudden, head of investment consultants at Moneyfarm. “Appetite to invest is linked to strong recent market performance. If there was to be a bubble that bursts in the coming few months, then it could make their job impossible.” IG’s Beauchamp argued that the government would need to pursue a broader education plan “to help people through the inevitable pullback” and prevent them from avoiding the stock market permanently. “How you do that without scaring people witless is a Herculean task,” he added. Laith Khalaf, head of investment analysis at AJ Bell, suggested investment platforms could encourage regular incremental savings in the stock market, known as dollar cost averaging, rather than throwing one lump sum in, which he said “mitigates the risk of a big market downdraft.” One solution that appears to be under consideration by Reeves as part of the autumn budget is to introduce a minimum U.K. stock shareholding in ISAs — which she could argue would protect British savers from a U.S. downturn and pump more money into local companies. This too is not without risk. The FTSE 100 derives nearly 30 percent of its revenue from the U.S., according to the London Stock Exchange, and U.K. markets are generally incredibly sensitive to macroeconomic shifts across the Atlantic. The FTSE 100 derives nearly 30 percent of its revenue from the U.S., according to the London Stock Exchange. | Jeff Moore/Getty Images Meanwhile, if an AI-induced stock bubble isn’t enough cause for concern, worries of trouble in the private credit sector exploded this month after the collapse of sub-prime auto lender Tricolor and car parts supplier First Brands left some U.S. banks with significant losses, causing a spillover onto public markets. BoE governor Bailey recently drew similarities between risks in the asset class and the 2008 global financial crisis, saying it was an “open question” if the event was “a canary in the coal mine” for a market meltdown. If one domino falls, they all could — and that would leave Britain’s chancellor in a real bind.

Factory workers, cashiers and hotel staff in Greece could soon be working longer shifts, with the country set to become the first EU member to officially introduce a 13-hour workday for the private sector. Parliament is set to vote on the controversial legislation on Wednesday, amid planned nationwide protest rallies. Despite growing pushback from unions and opposition parties, the bill is expected to pass comfortably with the votes of the ruling New Democracy party. Since taking power in 2019, the center-left government has transformed the country’s labor market into what it hails as one of the most “flexible” in Europe. Starting in July 2024, employees in industry, retail, agriculture and some service sectors can be asked to work a new six-day schedule, with an extra 40 percent paid on top of their regular wage for the sixth working day. The move, a shift against a trend toward shorter working weeks in some European countries, was deemed necessary due to Greece’s aging and shrinking population and a major shortage of skilled workers. Greece was gripped by a general strike on Tuesday, the second this month, as unions demanded the withdrawal of the new legislation. Most public transport and public services were brought to a standstill amid mass protests. “Flexible working hours” in practice means “the abolition of the eight-hour workday, the destruction of every concept of family and social life and the legalization of overexploitation,” the public sector union, ADEDY, said in a statement. The new legislation stipulates that employees can work up to 13 hours per day on no more than 37.5 days per year, with a maximum limit of 48 hours per week, based on a four-month average and maximum overtime of 150 hours. But the 40-hour workweek continues to be the rule, and overtime in general is to be better compensated, with a 40 percent bonus. The 13-hour workday should be voluntary with no employee obliged to work overtime, the Labor Ministry has said. But unions have argued that employers have the upper hand in this negotiation, particularly in a country with almost no tradition of workplace inspections. The legislation would also introduce an option for annual leave to be fragmented into more than two parts throughout the year, flexible weekly schedules, two-day contracts and fast-track hiring via an app, all in order to fulfill “urgent company needs,” the draft legislation says. Greece’s economy has rebounded since its decade-long financial crisis, which started with the 2009 debt crisis and was followed by three bailout programs that lasted until 2018. The unemployment rate, which during the crisis reached a staggering 28 percent, was at 8.1 percent in August, the latest month for which figures available. The EU average stood at 5.9 percent. However, there has been no convergence with the EU on the rest of the data: Salaries remain among the lowest in the bloc, which means many Greeks are forced to work two jobs to cover the soaring cost of living, in particular high housing costs. The country is second to last in the EU when it comes to purchasing power, with nearly half of households unable to afford basic necessities, according to a 2024 report by the European Committee of Social Rights. One in five Greeks works more than 45 hours a week, the highest rate in the European Union, according to Eurostat data published earlier this month. According to OECD data, Greece ranked fifth worldwide in terms of annual working hours in 2023, behind only Colombia, Mexico, Costa Rica and Chile. NEW LABOR RULES WILL GIVE ‘BOOST TO THE PRIVATE SECTOR’ Labor Minister Niki Kerameus of the New Democracy Party strongly supports the new legislation, arguing that it “gives a boost to the private sector” and “strengthens the employees.”  “The expression ’13-hour workday’ implies that we will all work 13 hours every day, all year round. Is this true? Can it happen every day? No, is the answer. It can happen up to 37 days a year, or three days a month. Secondly, it requires the employee’s agreement,” she told Skai TV in an interview on Tuesday. Kerameus has repeatedly stressed that an employee cannot be laid off for refusing to accept the new rules, added that with unemployment levels at a “17-year low […], you can understand how much this strengthens the position of the employee.” But opponents of the new law, including Dimitrios Mantzos, a lawmaker with the main opposition socialist Pasok party, called out the government in parliament on Tuesday for deregulating labor relations, heightening job insecurity and disrupting work-life balance. “The mere fact that we are here discussing such a bill is unacceptable, it is shameful, it is backward,” said Efi Achtsioglou, an MP with the New Left party. “It is unthinkable that in 2025 we are still debating whether to legislate a 13-hour work day.” Labor market experts have said the move would legalize labor rights violations that have been committed by employers in terms of overtime work and will lead to burnout and increased accidents. The legislation has been repeatedly condemned by employee representatives. “These regulations exacerbate job insecurity and reinforce the model of flexible and unprotected work,” Greece’s main private sector union, the Greek General Confederation of Labour, said in a letter to Kerameus in late September.

