Many describe our geopolitical moment as one of instability, but that word feels too weak for what we are living through. Some, like Mark Carney, argue that we are facing a rupture: a break with assumptions that anchored the global economic and political order for decades. Others, like Christine Lagarde, see a profound transition, a shift toward a new configuration of power, technology and societal expectations. Whichever perception we adopt, the implication is clear: leaders can no longer rely on yesterday’s mental models, institutional routines or governance templates. Johanna Mair is the Director of the Florence School of Transnational Governance at the European University Institute in Florence, where she leads education, training and research on governance beyond the nation state. Security, for example, is no longer a discrete policy field. It now reaches deeply into energy systems, artificial intelligence, cyber governance, financial stability and democratic resilience, all under conditions of strategic competition and mistrust. At the same time, competitiveness cannot be reduced to productivity metrics or short-term growth rates. It is about a society’s capacity to innovate, regulate effectively and mobilize investment toward long-term objectives — from the green and digital transitions to social cohesion. This dense web of interdependence is where transnational governance is practiced every day. The European Union illustrates this reality vividly. No single member state can build the capacity to manage these transformations on its own. EU institutions and other regional bodies shape regulatory frameworks and collective responses; corporations influence infrastructure and supply chains; financial institutions direct capital flows; and civic actors respond to social fragmentation and governance gaps. Effective leadership has become a systemic endeavour: it requires coordination across these levels, while sustaining public legitimacy and defending liberal democratic principles. > Our mission is to teach and train current and future leaders, equipping them > with the knowledge, skills and networks to tackle global challenges in ways > that are both innovative and grounded in democratic values. The Florence School of Transnational Governance (STG) at the European University Institute was created precisely to respond to this need. Located in Florence and embedded in a European institution founded by EU member states, the STG is a hub where policymakers, business leaders, civil society, media and academia meet to work on governance beyond national borders. Our mission is to teach and train current and future leaders, equipping them with the knowledge, skills and networks to tackle global challenges in ways that are both innovative and grounded in democratic values. What makes this mission distinctive is not only the topics we address, but also how and with whom we address them. We see leadership development as a practice embedded in real institutions, not a purely classroom-based exercise. People do not come to Florence to observe transnational governance from a distance; they come to practice it, test hypotheses and co-create solutions with peers who work on the frontlines of policy and politics. This philosophy underpins our portfolio of programs, from degree offerings to executive education. With early career professionals, we focus on helping them understand and shape governance beyond the state, whether in international organizations, national administrations, the private sector or civil society. We encourage them to see institutions not as static structures, but as arrangements that can and must be strengthened and reformed to support a liberal, rules-based order under stress. At the same time, we devote significant attention to practitioners already in positions of responsibility. Our Global Executive Master (GEM) is designed for experienced professionals who cannot pause their careers, but recognize that the governance landscape in which they operate has changed fundamentally. Developed by the STG, the GEM convenes participants from EU institutions, national administrations, international organizations, business and civil society — professionals from a wide range of nationalities and institutional backgrounds, reflecting the coalitions required to address complex problems. The program is structured to fit the reality of leadership today. Delivered part time over two years, it combines online learning with residential periods in Florence and executive study visits in key policy centres. This blended format allows participants to remain in full-time roles while advancing their qualifications and networks, and it ensures that learning is continuously tested against institutional realities rather than remaining an abstract exercise. Participants specialize in tracks such as geopolitics and security, tech and governance, economy and finance, or energy and climate. Alongside this subject depth, they build capabilities more commonly associated with top executive programs than traditional public policy degrees: change management, negotiations, strategic communication, foresight and leadership under uncertainty. These skills are essential for bridging policy design and implementation — a gap that is increasingly visible as governments struggle to deliver on ambitious agendas. Executive study visits are a core element of this practice-oriented approach. In a recent Brussels visit, GEM participants engaged with high-level speakers from the European Commission, the European External Action Service, the Council, the European Parliament, NATO, Business Europe, Fleishman Hillard and POLITICO itself. Over several days, they discussed foreign and security policy, industrial strategy, strategic foresight and the governance of emerging technologies. These encounters do more than illustrate theory; they give participants a chance to stress-test their assumptions, understand the constraints facing decision-makers and build relationships across institutional boundaries. via EUI Throughout the program, each participant develops a capstone project that addresses a strategic challenge connected to a policy organization, often their own employer. This ensures that executive education translates into institutional impact: projects range from new regulatory approaches and partnership models to internal reforms aimed at making organizations more agile and resilient. At the same time, they help weave a durable transnational network of practitioners who can work together beyond the programme. Across our activities at the STG, a common thread runs through our work: a commitment to defending and renewing the liberal order through concrete practice. Addressing the rupture or transition we are living through requires more than technical fixes. It demands leaders who can think systemically, act across borders and design governance solutions that are both unconventional and democratically legitimate. > Across our activities at the STG, a common thread runs through our work: a > commitment to defending and renewing the liberal order through concrete > practice. In a period defined by systemic risk and strategic competition, leadership development cannot remain sectoral or reactive. It must be interdisciplinary, practice-oriented and anchored in real policy environments. At the Florence School of Transnational Governance, we aim to create precisely this kind of learning community — one where students, fellows and executives work side by side to reimagine how institutions can respond to global challenges. For policymakers and professionals who recognize themselves in this moment of rupture, our programs — including the GEM — offer a space to step back, learn with peers and return to their institutions better equipped to lead change. The task is urgent, but it is also an opportunity: by investing in transnational governance education today, we can help lay the foundations for a more resilient and inclusive order tomorrow.

