U.S. sanctions on some Iranian oil will be temporarily lifted to allow the sale of shipments already in transit, Treasury Secretary Scott Bessent announced Friday. The partial pause on sanctions is intended to help ease what the Trump administration sees as a short-term shock to the global market as a result of the attack on Iran launched by the U.S. and Israel three weeks ago. Bessent said in a social media post that the U.S. is granting a short-term authorization to allow the sale of about 140 million barrels of Iranian oil in transit. “In essence, we will be using the Iranian barrels against Tehran to keep the price down as we continue Operation Epic Fury,” he said. Oil prices have spiked to more than $100 per barrel since the U.S. launched airstrikes on Iran last month, triggering a rise in gas prices. Israeli strikes on Iran’s vast offshore gas field and Iran’s closure of the Strait of Hormuz, a critical trade passage that facilitates a significant share of the world’s oil and natural gas trade, have helped drive the increases. The sales have been authorized for 30 days, according to a copy of the general license issued by the Treasury Department on Friday. The announcement marks a partial reversal of the longstanding aggressive economic pressure campaign by the U.S. intended to weaken Iran’s economy, though Bessent said the country would have “difficulty accessing any revenue generated” from the sales. “The United States will continue to maintain maximum pressure on Iran and its ability to access the international financial system,” he added. Trump appeared to acknowledge he was aware that entering a war with Iran could cause oil prices to spike, even as he touted the success of the U.S. military operation and the strength of the economy. “I expected it worse actually,” he told reporters at the White House on Friday. “I thought that oil prices would go much higher.” Bessent said he’s confident the suspension of sanctions on Iran will benefit the U.S. economy in the long run. “Any short-term disruption now will ultimately translate into longer-term economic gains for Americans — because there is no prosperity without security,” he said. Democratic Senator Jeanne Shaheen of New Hampshire, the ranking member on the Senate Foreign Relations Committee, said in response that the easing of sanctions gives the Iranian government “a financial lifeline” as Americans “continue to feel the impact” of the war. “To say the president has no plan is an understatement,” Shaheen said.

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.

Russian President Vladimir Putin entered the new year facing a painful choice — limit his so-called special military operation in Ukraine or risk serious damage to his economy. Almost overnight, U.S. President Donald Trump handed him the solution. U.S.-Israeli strikes on Iran have sent oil prices soaring, boosting the Kremlin’s main source of revenue and making it easier for Putin to sustain his war effort. After Israel bombed Iranian oil facilities this weekend, benchmark crude prices soared to above $100 per barrel, hitting their highest mark since the summer of 2022, when markets spiked following Russia’s full-scale invasion of Ukraine. For Russia, the surge in oil prices amounts to an economic windfall at a crucial moment, as the cost of four years of war in Ukraine threatened to spill over into a domestic economic crisis. The assault on Iran may undermine Moscow’s claim to stand by its allies, but it is already benefiting Russia’s economy and, by extension, its war against Ukraine — leaving the Kremlin well placed to emerge as one of the main beneficiaries of the expanding conflict in the Middle East. ECONOMIC TURNAROUND Only several weeks ago, the mood among Russia’s economic elite was grim. The Russian finance ministry’s budget plan for this year assumed a baseline benchmark of $59 per barrel of Urals crude, the country’s main export blend. But in January, energy revenues plunged to their lowest level since 2020, compounding a disappointing tax haul. As Western sanctions, high interest rates and labor shortages strained the economy, tension between the finance ministry and the central bank on how to mitigate the damage became increasingly visible. “It was far from a collapse,” said Sergey Vakulenko, a senior fellow at the Carnegie Russia Eurasia Center. “But the government was facing tough choices, had to cut its spending and raise taxes and even consider some reduction in military expenditure.” Stopping the war in Ukraine was never on the table, Vakulenko added, but it was becoming clear that even on that front, Russia would have to “economize a bit.” Then Israel and the U.S. attacked Iran. As Tehran retaliated and the conflict spilled over into a regional war, shipping through the Strait of Hormuz has stalled, sending oil prices soaring. “Suddenly, Moscow received this gift,” said Vladimir Milov, a former deputy energy minister turned Kremlin critic in exile. “They had their lifeline.” These days, he said, Russian officials are “very, very happy.” ‘STRATEGIC MISTAKE’ Instead of selling at a discount because of Western sanctions, Russian crude may now fetch premium prices as its main buyers — India and China — scramble to secure supplies. What’s more, they’ll have Washington’s blessing.  