Listen on * Spotify * Apple Music * Amazon Music Energy markets are on edge as Iran tensions disrupt shipping and threaten supply shocks. EU foreign ministers and energy ministers meet in Brussels to discuss what the bloc can actually do to protect global energy flows — and whether it has the tools to act. Meanwhile, Norway is positioning itself as a reliable energy lifeline as the geopolitical turmoil puts security of supply back in focus. And the U.K.’s Brexit minister is in town as the EU asks Britain to lower the tuition fees it charges students from the bloc before Brussels and London can move forward with a “Brexit reset.” Zoya Sheftalovich and Kathryn Carlson break it all down. If you have questions for us, or want to share your thoughts on the show, you can reach us on our WhatsApp at +32 491 05 06 29.

FAVERSHAM, U.K. — Frank Furedi, one of the European populist right’s intellectual darlings, has a nagging anxiety. What if they gain power, then blow it? A Hungarian-born sociologist who spent decades on the political fringes himself, Furedi now runs MCC Brussels, a think tank backed by Viktor Orbán’s Budapest government. It aims to challenge what he calls the European Union’s liberal consensus — and help sharpen the ideas of a rising populist right. Speaking in his home office in the English market town of Faversham, where he was recovering from a recent illness, the 78-year-old professional provocateur — who has risen to prominence in Europe’s right-wing circles — hailed what he sees as the impending collapse of Europe’s political center. But he also questioned whether the insurgent movements benefiting from that upheaval have the discipline needed to govern if they win. “You can win an election, but if you’re not prepared for its consequences, then you become your worst enemy,” he said during a two-hour conversation in his paper-strewn office. “You basically risk being doomed forever.” Across Europe, the movements Furedi is talking about are already testing the political mainstream. Nigel Farage’s Reform Party is surging in Britain, Marine Le Pen’s National Rally has a real shot at the French presidency, and the Alternative for Germany is consistently at or near the top of polls. In Italy and Hungary, Giorgia Meloni and Orbán have already shown what populists in power can look like. Inside his house in Faversham, the conversation turned from Europe’s populist surge to the ideas that might shape what comes next. As Furedi led the way up the stairs, a yapping cockerpoo was hauled away into some back room. At the top of the staircase was a framed poster of Hannah Arendt, the philosopher who understood the attraction of radical political movements for the disenfranchised and alienated — and the potential for those movements to veer into evil. Nigel Farage’s Reform Party is surging in Britain, Marine Le Pen’s National Rally has a real shot at the French presidency, and the Alternative for Germany is consistently at or near the top of polls. | Nicolas Guyonnet/Hans Lucas/AFP via Getty Images But Furedi isn’t worried about a return of European totalitarianism — if anything, he thinks the current regime is where freedom of thought and speech are being crushed. His real fear is that Europe’s right-wingers arrive in power unprepared — failing to learn from the experience of the U.S. MAGA movement, which almost blew its chance after Donald Trump won power in 2016 but couldn’t execute a coherent vision for government.  “There’s a real demand for something different,” he said. “It’s the collapse of the old order, which is really what’s exciting.” But while Furedi is eager to watch it all burn down, he’s unconvinced by the right-wing parties carrying the torches.  “At the moment, all politics is negative,” he said, noting two exceptions where the right has managed to govern with stability: Meloni and Orbán.  “It’s a fascinating moment in most parts of Europe, but it’s a moment that isn’t going to be there forever,” he said. “But whether these movements have got the maturity and the professionalism to be able to project themselves in a convincing way still remains to be seen.”  POLITICAL PROGRAM Like Farage, Meloni and many of their ilk, Furedi is riding a political wave after a lifetime spent far from power or relevance. Since the 1960s he has been an agitator at the obscure edge of politics, first on the left as a founder of the Revolutionary Communist Party and its magazine Living Marxism, which attacked the British Labour Party for its centrism, later to become a writer for Spiked, an internet magazine that attacked Labour from the right.  His real fear is that Europe’s right-wingers arrive in power unprepared — failing to learn from the experience of the U.S. MAGA movement. | Heather Diehl/Getty Images He’s pro-Brexit, but thinks the EU should remain intact (albeit with diminished power). He despises doctrinaire multiculturalism, is a defender of women’s right to have an abortion, and thinks Covid and climate change reveal an undesirable timidity in the face of danger. He’s an implacable supporter of Israel, but thinks freedom of speech should extend even to abhorrent ideas, including Holocaust denial. He thinks the far right should support trade unions.  “I don’t see myself as right-wing. So even though other people might call me far-right, right, fascist or whatever, I identify myself in a very different kind of way,” he said. That evening he planned to watch Wuthering Heights. The best thing he’s seen recently? Sinners.  Under Furedi, MCC Brussels has gained notoriety — and some level of mainstream acceptance — as a far-right counterweight to the hefty centrist institutes that dot the city’s European Quarter.  The think tank promotes Hungary’s brand of right-wing nationalism and its rejection of European federalism, immigration policy and LGBTQ+ inclusion. But he insists the project isn’t about being a mouthpiece for Budapest so much as creating a place where right-wing ideas can be tested and hardened. Across all of politics, he laments, “ideas are not taken sufficiently seriously.”  MCC Brussels is fully funded by the Mathias Corvinus Collegium, a private higher education institution that has received massive financial backing from Orbán’s government. While Furedi acknowledges that the think tank’s publications frequently echo the Hungarian government — “we have our sympathies” — he denies that Orbán calls the shots.  MCC Brussels is fully funded by the Mathias Corvinus Collegium, a private higher education institution that has received massive financial backing from Orbán’s government. | János Kummer/Getty Images Hungary’s upcoming election, which threatens to end the prime minister’s 16-year rule, is unlikely to affect its funding. The college is floated by assets permanently gifted by the government, said John O’Brien, MCC Brussels head of communications.  OTHER MOVEMENTS’ WEAKNESSES In his eighth decade, Furedi worries he will run out of time to see “something nice happening.” But he’s convinced the political order he has spent his life attacking is ready to fold. To illustrate why, he points to Faversham. He arrived in the area in 1974 to study at the University of Kent, where he later became a professor. In the last few years the town has become a flash point for anti-immigration protests after a former care home was converted to house a few dozen refugee children.  Last summer and fall, left and right protest groups clashed over a campaign to hang English flags across the town. One Guardian reader reported hearing chants of “Sieg Heil” in the streets at night. To Furedi, the anger behind the clashes is the inevitable consequence of a narrow politics that has not only lost touch with the people it represents, but actively shut them out. “Our elites adopted what are called post-material values and basically looked down on people who were interested in their material circumstances,” he said. YouGov’s most recent seat-by-seat polling analysis in September put Farage’s Reform easily ahead in Faversham. But Furedi doesn’t give the party a lot of credit for winning people’s backing with a positive program for government. “I think Reform recognizes the fact that they have to be both more professional,” he said. But, he added, “You cannot somehow magic a professional cadre of operators.”  YouGov’s most recent seat-by-seat polling analysis in September put Farage’s Reform easily ahead in Faversham. | Ben Birchall/PA Images via Getty Images The successes of the right are, in Furedi’s view, primarily based on being “beneficiaries of other movements’ weaknesses.”  The same was also true for Trump, he said. “It wasn’t like a love affair or anything of that sort. The U.S. president just happened to act as a conduit for a lot of those sentiments.” Is this a recipe for good government? “No,” he said. “One of the big tragedies in our world is that democracy in a nation requires serious political parties.”