WARSAW — President Karol Nawrocki said Thursday evening he intends to veto government legislation that lays out the how Poland should spend its €43.7 billion allocation under the EU’s loans-for-weapons scheme known as SAFE. Prime Minister Donald Tusk’s government lacks the necessary votes in the country’s parliament to override the veto. The standoff will inevitably escalate the political feud between Tusk and the president over Poland’s political orientation. Nawrocki, like the nationalist-populist opposition Law and Justice (PiS) party that supports him, views Brussels with skepticism, unlike the pro-EU Tusk administration. Poland is the only country where SAFE has become a political issue. European Commission President Ursula von der Leyen said in December that EU countries had already gobbled up the whole €150 billion from SAFE and were clamoring for more. “The President has lost the chance to act like a patriot. Shame!” Tusk posted on X shortly after Nawrocki announced his decision. The PM said the government will convene for an extraordinary session Friday morning to prepare a response. GOVERNMENT ALLEGES “NATIONAL TREASON” The EU program provides low-interest, long-term loans with a 10-year grace period for principal repayments. The funds are raised by Brussels on capital markets and offer significant savings compared to national borrowing — a crucial issue for Poland, which plans to devote 4.8 percent of its GDP to defense this year. Following Nawrocki’s veto decision, Poland’s SAFE allocation will remain guaranteed, but the rules for spending it will likely be less flexible than they would have been under the legislation Nawrocki blocked. The government had planned to use the money to boost financing for the Border Guard and the police or to upgrade infrastructure. Foreign Minister Radosław Sikorski said before the decision: “If the President vetoes SAFE and we still implement it … I will propose that a plaque with the inscription be placed on every rifle, tank, gun, drone, and anti-drone: ‘Dear soldier of the Polish Army, [President] Nawrocki did not want to give you this.’” Key figures in the Tusk government hammered Nawrocki in the media and online following the decision, calling it “national treason.” The veto also defies the military, whose top brass have spoken out in favor of the SAFE loans. Chief of the General Staff Wiesław Kukuła in February described SAFE as a “game changer” for the military. PRESIDENT RAISES SPECTER OF “MASSIVE FOREIGN LOANS” In his speech, Nawrocki reiterated the arguments he has been rolling out against SAFE for weeks now, claiming the Security Action for Europe loans would saddle Poland with long-term debt and expose the country to exchange-rate risks.  “The SAFE mechanism is a massive foreign loan taken out for 45 years in a foreign currency, with interest costs that could reach as much as PLN180 billion [€42 billion]. Poland would therefore have to repay an amount roughly equal to the value of the loan itself in interest, with Western banks and financial institutions standing to profit from it,” Nawrocki said. The president also argued the scheme could allow Brussels to attach political conditions to Poland’s defense financing and would benefit foreign arms-makers disproportionately.  “SAFE is a mechanism under which Brussels, through the so-called conditionality principle, could arbitrarily suspend financing while Poland would still have to continue repaying the debt. That’s why it must be said clearly: Security subject to conditions is not security. Poland’s security cannot depend on decisions taken elsewhere,” Nawrocki declared. “I have decided that I will not sign the law that would allow Poland to take out a SAFE loan. I will never sign legislation that strikes at our sovereignty, independence, and economic and military security.” Instead, Nawrocki renewed his proposal for a domestic alternative to SAFE that would mobilize money to finance arms purchases without loans or interest payments — by involving the National Bank of Poland’s vast gold reserves. With 550 tons of gold stored in domestic and foreign vaults, the NBP is one of Europe’s top gold hoarders. Central bank chief Adam Glapiński said last week that the NBP holds around 197 billion złoty in “unrealized gains resulting from the increase in the value of the bank’s gold reserves,” and is considering using part of that to support defense spending. The operations would involve transferring the profits generated by the NBP to a dedicated vehicle, the Polish Defense Investment Fund. Glapiński also said the gains would be realized by transactions reducing the share of gold in the bank’s portfolio. 2027 ELECTIONS ON HORIZON Tusk and his ministers have lambasted the gold idea as highly speculative and said it was inconsistent with the central bank’s role as the guardian of Poland’s financial stability. The government has also said that nearly all of Poland’s SAFE money will go to domestic manufacturers, creating jobs and stimulating economic growth. The clash over SAFE comes as Poland prepares for a parliamentary election next year in which PiS hopes to defeat Tusk’s pro-EU coalition. Polls suggest that Tusk’s party, the liberal Civic Coalition, might come first but could lack the votes to form a majority.  The PiS, meanwhile, could secure a majority if it allies with the far-right Confederation party and with the even-more-extreme, antisemitic Confederation of the Polish Crown.