Last Friday, the U.S. Treasury issued a 30-day waiver allowing India to buy Russian crude to “enable oil to keep flowing into the global market.” A day later, Treasury Secretary Scott Bessent said the United States could “unsanction other Russian oil,” a sharp reversal from last year’s policy of penalizing countries for buying Russian energy. Unsurprisingly, the Kremlin is using the moment to maximum advantage.  “Russia was and continues to be a reliable supplier of both oil and gas,” Putin’s spokesperson Dmitry Peskov told reporters on Friday in what sounded like a sales pitch, adding that demand for Russian energy products had increased. Meanwhile, Kremlin aide Kirill Dmitriev gloated in a series of posts on X that “the oil shock tsunami is just beginning,” criticizing Europe’s decision to cut itself off from Russian energy as “a strategic mistake.”  On Monday, pro-Kremlin commentators circulated a Wall Street Journal article predicting oil prices could skyrocket to $215. LONG GAME Energy experts warn it is too soon for Moscow to claim victory. Whether the Iran crisis proves a cure for Russia’s economy depends directly on how long it lasts. Milov, the former deputy energy minister, said that, to make a meaningful difference for the economy, Russia would need oil prices to remain at current levels for roughly a year. “One or two months of high prices would certainly help, but it won’t save it,” he said. A brief spike in prices will only “help to postpone the difficult decisions,” added Vakulenko, the analyst at the Carnegie Russia Eurasia Center.  There’s another reason why Moscow will be hoping the war drags on: With every day of fighting, the U.S. is depleting the weapon stocks Ukraine is relying upon to defend itself.  According to media reports, Russia has been providing Iran with intelligence to help it target U.S. warships and aircraft.  The assassination of Iran’s leader Ali Khamenei in a U.S.-Israeli airstrike may have dealt a blow to Russia’s promise to defend its allies, but Putin may ultimately decide it was a price worth paying.

Listen on * Spotify * Apple Music * Amazon Music “Made in Europe” is finally here. After four delays and fierce internal battles, the European Commission unveils its Industrial Accelerator Act — a plan aimed at challenging China’s dominance in clean tech and tilting public procurement toward EU-made products. Ian Wishart and senior finance reporter Kathryn Carlson break down what the push really means: Who stands to benefit, who fears creeping protectionism, and whether Brussels is turning inward at a fragile moment for global trade. Meanwhile, the Iran war is already pushing up gas prices and shipping insurance costs — and splitting Europe’s far right. Plus: The EU manages to mess up its translator exam … again. We’d love to hear from you. Tell us what you think about the podcast, suggest a topic we should cover, or let us know where — and when — you like to listen. You can reach us at our WhatsApp: +32 491 05 06 29. **A message for Amazon: Today's episode is presented by Amazon. Sixty percent of sales on Amazon come from independent sellers. Across Europe, over two hundred and eighty thousand Small and Medium Enterprises partner with Amazon to grow their business. Learn more at Aboutamazon.eu. **

John Kampfner is a British author, broadcaster and commentator. His new book, “Braver New World,” will be published in April. He is a regular POLITICO columnist. “The old order is unraveling at breathtaking pace,” said German Chancellor Friedrich Merz, speaking to the great and good at Davos as they frantically assessed the multitude of storms whipped up by U.S. President Donald Trump. The world has entered a new era built on brute force, and “it’s not a cozy place,” he declared. As far as appearances go, the speech was pretty good, delivered in the near-impeccable English of a man who spent many years with U.S. financial institutions. Yet Merz was still overshadowed by Canadian Prime Minister Mark Carney, whose own speech about the West’s “rupture” was hailed as epoch-making. Not to be outdone, a few weeks later Merz insisted to the Munich Security Conference’s organizers that he wanted to break with convention and give the opening address. With everyone fearing a repeat of U.S. Vice President JD Vance’s menace the year before, the chancellor took it upon himself to try and galvanize. His message: The world order is over; European complacency is over; but at the same time, Europe won’t apologize for its values. It was a speech that stiffened the sinews for what was to come. Make no mistake, Merz doesn’t have the charisma of other leaders. But as Germany approaches the first anniversary of the elections that ushered out the anemic Social Democrat-led government of Olaf Scholz, it may well be that in this new chancellor, the country has found the leader Europe needs for these darkened, hardened times. Merz is no Carney — but the two may have more in common than they realize. A former central banker, Carney certainly looks the part of the leader he’s become, but that wasn’t always the case. In early 2025, staring into an abyss, Canada’s Liberals decided to dump then-Prime Minister Justin Trudeau. Then, just weeks after taking over, Carney called a general election and, against the odds, defeated populist conservative Pierre Poilievre.  