LONDON — Britain’s graduates helped Keir Starmer’s Labour Party win power. Now they’re on the warpath. Soaring interest rates have left a cohort of voters in their 20s and early 30s — the first to be hit by an early 2010s overhaul of university funding — with spiraling student loan debts, and frustrated at sizable monthly repayments not touching the sides of what they owe. Chancellor Rachel Reeves delivers a tricky economic update Tuesday under pressure to act, and with opposition politicians — aware of bubbling rage among young professionals seeing their pay vanish — jumping on the bandwagon to offer friendlier options. Labour MPs are nervous too.  They are facing a real electoral threat from the left-wing populist Green Party, which has backed the complete abolition of university of tuition fees, and is open to student debt forgiveness. This generation of graduates is “the bedrock of Labour support,” Labour MP Chris Curtis, a former pollster and graduate on the controversial loan plan, said. He chairs the Labour Growth Group, which is campaigning on the issue. “There’s a worry about losing them” if financial pressures remain, he said. With Starmer’s place as prime minister under pressure, the row could also become a talking point in a future leadership contest. Wes Streeting, Starmer’s ambitious health secretary, said the “clearly rumbling” debate is “worth having.” In a sign of growing recognition of the problem, Starmer last week told MPs he would “look at ways” to make the student loans system in England “fairer.” Labour’s landslide majority in 2024 was built on support from graduates. A YouGov mega poll conducted after the 2024 general election found 42 percent of people with a degree or higher qualification backed Labour — compared to 18 percent for the rival Tories.  “It’s a ticking time bomb waiting to happen,” said Toby Whelton, a senior researcher at the Intergenerational Foundation, added. Graduates have been picked on “as the path of the least political resistance” by politicians, he argued. LEARN THE HARD WAY  This specific student loan problem dates back to 2012, when university tuition fees — introduced just a few years prior — soared to £9,000-a-year under the Conservative-Liberal Democrat coalition. The move was aimed at compensating for huge cuts to state funding for academic institutions. Maintenance grants for the poorest students were replaced with repayable loans in 2016.  Wes Streeting, Starmer’s ambitious health secretary, said the “clearly rumbling” debate is “worth having.” | Ian Forsyth/Getty Images Under the terms of these loans — known as “plan two,” and issued between 2012 and 2023 — students agreed to repay 9 percent of their salary over a threshold set by the Treasury. The terms of the deal last 30 years before any remaining arrears are wiped. (A different plan has been put in place since 2023.) With the interest rate on the loan tied to the retail price index (RPI) —seen as a poor measure of inflation by some analysts— graduate debts have been climbing at a time when wage growth has slowed and living costs are shooting up. Reeves’ decision last fall to keep the repayment threshold frozen at £29,385 for three years until 2030 was the final straw, and appears to have mobilized influential campaigners behind the plight of graduates. The Times newspaper launched an End the Graduate Rip-Off campaign, and the popular consumer finance journalist Martin Lewis has made it a cause, questioning the morality of the freeze. “It’s a complete mess,” said National Union of Students (NUS) Vice President for Higher Education Alex Stanley, whose members recently held a protest outside parliament dressed as sharks. “The fault initially may not be theirs, but the responsibility is absolutely now theirs,” he said of the Labour government, arguing the backlash poses an “opportunity as much as it is a threat” to Starmer.  “We’ve got a system that is costing students so much money that it risks putting off prospective students,” he warned.  “This is a very real burden on young people when it comes to the cost of living,” says Curtis. The repayments are a “deep cause of the economic insecurity that many younger graduates are facing” as they try buying their first home, he adds. Curtis supports a graduate tax, where university leavers would pay extra tax when they start earning with lower repayments, but in the near-term at least wants ministers to increase the threshold for loan repayments. ALTERNATIVE GRAD SCHEME Labour’s opponents on the right and left of British politics spy an opportunity. Green leader Zack Polanski — whose party won a seismic by-election in Greater Manchester last Thursday — said the system is “deeply unjust,” and treats “the costs of education as a private debt rather than a public investment.” Reeves’ decision last fall to keep the repayment threshold frozen at £29,385 for three years until 2030 was the final straw. | Jack Taylor/Getty Images He backs abolishing tuition fees and reversing repayment freezes, claiming “young people have been let down time and time again by governments who have chased the votes of older voters.”  Polanski told POLITICO in a statement he is open to debt forgiveness in the longer term, but admits “it’s a really complex issue, and we’d need to look carefully at how it would be funded.” Labour’s Curtis is skeptical the rival Greens have the answer, however. “People in this country aren’t idiots,” he said. “When these populist parties try to make arguments that one side of the balance sheet doesn’t have to add up to the other, voters … will realize that promises are being made that can’t be kept.”  A U-turn would not be cost-free for taxpayers. Last month, the Institute for Fiscal Studies calculated that increasing the repayment threshold in line with average earnings growth each year (as the centrist Lib Dems have proposed) would cost taxpayers around £3 billion just for graduates who started courses in 2022/23. Totally writing off existing student debts would cost tens of billions of pounds. Starmer has moved away from former Labour Prime Minister Tony Blair’s ambition for 50 percent of young people to attend university, pivoting to a target of two-thirds doing apprenticeships, higher training or going to university.  