BRUSSELS — The EU is seeking reassurances from Ukraine over future financial support to the country after a far-reaching corruption probe revealed a $100 million kickback scheme tied to its energy sector. Ukrainian anti-corruption agencies revealed this week that some of Volodymyr Zelenskyy’s close associates were allegedly involved in the plot, prompting the Ukrainian president to issue sanctions against his former business partner and dismiss several senior ministers. That’s divided Kyiv’s European partners. For many, the revelations are a positive sign of the continued independence of Ukraine’s anti-graft watchdogs. Some, however, want concrete commitments from the country that show it is serious about preventing similar incidents in the future. “The endemic corruption” revealed in the probe is “revolting,” said one EU official, who, like others for this story, was granted anonymity to speak freely on the sensitive matter, and “won’t help” the country’s reputation with international partners. “It will mean [the European] Commission will surely have to reassess how it spends” funds on Kyiv’s energy sector, the official argued, adding that in the future, “Ukraine will have to give more attention and transparency in how it spends cash.” “We expect Ukraine to press ahead with anti-corruption measures and reforms in its own country,” German Chancellor Friedrich Merz said Thursday, after calling Zelenskyy.  The president “needs to comfort everyone,” added an EU government official, “most likely with a plan on how to fix corruption.” The scandal comes at a delicate time for Ukraine. The country is facing a €41 billion budget crunch next year, while EU countries are currently deadlocked over unblocking a €140 billion reparations loan for Kyiv from frozen Russian assets. Ukraine’s foreign and energy ministries didn’t respond to POLITICO’s request for comment. But on Wednesday, Zelenskyy said “there must be maximum integrity in the energy sector in absolutely all processes,” adding: “I support … every investigation carried out by law enforcement and anti-corruption officials.” HIGH WIRE ACT So far, the scandal — the worst to hit Zelenskyy since he took office in 2019 — is not prompting allies to threaten to cut aid to Ukraine. On Thursday, the EU confirmed it would earmark €6 billion in new aid for Ukraine. Earlier this week, Estonia officially approved an additional €150,000 for Kyiv’s energy sector, while Germany is reportedly considering a €3 billion top-up for the country next year. As they met at the G7 on Wednesday and flocked to Warsaw for the EU-Ukraine Investment Conference on Thursday, allies sought to put on a united front. In recent months, Moscow has ramped up its bombing campaign on Ukraine’s critical energy infrastructure, pummelling its gas production facilities and coal power plants. | Maxym Marusenko/NurPhoto via Getty Images “It is painful to see how corruption affects the energy sector, especially as winter approaches and Russia continues its brutal attacks on energy infrastructure,” said Lithuanian Energy Minister Žygimantas Vaičiūnas. But we “stand firmly with the people of Ukraine — our support will not stop,” he told POLITICO. Ending aid for Kyiv’s battered energy sector would have a “terrible” impact ahead of this winter, said Aura Sabadus, a senior energy analyst specializing in eastern Europe at the ICIS energy consultancy. In recent months, Moscow has ramped up its bombing campaign on Ukraine’s critical energy infrastructure, pummelling its gas production facilities and coal power plants. As a result, the country has secured €500 million in aid from the European Bank for Reconstruction and Development to buy up emergency gas imports. Behind closed doors, Ukraine’s EU backers are also wary that being too vocal could feed into its opponents’ narratives aimed at discrediting Kyiv and scuppering its efforts to join the bloc. “A wartime mafia network with countless ties to President Zelenskyy has been exposed,” Hungarian Prime Minister Viktor Orbán, a consistent critic of Ukraine, claimed on social media on Thursday. “This is the chaos into which the Brusselian elite want to pour European taxpayers’ money.” “By [highlighting] corruption scandals, they only give ammo to those like Hungary who are saying it is a corrupt nation,” said one EU diplomat. “Those who are opposed to Ukraine … will milk this for all it’s worth,” added a second diplomat. A former senior Ukrainian official said he expected Brussels to double down on making some funding conditional on reforms. “But the overall taboo on criticizing Ukraine in public will hold,” he said. CLEANING UP Ukraine’s defenders say the probe is limited to one company, arguing international backers shouldn’t punish the energy sector as a result. But some allies still want to see more reforms. Up until now, the investigation has largely focused on Energoatom, Ukraine’s state nuclear energy company, accusing seven officials of manipulating contracts to extract