The person he really had to thank, however, was the incoming president south of the border who, after just a few months in office, had already vowed to absorb Canada as the 51st U.S. state. These are trying times for those who refuse to kowtow to Trump, but for Carney, they appear to be paying dividends — his approval ratings are now at their highest since he took office in March 2025. So, might the same happen to fellow centrist and ally Merz?  Unfortunately, there are a lot of things working against the German leader. For one, his party’s polling ratings remain doggedly low. The first poll of 2026 showed the far-right Alternative for Germany (AfD) extending its overall lead to 27 percent of the vote, while Merz’s Christian Democratic Union (CDU) came in at 24 percent. The chancellor’s personal popularity remains in the doldrums as well, as only 23 percent satisfied with him, and even among CDU supporters, only just over half approve of their own leader. Then, there is the fact that steadfastness in dealing with Trump’s vagaries — not to mention Russian President Vladimir Putin’s and Chinese President Xi Jinping’s — doesn’t necessarily insulate one from disenchantment back home. Something British Prime Minister Keir Starmer and French President Emmanuel Macron are finding out to their cost. For sure, Merz faces headwinds: Economic growth is forecast at around 1 percent in 2026 — which is better than the anaemic 0.2 percent of 2025 but still a far cry from the powerhouse of old. Consumer spending remains stubbornly low, and insolvencies are at their highest in a decade. In a letter to his party at the start of the year, Merz wrote that the economy was in a “very critical state.” The coalition, he said, would “have to concentrate on making the right political and legal decisions to drastically improve the economic conditions,” and that labor costs, energy costs, bureaucratic hurdles and tax burdens are all too high. “We will need to work on this together,” he concluded. But his coalition is struggling to do so, turning the much-vaunted “Autumn of Reforms” into a damp squib. Yet Merz was still overshadowed by Canadian Prime Minister Mark Carney, whose own speech about the West’s “rupture” was hailed as epoch-making. | Andrej Ivanov/AFP via Getty Images Moreover, many of the changes Merz would like to introduce — his latest bugbears are part-time work and Germans’ propensity to call in sick — are fiercely opposed by his coalition partners, the Social Democrats (SPD), which continue to cling to the welfarist view of yesteryear. In any case, Germany’s problems go even deeper: Putin’s invasion of Ukraine exposed an overreliance on Russian gas, which has proven rather expensive to move away from. Trump’s tariffs compromised Germany’s export-driven model. And now China’s overtaking Germany in several sectors it once provided a willing market for — notably cars. One thing working in Merz’s favor, however, is that compared to the far more embattled Starmer and Macron, he at least has money to spend. Of course, it’s not all perfect: Statistics for 2025 show the government’s been struggling to implement its plans to inject half-a-trillion euros into infrastructure over the long term, and there’s considerable concern over how this money will be spent. The Council of Economic Experts, which provides independent advice to ministers, has warned the government is at risk of “squandering” its investment, as it’s been using too much of the new funds to pay for pensions and social spending. But that’s a nice problem to have compared to others in Europe.  Finally, one date in the diary is filling Merz — and the leaders of Germany’s other mainstream parties — with trepidation: Sept. 6, when voters in the eastern state of Saxony Anhalt cast their ballots. One of the quirks of German politics is that the country’s in a permanent state of electioneering, with several regional elections per year. And ahead of the Saxony Anhalt vote, the AfD is currently at around 39 percent, with the CDU trailing at 26 percent, followed by the Left Party at11 percent, and the once-mighty SPD hitting rock bottom at 8 percent. One thing working in Merz’s favor, however, is that compared to the far more embattled Starmer and Macron, he at least has money to spend. | Pool photo by Stefan Rousseau/Getty Images If the eventual results broadly reflect current predictions, one of two options will come to pass: Either the CDU will be forced to cobble together an unwieldy coalition with parties it has almost nothing in common with, or the AfD will secure an outright majority, and in so doing, control its first regional parliament and get a seat in the Bundesrat upper house. This would, in turn, rekindle the fraught debate over the “firewall” — i.e. the main parties’ refusal to include the AfD from government at any level. Still, these elections are seven months away, and seven months in MAGA mayhem is a long time. Trump’s threats to take over Greenland even caused far-right parties across Europe disquiet, impelling some to criticize him, and nonetheless discomfiting those who didn’t. So, might voters begin to tire of all the disruption as the economy slowly cranks into gear? That’s his hope. It’s a distant one, but there’s a chance that what helped Carney could help him too.