Labour will also be well aware of the problems former U.S. President Joe Biden encountered in Republican states and the Supreme Court over his student loan relief program, which would have canceled hundreds of billions of dollars in student loans. AGE OLD PROBLEM  The opposition Conservatives are backing changes too. “It’s an infuriating situation,” Tory leader Kemi Badenoch wrote in the Sunday Telegraph. “You’re paying money back, but every time you look at the outstanding amount, it’s rising. It just isn’t fair.”  The Tories have pledged to scrap additional interest applied to some student loans, and fund it by scrapping “dead end university courses.”   Tory MP David Reed, who is also in the graduate cohort hit by the student loan trap, argues women are being particularly hard hit when they temporarily leave the workplace. They are unable to make repayments, but the high interest rates mean their loan balance continues to rise. “The rules are technically the same for everyone,” Reed said. “But because women are still far more likely to take time out to raise children, the impact falls disproportionately on them.” “It’s an infuriating situation,” Tory leader Kemi Badenoch wrote in the Sunday Telegraph. “You’re paying money back, but every time you look at the outstanding amount, it’s rising. It just isn’t fair.” | Jeff J. Mitchell/Getty Images Nigel Farage’s Reform UK will address the issue at a press conference Wednesday. The party’s Treasury spokesperson Robert Jenrick has previously said interest rates are far too high. A U.K. government spokesperson said: “The student finance system protects lower-earning graduates, with repayments determined by incomes and outstanding loans and interest being cancelled at the end of repayment terms.” The spokeperson pointed out ministers are reintroducing targeted maintenance grants. Reeves argues government efforts to lower inflation will lower Bank of England interest rates, helping graduates. But with a powerful constituency calling for action, that position may struggle to hold. It is unacceptable for governments to “milk young people dry” to fund older generations’ benefits, Whelton, the Intergenerational Foundation researcher, argues. “As graduates on plan two systems get older [and] go into positions of influence and power, we will see more of a backlash,” he adds. “They will be [an] increasing voting constituency that can sway elections.”

Zoja Surroi is political advisor to the prime minister of Kosovo. Prime Minister Albin Kurti’s second majority win in Kosovo shows it’s possible to inspire through governance. To understand how he won his second mandate, one has to understand why he won his first — and that is the desire for change. To correct a political course before it becomes irreversible and to move toward something better. At the time, I was filled with such hope, watching the results from the Harvard Kennedy School library, yet to join his cabinet. For decades, Kosovo — like much of the Balkans — had succumbed to the cliches of the region: Corruption was treated as inevitable, stability was prioritized over accountability, and the implicit assumption was that it was naïve to expect more from a post-conflict Balkan state than just free trade. But this felt genuinely new. It seemed Kurti was in politics for the right reasons — and he had the past to prove it. A former political prisoner under Serbian rule, he spent years in opposition as one of the only credible voices speaking for true independence in Kosovo. And the promise he represented was different: prosperity, modernity, non-corruption. The kind of politics that increases turnout and pulls back those who had disengaged. Kosovo had declared independence, but it had never quite received a fresh start — until then. Kosovo became an independent country in the 21st century. Its political identity has never been about settling for the crumbs of the 20th. And Kurti avoided the fate of many first-term reformers because he delivered. Fulfilling the promises you’ve set out for the people that count on you the most isn’t just the right thing to do — it’s also good politics. That mandate wasn’t built on spectacle or shiny mega-projects. It focused on the unglamorous work of governance: building a non-corrupt government, expanding social protection, making public higher education free and strengthening government institutions. These things don’t go viral, but they’re felt: Kosovo’s standing in international transparency indices has markedly improved. The World Bank removed Kosovo from its list of fragile and conflict-affected situations, and projected it as the fastest-growing economy in its region. In Transparency International’s Corruption Perceptions Index, Kosovo rose 28 places during Kurti’s tenure. However, governing isn’t just about domestic reform, and Serbia remains the main external complication. As Kosovo reached its adulthood as a state this month, continued denial of its sovereignty looks increasingly anachronistic — and yet, it persists. And while Kosovo remains firmly pro-EU, Serbia has leaned in the opposite direction, deepening ties with Russia and tightening internal political control. This dynamic has real consequences: Belgrade’s influence over Kosovo’s Serb minority — roughly 4 percent of the population, one-third of which is concentrated around the north border — has worked against integration in the country. Political pluralism has been constrained, with one party effectively monopolizing the political field. And the dangers of this became brutally clear with the armed attack in Banjska in September of 2023. To that end, Kurti’s most ambitious — and controversial — policy has been his effort to close institutional vacuums in the north by extending the reach of Kosovo’s administrative authority. To some international partners, this appeared hasty, and the EU responded with punitive measures it has now lifted. But for many Kosovars, it was long overdue. Indeed, it’s difficult to convince a Kosovar that the threat Serbia represents is overstated. This is where Kurti’s victory takes on broader meaning. Whether in Kosovo or elsewhere, politics requires the courage to move beyond the center. It rewards those who stand for something — consistently and over time. Kosovo today exceeds many of the expectations once placed upon it. Its success is also the success of the U.S. and the EU, both of which helped shape its post-war institutions and remain deeply popular among its citizens. The question now isn’t if Kosovo belongs in the European project — it’s about Europe’s willingness to uphold its own values.

