LONDON — Global Counsel started the year riding high. The public affairs agency had just posted its best-ever financial results, could boast of staff in multiple countries, and was in the process of expanding its international operations. In a matter of weeks, the lobby shop’s 16-year legacy had been all-but wiped out, and it had collapsed into administration under the weight of the Epstein scandal. Co-founder Peter Mandelson, the former U.K. ambassador to Washington and one of the commanding figures of British politics over the past four decades, is facing fresh revelations over his links to convicted sex offender Jeffrey Epstein. Despite frantic efforts to distance itself from Mandelson, the influence business he masterminded was forced to fold. POLITICO spoke to more than half a dozen members of staff and former clients since the agency announced it was going into administration last Thursday. They paint a picture of a dramatic and sudden disintegration which left more than 100 staffers in London, Brussels and Washington scrambling to find new jobs. Many were granted anonymity to speak openly about their experience. NEVER SEEN HIM Staff insist Mandelson — who founded Global Counsel in 2010 after Labour lost power — had very little to do with the firm when the latest documents on his contact with Epstein dropped at the end of January. Among them were emails suggesting Mandelson leaked sensitive information to Epstein when serving as business secretary. He is now subject to a police investigation. Mandelson’s lawyers Mishcon de Reya say he is cooperating with the police investigation, and his overriding priority is to “clear his name.” “There was a feeling of bewilderment initially because it seemed blindingly obvious to us that [Mandelson] was out of the picture,” a senior staff member said. “But the reporting, or maybe more the response from people to the reporting, made it sound like he was still sitting in on pitches and approving our expenses.” The former Labour heavyweight’s association with the firm had long been seen as a major asset — particularly as Labour’s Keir Starmer prepared for power, backed by Mandelson ally Morgan McSweeney. But Mandelson formally stepped back from any day-to-day involvement with Global Counsel when he became U.K. ambassador to Washington in December 2024. When he was sacked from the post by Starmer last September over previous revelations about his links to Epstein, the firm announced his 21 percent stake would be sold. He would be barred from drawing financial benefits, and his shares would be reclassified so he would no longer have a say over business decisions. But the senior staff member quoted above said a failure to complete the divestment process quickly, given the complex legal and financial process involved, meant it was “impossible to argue there was clear blue water” from Mandelson. Mandelson was sacked from the ambassador post by Keir Starmer last September over previous revelations about his links to Epstein. | Rick Friedman/Corbis via Getty Images This was particularly frustrating for staff members who said they had never seen Mandelson in the flesh. Even those with years of service said he had only been present a handful of times. ‘BLOWN OUT OF PROPORTION’ Matters were also complicated by the appearance of Global Counsel co-founder Benjamin Wegg-Prosser — then still the company’s chief executive —in the Epstein emails released by the U.S. Department of Justice. He was copied into conversations about the business between Mandelson and Epstein, and directly emailed Epstein with a draft statement the company had prepared seeking to downplay links between Mandelson and the convicted sex offender. Global Counsel was approached for comment about the Wegg-Prosser emails at the time they were released, but they declined to comment. POLITICO was unable to reach Wegg-Prosser for comment ahead of the publication of this article. Wegg-Prosser’s involvement was simply “one of those circumstances where you’re asked to do something by your chairman and you do that,” a Global Counsel director said. His role, they argued, had been “blown significantly out of proportion” by media reporting. “Anyone that works in public affairs will know that a meeting is a meeting, and you’re never always going to know who that person is.” In an attempt to put a lid on the growing crisis, Wegg-Prosser announced his departure from Global Counsel on Feb. 6, just hours before the firm confirmed it had finally completed the divestment of Mandelson’s shares. But it wasn’t enough. An associate director of the agency said Wegg-Prosser’s exit came as a “real shock” to staff, and argued that his links had been “seriously overblown” by the media. Wegg-Prosser’s “principled” decision to step down, they suggested, may have instead “perversely” fueled an erroneous impression that the links between Epstein and the firm were deeper than the reality. NOT JUST HEADLINES Staff initially hoped the Mandelson backlash would be limited to a series of gruesome headlines. But those hopes were dashed when a host of household names — including Tesco, Bank of America and Barclays — called time on their relationship with the firm. Some major clients did stick by the embattled agency, including banking giant Santander. Samir Dwesar, the bank’s senior public affairs and public policy manager told POLITICO the staff “don’t deserve this,” but predicted the “consummate professionals, who have deep expertise in their areas” would “all be snapped up pretty quickly.” Another public affairs professional at a company which employed Global Counsel said there had been “no discussions” about ending their contract. “Our assessment was that Global Counsel’s leadership had taken the correct decisions under incredibly difficult circumstances,” they said. “We were confident they’d get through it.” Many staff believed the same when they gathered for the all-hands meeting at the firm’s London HQ last Thursday — only to be told that not only was Global Counsel to close, but that administrators had been appointed to oversee the company’s affairs. A note to staff from Chief Executive Rebecca Park said “the decision to wind up the UK business affects all of GC. We will be discussing separately with each country office how the process will work for them.” Staff present for the London HQ announcement soon decamped to local bars to digest the news and drown their sorrows. | Daniel Sorabji/AFP via Getty Images “I think for a lot of people, it was a shock,” the same director at the firm quoted above said. “We’d amazingly retained a significant number of clients. In terms of business, that’s not easy, particularly when you’re politically exposed. So I think there should be a big thanks to them and the loyalty they showed as well.” The associate director quoted above said staff had sought solace in the survival of  business lobby group the Confederation of British Industry, which weathered its own storm of sexual misconduct claims. A mass exodus of members, and the icing of Whitehall meetings by government ministers wary of association with the group, was overcome under new leadership. “Maybe I was naïve, but lots of business leaders and politicians are brought down by scandals that leave their companies or parties bruised, and they still survive,” the associate director quoted above said. “I’d started to believe that might be the case with us too.” Staff present for the London HQ announcement soon decamped to local bars to digest the news and drown their sorrows. Some who had dialed in from half-term holidays had to return to their families knowing they’d just lost their livelihoods. Everyone — from decade-long veterans to new joiners — was affected. There remains a sense of genuine anger and grief among staff, who say their time at Global Counsel was among the most rewarding of their careers. While some had begrudgingly started job-hunting when the scandal first broke, others had opted to stay given a belief that the firm was entirely disconnected from Mandelson’s historic behavior. “I spent the weekend speaking to my partner, my parents, and my closest friends about what to do,” the associate director quoted above said of the days after the scandal broke. “I looked through some of the emails [in the Epstein files] and felt physically nauseous. I didn’t want to have even a microscopic link to what I was reading about, but at the same time I didn’t see that reflected whatsoever in the culture or people at Global Counsel.” The lingering question for many is whether the collapse could have been prevented. The failure to divest Mandelson’s shares left a tangible legal link, but a second associate director said frequent references to Mandelson in Global Counsel media coverage meant people outside the operation saw him as “central to its DNA” — even if that was not the experience of those working there. NEW HORIZONS Park, who stepped up as CEO following Wegg-Prosser’s departure, was praised by some of the staff for how she handled the final days of the crisis. Staff POLITICO spoke to highlighted efforts she had overseen to try and secure new jobs for those out of work. There is even more urgency to find a new job for those staff whose visas are linked to their work at the firm. Under U.K. laws they will have just 60 days to find new employment or face having their visas revoked. It has left some Global Counsel staff at risk of losing their immigration status, along with family members listed as their dependents. One staff member left in that situation said the change to their visa status meant they are no longer entitled to unemployment benefits or other public funds. With the firm entering into the administration process, other staff also lost access to enhanced parental pay packages. Despite initial fears that staff at the agency would be stained by their association, several of those who spoke to POLITICO have already secured new jobs. One staff member at rival firm FGS Global said it the lobbying agency is planning a hiring spree, with as many as two dozen ex-Global Counsel staff being lined up for new gigs. Those are expected to include a raft of senior staffers who’d been working on financial services and private equity briefs. “I think people do recognize that this is an insane opportunity from a talent perspective, just given how [Global Counsel] was respected and the people that were there, I think they genuinely are recognized as top of the class in the field,” the ex-Global Counsel director quoted above said. This reporting first appeared in POLITICO London Influence, a weekly newsletter on lobbying, campaigning and influence in Westminster and beyond.

President Donald Trump’s State of the Union address was defined in many respects not by what he said but by what he avoided saying. There were the mistakes he avoided making: Trump did not attack the Supreme Court. He did not blitz members of his own party who have criticized him. He avoided rambling, angry digressions from the script. Then there were the issues he avoided addressing: Trump offered no new ideas on housing or health care, two defining issues of the midterm campaign. He made no mention of the Jeffrey Epstein scandals consuming politics in Washington and far beyond. He did not clarify his policy toward Iran, even as he masses air and naval forces in the region. It was, for better or worse, a speech not likely to change the political trajectory of Trump’s second term. The historically long address was, in some ways, nearly indistinguishable from Trump’s daily patter in the Oval Office, on Air Force One or in the White House driveway. For some leaders in the president’s party, mindful of his capacity for political self-harm, that might be cause for relief. Republicans wake up on Wednesday morning with no political problems they did not have the day before. Yet the status quo of the midterm campaign does not favor the GOP: Trump is