BRUSSELS — The right to use Swiss franc banknotes and coins will be enshrined in Switzerland’s constitution after voters on Sunday backed a measure designed to safeguard the use of cash in society. Preliminary official estimates revealed 69 percent of voters backed the legal amendment, which the government proposed as a counter to a similar initiative by a group called the Swiss Freedom Movement. The Swiss Freedom Movement triggered the national referendum after its initiative to protect cash collected more than 100,000 signatures, triggering a national referendum. Its initiative secured only 46 percent of the final vote after the government said some of the group’s proposed amendments went too far. The vote means Switzerland will join the likes of Hungary, Slovakia and Slovenia, which have already written the right to cold, hard cash in their constitutions. Austrian politicians are also debating whether to follow suit, as people’s payment habits become increasingly digital — especially since the pandemic. The trend has fanned Big Brother conspiracy theories that governments aim to control populations by withdrawing cash altogether. The European Central Bank’s plans to issue a virtual extension of the euro have fanned those fears, prompting the EU’s executive arm to propose a bill that will cement physical cash in societies across the bloc. Switzerland, too, has seen a drop in cash payments over the past decade. More than seven out of 10 payments at the till were in cash in 2017. In 2024, cash only featured in 30 percent of in-shop transactions, according to data from the Swiss National Bank. The Swiss Freedom Movement has previously pursued campaigns to sack unpopular government ministers, ban electronic voting, and protect citizens from professional or social retribution if they refuse to be vaccinated against Covid-19 — none of which made it to the ballot box.

The U.K. government must move to protect the financial services industry from the potential costs of an unpredictable Trump administration, the City of London’s newly appointed artificial intelligence czar told POLITICO.  City firms which are “heavily reliant on U.S. technology” face the “risk” of changes beyond their control due to the climate of uncertainty stemming from U.S. President Donald Trump’s government, said Harriet Rees, who is one of two appointments by the U.K. Treasury to champion artificial intelligence adoption in financial services. “I definitely see a geopolitical risk right now when it comes to our relationship with U.S. technology, our reliance on it,” said Rees, who serves as the chief information officer at Starling Bank. She added: “Within my role as AI champion, I will be looking for some more confidence for the industry as to what the government is doing to protect firms, or what mitigations the industry needs to be put in place, so that we’ve got the confidence that we won’t be out of pocket for the things that we don’t have any input over.” Her warnings come as multiple sectors are eyeing ways to diversify away from the U.S., particularly in the EU, in the wake of Trump’s ongoing tariff war and threat to use force to take Greenland. In financial services, the focus is on creating a new payments system to replace U.S. card heavyweights Visa and Mastercard. Aurore Lalucq, a left-leaning member of the European Parliament, said last month: “The urgency is our payment system. Trump can cut us off from everything.” In Britain, banks will meet in mid-March to discuss account-to-account payments, a system which would also bypass Visa and Mastercard by allowing payments directly between bank accounts. But regulators in the U.K. insist plans are about “resilience” rather than an intention to cut out the U.S. Industry plans should take into account this eventuality, Rees argued. “We see that the U.S. is prepared to make changes, be it tariffs, be it the way trade operates between countries and so where we are reliant … on exports from the U.S. we need to make sure that we understand the risks,” she said, adding that it’s key to “have plans in place as an industry to be able to cope with that, should that eventuality happen, that we have the government really lobbying on our side to make sure that that is an unlikely risk to crystallize.” British firms’ reliance on American cloud service providers poses a particular risk, Rees said, with U.S. tech giants Amazon, Microsoft and Google dominating in the cloud computing space. She called on regulators to ensure the providers are adhering to legislation. Any outage of these cloud providers could cause “significant disruption” for the financial services industry, Rees said, and Britain should “ensure that we hold those technologies to the same standards as we would any other critical infrastructure here in the U.K.” A bug in automation software took down Amazon Web Services, the largest cloud provider in the world, in October last year, causing outages for thousands of sites and applications. Last month, MPs criticized the government for not acting decisively enough on cloud service providers. New rules for “critical third parties” — firms, such as cloud providers, whose disruption could impact Britain’s financial stability — came into effect in Jan. 2025. They give the U.K.’s City regulators new powers of investigation and enforcement over providers designated as critical.  Despite the regime being in place for a year, no providers have been handed the designation. MPs on the Treasury Committee queried why the government “has been so slow to use the new powers at its disposal.”