Hungarian Prime Minister Viktor Orbán has decided a showdown with Brussels is exactly what his flagging election campaign needs.  Orbán is on the back foot at home — trailing his rival Péter Magyar by some 8 percentage points in polls ahead of the April 12 election. So he’s gone on the attack against two of his favorite bogeymen abroad: Brussels and Ukrainian President Volodymyr Zelenskyy.  In doing so he’s trying to set a trap for Magyar, the 44-year-old member of the European Parliament who is on track to beat him.   Magyar has built his poll lead through a laser-focus on the corruption, mismanagement and cronyism that he says has defined Orbán’s 15 years in power. The last thing he wants is an election race in which he is typecast as the pro-EU or pro-Ukrainian candidate.   But that’s exactly where Orbán is now trying to shift the campaign. On the international stage, Orbán’s government has taken the highly confrontational step of blocking the EU’s €90 billion financial lifeline to Ukraine — agreed at a European Council meeting in December — accusing Kyiv of slow-walking repairs to the Druzhba pipeline that supplies oil to Hungary.  The timing of Orbán’s move is hardly coincidental, given his troubles in the election race. Having engineered a conflagration with Brussels over Ukraine, he upped the ante this week by accusing Magyar’s Tisza party of being traitors, of taking the side of the EU and Zelenskyy in the standoff.   ORBÁN ON THE ATTACK It’s Orbán himself who is leading the offensive. He is styling his clash with Brussels and Kyiv as one and the same as his fight with the Tisza party, which he accused of remaining “shamefully silent” about the problems with the oil supply from Ukraine.  “In line with Brussels and Kyiv, instead of a national government, they [Tisza] want to bring a pro-Ukrainian government to power in Hungary. That is why they are not standing up for the interests of Hungarian people and Hungary,” Orbán argued in a Facebook post on Monday.  He followed up with another post saying Tisza would wreck the country’s energy sector, and insisted his ruling Fidesz party was “the safe choice in April.”  “[The opposition’s] goal is chaos, fuel shortages, and gasoline price increases before the elections. That is why they have sided with Zelenskyy, against the Hungarian people,” Orbán said.   Sidestepping the trap, Magyar hit back against Orbán’s accusations — not by defending the EU or Zelenskyy, but by claiming economic mismanagement by the prime minister was stoking the high prices and insisting fuel was cheaper in Poland, the Czech Republic and Bulgaria.  Péter Magyar has built his poll lead through a laser-focus on the corruption, mismanagement and cronyism that he says has defined Orbán’s 15 years in power. | Bállint Szentgallay/NurPhoto via Getty Images “Orbán does not govern effectively and shows no interest in the continuously deteriorating situation of Hungarian citizens or businesses. Instead, he chooses to lie, incite hatred, and burden the country with some of the highest taxes in Europe,” Magyar said. Tisza declined to comment.   HOW PRO-EU IS MAGYAR, REALLY? For the EU, the big concern is how long Orbán, the EU leader closest to the Kremlin, will drag out this fight. Kyiv desperately needs the now-blocked €90 billion cash injection, and six weeks of uncertainty due to the Hungarian election would inflame geopolitical tensions over the war in Ukraine.   While much of Brussels is holding out for a Magyar win — largely to end Budapest’s obstructionism on Ukraine — the irony of Orbán’s attacks is that Magyar is hardly an unalloyed pro-EU politician, and far less a pro-Ukrainian one. Indeed, he is outdoing Orbán with his some of his more nationalist campaigning. Tisza, for example, voted against the €90 billion loan to Ukraine in the European Parliament and Magyar has strongly opposed plans for Kyiv’s accelerated membership in the European Union.   In an interview with POLITICO in 2024, Magyar said Tisza was pro-EU but was candid about the EU’s shortcomings. He expressed opposition to a European “superstate” and said he didn’t have “friends” in the European Parliament. That followed his first press conference in the Parliament, in which he opposed sending weapons to Ukraine. Earlier this year, Orbán’s Fidesz party sought to corner Magyar over the EU’s giant Mercosur trade deal with South America, which it opposes on the grounds it would harm Hungarian farmers. In Budapest, Orbán accused Magyar of backing the agreement and undermining farmers because Tisza sits with the center-right European People’s Party grouping in the European Parliament, which supported the trade pact.  So Orbán’s gone on the attack against two of his favorite bogeymen abroad: Brussels and Ukrainian President Volodymyr Zelenskyy. | Ukrinform/NurPhoto via Getty Images Ultimately, however, Tisza voted in January to freeze ratification of the EU-Mercosur accord, breaking with the EPP line — a move that triggered a “shitstorm” against the Hungarian delegation at a subsequent group meeting, according to an official who was present. CALIBRATED MESSAGING Magyar’s awkward relationship with Brussels was on full display at the Munich Security Conference this month. He used the event to initiate a tentative outreach to European heavyweights including Germany’s Chancellor Friedrich Merz and Vice Chancellor Lars Klingbeil, as well as Polish Prime Minister Donald Tusk, Croatia’s Prime Minister Andrej Plenković, and Finnish President Alexander Stubb.  The messaging was cautiously calibrated. Magyar said he wanted to undo the damage Orbán had done to democratic and judicial norms, but with the chief goal of restoring Hungary’s access to EU funds and standing up “for Hungarian interests.” His language on Ukraine was far cooler.   “The top priority of a future Tisza government will be to secure the EU funds Hungary is entitled to. To achieve this, we will immediately introduce strict anti-corruption measures, restore judicial independence, and safeguard the freedom of the press and higher education,” he said on X after meeting with Merz Feb. 14. While that was music to EU mainstream ears, Magyar also said he had used his talk with Poland’s Tusk to stress he didn’t support a fast-track EU membership for Kyiv.  Conspicuously, Magyar did not meet with any leader of the EU institutions. The optics would admittedly have been hard to navigate given that the Fidesz camp has flooded the streets of Budapest with AI photos of Magyar conspiring against Hungary with European Commission President Ursula von der Leyen. MYSTERY MAN All in all, Magyar remains an enigma to observers in both the EU and Ukraine. An MEP from the liberal Renew group in the European Parliament said: “We feel anything is better than Orbán but, honestly, I’m not sure what they are, content wise, what are the things they concretely want to do, for example in Europe and geopolitically.” While that was music to EU mainstream ears, Magyar also said he had used his talk with Poland’s Donald Tusk to stress he didn’t support a fast-track EU membership for Kyiv. | Thomas Kienzle/AFP via Getty Images Even inside the ranks of Magyar’s center-right EPP grouping, the jury remains out. “We need to see, if Magyar wins, how he will organize the government and distribute power,” said an EPP official. “But once you are in power the question is whether he will have the strength to overcome temptations or fall [to them] as Orbán did.” On Ukraine, it’s already clear that a Magyar victory would not signal an overnight thaw in ties with Kyiv. But the hope among diplomats from the EU and Kyiv is that he won’t deliberately wreck EU efforts, as Orbán has done.  “We don’t know the consequences [of the election] so we have to be careful,” said a Ukrainian government adviser, who noted they were communicating with Magyar’s team. “But by following his public speeches, it seems he is a little bit more flexible and we will expect this.”  Swedish European Affairs Minister Jessica Rosencrantz told POLITICO she was still holding out hope for a more emphatic change in Budapest’s position.  “I hope for a shift in the Hungarian approach toward Ukraine because we need to stand united for European security. Given Hungary’s own history I think it’s unbelievable that they did not show solidarity,” she said.  Ketrin Jochecová contributed to this report.