on the defensive on many of the issues driving the election cycle so far. That, too, did not change. “In some ways, this was Trump’s finest — it was a full patriotic projection,” said GOP strategist Matthew Bartlett, who served in Trump’s first administration. “It was aspirational, emotive. Yet in terms of a political speech there was no policy prescription that will guide Republicans towards safer ground in the midterms.” Another Republican operative, granted anonymity to discuss the president’s performance, expressed concern that the speech didn’t do enough to look forward. “It’s all look behind, as great as it all is,” the operative said. “I wish we had more detailed steps to take, directing Congress to do more for people who are hurting.” For some, Trump did exactly what he needed to do — offering plenty of red meat to a base hungry for the president to call out Democrats for their hypocrisy about inflation, blame former President Joe Biden and talk tough on illegal immigration. Steve Bannon, Trump’s former chief strategist, said talking to so-called persuadable voters is a losing strategy that failed in 2018. “Tonight changes that,” he said. “The president is not reaching out , he’s leading forward—game now on!” The speech was replete with Trump’s usual flourishes — braggadocio, hyperbole, unscripted asides and anecdotes. He talked about the wars he stopped, the prices he has helped bring down and the “hundreds of billions of dollars” he’s brought in from foreign investments through tariffs and negotiations. “We’re winning so much that we really don’t know what to do about it,” Trump said. “People are asking me, ‘please, please please, Mr. President, we’re winning too much. We can’t take it anymore. We’re not used to winning in our country until you came along. We were just always losing.’” Still, 13 months into a second term defined largely by the president’s outsized ambition and focus on personal prerogatives, be it his quest for a Nobel Peace Prize or determination to remodel and redecorate the White House complex, the remarks were also notable for their uncharacteristic restraint. The president remained disciplined even as he broke his own record for the longest State of the Union ever. There was no mention of owning or annexing Greenland, which caused international chaos and strained the transatlantic alliance, just last month. In fact, foreign policy made up a relatively small part of his remarks given what a huge part of his agenda it has been. With his approval rating stuck around 40 percent and Republicans increasingly nervous about the possibility of a midterm tsunami, Trump stuck to politically safer ground. He interspersed his remarks with several feel-good set-pieces, diverting the audience’s attention to the House balcony in an effort to rise above partisan politics: he cheered the gold-medal olympic hockey team; praised the Coast Guard rescue swimmer who saved an 11-year from the central Texas flooding, pinned medals and ribbons on war heroes and servicemen and prayed for a woman trying to conceive through IVF, whose drugs were cheaper because of TrumpRX. That last point, a focus on economic issues and affordability, was an effort to shore up a growing liability. Trump outlined the tax cuts enacted by Republicans last year and outlined additional policy proposals for Congress, urging lawmakers to aid prospective homeowners by preventing private equity firms from buying up single-family homes and to lower prescription drug costs for seniors. But with the GOP holding such slim legislative majorities and the focus quickly turning to the campaign trail, the prospects for major legislative action this year are slim. Asserting that consumer prices are coming down, Trump continued to attack Democrats as hypocrites for “suddenly” emphasizing affordability issues. “You caused that problem,” Trump said to the Democratic side of the aisle. “Their policies created the high prices. Our policies are rapidly ending them.” His hectoring, especially when he turned to immigration issues, provoked a stronger reaction from a few Democratic lawmakers who weren’t able to stay quiet. “You should be ashamed of yourselves,” Trump said to Democrats, over their refusal to fund the Department of Homeland Security. Democrats are demanding changes to how federal agents operate in the wake of the deadly shootings of protesters by Immigrations and Customs Enforcement officers carrying out raids in Minneapolis and several other cities. Reps. Rashida Tlaib (D-Mich.) and Ilhan Omar (D-Minn.) — both frequent targets of the president’s attacks — shouted back. “You have killed Americans,” Omar shouted, referencing Alex Pretti, the nurse who was killed by federal agents in Minneapolis last month. “Alex wasn’t a criminal,” she said. When some Democrats didn’t heed Trump’s call for lawmakers to stand at various points to show support for crime victims attacked by undocumented immigrants or parents seeking to prevent their children’s sexual transition, the president dismissed the entire party. “These people are crazy,” he said. “They’re crazy.” Trump looked to frame his dizzying return to the Oval Office — the upheaval caused by his predatory foreign policy, his punishing, unpredictable tariff regime and even the violence sparked by his immigration enforcement efforts — as a modern corollary to America’s original revolution, filling his speech with references to 1776 and the milestone 250th anniversary the country will mark in July. “These first 250 years were just the beginning,” Trump said as he wrapped his speech. “The golden age of America is upon us. The revolution that began in 1776 has not ended. It still continues because the flame of liberty and Independence still burns in the heart of every American patriot. And our future will be bigger, better, brighter, bolder, and more glorious than ever before.” Lisa Kashinsky, Dasha Burns, Megan Messerly and Alex Gangitano contributed to this report.