FRANKFURT — The head of Germany’s central bank has called for the EU to issue more joint debt, putting him at odds with Chancellor Friedrich Merz who wants to keep it strictly as a response to emergencies. “To make Europe attractive also means to attract investors from outside,” the German central bank governor, Joachim Nagel, told POLITICO ahead of an informal summit of EU leaders on Thursday to address the bloc’s economic challenges. “A more liquid European market when it comes to safe European assets would support that.” Eurozone central bankers — who have for the first time coalesced around support for joint debt — have sent EU leaders a wish-list of reforms to ensure that Europe’s economy can reform and keep pace with the U.S. and China. The European Central Bank’s policymakers, Nagel said in an interview on Friday, see “the benefits of creating a common European, highly liquid, euro-wide benchmark safe asset. Action is necessary.” But Nagel’s break from Germany’s traditional opposition to joint debt comes at an awkward time for Berlin. Earlier this week, the German government rebuked a rallying call from French President Emmanuel Macron to issue more eurobonds to boost certain sectors, such as artificial intelligence, European defense, semiconductors and robotics. The EU could also exploit U.S. President Donald Trump’s erratic foreign policy goals and lure global investors across the Atlantic. “The global market … is more and more afraid of the American greenback. It’s looking for alternatives. Let’s offer it European debt,” Macron told a group of reporters on Monday. Joint debt, known by the market shorthand of “eurobonds,” has long been a divisive topic. Since the sovereign debt crisis, southern European governments have pushed for eurobonds to spread the burden of national debt more evenly across the region. Frugal northern states, by contrast, have warned they risk undermining fiscal discipline — and have refused to put their taxpayers on the hook for debts racked up elsewhere. The Bundesbank has long been the de facto leader of the skeptics in northern and central Europe who believe eurobonds are best suited to isolated crises that require drastic action. These include an €800 billion post-pandemic recovery plan and a €90 billion loan to Ukraine to finance its defense against Russia. The last thing the so-called frugal bloc wants is for the EU to get into the habit of raising common debt to solve all of its issues. But times are fast changing. “Tradition is something that is a reflection of the reality of the past,” Nagel said when asked about the Bundesbank’s shift, stressing that Europe’s security has not been as threatened as today since World War II. “Now we have a different reality.” EUROBONDS, WITH LIMITS Support for joint debt does not mean the Bundesbank is dropping its commitment to ensuring sound fiscal policies. A European asset would only support “specific purposes,” and “how it is controlled by the European authorities and the Member States should be equally clear,” the 59-year-old said. Eurobonds must also be accompanied by debt reduction at the national level. “European debt is not a free lunch. And doubts about fiscal sustainability should not jeopardize the chances for improved common policies,” he said. Nagel stopped short of saying how much EU debt is needed to achieve real change. “I won’t give you a number,” he said, but added that “if you want to create something liquid, you have to give the markets an indication about the volume that you will supply over a certain period of time and for a certain purpose.” The central banker would not be drawn into whether Berlin might also adjust its views to reflect the new reality. “I see my role as giving advice on what could be a way out of a complicated situation that we are confronted with in Germany and in Europe,” he said. AUTONOMY, NOT SUPREMACY But a more efficient euro capital market is only one front in the battle to secure Europe’s economic independence and autonomy, Nagel said, adding that it will be equally important to ensure that the continent’s payment system can function independently from outside pressure. “Payment solutions, in an extreme scenario, could be weaponized,” he said.  Accordingly, he argued, the bloc needs to break the duopoly that U.S. credit card giants Mastercard and Visa hold over Europe’s payment rails across its borders. The key to payment security, he went on, is to mint a virtual extension of euro banknotes and coins that can settle transactions across the EU in seconds. The twin projects of the digital euro and perfecting the euro capital market may help boost Europe’s strength and autonomy, but still don’t amount to a masterplan to steal the dollar’s crown. And Nagel added that last week’s hint by the ECB about expanding its liquidity lines to central banks around the world, securing companies’ access to euros in times of stress, should not be seen as motivated by a political desire to boost the euro. “It is about monetary policy,” he said. Since last summer, Lagarde has urged Europe to seize a “global euro moment” as cracks began to appear in U.S. dollar dominance. While Nagel believes that “the euro could play here a significant role” as investors rebalance their portfolios to adjust to the new reality, he is not a fan of quick shifts. “I’m not in favor of fast tracking, jumping from one level to the next,” he said. “Often, such a development is not a very healthy one. I’m comfortable with gradual progress on the international role of the euro, as long as it’s moving in the right direction.”

Canadian Prime Minister Mark Carney publicly backed Kevin Warsh as the next chair of the Federal Reserve on Friday, calling him a “fantastic choice,” in a rare point of alignment amid an escalating U.S.-Canada trade war. “Kevin Warsh is a fantastic choice to lead the world’s most important central bank at this crucial time,” Carney wrote on X shortly after President Donald Trump announced he will nominate the former Fed board member to replace current chair, Jerome Powell. Carney is an experienced central banker himself. He oversaw the Bank of Canada from 2008-2013, briefly overlapping with Warsh’s first tenure as a Fed governor, before leading the Bank of England from 2013-2020. The endorsement stood out as relations between the Trump administration and Canada continue to strain, with Canadian officials warning that Trump’s trade agenda and broader foreign policy are destabilizing both the U.S. and Canadian economies. On Saturday, Trump threatened to impose a 100 percent tariff on Canada if it follows through on a planned trade deal with China. In his latest threat Thursday, he said he would impose a 50 percent tariff on Canadian-made aircrafts after a dispute over aviation certification. “Canada is effectively prohibiting the sale of Gulfstream products in Canada through this very same certification process,” the president wrote on Truth Social. “If, for any reason, this situation is not immediately corrected, I am going to charge Canada a 50% Tariff on any and all Aircraft sold into the United States of America.” Earlier this week, the Bank of Canada said U.S. tariffs are expected to have a “lasting negative impact” on Canada’s economy, citing prolonged uncertainty tied to Trump’s trade policies. “It’s pretty clear that the days of open rules-based trade with the United States are over,” Bank of Canada Gov. Tiff Macklem said. “It’s not a good thing for Americans. It’s not a good thing for Canadians.” In an interview with Reuters on Wednesday, Macklem said Trump’s actions could derail the central bank’s economic forecasts, pointing to Trump’s repeated tariff threats against Canada and other actions abroad, including repeat pressure on Greenland and the capture of Venezuelan President Nicolás Maduro. “There is unusual potential for a new shock, a new disruption,” he said. “Geopolitical risks are elevated.” Macklem also voiced his support for Powell, telling Reuters that he told Powell in a private conversation that he was “doing a good job under difficult circumstances.” Several global central bank leaders, including Macklem, issued a joint statement earlier this month in support of Powell and the Federal Reserve after the Department of Justice launched a criminal investigation into the Fed chair. They warned that political pressure on central banks could undermine global financial stability. “We stand in full solidarity with the Federal Reserve System and its Chair Jerome H. Powell,” the statement said. “Chair Powell has served with integrity, focused on his mandate and an unwavering commitment to the public interest. To us, he is a respected colleague who is held in the highest regard by all who have worked with him.”