Andrea Dugo is an economist at the European Centre for International Political Economy. In the late 1400s, Italy was the jewel of Europe. Venice ruled the seas; Florence dominated art and finance; and Milan led in trade and technology. No corner of the Western world was more advanced. Yet, within decades, both its political independence and economic primacy were gone. Europe today risks a similar fate. Once the envy of the world, the bloc’s lead has eroded. The EU isn’t just politically divided, it’s also falling behind in industries that will define the rest of this century. Young talent is fleeing for the U.S. and Asia, while its economy increasingly resembles an open-air museum of past achievements. Whether in growth, technology, industry or living standards, Europe is in jeopardy of becoming a province in a world defined by others. And it stands to learn from Italy’s decline. The warning signs are unmistakable: Since 2008, the EU’s GDP expanded by just 18 percent, while the U.S. grew twice as fast and China grew nearly three times bigger. Tourism across the continent is still booming, of course, but the millions chasing their Instagram-able escapes aren’t enough to offset stagnation, and also bring costs. The bloc’s fall in living standards echoes Renaissance Italy as well. Around 1450, Italy’s income per person was 50 percent higher than Holland’s. A century later, the Dutch were 15 percent richer, and by 1650, they were nearly twice as rich. Modern Europe is slipping even faster than that. In 1995, Germany’s GDP per capita was 10 percent higher than America’s, whereas today, the U.S. is 60 percent higher. At this pace, Germany’s prosperity levels could shrink to a third of its transatlantic partner’s within a generation. Much like in Renaissance Italy, this economic malaise reflects a deep technology gap. Once the queen of the seas, Venice clung to old technology and paid the price. Its galleys, superb in calm Mediterranean waters, were no match for the ocean-going caravels that carried Spain and Portugal across the world. Modern Europe is now doing the same: On artificial intelligence, the EU invests barely 4 percent of what the U.S. does. Today, OpenAI is valued at $500 billion, while Europe’s biggest AI startup Mistral is worth just $15 billion. And though it pioneered the science in quantum, Europe trails behind in commercialization — a single U.S. startup, IonQ, raised more capital than all the bloc’s quantum firms combined. Even when it comes to batteries, Sweden’s much-touted Northvolt collapsed in March, only to be snapped up by a Silicon Valley startup. Traditional industries are faltering too. Taken together, Germany’s top three carmakers are worth just an eighth of Tesla. Ericsson and Nokia, once world leaders in mobile network technology, lag behind Asian rivals in 5G. And France’s Arianespace, once dominant in satellite launches, now hitches rides on tech billionaire Elon Musk’s rockets. The problem isn’t invention, though — it’s scale. Despite its top engineers and universities, nearly 30 percent of the bloc’s unicorns have transferred to the U.S. since 2008, taking its most entrepreneurial spirits with them. It seems the continent sparks ideas, while America fuels them and profits — yet another pattern that mirrors Italy, which supplied talent as others built empires. Its greatest explorers like Columbus, Cabot, Vespucci and Verrazzano had also trained at home, only to sail under foreign flags. The prescriptions are known. Former Italian Prime Minister Mario Draghi detailed them in his report on the EU’s future. | Thierry Monasse/Getty Images The fundamental issue in both cases is political. Like Italy’s warring city-states in the 1500s, today’s Europe is divided and feeble. Capitals quarrel over energy, debt, migration and industrial policy; a common defense strategy remains only an aspiration; and ambitious plans for joint technology spending or deeper capital markets get drowned in debate. This disunity is what doomed Italy as it fell prey to foreign powers that eventually carved up the peninsula. And the bloc’s current divisions leave it similarly vulnerable to global competitors, as Washington dictates defense; Russia menaces the continent’s east; China dominates supply chains; and Silicon Valley rules the digital economy. But is this all fated? Not necessarily. The EU has built institutions Renaissance Italy could never have dreamed of: a single market, a currency, a parliament. It still hosts world-class research institutions and excels in advanced manufacturing, pharmaceuticals, aerospace, green energy and design. The continent can still lead — but only if it acts. Sixteenth-century Italy had no such chance. Geography trapped it in the Mediterranean while trade routes shifted to the Atlantic, and commerce stagnated. New naval technologies left its fleets behind, and its brightest minds sought their fortunes abroad. But Europe faces no such limit. Nothing is stopping it other than its own political timidity and fractiousness. The bloc needs to accept costs now in order to avoid the greatest of costs later: irrelevance. It needs to invest heavily in frontier technologies like AI, quantum, space and biotech, while also building real defense and creating deep capital markets so that start-ups can scale up at home. The prescriptions are known. Former Italian Prime Minister Mario Draghi detailed them in his report on the EU’s future. What’s missing is political will. Once Europe’s beating heart, Italy eventually became a land of visitors rather than innovators. And history’s lesson is clear: Its culture endured, but its power withered. The EU still has time to avoid that destiny. Europeans can either wake up or resign themselves to becoming a continent of monuments and echoing memories.