Convicted sex offender Jeffrey Epstein for years communicated with experts in the cybersecurity community and expressed interest in attending two of the largest hacker conventions in the world, according to documents released by the Justice Department. It’s unclear if Epstein ever attended either DEFCON or Black Hat, where thousands of hackers and researchers gather annually in Las Vegas to discuss the latest cyber vulnerabilities and trends. According to his emails with several prominent researchers and business people, his interest in cybersecurity and cryptography appeared to be widespread, ranging from discussions about removing information about himself from online search engines to network security. Jeff Moss, founder of both the Black Hat and DEFCON conferences, told POLITICO in a statement that it’s unlikely Epstein actually made it to the conferences. “As far as we can tell, he wanted to attend, but never did,” Moss said of Epstein. “It looks like there were a lot of plans and I’m just waiting for some sort of evidence that he followed through on them.” According to the released emails, Epstein first made plans to attend DEFCON for a few hours in August 2013 to meet with Pablos Holman, who at the time worked on various tech and cyber projects at private equity company Intellectual Ventures. It’s unclear whether Epstein and almost a dozen of his guests obtained tickets to DEFCON or if Epstein attended. It appears that Epstein and Holman had been in touch since 2010, according to emails. Epstein in 2010 emailed cryptography researcher Ian Goldberg and said Holman “suggested we speak.” Holman also planned to stay in Epstein’s apartment while visiting New York City in 2013 and advised Epstein on how to bury “negative stuff” online. A spokesperson for the University of Waterloo, where Goldberg works within the School of Computer Science, confirmed to POLITICO that Goldberg turned down the offer from Epstein in 2010 to fund his work at the university. Holman, who currently serves as a general partner at venture capital group Deep Future, did not respond to multiple requests for comment. Joi Ito, the current president of Japan’s Chiba Institute of Technology and former director of the Massachusetts Institute of Technology’s Media Lab, appears to have introduced entrepreneur and researcher Vincenzo Iozzo via email to Epstein in 2014, according to the emails. Ito stepped down from his role at MIT in 2019 when previous disclosures revealed Ito had accepted about $1.7 million from Epstein for the lab and his own investment funds. Spokespersons for Chiba Institute of Technology did not respond to a request for comment on Ito’s connections to Epstein. Ito previously apologized for his association with Epstein and stressed that he was “never involved in, never heard him talk about and never saw any evidence of the horrific acts that he was accused of.” According to the emails, Iozzo, who currently serves as CEO of identity management company SlashID, discussed obtaining tickets for Epstein to attend DEFCON conferences in Las Vegas in 2016 and 2018. Iozzo previously served in roles at cybersecurity company CrowdStrike and as a board member for the annual Black Hat conference. He also planned to meet with Epstein at his New York City home on at least five occasions in 2014, 2015, 2016, 2017 and 2018. One email sent by Epstein to Iozzo ahead of the 2016 conferences noted he wanted to bring guests, including former Israeli Prime Minister Ehud Barak, American billionaire Tom Pritzker and “four girls.” It’s not clear if Epstein attended the conference that year or met with Barak, Pritzker or Iozzo. A spokesperson for Barak told POLITICO that the former prime minister “did not attend DEFCON in 2016,” and further noted that Epstein never asked him to attend. The spokesperson stressed that Barak “has repeatedly and publicly stated that he deeply regrets having any association with Jeffrey Epstein.” Separate spokespersons for Hyatt Hotels — where Pritzker serves as executive chairman of the board of directors — and for the Pritzker Organization did not respond to a request for comment. Epstein again discussed attending DEFCON in 2018, which Iozzo also offered to procure tickets for, according to the emails. Ahead of the 2018 convention, Epstein requested to meet with “founder” of Black Hat, but Iozzo wrote in an email that this person had turned down the meeting due to “what’s out there online” about Epstein. The founder, however, was “happy” to provide Epstein with tickets to the event, Iozzo wrote. It’s unclear if Epstein was referring to Moss or someone else. Moss told POLITICO in a statement that he “turned down Vincenzo’s badge request” for Epstein, and “advised Vincenzo to stay clear” of the disgraced financier. Moss noted that it’s possible Iozzo bought passes to the conference separately. An FBI file released by the Justice Department — first reported by TechCrunch — suggested that Epstein had a “personal hacker” who developed “offensive cyber tools” that were sold to several unnamed governments. It’s unclear if the information provided by the unnamed informant to the FBI is accurate. The name of the hacker is redacted in the file but a description of the person — including that they had a company that was acquired by CrowdStrike in 2017 and found vulnerabilities in Blackberry and iOS devices — matches Iozzo. Iozzo strongly denied that he was the so-called personal hacker for Epstein and issued a lengthy statement to POLITICO refuting the claims made by the FBI informant, including his alleged past work for foreign governments. Iozzo said that his interactions with Epstein “were limited to business opportunities that never materialized, as well as discussion of the markets and emerging technologies.” “The latest release of files contains a document with fabricated claims made about me to an FBI agent over eight years ago,” Iozzo said, noting that neither the FBI nor any other government agency ever contacted him about the file. “These accusations are false and defamatory. For the avoidance of doubt, it should go without saying that I have never been involved in any illegal or unethical activity.” Iozzo also said that he did not provide Epstein with “exclusive access” to the DEFCON and Black Hat conferences and did not know if Epstein actually attended either event. “I unfortunately knew Epstein for professional reasons,” Iozzo said. “I wish I did not. We were introduced by people whom I trusted and admired when I was 25 fundraising for my startup in 2014. Because of this, I failed to ask the right questions — questions that, in retrospect, seem obvious. I foolishly accepted the narrative that was presented to me by others that greatly minimized the magnitude of his horrific actions.” “I regret the past association and take full responsibility for not exercising greater judgment at the time,” he added. Epstein’s interest in the Black Hat and DEFCON conventions began years after he had been convicted of and jailed for soliciting sex from minors in 2008. Following his incarceration, Epstein reportedly took steps to scrub references to his conviction from the internet with the help of cyber professionals. Epstein was again arrested and charged with sex trafficking minors in 2019, though the federal case was formally dismissed in August 2019 following his death by suicide in jail while awaiting trial.