Lucas Guttenberg is the director of the Europe program at Bertelsmann Stiftung. Nils Redeker is acting co-director of the Jacques Delors Centre. Sander Tordoir is chief economist at the Centre for European Reform. Europe’s economy needs more growth — and fast. Without it, the continent risks eroding its economic foundations, destabilizing its political systems and being left without the strength to resist foreign coercion. And yet, despite inviting former Italian prime ministers Mario Draghi and Enrico Letta to discuss their blueprints to revive the bloc’s dynamism, member countries have cherry-picked from the pair’s recommendations and remain firmly focused on the wrong diagnosis. Europe, the current consensus goes, has smothered itself in unnecessary regulation, and growth will return once red tape is cut. The policy response that naturally follows is deregulation rebranded as “simplification,” with a rollback of the Green Deal at its core. This is then combined with promises that new trade agreements will lift growth, and ritual invocations of the need to deepen the internal market. But this agenda is bound to disappoint. Of course, cutting unnecessary red tape is always sensible. However, this truism does little to solve Europe’s current malaise. According to the latest Economic Outlook from the Organisation for Economic Co-operation and Development, the regulatory burden on European business has risen only modestly over the past 15 years. There has been no explosion of red tape that could plausibly account for the widening growth gap with the U.S. And even the European Commission estimates that the cost savings from its regulatory simplifications — the so-called omnibuses — will amount to just €12 billion per year, or around 0.07 percent of EU GDP. That isn’t a growth strategy, it’s a rounding error. New free trade agreements (FTAs) won’t provide a quick fix either. The EU already has FTAs with 76 countries — far more than either the U.S. or China. Moreover, a recent Bertelsmann Stiftung study showed that even concluding pending deals and simultaneously deepening all existing ones would lift EU’s GDP by only 0.6 percent over five years. From Mercosur to India, there’s a strong geopolitical imperative to pursue agreements, and in the long run they can, indeed, help secure access to both supply and future growth markets. But as a short-term growth strategy, the numbers simply don’t add up. The same illusion shapes the debate on deepening the single market. Listening to national politicians, one might think it’s an orchard of low-hanging fruit just waiting to be turned into jars of growth marmalade, which past generations simply missed. But the remaining gaps — in services, capital markets, company law and energy — are all politically sensitive, technically complex and protected by powerful vested interests. The push for a Europe-wide corporate structure — a “28th regime” — is a telling admission: Rather than pursue genuine cross-border regulatory harmonization, policymakers are trying to sidestep national rules and hope no one notices. But while this might help some young firms scale up, a market integration agenda at this level of ambition won’t move the macroeconomic needle. From Mercosur to India, there’s a strong geopolitical imperative to pursue agreements, and in the long run they can, indeed, help secure access to both supply and future growth markets. | Sajjad Hussain/AFP via Getty Images A credible growth strategy must start with a more honest evaluation: Europe’s economic weakness doesn’t originate in Brussels, it reflects a fundamental shift in the global economy. Russia’s invasion of Ukraine delivered a massive energy price shock to our fossil-fuel-dependent continent. At the same time, China’s state-driven overcapacity is striking at the core of Europe’s industrial base, with Chinese firms now outcompeting European companies in sectors that were once crown jewels. Meanwhile, the U.S. — long Europe’s most important economic partner — is retreating behind protectionism while wielding coercive threats. With no large market willing to absorb Europe’s output, cutting EU reporting requirements won’t fix the underlying problem. The continent’s old growth model, built on external demand, no longer works in this new world. And the question EU leaders should be asking is whether they have a plan that matches the scale of this shift. Here is what that could look like: First, as Canadian Prime Minister Mark Carney argued at Davos, economic strength starts at home — and “home” means national capitals. Poland, Spain and the Netherlands are growing solidly, while Germany is stagnating, and France and Italy are continuing to underperform. What is seen as a European failure is actually a national one, as many of the most binding growth constraints — rigid labor markets, demographic pressure on welfare systems and fossilized bureaucracies — firmly remain in national hands. And that is where they must be fixed. It’s time to stop hiding behind Brussels. Next, Europe needs a trade policy that meets the moment. Product-by-product trade defense can’t keep pace with the scale and speed of China’s export surge, which is threatening to kill some of Europe’s most profitable and innovative sectors. The EU must move beyond microscopic remedies toward broader horizontal instruments that protect its industrial base without triggering blunt retaliation. First, as Canadian Prime Minister Mark Carney argued at Davos, economic strength starts at home — and “home” means national capitals. | Harun Ozalp/Anadolu via Getty Images This is difficult, and it will