Ivo Daalder, former U.S. ambassador to NATO, is a senior fellow at Harvard University’s Belfer Center and host of the weekly podcast “World Review with Ivo Daalder.” He writes POLITICO’s From Across the Pond column. When U.S. President Donald Trump first met with then-German Chancellor Angela Merkel after his first term began, he told her that Germany’s lack of defense spending was a problem. It meant the U.S. had to spend too much. “Angela, you owe me $1 trillion,” he said. In the end, Germany never paid a penny. But this exchange set the tone for how Trump would approach the presidency in his second term. Whether a person, business, university, law firm, media company or country — Trump has used the power of the presidency to exact a price, often in dollar terms, from whoever he interacts with. It’s the unifying theme of his leadership and his approach to the world. Donald Trump is the “Shakedown President.” It started even before he won reelection. At a dinner in Mar-a-Lago with some 20 top oil executives in April 2024, Trump told attendees to raise $1 billion for his reelection campaign, which, he promised, would be a great “deal” because he’d cut red tape and lower their taxes on “Day One” of his presidency — and that was just the beginning. Since returning to the White House, Trump has turned the Oval Office into the pay-to-play room: It’s where he met the managing head of venerable New York litigation firm Paul, Weiss and twisted arms to get $40 million in annual pro bono work for causes he deems worthwhile. In return, he rescinded an executive order he’d signed, barring the firm from federal contracts and its employees from holding security clearances. Seeing the writing on the wall, eight other white-shoe law firms then followed in Paul, Weiss’s footsteps, signing deals with the administration that collectively promised more than $1 billion in pro bono services for Trump’s priorities. Smelling victory, the president soon set his sights on other industries, starting with big media: He sued ABC and CBS News when they broadcast interviews he didn’t like and got them to pay $15 million and $16 million, respectively. The president reached multimillion dollar settlements with tech companies Meta and X. And while his multi-billion-dollar suit against the New York Times was thrown out, the Wall Street Journal’s is still pending. Tasos Katopodis/Getty Images Aside from the steep monetary value, these shakedowns have also made media companies more adverse to reporting criticism of the president and his administration’s actions. Next came universities: Long the foundation of America’s scientific and technological supremacy, Trump cut off federal research funding for major universities in order to force them to adopt policies favored by his administration. Some institutions, like Columbia University, Brown University and the University of Pennsylvania, obliged, agreeing to pay eight-to-nine figure “fines.” Others, like Harvard University, resisted and have been financially squeezed, seeing their critical scientific research grants cancelled. Corporations haven’t escaped Trump’s crosshairs either, despite much of corporate America backing Trump in the latest election. He approved Nippon Steel’s takeover of U.S. Steel, but only after demanding a “Golden Share” in the company, which grants his administration extraordinary control and veto authority over operations and decisions. He also turned a government subsidy to Intel into a 10 percent stake in the company — with the option for another 5 percent down the road — and approved chip sales to China by Nvidia and AMD in return for a 15 percent levy on all sales. Then, there are America’s trading partners, which are, notably, some of its closest allies. Here, Trump brokered remarkably similar and extraordinarily one-sided deals with the EU, Japan and South Korea, after threatening to impose tariffs of 25 percent or more on all imports from America’s largest trading partners in the Europe and Asia. He finally “compromised” at a 15 percent levy that was still six times higher than before and, of course, his victory has left the U.S. public as the real losers, facing higher prices on a wide variety of goods. But that wasn’t all. Trump also exacted commitments from these governments to make large-scale investments in the U.S. — $350 billion by South Korea, $550 billion by Japan and up to $600 billion by European companies. Europe also agreed to purchase $750 billion in gas and other energy products over four years. And here’s the kicker: In most cases, Trump will control where the investment goes, and the U.S. will receive most of the profits — up to 90 percent in the case of Japanese investments. In the short term, the Shakedown Presidency works. Individuals, law firms, media companies, universities and even countries calculate they’re better off paying a little than fighting a lot. And once one of them does, others follow. Pretty soon, it’s a billion here, a few hundred billion there, and it all adds up to real money. But — and this is crucial — in the long term, this is bound to fail. These shakedowns create massive resentment among those who bear the consequences. Clients, partners and associates search out other firms to bring their business to; readers, listeners and viewers tune out media companies they can no longer trust; and countries begin to shift to markets and partners that won’t use their interconnectedness to serve the narrow, selfish ends of one man and his administration. So far, Trump has been able to shake down a good many individuals, succeeding as he picks off firms and countries one by one. But soon, everyone will get wiser and realize they have alternatives — and that when they unite, Trump will be unable to continue his shake down operations.

University leaders who have struggled to counter the Trump administration’s monthslong campaign to rewrite higher education just caught the biggest break academia has had all year. Massachusetts Institute of Technology President Sally Kornbluth’s public rejection Friday of an offer to voluntarily link the school’s federal funding to President Donald Trump’s higher education priorities on college finance, hiring and admissions came after a string of setbacks for elite institutions in particular. “Today really felt like the clouds were breaking,” Ted Mitchell, the former president of Occidental College, said after MIT’s announcement. “One of the things I appreciate most about Sally Kornbluth’s letter is that she is capturing what a lot of presidents are saying behind the scenes.” The Trump administration has spent the year trying to assert control over universities by launching civil rights probes, freezing millions in federal research dollars and throttling their international student enrollment. And while the federal government has spent months in court fighting Harvard University, Columbia University — the administration’s first target — signed a deal over the summer that Trump critics saw as capitulation. Over the past few weeks, Trump administration officials have flipped their strategy and are now trying to sell universities on a deal that will net them federal cash, business and a bit of White House praise — a suite of benefits that aren’t explicitly in the contract. It’s an arrangement former college presidents are urging their schools to reject. “It’s pretty vague what the advantages are of signing the compact,” said Teresa Sullivan, the former president of the University of Virginia, one of nine colleges the Trump administration is trying to court. “If you’re thinking of this as a deal, it’s a one-sided deal.” The benefits of Trump’s “compact” include “increased overhead payments where feasible” and “substantial and meaningful federal grants,” according to a cover letter sent to university leaders alongside the agreement. But the White House is offering things colleges enjoyed until just a few months ago. Sullivan and others say the offer is all sticks and no carrots. And while the compact itself makes no mention of the benefits the White House is offering, it