GASTEIN, Austria — European Health Commissioner Olivér Várhelyi said the EU will eventually hike taxes on vapes to match “classic tobacco products” as Europe was already seeing the public health impact of vaping. Várhelyi said the European Commission’s proposed tax hikes on cigarettes and vapes, presented in July, were a “strong signal” of EU policy’s direction of travel. The Commission proposed to raise tobacco taxes across the board and set minimum taxes on vapes and nicotine pouches for the first time.  The proposed tax levels vary by product but are higher for cigarettes and tobacco than e-cigarettes. The new tax on cigarettes would be at least 63 percent of the average retail price, while for vapes it will range from 20 to 40 percent.  “We will raise the excess duties on these new products to the exact same level as it is for classic tobacco products and we will need to continue in that direction,” the commissioner said during a panel at the European Health Forum Gastein in Austria. “For whatever reason, in the public [vaping] is not presented as a danger — yet,” Várhelyi said. But he said Europe was already witnessing the public health impact. In the Czech Republic, more than 25 percent of young people vape. “The health impact is already there,” he said, pointing out this number was higher than the average rate of EU adults who smoke. In 2019, 18.4  percent of people in the EU aged 15 and over smoked daily. Várhelyi didn’t give a timeline for when taxes on new products would rise to match cigarettes. “Of course, it’s very important to have confirmation from the lung experts that we’re doing the right thing,” he added. Várhelyi was speaking at a panel on heart health where he heard pitches from experts on how to maximize the impact of the planned cardiovascular health plan, expected by the end of the year.

Friedrich Merz’s stimulus can’t arrive quickly enough. The number of people out of work in Germany rose by more than expected again in September, as years of economic weakness took their toll on the labor market. Data released by the Federal Labor Office showed unemployment, adjusted for seasonal effects, rose by a worse-than-expected 14,000 to a new 14-year high of 2.98 million. “The labor market continues to lack the necessary impetus for a stronger recovery,” said labor office head Andrea Nahles. Indeed, the local headlines are being conspicuously dominated by national champions shedding staff. Earlier this week, Lufthansa said it will cut 4,000 administrative jobs by 2030. The news came only days after engineering giant Robert Bosch said it would cut an additional 13,000 positions by 2030, after announcing 5,550 layoffs in November last year. Automaker Volkswagen and Germany’s second-largest lender, Commerzbank, announced significant job cuts earlier this year. Such trends are having knock-on effects further down the supply chain: Insolvencies nationwide were up over 12 percent from a year earlier in the first half of 2025. Last week it was the turn of Kiekert, an auto supplier that pioneered central locking sytems, to declare itself bankrupt, putting another 700 German jobs at risk. Europe’s largest economy has been in recession for two consecutive years and will eke out minimal growth this year, according to a report from think tanks that advise the government. Many fear the country risks missing out on the turnaround that Chancellor Friedrich Merz promised to deliver when he took office earlier this year. Companies have become increasingly skeptical that the government will deliver necessary reforms. Only last month, the unadjusted number of unemployed in Germany passed 3 million for the first time in a decade. It dipped back below that level in September, as is usual at this time of year. The seasonally adjusted jobless rate remained stable at 6.3 percent of the workforce. While analysts say that unemployment may continue to tick up, they argue that changing demographics and ongoing skills shortages should prevent any massive surge similar to the one in the early 2000s that triggered radical labor market reforms under then-Chancellor Gerhard Schröder. The jobs numbers wasn’t the only worrying data out of Germany on Tuesday. Retail sales volumes in August fell 0.5 percent, suggesting that consumers are getting increasingly cautious about spending. On the brighter side, recent declines in world energy prices are leaving more in consumers’ pockets, and Pantheon Macroeconomics’ Claus Vistesen pointed out that planned cuts to energy-related taxes will give them a further boost from January.