come with costs that capitals will have to be ready to bear. But without it, Europe’s core industries will remain under acute threat of disappearing. Moreover, trade defense must be paired with a rigorous industrial policy. The Green Deal remains the most plausible growth strategy for a hydrocarbon-poor continent with a highly educated workforce. But it needs clarity, prioritization and sufficient funding in the next EU budget at the expense of traditional spending. “Made in Europe” preferences can make sense — but only if they’re applied with discipline. Europe must be ruthless in defining the industries it can compete in and be prepared to abandon the rest. That was the Draghi report’s core argument. And it boggles the mind that the continent is still debating European preferences in areas like solar panels, which were lost a decade ago. Finally, deepening the single market in earnest isn’t a technocratic tweak but a federalizing choice. It means going for full harmonization in areas that are crucial for growth. It means taking power away from national regimes that serve domestic interests. Any serious reform will create losers, and they will scream. That isn’t a bug — it’s how you know the reform matters. In areas like capital markets supervision or the regulation of services, leaders now have to show they’re willing to act regardless. And unanimity is no alibi: The rules allow for qualified majorities. EU leaders must learn to build them — and to live with losing votes. EU leaders face a clear choice tomorrow: They can pursue a growth agenda that won’t deliver, reinforcing the false narrative that the EU shackles national economies and giving the Euroskeptic extreme right a free electoral boost. Or they can confront reality and make the hard choices a bold agenda calls for. The answer should be obvious.

Ed Miliband is the U.K. energy secretary and Dan Jørgensen is the EU commissioner for energy. The world has entered an era of greater uncertainty and instability than at any other point in either of our lifetimes, and energy is now central to this volatile age we find ourselves in. In recent years, both Britain and Europe have paid a heavy price for our exposure to the roller coaster of international fossil fuel markets. Russia’s illegal invasion of Ukraine in 2022 sent global gas prices soaring — driving up bills for families and businesses across the continent and leading to the worst cost-of-living crisis our countries have faced in a generation. Even as Europe rapidly cut its dependence on Russian gas and is now swiftly moving toward a complete phaseout, exposure to fossil fuels remains the Achilles’ heel of our energy systems. The reality is that relying so heavily on fossil fuels — whether from Russia or elsewhere — can’t give us the energy security and prosperity we need. It leaves us incredibly vulnerable to international market volatility and pressure from external actors. Like European Commission President Ursula von der Leyen said: “As our energy dependency on fossil fuels goes down, our energy security goes up.” This is why Britain and the EU are committed to building Europe’s resources of homegrown clean power, looking to increase our energy security, create well-paid jobs, bring down bills and boost our industrial competitiveness, all while tackling the climate crisis to protect future generations. Today, nine European countries, alongside representatives from NATO and the European Commission, are meeting in Hamburg for the third North Sea Summit to act on this shared understanding. Together, we can seize the North Sea’s vast potential as a clean energy powerhouse — harness its natural resources, skilled workforce and highly developed energy industries to lead the world in offshore wind, hydrogen and carbon capture technologies.   Three years ago in Ostend, our countries united behind a pioneering goal to deliver 300 gigawatts of offshore wind in the North Sea by 2050. Today in Hamburg, we will double down on those commitments and pledge to jointly deliver shared offshore wind projects. With around $360 billion invested in clean energy in the EU just last year, and wind and solar overtaking fossil-fuel-generated power for the first time, this is an historic pact that builds on the clean power momentum we’re seeing all across Europe. And this unprecedented fleet of projects will harness the abundant energy waiting right on our doorstep, so that we can deliver cheap and secure power to homes and businesses, cut infrastructure costs and meet rising electricity demand. Everything we’re seeing points to a clean energy economy that is booming. Indeed, earlier this month Britain held the most successful offshore wind auction in European history, delivering enough clean energy to power 12 million homes — a significant vote of confidence in Britain and Europe’s drive to regain control of our energy supplies. We believe there is huge value in working together, with our neighbors and allies, to build this future — a future that delivers on shared energy infrastructure, builds strong and resilient supply chains, and includes talks on the U.K.’s participation in the European electricity market. Strengthening such partnerships can help unlock investment, reduce our collective exposure to fossil fuels and bring down energy costs for our citizens. This speaks to a wider truth: An uncertain age makes cooperating on the basis of our shared interests and values more important — not less. By accelerating our drive to clean energy, today’s summit will be fundamental in delivering the energy security and prosperity Europe desperately needs.