does spell out what costly financial penalties schools will face if they fall short of what the administration deems as compliance. Mitchell, who now leads the American Council on Education, which represents roughly 1,600 institutions, said many university leaders agree with statements about the need for addressing the cost of college, discrimination and free speech. “But we will not compromise our independence as institutions and we will not allow higher education to be an instrument of the government,” he said. Education Secretary Linda McMahon, White House Domestic Policy Council Director Vince Haley and senior adviser May Mailman are spearheading the effort, having started with Vanderbilt, Dartmouth, University of Pennsylvania, University of Southern California, MIT, University of Texas at Austin, University of Arizona, Brown University and UVA. Those officials say universities have long benefited from their relationships with the government. That includes access to federal student loans, competitive grant programs and federal contracts to fund research, approval for foreign student visas and tax-exempt status for the vast majority of institutions. The White House now wants these colleges to make changes to their admissions policies, faculty hiring, how they use their endowments and ensure there is “a broad spectrum of viewpoints” on campus. Trump officials also want the schools to freeze their tuition for five years, cap their international undergraduate student enrollment at 15 percent, ensure sex is defined as “male” and “female,” and adopt a policy of institutional neutrality, which means their campuses won’t weigh in on societal and political events. “Institutions of higher education are free to develop models and values other than those below, if the institution elects to forego federal benefits,” the compact said. A school found in violation of the document by the Justice Department will lose access to federal student aid, grants and contracts and more for at least a year. Institutions would also have to pay back all federal cash they’ve received that year to the government along with any private donations, if the donors ask for them back, according to the compact. Former presidents, including some who once led those institutions, are urging current leaders to resist what they see as unworkable mandates and severe penalties. “The potential sanctions are existential,” one former university president told POLITICO. “To me, it feels like a federal takeover of higher education.” A White House official on Thursday said the administration has received widespread engagement on the compact and there is some flexibility to negotiate the terms. “We’ve heard from many current and former university leaders who think the US university system needs significant change to get back on track,” a White House official said in a statement. “President Trump is delivering lasting reform to make our universities once again the envy of the world.” Spokespeople for the Education Department did not respond to a request for comment. Former Dartmouth President Phil Hanlon said some of the compact’s goals — like cost control and protecting broader expression of viewpoints — are reasonable. But he warned that most provisions are nonstarters. “All of these, at least in my mind, are quite extreme demands that universities forfeit self-governance and academic freedom,” Hanlon said. “There are certainly ways in which U.S. higher education needs to improve. But universities always have, in my experience, worked towards self-improvement without the need to have someone hit them over the head with a cudgel.” Sullivan, the former UVA president, said one of the greatest issues higher education leaders must weigh is how this compact could affect their finances. “The part of this compact that shows the least sophistication is the part that deals with finances,” Sullivan said, pointing to the mandates on tuition pricing and how endowments are used. “It just read to me as pretty naive about how higher education finance works.” She said Trump’s compact ignores inflation, the cost of new technology, faculty benefits including health care, and unpredictable state appropriations. “You don’t have that many levers to pull if you cannot ever increase tuition,” she said. “This puts the university in an impossible situation. They have to control their prices but no one else has to control theirs.” The initial group of nine universities has been asked to submit feedback by Oct. 20, with an eye toward inviting those schools in “clear alignment” with the administration’s effort to the White House by Nov. 21. How those first nine leaders respond could usher in a new era of how the federal government decides which schools it will work with and the terms they must agree to. But so far, several leaders appear to be leaning towards aligning with Kornbluth’s decision. UVA’s interim President Paul Mahoney and Rector Rachel Sheridan told their campus community, “It would be difficult for the University to agree to certain provisions in the Compact.” Dartmouth College President Sian Leah Beilock wrote a letter to her campus noting “we will never compromise our academic freedom and our ability to govern ourselves.” And University of Pennsylvania President Larry Jameson in his message to campus said “Penn seeks no special consideration. We strive to be supported based on the excellence of our work, our scholars and students, and the programs and services we provide.” But for some schools, their presidents aren’t the final say. “Regardless of what some presidents may think about it, governing boards make policy,” Sullivan said. At the University of Texas, Board of Regents Chair Kevin Eltife said they were “honored” that their flagship campus made the White House’s initial list of outreach. Hanlon, the former Dartmouth president, said the “greatest risks to the partnership between higher ed and the U.S. government” are still ahead. “I liken the partnership to the goose that laid the golden egg for the U.S.,” Hanlon said. “So let’s not kill it.”

RINGASKIDDY, Ireland — When Pfizer started manufacturing its anti-impotence drug Viagra in southwestern Ireland, locals experienced a spike in sexual arousal, five-legged rabbits proliferated, and visitors took U-turns back to their spouses after fumes from its local plant drifted in through their car windows.   That’s according to local legend, at least.  These stories “transited through the local pub,” said Pat Hennessy, a long-term resident of Shanbally, just up the road from the coastal village of Ringaskiddy. “There was a girl there and she said: ‘One whiff and they’re stiff.’”   The impact of Big Pharma on the area, however, goes far beyond amusing anecdotes: Its arrival in the 1970s turned a sleepy fishing village into an industrial powerhouse and turbocharged economic growth in County Cork. But today, the industry — and the region that depends on it — are in the eye of U.S. President Donald Trump’s tariff storm.  As he drives to slash the massive U.S. trade deficit, Trump says he is determined to reshore the production of weight-loss drugs, cancer treatments and other pharmaceuticals. He has threatened to eventually slam tariffs as high as 250 percent on the sector.  Ireland, Trump says, “took our pharmaceutical companies away” with its tax policies: Of the $213 billion of medicines the U.S. imports, the largest share comes from Ireland, a global leader in the production of expensive brand-name medicines. Dublin’s liberal tax regime has exerted an irresistible pull on U.S. Big Pharma for decades.  Locals find only limited solace in a deal struck in July between the European Union and the White House which — at least on paper — caps U.S. tariffs on pharmaceutical imports from the EU at 15 percent and exempts generic medicines. Ireland, as one of the EU’s most open economies, is particularly vulnerable to the tariffs, and uncertainty persists over Trump’s next moves and the damage they could inflict.  “It’s still like an axe hanging over us,” said David Collins, the fifth-generation owner of a family-run store in Carrigaline, a commuter town 20 minutes by bike from Ringaskiddy. “It’s a constant threat.”  The area is home to seven of the 10 largest pharma companies worldwide. More than 11,000 people in County Cork work in the industry — with tens of thousands more in ancillary jobs. Ringaskiddy alone hosts Pfizer and Johnson & Johnson, Sterling Pharma Solutions producing for Novartis, as well as smaller firms such as Recordati, BioMarin and Hovione. In addition to Viagra’s active ingredient, critical components of cardiology, immunology and oncology medications are made here.   PITCH AND PUTT  When Pfizer arrived in 1969, its workers spent their lunch breaks building a course to play pitch and putt — a scaled-down version of golf — for the local community, recalled Michael Goably, a pensioner, while enjoying his morning coffee at the clubhouse of Raffeen Creek Golf Club, nestled on the lush shores of Cork harbour.  As the name suggests, a nine-hole golf course, also built on land owned by Pfizer, now complements the pitch and putt. It’s just one example of how the area has benefited from big pharma: Ask the locals, and they’ll tell you the industry’s contribution far outweighs the side effects, such as commuter traffic and environmental pollution.  “I couldn’t say a bad word,” said Ray Keohane, another golfer taking a break on a bench between rounds.  The town of Carrigaline, once an agricultural village, now counts 20,000 residents, as well as a hotel, several supermarkets and a lively shopping street.  “When I was a child growing up in Carrigaline, there was one main industry, and it was called Carrigaline Pottery … there wasn’t a family in the area of Carrigaline that didn’t at least have one person working in the pottery,” said Collins, the supermarket owner.  “Roll on 50 years later, that’s been replaced by the pharmaceutical industries.”  CELTIC TIGER  The arrival of multinational corporations softened the impact of the closure of manufacturing sites by carmaker Ford and Dunlop, a tyre company, in the 1980s. “Ireland as a country wasn’t doing well, but Cork was a particularly black spot then,” said John O’Brien, a lecturer in finance at University College Cork. “The combination of pharmaceuticals and IT … together really have brought up the city,” he added, referring to Ireland’s second-largest city Cork, which hosts the EU headquarters of tech giant Apple.   Nationally, the success in the pharma sector helped drive economic growth in Ireland’s “Celtic Tiger” era from the 1990s to the late 2000s. That’s thanks to large-scale foreign investment — especially from the U.S. — low corporate taxes, a skilled English-speaking workforce and EU membership.  According to Louis Brennan, an emeritus professor at Trinity College Dublin, pharma’s contribution was threefold: It created high-value and high-paying jobs, led to the development of an ecosystem of suppliers and subcontractors, and generated government revenues.   Cork has also established itself as a hub for higher education in pharma-related fields.   TARIFF GAMES  Since Trump’s return to the White House, that engine of the Irish economy finds itself under (verbal) attack, exposing just how much Irish success hinges on the country’s capacity to remain the go-to location for U.S. firms, which beyond welcoming tax benefits have also long shifted their profits and patents there.  “We want pharmaceuticals made in our country,” Trump told CNBC in August.  As part of his vow to slash drug prices and bring manufacturing back to the U.S., Trump in April opened a so-called Section 232 investigation into the pharmaceutical sector to probe the impact of imports on national security and impose tariffs if needed.   Analysts estimate that Trump is unlikely to impose a tariff as high as the threatened 200 or 250 percent. However, a first “lower tariff” — no higher than 15 percent, provided Trump does indeed stick to the terms of the EU-U.S. agreement — could yet be followed by a heavily disruptive tariff of around 50 percent after a year or two. The message isn’t lost on big pharma: Giants such as Eli Lilly and Johnson & Johnson have this year announced new investments in the U.S. Yet experts warn Trump’s tariff policy risks driving up drug prices and leading to shortages, rather than spurring large-scale relocation.  While the 15 percent tariff cap foreseen by the EU-U.S. deal offers the industry a reprieve, companies need to make tricky calculations, warned Dan O’Brien, chief economist at the Institute of International and European Affairs, an Irish think tank.  “For those products that are uniquely made in Ireland there is at least some element of a buffer: It’ll take a few years for production to move out of Ireland, in a worst-case scenario,” he said. For products also made elsewhere, it will be easier to shift production and “could happen more quickly,” he added.  RISKY BUSINESS   For now, those scenarios remain hypothetical — but the unpredictability is already leaving its mark.   As companies rushed to export their goods, Irish pharma exports to the U.S. surged by nearly 50 percent in the first five months of this year. “Geopolitical concerns” now rank among the top three threats to business in the Cork Chamber of Commerce’s last survey of its members.  Companies are mostly keeping quiet. Pfizer and Johnson & Johnson declined to comment for this story, whereas Sterling Pharma Solutions, BioMarin, Recordati and Hovione did not respond to requests for comment. Novartis, which is supplied by Sterling Pharma Solutions, warned that “the introduction of tariffs risks creating additional barriers that could further delay access to life-saving treatments.”  Giants such as Eli Lilly and Johnson & Johnson have this year announced new investments in the U.S. | Cristina Arias/Getty Images Reacting to the deal between the EU-U.S. deal, the Irish Pharmaceutical Healthcare Association warned that “tariffs on medicines would be a substantial new cost where there was none before and a drag on investment, jobs and innovation.”  A worker at a pharma plant in the area, granted anonymity to protect their job security, told POLITICO output had slowed in the last couple of months as the company waited to regain planning certainty. Similarly, Dan Boyle, a Green Party councillor for Cork and the city’s former mayor, said companies told him that “our hope was that we would have announced future investment for 2030, and that’s being sat on, until we know what the situation is going to be.”  UNDER PRESSURE  Local, national and European politicians are acutely aware of just how much is at stake.  Séamus McGrath, a Dáil deputy for the Cork South-Central constituency, called for a “continuous process of renegotiation and engagement” with Washington.   “We need to renew our pitch and renew our attraction as a country for foreign direct investment,” said McGrath, sitting in the lobby of the Carrigaline Court Hotel, the town’s only hotel. “You cannot sit back.”   The politician with the co-governing centrist Fianna Fáil party entertains strong ties with Brussels, not least thanks to his brother, EU Justice Commissioner Michael McGrath.  In the EU capital, lawmakers from the region are urging the EU to boost the bloc’s competitiveness. Cynthia Ní Mhurchú, of the liberal Renew Europe group, called for cutting “excessive red tape” for businesses. And Seán Kelly, an MEP with the centre-right European People’s Party, welcomed the European Commission’s plans to secure access to new markets through trade deals.  After all, for locals back on the Irish coast, power politics determine no less than their personal future.  “They say they [the big companies] will go away,” said Amy Lyons, a bartender at Ringaskiddy’s only pub, The Ferry Boat Inn.    “I’m doing a biopharma course in college. So, imagine I get my degree, and they are gone,” she added as she drew pints for the regulars, who were discussing a new road being built to ease road congestion — caused by commuter traffic to the pharma plants.  Graphics by Hanne Cokelaere.