EU governments pursued additional privacy safeguards to ensure people’s payment habits are kept under wraps as part of a legislative framework for minting a virtual extension of euro banknotes and coins. The Council of the EU rubberstamped its negotiating position for a digital euro on Friday afternoon after clinching a deal earlier this week, as reported by POLITICO. The onus is now on members of the European Parliament to agree on a legal text so that both sides can begin legislative negotiations next year. The digital euro was the European Central Bank’s answer to Meta’s (failed) plan to launch its own virtual currency, called Diem, for its 3 billion users. Since Diem’s demise, ECB policymakers have pitched the project as a vital strategy to reduce the bloc’s reliance on U.S. credit card giants, Mastercard and Visa, for cross-border payments. EU shoppers would be able to pay with the virtual currency, backed by the central bank, across the bloc in the form of plastic or a smartphone app. The spread of Big Brother-style conspiracy theories, meanwhile, has forced policymakers to take extra precautions to reassure the public that authorities will not use the digital euro to snoop on people’s payment habits. “You cannot disregard” the concern of “many millions of citizens,” Fernando Navarrete, the center-right MEP shepherding the bill through the Parliament, told POLITICO in November. “In China, it’s explicit that they wanted to build [a digital yuan] in order to increase control over the people. I’m scared of this.” Navarrete, who hails from the European People’s Party, is highly skeptical of the initiative but is comfortable with the notion of an offline version of the digital euro that protects people’s privacy. “I’m not saying it will be used” for snooping, “but they know that the technology has potential,” he said. On the contrary, consumer groups have praised the initiative, assuming the digital euro is safe, free, and private. Banks are far less enthusiastic. Especially, as they’ll be on the hook for distributing basic digital euro services to their clients at no extra cost — a bill that could amount to over €5 billion over four years, according to ECB estimates. Bankers’ protests aside, the biggest obstacle facing the digital euro is countering conspiracy theories that the authorities will use the ECB’s project to control the populace — despite reassurances from the European Commission and the ECB. The Commission’s original proposal and the ECB’s envisioned design for the project already prevent the central bank from matching people’s digital euro accounts with citizens’ personal data. That wasn’t enough for some countries, in particular Belgium and the Netherlands, which fear the project could be politically weaponized. The final text has even strengthened privacy safeguards, making it explicit that central banks “shall not be in a position to lift these [segregation] measures during any processing of the data.” APPEASING THE BANKS Mindful of the crucial role that banks will play in getting digital euros into citizens’ virtual wallets, EU governments have tried to make the project more palatable for the industry. The key to pleasing bankers is ensuring they make money from the initiative. Once the digital euro is minted, banks can charge shopkeepers a fee for processing transactions at the cashier. These fees would be capped at the average cost of international and domestic debit cards for at least five years until the overall cost of distributing the digital euro becomes more stable. Then, new fees can be calculated. The bankers aren’t convinced, however. The Council’s bid to get banks “a ‘fair’ remuneration,” while making digital euro payments “cheaper for merchants and consumers,” is a ‘squaring the circle problem’ [that] cannot be solved,” Tobias Tenner, head of digital finance at the German banks association, said. “At least if one takes the huge necessary investments [for banks] into account.”

BRUSSELS — European banks and other finance firms should decrease their reliance on American tech companies for digital services, a top national supervisor has said. In an interview with POLITICO, Steven Maijoor, the Dutch central bank’s chair of supervision, said the “small number of suppliers” providing digital services to many European finance companies can pose a “concentration risk.” “If one of those suppliers is not able to supply, you can have major operational problems,” Maijoor said. The intervention comes as Europe’s politicians and industries grapple with the continent’s near-total dependence on U.S. technology for digital services ranging from cloud computing to software. The dominance of American companies has come into sharp focus following a decline in transatlantic relations under U.S. President Donald Trump. While the market for European tech services isn’t nearly as developed as in the U.S. — making it difficult for banks to switch — the continent “should start to try to develop this European environment” for financial stability and the sake of its economic success, Maijoor said. European banks being locked in to contracts with U.S. providers “will ultimately also affect their competitiveness,” Maijoor said. Dutch supervisors recently authored a report on the systemic risks posed by tech dependence in finance. Dutch lender Amsterdam Trade Bank collapsed in 2023 after its parent company was placed on the U.S. sanctions list and its American IT provider withdrew online data storage services, in one of the sharpest examples of the impact on companies that see their tech withdrawn. Similarly a 2024 outage of American cybersecurity company CrowdStrike highlighted the European finance sector’s vulnerabilities to operational risks from tech providers, the EU’s banking watchdog said in a post-mortem on the outage. In his intervention, Maijoor pointed to an EU law governing the operational reliability of banks — the Digital Operational Resilience Act (DORA) — as one factor that may be worsening the problem. Those rules govern finance firms’ outsourcing of IT functions such as cloud provision, and designate a list of “critical” tech service providers subject to extra oversight, including Amazon Web Services, Google Cloud, Microsoft and Oracle. DORA, and other EU financial regulation, may be “inadvertently nudging financial institutions towards the largest digital service suppliers,” which wouldn’t be European, Maijoor said. “If you simply look at quality, reliability, security … there’s a very big chance that you will end up with the largest digital service suppliers from outside Europe,” he said. The bloc could reassess the regulatory approach to beat the risks, Maijoor said. “DORA currently is an oversight approach, which is not as strong in terms of requirements and enforcement options as regular supervision,” he said. The Dutch supervisors are pushing for changes, writing that they are examining whether financial regulation and supervision in the EU creates barriers to choosing European IT providers, and that identified issues “may prompt policy initiatives in the European context.” They are asking EU governments and supervisors “to evaluate whether DORA sufficiently enhances resilience to geopolitical risks and, if not, to consider issuing further guidance,” adding they “see opportunities to strengthen DORA as needed,” including through more enforcement and more explicit requirements around managing geopolitical risks. Europe could also set up a cloud watchdog across industries to mitigate the risks of dependence on U.S. tech service providers, which are “also very important for other parts of the economy like energy and telecoms,” Maijoor said. “Wouldn’t there be a case for supervision more generally of these hyperscalers, cloud service providers, as they are so important for major parts of the economy?” The European Commission declined to respond.