BRUSSELS — The EU will begin to ban all Russian gas imports to the bloc early next year after lawmakers, officials and diplomatic negotiators struck a last-minute deal over a key piece of legislation set to reshape Europe’s energy sector. Put forward over the summer, the bill is designed to kill off the EU’s lingering Russian energy dependency at a critical juncture in the Ukraine war, with Russia advancing steadily and Kyiv fast running out of cash. While Europe’s imports of Russian gas have fallen sharply since 2022, the country still accounts for around 19 percent of its total intake. The EU is already set to sanction Russian gas imports, but those measures are temporary and subject to renewal every six months. The new legislation is designed to make that rupture permanent and put member countries that still operate contracts with Russia on a surer footing in the event of legal action. “We were paying to Russia €12 billion per month at the beginning of the war for fossil fuels. Now we’re down to €1.5 billion per month … We aim to bring it down to zero,” European Commission President Ursula von der Leyen told reporters on Wednesday. “This is a good day for Europe and for our independence from Russian fossil fuels — this is how we make Europe resilient.” “We wanted to show that Europe will never go back to Russian fossil fuels again — and the only ones who lost today are Russia and Mr Putin,” Green MEP Ville Niinistö, one of the Parliament’s two lead negotiators on the file, told POLITICO. The law will enter into force on Jan. 1 next year and then apply to different kinds of gas in phases. Spot market purchases of gas will be banned almost immediately, while existing short- and long-term contracts will be banned in 2026 and 2027. A prohibition on pipeline gas will come into effect in September 2027, owing to concerns from landlocked countries reliant on Russian gas, such as Slovakia and Hungary. Finalized in barely six months, the law was the subject of fierce disagreements in recent weeks as the European Parliament’s more ambitious stance irked member countries concerned about the legal risks and technical difficulties of the ban. But despite fears that talks would be prolonged and even spill over into the new year, negotiators reached a compromise on key aspects of the law at the last minute. Now both sides can claim victory. Lawmakers, for instance, repeatedly pushed for an earlier timeline and ultimately ensured that none of the bans would enter into force later than 2027. The Parliament also secured commitments from national capitals to impose one of three penalties on companies that breach the rule: a lump sum penalty of €40 million, 3.5 percent of a company’s annual turnover, or 300 percent of the value of the offending transaction. Where the Council included its demands, the Parliament was able to water them down. For instance, lawmakers convinced member countries to tighten a controversial clause allowing countries facing energy crises to lift the ban — suspensions will only last four weeks at a time and will need to be reviewed by Parliament and the Commission. The Parliament also backed down from a push for a parallel ban on Russian crude imports in the same file after the Commission promised a separate bill early next year, as first reported by POLITICO. The Council did push through its controversial list of “safe” countries from which the EU can still import gas without rigorous vetting. Lawmakers complained that the list includes Qatar, Algeria and Nigeria, but have now accepted it, so long as countries can be excised from the list if they offend. MEPs gushed that they got far more than they expected and weren’t trampled by seasoned diplomats, as some had feared. “We have strengthened the European Commission’s initial proposal by introducing a pathway towards a ban on oil and its products, ending long-term contracts sooner than originally proposed, and secured harmonized EU penalties for non-compliance,” European People’s Party MEP Inese Vaidere, who also led the file, told POLITICO. “We achieved more than my realistic landing scenario — earlier phase-outs, tougher penalties, and closing the loopholes that let Russian gas sneak in,” said Niinistö. “This was about proving European unity — Parliament, Council and Commission on the same side — and showing citizens that we can cut Russia’s revenues faster and more decisively than ever proposed before.”