TikTok has closed a $14 billion deal establishing a U.S. subsidiary of the platform to avoid a ban, the company said Thursday. The new owners will include the U.S. private equity firm Silver Lake, Abu Dhabi-based artificial intelligence company MGX and Oracle, a tech giant co-founded by Larry Ellison, an ally of President Donald Trump. They will each hold a 15 percent stake in the U.S. joint venture. The deal allows TikTok’s Beijing-based parent company, ByteDance, to maintain a nearly 20 percent stake. The Dell Family Office, investment firm of Chair and CEO of Dell Technologies Michael Dell, is also an investor. Congress passed a law in April 2024 requiring the sale of TikTok to a U.S. buyer before Jan. 19, 2025, or banning it, citing national security concerns about the app’s ties to China. But Trump delayed the ban from taking effect five times last year while a deal was negotiated to divest the app to American owners. Trump signed an executive order in September approving the deal and giving the parties until Friday to formalize the terms. The deal matches an internal memo distributed by TikTok CEO Shou Zi Chew last month, who said the agreement would be finalized by Thursday. The U.S. version will operate as an independent entity, governed by a seven-member board including TikTok CEO Shou Zi Chew, Oracle Executive Vice President Kenneth Glueck, Timothy Dattels, senior adviser of TPG Global; Mark Dooley, managing director at Susquehanna International Group; Silver Lake Co-CEO Egon Durban, DXC Technology CEO Raul Fernandez; and David Scott, chief strategy and safety officer at MGX. Adam Presser, head of operations and trust and safety at TikTok, will now serve as CEO of the joint venture. Trump praised the deal in a Truth Social post Thursday evening. “I am so happy to have helped in saving TikTok! It will now be owned by a group of Great American Patriots and Investors, the Biggest in the World, and will be an important Voice,” Trump wrote. Trump said in September that Chinese President Xi Jinping had agreed to the deal, but Chinese officials provided an ambiguous narrative, signaling that any deal would be a drawn out process. China’s Ministry of Foreign Affairs said the country “respects the wishes of enterprises” and welcomes them to reach “solutions that comply with Chinese laws and regulations and balance interests.” The president thanked Xi in his Truth Social post “for working with us and, ultimately, approving the Deal.” “He could have gone the other way, but didn’t, and is appreciated for his decision,” Trump wrote. Trump previously described the deal as a “qualified divestiture,” meaning the sale would fully sever ByteDance’s control over the platform and therefore make TikTok legal under the U.S. law. China hawks on Capitol Hill have championed this issue over national security concerns and fears that the Chinese-controlled app subjects users to government surveillance and content manipulation. While they’ve vowed to scrutinize the potential deal to ensure it adheres to the law, they seemed prepared to accept Trump’s claim the deal would resolve concerns over national security and control. Vice President JD Vance confirmed that the U.S. owners would have control over the app’s algorithm, which is at the heart of the platform’s success. “The U.S. company will have control over how the algorithm pushes content to users and that was a very important part of it,” Vance said during the September executive order signing in the Oval Office. “We thought it was necessary for the national security level element of the law.” According to the company release, the U.S. version will retrain and update the platform’s algorithm based on U.S. user data. Oracle will control the algorithm within its U.S. cloud environment. “President Trump got played by Xi Jinping. He got terrible advice from his staff on these negotiations. This isn’t the Art of the Deal, it’s the art of the steal. Xi Jinping can’t believe his luck,” Michael Sobolik, senior fellow at the right-leaning Hudson Institute and an expert on U.S.-China policy, told POLITICO.