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.

HOW BELGIUM BECAME RUSSIA’S MOST VALUABLE ASSET Belgian Prime Minister Bart De Wever is unmoved in his opposition to a raid on Moscow’s funds held in a Brussels bank for a loan to Ukraine.  By TIM ROSS, GREGORIO SORGI, HANS VON DER BURCHARD and NICHOLAS VINOCUR in Brussels Illustration by Natália Delgado/POLITICO It became clear that something had gone wrong by the time the langoustines were served for lunch.  The European Union’s leaders arrived on Oct. 23 for a summit in rain-soaked Brussels to welcome Ukraine’s President Volodymyr Zelenskyy with a gift he sorely needed: a huge loan of some €140 billion backed by Russian assets frozen in a Belgian bank. It would be enough to keep his besieged country in the fight against Russia’s invading forces for at least the next two years.  The assorted prime ministers and presidents were so convinced by their plan for the loan that they were already arguing among themselves over how the money should be spent. France wanted Ukraine to buy weapons made in Europe. Finland, among others, argued that Zelenskyy should be free to procure whatever kit he needed from wherever he could find it.  But when the discussion broke up for lunch without agreement on raiding the Russian cash, reality dawned: Modest Belgium, a country of 12 million people, was not going to allow the so-called reparations loan to happen at all.  The fatal blow came from Bart De Wever. The bespectacled 54-year-old Belgian prime minister cuts an eccentric figure at the EU summit table, with his penchant for round-collared shirts, Roman history and witty one-liners. This time he was deadly serious, and dug in.  He told his peers that the risk of retaliation by the Russians for expropriating their sovereign assets was too great to contemplate. In the event that Moscow won a legal challenge against Belgium or Euroclear, the Brussels depository holding the assets, they would be on the hook to repay the entire amount, on their own. “That’s completely insane,” he said.  As afternoon stretched into evening, and dinner came and went, De Wever demanded the summit’s final conclusions be rewritten, repeatedly, to remove any mention of using Moscow’s assets to send cash to Kyiv.   Bart De Wever attends the European Council summit, in Brussels, Belgium, on Oct. 23, 2025. | Dursun Aydemir/Anadolu via Getty Images The Belgian blockade knocked the wind out of Ukraine’s European alliance at a critical moment. If the leaders had agreed to move ahead at speed with the loan plan at the October summit, it would have sent a powerful signal to Vladimir Putin about Ukraine’s long-term strength and Europe’s robust commitment to defend itself. Instead, Zelenskyy and Europe were weakened by the divisions when Donald Trump, still hoping for a Nobel Peace Prize, reopened his push for peace talks with Putin allies. The situation in Brussels remains stuck, even with the outcome of the almost-four-year-long war approaching a pivotal moment. Ukraine is sliding closer toward the financial precipice, Trump wants Zelenskyy to sign a lopsided deal with Putin — triggering alarm across Europe — and yet De Wever is still saying no. “The Russians must be having the best time,” said one EU official close to negotiations. The bloc’s leaders still aim to agree on a final plan for how to stop Ukraine running out of money when they meet for their next regular Brussels summit on Dec. 18.  But as the clock ticks down, one key problem remains: Can the EU’s most senior officials — European Commission President Ursula von der Leyen and António Costa, the president of the European Council — persuade De Wever to change his mind? So far the signs are not good. “I’m not impressed yet, let me put it that way,” De Wever said in televised remarks as the Commission released its draft legal texts on Wednesday. “We are not going to put risks involving hundreds of billions … on Belgian shoulders. Not today, not tomorrow, never.” In interviews, more than 20 officials, politicians and diplomats, many speaking privately to discuss sensitive matters, described to POLITICO how European attempts to fund the defense of Ukraine descended into disarray and paralysis, snagged on political dysfunction and personality clashes at the highest levels. The potential consequences for Europe — as Trump seeks to force a peace treaty on Ukraine — could hardly be more severe. SPOOKING THE HORSES  According to several of those close to the discussions, the reparations loan proposal started to hit trouble when tension began to build between De Wever and his neighbor, the new German chancellor, Friedrich Merz. A Flemish nationalist, De Wever came to power just this past February after months of tortuous coalition negotiations — a classic scenario in Belgian politics. Three weeks later, Germany voted in a national election to hand Merz, a center-right conservative, the leadership of Europe’s most powerful economy.  Like De Wever, Merz can be impulsive in a way that is liable to unsettle allies. “He shoots from the hip,” one Western diplomat said. On the night he won, he called on Europe to work for full “independence” from the United States and warned NATO it may soon be history.  Amid delays and continuing failure to agree on a way forward, bad-tempered briefings have been aimed at Bart De Wever, and increasingly at Ursula von der Leyen, too, in recent weeks. | Nicolas Tucat/Getty Images In September, the German chancellor stuck his neck out again. It was time, he said, for Europe to raid its bank vaults in order to exploit immobilized Russian assets to help Ukraine. With his outburst, Merz apparently spooked the Belgians, who were at the time in sensitive private talks with EU officials trying to iron out their worries. Several officials said Merz went rogue in putting the policy into the public domain so forcefully and so early — before De Wever had signed up.  