When you live at the crossroads of East and West, energy is never just about electricity or gas. In the Republic of Moldova, high-voltage lines and pipelines have always carried more than power — they have carried geopolitics. For decades, this small country wedged between Romania and Ukraine found itself trapped in a web of vulnerabilities: dependent on Russian gas, tied to Soviet-era infrastructure and reliant on energy supplies from the breakaway Transnistrian region. Energy was less a utility than a lever of political blackmail.         And yet, in just a few years, Moldova has begun to flip the script. What was once the country’s greatest weakness has been turned into a project of sovereignty — and, crucially, a bridge to Europe.         A turning point in the crisis         The breaking point came in October 2021, when Gazprom slashed deliveries, prices exploded and Chișinău suddenly found itself staring at an energy abyss. Electricity was supplied almost entirely from the MGRES plant in Transnistria, itself hostage to Kremlin influence. By 2022 the situation worsened: gas supplies were halted altogether, MGRES cut the lights on the right bank of the Dniester and Moldova teetered on the edge of a blackout.         With coordinated support from the European Union — which helped Moldova overcome the crises, cushion the impact on consumers hit by soaring prices and committed further backing through instruments such as the Growth Plan for the Republic of Moldova — the country managed to stabilize the situation.              For many countries, such a crisis would have spelled capitulation. For Moldova, it became the start of something different: a choice between survival within the old dependency or a leap toward reinvention. > What was once the country’s greatest weakness has been turned into a project > of sovereignty — and, crucially, a bridge to Europe.         Reinvention with a European compass         Under a unified Pro-European leadership — President Maia Sandu, Prime Minister Dorin Recean and Energy Minister Dorin Junghietu — Moldova has embraced the latter path. In 2023 the Ministry of Energy was created not as another bureaucratic silo, but as an engine of transformation.         The strategy was clear: diversify supply, integrate with the European grid, liberalize markets and accelerate the green transition. Within months, JSC Energocom — the newly empowered state supplier — was sourcing natural gas from more than ten European partners via the Trans-Balkan corridor. Strategic reserves were secured in Romania and Ukraine. For the first time, Moldova was no longer hostage to a single supplier.         In 2024 Moldova joined the Vertical Gas Corridor linking Greece, Bulgaria, Romania and Ukraine — a symbolic and practical step toward embedding itself into Europe’s energy arteries. On the electricity side, synchronization with ENTSO-E, the European grid, in March 2022 allowed direct imports from Romania. The Vulcănești–Chișinău transmission line, to be completed this year, alongside the Bălți–Suceava interconnection in tender procedures, ensures Moldova’s future is wired into Europe, not into its separatist past. Since 2025 the right bank of the Dniester has no longer bought electricity from Transnistria.         Accelerated legislative reform         None of Moldova’s progress would have been possible without shock therapy in legislation. The country rewrote its gas law to enforce mandatory storage of 15 percent of annual consumption, guarantee public service obligations, open its markets to competition, and shield vulnerable consumers. In parallel, it adopted EU rules on wholesale market transparency and trading integrity, aligning itself not only in practice but also in law with European standards, a pace of change that has been repeatedly underscored by the Energy Community Secretariat in its annual Implementation Reports, which recognized Moldova as the front-runner in the Community in 2024.         But perhaps the most striking step was political: Moldova became the first country in Europe to renounce Russian energy resources entirely. A government decision spelled it out clearly: “the funds are intended to ensure the resilience and energy independence of the Republic of Moldova, including the complete elimination of any form of dependence on the supply of energy resources from the Russian Federation.”         Junghietu, Moldova’s energy minister, has been blunt about what this meant. “Moldova no longer wants to pay a political price for energy resources — a price that has been immense over the past 30 years. It held back our economic development and kept us prisoners of empty promises.” The new strategy is built on diversification, transparency and competition. As Junghietu put it: “The economy must become robust, so that it is competitive, with prices determined by supply and demand.”         This combination of structural reform and political clarity marked a definitive break with the past — and a foundation for Moldova’s European energy future.         The green transition: from ambition to action         The reforms went beyond emergency fixes. They set the stage for a green transformation. By amending renewables legislation, the government committed to 27 percent renewable energy in total consumption by 2030, with 30 percent in the electricity mix.         The results are visible: tenders for 165 MW of renewable capacity have been launched and contracted and a net billing mechanism was introduced, boosting the number of prosumers. In April 2025 more than a third of Moldova’s electricity already came from local renewables. The ministry has also supported the development of energy communities, biofuels and pilot projects for energy efficiency. The green transition is no longer a slogan — but a growing reality.         