One trillion US dollars of gross domestic product (GDP) has been surpassed. Poland has entered the ranks of the world’s 20 largest economies, symbolically ending a phase of chasing the West that has lasted more than three decades. The Polish Development Fund’s (PFR) new strategy seeks to address the challenge of avoiding the medium-level development trap and transitioning from the role of subcontractor to that of investor. This year marks a turning point in Polish economic history. After years of transformation, reforms and overcoming civilizational deficits, Poland has reached a point that the generation of ‘89 could only dream of. GDP crossed the symbolic barrier of US$1 trillion, and we proudly enter the exclusive club of the world’s 20 largest economies. Diversified Polish exports are breaking records, and innovative companies are conquering global markets. Sound like a happy ending? Not necessarily. Via PFR Investing for future generations Poland’s past success invites tougher challenges in a brutal world. The cheap labor growth model is dead; demographics are relentless. PFR analyses highlight declining employment as a core issue — without bold changes, stagnation looms. Piotr Matczuk, PFR president, says Poland needs an impetus for resilience, innovation and growth. PFR’s 2026-2030 strategy is that roadmap, urging a shift to high gear. On Dec. 10, it unveiled investments for future generations. Geopolitics enters the balance sheet PFR’s strategy marks a paradigm shift: integrating economics with security. Business now anchors state security, with “economic and defence resilience” as a core pillar — viewing security spending as essential insurance, not cost. > The PFR’s strategy is clear: the competitiveness of the Polish economy depends > directly on access to cheap and clean energy. PFR has invested in WB Electronics, Poland’s defense leader in command systems and drones. It expands beyond arms via dual-use tech: algorithms, encrypted communications and autonomous drones often from civilian startups. This spring’s PFR Deep Tech program backs venture capital (VC) for scaling these firms; IDA targets innovations for logistics, cybersecurity and future defense. The focus is Poland’s technological sovereignty. Controlling key security links — from ammo to artificial intelligence — ensures economic maturity resilient to geopolitical shocks. > Poland needs a boost to our resilience, innovation and growth rate. That is > why the new strategy emphasizes investment in new technologies, infrastructure > and the financial security of Poles. We want the PFR to be a catalyst for > change and a partner of choice — an institution that invests for future > generations, sets quality standards in development financing and supports > Polish entrepreneurs in boosting their international presence. > > Piotr Matczuk, President, PFR Piotr Matczuk, President, PFR / Via PFR Energy: to be or not to be for the industry If defense is the shield, then energy is the bloodstream. The PFR’s strategy is clear: the competitiveness of the Polish economy depends directly on access to cheap and clean energy. Without accelerating the transformation, Polish companies, instead of increasing their share in foreign markets, may lose their position. This is why the fund wants to enter the game as an investor where the risks are high, but the stakes are even higher — into an investment gap that the commercial market alone will not fill.  The concept of local content, in other words the participation of domestic companies in the supply chain, is key to the new strategy. This is where the circle closes. The Baltic Hub is not just a container terminal. Investment in the T5 installation terminal is the foundation, as the Polish offshore will not be built with the appropriate participation of a domestic port. This is a classic example of how the PFR works: building ‘hard’ infrastructure that becomes a springboard for a whole new sector of the economy.  The end of being a subcontractor: capital emancipation Taking inspiration from, among others, France’s Tibi Initiative, in mid-November 2025 the Polish minister of finance and economy, Andrzej Domański, announced the Innovate Poland program. The PFR plays a leading role in what will be the largest initiative in the history of the Polish economy to invest in innovative projects. Thanks to cooperation with Bank Gospodarstwa Krajowego (BGK), PZU and the European Investment Fund, Innovate Poland is already worth 4 billion złoty, and the program multiplier may reach as much as 3-4. The combined development and private capital will be invested by experienced VC and private equity funds. The aim is to further Poland’s economic development — driven by innovative companies that make a profit. In the first phase, it is expected to finance up to 250 companies at various stages of development. Via PFR The expansion of Polish companies abroad is also part of the effort for advancement in the global hierarchy. Their support is one of the pillars of the new PFR strategy. For three decades, Poland has played the role of the assembly plant of Europe — solid, cheap and hard-working. However, the highest margins, flowing from having a global brand and market control, went overseas. Polish companies need to stop being anonymous subcontractors and become owners of assets in foreign markets.  Here, the PFR acts as financial leverage. The support for the Trend Group is a prime example of this maturing process. This is a transaction with a symbolic dimension: it reverses the investment vector of the 1990s, when German capital was consolidating Polish assets. Today, it is Polish entities that are increasingly becoming leaders in offering industrial solutions in the European Union. > Polish companies need to stop being anonymous subcontractors and become owners > of assets in foreign markets. However, these ambitions extend beyond the Western direction. The strategy strongly emphasizes Poland’s role in the future reconstruction of Ukraine and the consolidation of the Central and Eastern European region. The involvement of the PFR in the operations of the Euvic Group on the Ukrainian IT market is a good example. In the digital world, big players have more power, and the PFR strives to ensure that the decision-making centers of those growing giants remain in Poland. Most importantly, Polish businesses are no longer alone in this struggle. The strategy institutionalizes the concept of ‘Team Poland’. In this initiative, the PFR provides capital; BGK, a state development bank, offers debt solutions; the KUKE, an insurance company, insures the risk; and the Polish Investment and Trade Agency provides promotional support. Acting like a one-stop shop, all these institutions enable Polish capital to compete as a partner in the global league. This is part of the Polish government’s modern economic diplomacy strategy, led by Domański. Capital for generations. From an employee to a stakeholder in the economy  All grand plans need fuel. Mature economies like the Netherlands and the United Kingdom harness citizens’ savings via capital markets. PFR’s strategy boldly demands Poland’s success create generational wealth: turning the average Kowalski from an employee into a stakeholder. Diagnosis is brutal: Poles save little (6.38 percent compared with the EU’s 14.32 percent in Q1 2024) and inefficiently, favoring low-interest deposits. Employee Capital Plans (PPK) drive cultural change. Hard data demonstrate this: 67 percent average returns over five years crush traditional savings. It’s a virtuous cycle — PPK capital feeds stock markets, finances company growth and loops profits back to future pensioners. An architect, not a firefighter  The new PFR strategy for 2026-30 is a clear signal of a paradigm shift. The company, which many Polish entrepreneurs still see as a firefighter extinguishing the flames of the pandemic with billions from the Anti-Covid Financial Shields, is definitively taking off its helmet and putting on an engineer’s hard hat. It is shifting from interventionist to creator mode, abandoning the role of ‘night watchman’ of the Polish economy to that of its ‘chief architect’. This is an ambitious attempt to establish an institution in Poland that not only provides capital, but also actively shapes the country’s economic landscape, setting the direction for development for decades to come.