Five days later, von der Leyen discussed it herself, though she was careful to try to reassure anyone who might have concerns: “There is no seizing of the assets.” Instead, she argued, the assets would just be used to provide a sort of advance payment from Moscow for war reparations it would inevitably owe. The money would only be returned to Russia in the unlikely event that the Kremlin agreed to compensate Kyiv for the destruction in Ukraine.  The idea gained rapid momentum. “It’s important to move forward in the process because it’s about making sure that there is funding to meet the budgetary and military needs for Ukraine, and it’s also a moral issue about making Russia pay for the damage that it has caused,” Jessica Rosencrantz, Sweden’s EU affairs minister, told POLITICO. “In that sense, using the frozen Russian assets is the logical and moral choice to make.” THE SPIDER’S WEB  Most of the work of a European Council summit is already done long before the bloc’s leaders arrive at the futuristic “space egg” Europa building for handshakes and photos. Ambassadors from the bloc’s 27 member countries gather to discuss what the summit will achieve — and to thrash out the precise wording of the plans — during the weeks leading up to each meeting.  Ahead of the October summit, Belgium’s ambassador to the EU, Peter Moors, had been sending signals to his colleagues that making progress on plans to use Russia’s frozen assets would be fine. The problem, according to four officials familiar with the matter, was that Moors wasn’t speaking directly to De Wever, and all the decisions about Russian assets rested with the prime minister.  While others inside the Belgian government knew that the prime minister was implacably opposed to ransacking Euroclear, one of his country’s most valuable and important financial institutions, the diplomat negotiating the summit deal a few hundred meters up the road apparently did not.  That meant nobody in the EU machinery really understood just how serious De Wever’s opposition was going to be until he arrived on summit day with steam coming out of his ears.  Moors is well respected among his peers and within the Belgian government. He is seen as effective, experienced and competent, having had a long career in diplomacy and politics. Before he took on the role of ambassador to the EU, he was known as the “spider in the web” of Belgian foreign policy.  Several officials said Friedrich Merz went rogue in putting the policy into the public domain so forcefully and so early — before Bart De Wever had signed up. | Tobias Schwartz/Getty Images The trouble, it seems, may have been political. He was the chief of staff to De Wever’s rival and predecessor as prime minister, Alexander De Croo, and comes from a party that lost power in last year’s election and now serves in opposition. It’s hardly uncommon in politics for such distinctions to affect who gets left out of the loop.  The other complicating factor was Belgium’s political dysfunction. As De Wever himself put it, he had been locked in negotiations with his compatriots trying to agree a national budget for weeks with no deal in sight.  “I’ve been negotiating for weeks to find €10 billion,” De Wever said on the way into the EU summit. A scenario in which Belgium would have to repay Russia more than 10 times that amount would therefore be unthinkable, he added.  As the summit broke up with only a vague agreement for leaders to look again at financing Ukraine, officials were left scratching their heads and wondering what had gone wrong.  AMERICA FIRST   The question of what to do with hundreds of billions of dollars worth of Russian assets locked in Western accounts had been hanging over Ukraine’s allies since the funds were sanctioned at the start of the war in February 2022. Now, though, it’s not just the Europeans who have their eyes on the cash.  The American side has quietly but firmly let Brussels know they have their own plans for the funds. When EU Sanctions Envoy David O’Sullivan traveled to Washington during the summer, U.S. officials told him bluntly they wanted to hand the assets back to Russia once a peace deal was done, according to two senior diplomats.  Trump is increasingly impatient for Kyiv and Moscow to agree to a full peace treaty. True to their word, the Americans’ original 28-point blueprint for an agreement included proposals for unfreezing the Russian assets and using them for a joint Ukraine reconstruction effort, under which the U.S. would take 50 percent of the profits.  The concept provoked outrage in European capitals, where one shocked official suggested Trump’s peace envoy Steve Witkoff should see “a psychiatrist.” If nothing else, Trump’s desire for a speedy deal with Putin — and his apparent designs for the frozen assets — lit a fire under the EU’s negotiations with De Wever.  WASTED TIME   Many EU governments are sympathetic toward the Belgian leader. Officials and politicians know just how difficult it is for any government to contemplate a step like this one, which could theoretically open them up to punishingly expensive legal action. De Wever is worried the stability of the euro itself could be undermined if a raid on Euroclear forced investors to think again about placing their assets in European banks.  In recent weeks, von der Leyen’s most senior aide, Björn Seibert, among others, invested time in trying to understand Belgium’s objections and to find creative ways to overcome them. Moors and other ambassadors have discussed the issues endlessly, during their regular meetings with each other and the Commission.  