kickbacks worth 10-15 percent of contract values. “There will be a cleansing and reset of Energoatom’s management,” Zelenskyy said Wednesday. In total, the Commission has granted “more than €3 billion” in energy-related aid to Kyiv since 2022, a spokesperson for the EU executive said. Around one tenth of that has been channeled through the Energy Community, an international organization that supplies Ukraine with in-kind energy equipment like transformers based on requests from Kyiv. In total, it has mobilized €1.5 billion in donations from Ukraine’s western partners. Energy Community Director Artur Lorkowski called the scandal “frustrating.” But at the Vienna-based organization, the corruption “risk is mitigated,” he said, since it retains “full control” over the coordination, purchase and post-arrival monitoring of the equipment — with procurement handled by an independent agency in the U.K. The EBRD, meanwhile, has allocated €3.1 billion in aid to Ukraine’s energy sector, a bank spokesperson said, around a third of its total support since 2022. Its “very robust procurement requirements,” including open tenders and direct payments to contractors, they said, gives the bank a “very high degree of comfort” for future donations. Still, others argue there is still a long way to go in eliminating corruption in the sector. Going forward, Ukraine should make its energy sector more transparent and give reassurances to its European partners that their money will be well spent, two EU diplomats and two European government officials said. “This is also a chance to cleanse and rebuild stronger,” said Vaičiūnas, the minister. Andrii Zhupanyn, an MP from Zelenskyy’s ruling Servant of the People party who sits on the parliament’s energy committee, agreed. Kyiv should start by improving the corporate governance of state-owned energy firms and strengthening their supervisory boards, he said, adding: “More transparency is necessary for sure.” Tim Ross, Jamie Dettmer and Veronika Mekoverova contributed to this report.

MILAN — On a Friday morning under the boiling Lombard sun, the old men of Italian banking descended on the country’s financial capital to bask in their industry’s astonishing recent run of success. But the avuncular embraces over sugared breakfast treats gave way to nervous gossiping when the time came to discuss — sotto voce — the latest twists and turns in a high-stakes game of ‘Risk’ that continues to convulse this tight-knit family of financial elites — and now threatens a protracted conflict between Brussels and Rome. Over the past six months, the Italian banking sector has been consumed by a convoluted series of bids and counter-bids involving almost every major player in the country. Recently, the drama has veered toward a climactic denouement as a seemingly heavy-handed response from Rome toward one takeover bid in particular set off a conflagration between the Italian government and the European Commission, exposing their contradictory visions for Europe’s financial future. It began last year, when Milanese banking giant UniCredit angered Prime Minister Giorgia Meloni’s government by attempting to take over crosstown rival BPM, which Meloni had hoped to merge with the partially bailed-out Tuscan lender Monte dei Paschi di Siena. In response, Rome deployed screening tools known as the ‘golden power’ — whose purpose is to prevent malicious foreign investment — to impose tough conditions on the bid, which UniCredit claims has effectively blocked it, prompting a court battle that unfolded earlier this week. But more broadly, Rome’s strong-arming has also come into conflict with the grand industrial vision of the Commission, which has placed consolidating Europe’s still-fragmented banking market at the center of Europe’s new — and what it describes as an increasingly urgent — competitiveness drive. Commission officials are readying a warning to the Italian government on its misuse of golden power to hamper UniCredit’s bid for BPM. At the annual assembly of the Association of Italian Banks (ABI) on Thursday, those tensions played out in real-time between financial officials and their industry counterparts — albeit in muted form. On the surface, it was more like an infrequent gathering of a fractious family that wants to keep up appearances over festivities, and there was no explicit mention of the drama in public comments. But on the industry and regulatory side, the speeches contained barely concealed paeans to free-market capitalism and the virtue of unmolested free markets. ABI Chairman Antonio Patuelli, a spry veteran of the scene, emphasized the importance of advancing the European banking union, calling for “common rules for corporate governance, markets, savings and investment.” In a conspicuous swipe at the Italian government — and its controversial alignment with construction billionaire Francesco Gaetano Caltagirone — he added that “competition must always be developed and safeguarded,” and that banks and “non-traditional financial actors … must be subject to the same rules.” But Italian officials painted a different picture, arguing that the EU and those sympathetic to its supranational vision of European industry misunderstand what Italy is doing. The government has already signaled in a recent court hearing that it will fight its doubters to the last, even through the European Court of Justice. Speaking to POLITICO, one Treasury official said Rome’s interventions into UniCredit’s adventures were a genuine matter of national security, as important as boosting defense spending. But as Italian Finance Minister Giancarlo Giorgetti told the ABI attendees, the banks’ pronounced growth has come at the expense of much of their regional character. | Riccardo Antimiani/EPA To him, it’s the EU being heavy-handed, not Rome. “The Italian people elected a sovereigntist government, why are people surprised when we do sovereigntist things?” the person said. Much of the concern over UniCredit’s move stems from broader discontent in Italy over the way its banks have failed to translate whopping gains into tangible benefits for average Italians. After teetering on the edge of cataclysm during the global financial crisis, Italian banks pulled off a dramatic turnaround, bolstering their capital and reducing their holdings of bad debt. But as Italian Finance Minister Giancarlo Giorgetti told the ABI attendees, the banks’ pronounced growth has come at the expense of much of their regional character. “The organizational, income and capital strengthening of Italian banks over the last 15 years has not always translated into more favorable credit conditions but rather into a reduction in lending to businesses,” he said. He highlighted that the “exceptional returns” to shareholders — with UniCredit hitting record profits in the first quarter of 2025 thanks to a major boost from high interest rates — “were made possible thanks to public guarantees… So it is legitimate to ask whether we’re witnessing an excess of ‘financialization.'” There are good reasons for the government to be concerned. Italy, which after Greece has the highest debt in the EU as a proportion of GDP,  is sensitive to large moves involving holders of its sovereign debt. Meanwhile, the country’s countless small and medium-sized enterprises, which make up a major part of the government’s electoral base, are reliant on the kind of easy credit access that BPM — a bank with strong ties to Northern Italy — might be less inclined to give if subsumed into the more international UniCredit. To others, Europe’s ambition to rival the United States on the financial stage might run counter to the more narrow interests of Rome and — more importantly — the Italian people. “The European Union doesn’t understand,” said one Italian regulatory official, speaking on condition of anonymity. “We’re dwarves, and we’ll never seriously compete with the U.S.” Giorgetti himself said much the same, calling on the nation’s banks to “focus as much as possible on doing their part: going back to being banks.” Francesca Micheletti contributed to this report.

LONDON — Former U.K. Prime Minister Rishi Sunak has rejoined investment giant Goldman Sachs as a senior adviser. It is Sunak’s first senior outside role since he resigned as Conservative leader after Labour’s landslide election win last July. It marks a return to the investment bank he joined at the start of his career in 2001. “I am excited to welcome Rishi back to Goldman Sachs in his new capacity as a Senior Advisor,” Goldman Sachs chairman and CEO David Solomon said in a statement.  “In his role, he will work with leaders across the firm to advise our clients globally on a range of important topics, sharing his unique perspectives and insights on the macroeconomic and geopolitical landscape. He will also spend time with our people around the world, contributing to our culture of ongoing learning and development.” Sunak, who is still the MP for Richmond and Northallerton, served as prime minister between October 2022 and last July, when Keir Starmer won his thumping election victory.  The former PM was first elected in 2015 and served as chancellor during the height of the pandemic, before resigning from Boris Johnson’s government in July 2022.  In a letter to Sunak published on Monday, the government appointments watchdog said the role with Goldman Sachs is “likely to have a broad overlap with your access to information in office” and, as prime minister, he could have “been privy to a range of high-level sensitive information on more or less all government-related matters.” As a result, Acoba has restricted Sunak from some activities, including lobbying the U.K. government on behalf of the bank over the next 12 months. “Goldman Sachs has a significant interest in UK government policy. As the former Prime Minister, there is a reasonable concern that your appointment could be seen to offer unfair access and influence within the UK government,” Acoba wrote.