The Trump administration extended a sanctions waiver for Russian oil giant Lukoil, days before Washington’s measures were set to take effect.  The U.S. Treasury Department issued licenses to allow Lukoil to keep operating many of its businesses around the world until Dec. 13 — and until April 2026 for its refinery in Bulgaria — as the company looks to sell off its foreign assets. Last month, American President Donald Trump announced “tremendous” new sanctions targeting Lukoil and Kremlin-owned Rosneft over Moscow’s refusal to negotiate an end to its war in Ukraine. The punitive measures had been set to come into force on Nov. 21. The measures, announced on Oct. 22, were “a result of Russia’s lack of serious commitment to a peace process to end the war in Ukraine,” the U.S. Treasury said.  Lukoil subsequently announced it would sell its overseas assets but has yet to find a buyer after a deal with Swiss-based firm Gunvor fell through when Washington blocked it. U.S. private equity firm Carlyle is considering purchasing the vast international holdings, according to Reuters. Potential buyers now have until Dec. 13 to negotiate with Lukoil.  It’s expected Washington will only authorize a sale if it completely severs ties with Lukoil and the funds from that sale are placed into a blocked account that Lukoil cannot access until the sanctions are lifted. Trump’s sanctions sent European countries scrambling to prevent fuel cutoffs. Germany won a six-month exemption for its Rosneft-owned Schwedt refinery, which was formalized by Washington on Friday, while Bulgaria moved to nationalize the country’s enormous Lukoil-owned Burgas refinery.  Hungary locked in a one-year exemption to keep purchasing Russian oil after Prime Minister Viktor Orbán’s visit to the White House earlier this month. 

Warning signs from an obscure part of the financial markets have got policymakers rattled, and one of their oldest and most profound fears may be about to get very real. As the world’s top central bankers and finance ministers descend on Washington for the annual meetings of the International Monetary Fund and World Bank, signs are increasing that the next bout of financial instability may be around the corner. The most worrying signs are arguably not from the foreign exchange market, where confidence in the dollar — the global system’s anchor — is gradually eroding, nor from the stock market, where the AI frenzy has driven equities to record highs in the U.S. and Europe. Rather, it’s what’s happening in the credit markets that’s sending a shiver down the spine of all those who remember 2008. The collapse of U.S. auto loan dealer Tricolor and parts supplier First Brands Group hints that something may be wrong in the world of private credit. Private credit refers to loans that are neither issued by banks nor publicly traded on an exchange like corporate bonds. It’s a broad description, and it can refer to anything from the aforementioned car loans issued by special credit suppliers to private funds lending money to help buy a family-owned company or financing for a new apartment block. It’s a young market, but has grown at breakneck speed. Goldman Sachs estimates it’s worth $2.1 trillion, and private equity companies, in particular, have made a fortune from it, helped by a vast amount of leverage. Because the money isn’t lent by banks, and because it’s structured as a private deal off the public markets, it’s a corner of the financial ecosystem that’s particularly hard to oversee — even when, as with Tricolor, the loans are then repackaged into tradable bonds. That means that if something is going disastrously wrong, it might only be detected once it’s too late. Officials are alarmed that something like that might be happening. For years, banking regulators have congratulated themselves on stamping out the kind of excessive risk-taking, questionable ethics and shoddy governance that caused the last financial crisis. But all along, they have fretted that, far from being dead, such behavior had just moved to other parts of the financial system outside their reach. In a speech last week, European Central Bank President Christine Lagarde warned that it was “imperative” to improve transparency in the non-bank financial sector, whose assets are now bigger than those of the regulated banking sector. “Policymakers must do so sooner rather than later,” she said. The Bank of England also took up the theme earlier this week, its Financial Policy Committee warning that “the risk of a sharp market correction has increased.” It said the defaults in the U.S. “underscore some of the risks the FPC has previously highlighted around high leverage, weak underwriting standards, opacity, and complex structures.” THE WHEELS COME OFF Texas-based Tricolor was an auto loan provider that lent to riskier clients, notably undocumented migrants. First Brands, meanwhile, is a car parts supplier that used opaque and complex financing schemes to pay its suppliers — until it wasn’t able to anymore. One of its creditors, Raistone, alleges that some $2.3 billion that it was owed “simply vanished.” Shares of investment bank Jefferies tumbled this week after it declared it had $715 million in exposure to First Brands. Swiss giant UBS, meanwhile, says it has $500 million at risk. The big question is whether the twin bankruptcies — concentrated in an inherently riskier segment of the market — are just two accidentally similar one-offs, or whether they are the first signs of a broader crisis brewing. Credit rating agency Fitch said defaults in the private credit market rose to 5.5 percent in the second quarter of the year, up from 4.5 percent in the first quarter. Meanwhile, in January, Fitch said auto loan payments that were 60 or more days late among the least creditworthy (subprime) borrowers were at the highest level on record, at 6.6 percent. A growing body of academic literature has found extensive links between non-bank financial institutions (NBFIs) — a category that includes hedge