But as the nights draw in, the mood is darkening. Amid delays and continuing failure to agree on a way forward, bad-tempered briefings have been aimed at De Wever, and increasingly also at von der Leyen in recent weeks. She has held off the decisive step of publishing the draft legal texts that would enable the assets to be used for the reparations loan. These documents are what all sides need to enact, alter or reject the plan. “We have wasted a lot of time,” Jonatan Vseviov, secretary-general of the Estonian foreign ministry, told POLITICO. “Our focus has been solely on the Commission president, asking her to present the proposal. Nobody else can table the proposal.” He said it would have been “better” if the Commission had produced the legal texts setting out the details of the loan earlier than Wednesday, when they were eventually released. “We have wasted a lot of time,” Jonatan Vseviov, secretary-general of the Estonian foreign ministry, told POLITICO. | Ali Balikci/Getty Images “We all have a responsibility” to speed up now, another diplomat said, while a third noted that even Belgium had been imploring the Commission to publish the legal plans in recent weeks. An EU official said everyone should calm down and noted that De Wever still needed to get off his ledge. Another diplomat said Belgium “cannot expect all their wishes to be granted in full.” WINTER IS HERE Merz is particularly agitated. He worries that it will be his country’s taxpayers who have to step in unless the assets loan goes ahead. “I see the need to do this as increasingly urgent,” the German leader told reporters on Friday. “Ukraine needs our support. Russian attacks are intensifying. Winter is approaching — or rather, we are already in winter.” De Wever, in the words of one diplomat, is still “pleading” for other options to remain in play. Two alternative ideas are in the air. The first would ask EU national governments to dig into their own coffers to send cash grants to Kyiv, a prospect most involved think is unrealistic given the parlous state of the budgets of many European nations.  The other idea is to fund a loan to Kyiv via joint EU borrowing, something frugal countries dislike because it would pile up debt to be repaid by future generations of taxpayers. “We are not keen on that,” one diplomat said. “The principle of saying Russia needs to pay for the damage is right.”  Some combination of these ideas might be inevitable, especially if the reparations loan is not finalized in time to meet Ukraine’s funding needs. In that case, a bridging loan will be required as an emergency “plan B”.  In a letter to von der Leyen on Nov. 27, De Wever underlined his opposition, describing the reparations loan proposal as “fundamentally wrong.”  “I am fully cognizant of the need to find ways to continue financial support to Ukraine,” De Wever wrote in his letter to von der Leyen. “My point has always been that there are alternative ways to put our money where our mouth is. When we talk about having skin in the game, we have to accept that it will be our skin in the game.”  “Who would advise the prime minister to write such a letter?” one exasperated diplomat said, dismayed at De Wever’s apparent insensitivity. “He talks about having ‘skin in the game.’ What about Ukraine?” RUSSIAN DRONES  Despite frustrating his allies, De Wever still has support from within his own government for the hard-line stance he’s taking. His position has been reinforced by Euroclear itself, which issued its own warnings. In a sign of how critical the subject is for Belgium, Euroclear’s bosses deal directly with De Wever’s office, bypassing the finance ministry.  Some also fear the threat to Belgium’s physical security. Mysterious drones disrupted air traffic at Brussels Airport last month and were spotted over Belgian military bases, suspected of spying on fighter jets and ammunition stores. The concern is that they may be part of Putin’s hybrid assault on Europe, and that Belgium would be at heightened risk if De Wever approved the use of Moscow’s assets.  Another major hurdle to progress on the loan is Hungary. Russia’s assets are only frozen because all the EU’s leaders — including Putin’s friend Viktor Orbán — have agreed every six months to extend the sanctions immobilizing the funds. Should Orbán change his mind, Russia could suddenly be free to lay claim to those assets again, putting Belgium in trouble.  In the end, the task may just be too big even for the Commission’s highly qualified lawyers. It’s far from certain that a legal fix even exists that could duck Hungary’s veto and Russian retaliation, keep Belgium happy, and avoid the need for European taxpayer money to be committed up front.  Mysterious drones disrupted air traffic at Brussels Airport last month and were spotted over Belgian military bases, suspected of spying on fighter jets and ammunition stores. | Nicolas Tucat/Getty Images As the next crunch European Council summit on Dec. 18 gets closer, European officials are feeling the pressure. “This is not an accounting exercise,” Estonia’s Vseviov said. “We are preparing the most consequential of all European Councils … We are trying to ensure that Europe gets a seat at the table where history is being made.” For the EU, one essential question remains — and it’s one that is always there, in every crisis that crosses the desks of the diplomats and officials working in Brussels: Can a union of 27 diverse, fractious, complex countries, each with its own domestic struggles, political rivalries and ambitious leaders, unite to meet the moment when it truly matters?  In the words of one diplomat, “It’s anyone’s guess.” Jacopo Barigazzi, Camille Gijs, Bjarke Smith-Meyer and Hanne Cokelaere contributed to this report.