funds and private equity, as well as private credit — and the traditional banking sector. “Through these linkages, shocks can propagate rapidly across entities, sectors, or jurisdictions, especially when multiple institutions respond simultaneously to market stress,” said the authors of a paper at this year’s ECB research conference in Sintra, Portugal. They wrote that nearly one tenth of banks’ assets in the European Union were claims on NBFIs, and that 10-15 percent of banks’ deposits also came from non-banks. Loriana Pelizzon, deputy scientific director at the Leibniz Institute for Financial Research and one of the authors of the paper, said she wasn’t overly concerned about the two bankruptcies, given the relatively small size of the auto financing market. However, she said that interlinkages between European NBFIs and the U.S. financial system needed to be monitored, given the scale of the investments. “There’s a significant amount — trillions and trillions invested — in the U.S.,” she said, noting that investment chains are often long and complex, and that regulators lack insight into them. “The question is whether this is just a couple of rotten apples,” said Davide Oneglia, director at economic consultancy TS Lombard. He said that the risk in the private credit segment will grow further if U.S. interest rates don’t fall as quickly as expected, for example, due to high inflation. That would put a further squeeze on private credit providers. IN PLAIN SIGHT But it’s not just private credit that has policymakers on tenterhooks. The benchmark U.S. stock index S&P 500 is now trading at nearly 30 times the expected earnings of its components, far above its long-run average, and closer to the freak levels seen during the Dotcom boom and the pandemic. Over the last three years, the S&P has risen over 80 percent, largely powered by the performance of U.S. tech stocks on the back of a boom in AI investment. Companies have invested some $400 billion to build out the infrastructure — microchip factories and data centers — that powers AI. Should that money turn out to be misspent, for example, if AI doesn’t provide the productivity gains that investors are betting on, that bubble will burst with painful consequences. In parallel, unbridled government spending throughout the developed world, from the U.S., to Europe and Japan, have pushed market interest rates higher, amid growing doubts that governments can ever repay the debts they are building up. That has also helped push the price of gold — seen as a safe asset that won’t lose value — higher, with some investors piling into both gold and Bitcoin to avoid the debasement of their investments through inflation. It’s not clear which of these — if any — will light the wick of the next global financial meltdown. But what is clear is that policymakers will have no shortage of threats to obsess over next week.

U.S. Senator Elizabeth Warren has called for a former Trump-appointed banking regulator to be dismissed from the global financial watchdog, warning he is putting the world’s economic stability at risk. Randal Quarles, who was vice chair of supervision at the U.S. Federal Reserve from 2017 to 2021 where he oversaw a wave of deregulation, was last month chosen to lead a worldwide review of post-2008 financial crisis reforms for the Financial Stability Board. In a letter addressed to FSB Chair Andrew Bailey, obtained by POLITICO, Warren blamed Quarles’ deregulatory measures for the collapse of three U.S. banks including Silicon Valley Bank in 2023 and warned he would bring the same mindset to global standards. “Mr. Quarles spent his tenure as a top financial regulator in the United States weakening safeguards for megabanks at the expense of financial stability and the American public,” said Warren, a former U.S. presidential hopeful who is the most senior Democrat on the Senate banking committee. “It would be deeply troubling if this FSB review became a mechanism to coordinate the easing of post-2008 rules across the globe.” She said Quarles’ background “demonstrates that he is the wrong person to lead such a review.” She called on Bailey to “consider terminating the appointment and conduct your own search for a suitable replacement.” Bailey, who is governor of the Bank of England, became FSB chair after Quarles’ appointment. The warning came as the FSB, a global body that monitors and coordinates national financial regulations, issued new guidance on the regulation of nonbank financial groups, such as hedge funds. The guidance recommended capping the amount of borrowing these groups can do, but left up to national regulators to determine the details. ROLLING BACK SAFEGUARDS In the years following the 2008 global financial crisis, countries clubbed together and tasked the FSB with coordinating national regulators to prevent a similar crisis happening again. But in 2017, with momentum shifting back to deregulation, newly-elected U.S. president Donald Trump nominated Quarles to head up the Fed’s banking supervision arm. Warren’s main criticism of Quarles relates to his implementation of the Economic Growth, Regulatory Relief, and Consumer Protection Act, which gave the Fed discretion to apply tougher regulatory standards to large banks with assets of between $100 billion and $250 billion. “Under the law, Mr. Quarles had discretion to apply these rules … [but] he and other Trump-installed regulators refused to do so,” she said. She said Quarles also led the rollback of rules prohibiting banks from making “risky proprietary bets with customer deposits and from investing in or sponsoring hedge funds or private equity funds.” Both of these contributed to the collapse in 2023 of Silicon Valley Bank, she said. As well as calling for Quarles’ termination, the letter asks whether his appointment is an indication that the FSB sees “this review as an opportunity to coordinate the easing of post-2008 financial safeguards.” Neither Quarles nor the FSB immediately responded to a request for comment.