More than energy policy — a political project         Digitalization, too, is reshaping the sector. With support from UN Development Programme and the Italian government, 35,000 smart meters are already in place, with a goal to reach 100,000 by 2027. These are not just gadgets — they cut losses, enable real-time monitoring and give consumers more control. Meanwhile, ‘sandbox’ regimes for energy innovators, digital platforms for price comparison and streamlined supplier switching are dragging Moldova’s energy sector into the 21st century.       These are not technical reforms in isolation; they are political acts. Energy independence has become the backbone of Moldova’s EU trajectory. By transposing the EU’s Third and Fourth Energy Packages, adopting the Integrated National Energy and Climate Plan, and actively engaging in European platforms, with technical support from the Energy Community Secretariat that helped authorities navigate these challenges, Chișinău is demonstrating that integration is not just a diplomatic aspiration — it is a lived reality.         Partnerships with Romania have been central. The 2023 energy memorandum, joint infrastructure projects, and cross-border storage and balancing initiatives have anchored Moldova firmly in the European family. Step by step, the country has become not only a consumer but also a credible partner in the European energy market. > These are not technical reforms in isolation; they are political acts. Energy > independence has become the backbone of Moldova’s EU trajectory.         Lessons from crisis         The energy crises of 2021-22 were existential. Moldova was threatened with supply cuts, social unrest and economic collapse. But the government’s response was coordinated, strategic and unusually bold for a country long accustomed to living under the shadow of dependency.         New laws harmonized tariffs, enforced supplier storage obligations and put in place shields for vulnerable households. The Ministry of Energy proved capable of anticipating risks and managing them. Moldova ceased being reactive — and started planning.         Of course, challenges remain. Interconnections with Romania must be further expanded, balancing capacity for the electricity grid is still limited and investment in efficiency has only begun. But today, Moldova has a coherent plan, a competent team and an irreversible direction.         A change of mindset         Perhaps the most profound transformation has been cultural. Chișinău’s energy ministry has evolved from crisis responder to a forward-looking body linking European market realities with citizens’ daily needs. Its teams are now engaging with both the complexities of European energy markets and the practical concerns of Moldovan households. Decisions are increasingly data-driven, communication is transparent, and cooperation with private actors and international partners has become routine.         This institutional maturity is crucial for Moldova’s EU path. Integration is not only about harmonizing legislation but also about building trust, credibility and resilience. Energy has become the showcase — the sector that proves Moldova can implement European rules, innovate and deliver. > Energy has become a catalyst for broader reforms in governance, transparency, > social protection and regional development.         A model in the making         In a region where instability remains the norm, Moldova is beginning to stand out as a model of resilience. Its reforms — synchronization with ENTSO-E, participation in the Vertical Gas Corridor, expansion of renewables and rapid digitalization — are being watched across the Eastern Partnership. Energy has become a catalyst for broader reforms in governance, transparency, social protection and regional development.         What was once a weapon turned against Moldova has been reimagined as a shield. Energy, long the Achilles’ heel of this fragile state, has become its spearhead into Europe.          Moldova’s journey is far from complete. But one thing is already clear: its European future is no longer a promise. It is under construction, one kilowatt at a time. -------------------------------------------------------------------------------- Author: Daniel Apostol is an economic analyst, first vice president of the Association for Economic and Social Studies and Forecasts (ASPES), and CEO of the Federation of Energy Employers of Romania. -------------------------------------------------------------------------------- This publication was produced with the financial support of the European Union. Its content represents the sole responsibility of the MEIR project, financed by the European Union. The content of the publication belongs to the authors and does not necessarily reflect the vision of the European Union.

Mr. Marcin Laskowski | via PGE The European Union finds itself navigating an era of extraordinary challenges. From defending our shared values against authoritarian aggression to preserving unity in the face of shifting geopolitical landscapes, the EU is once again being tested. Covid-19, the energy crisis, the full-scale Russian war against Ukraine and renewed strains in international relations have taught us a simple lesson: a strong Europe needs capable leaders, resilient institutions and, above all, stable yet flexible financial frameworks. The debate on the next Multiannual Financial Framework (MFF) is therefore not only about figures. It is, fundamentally, a debate about Europe’s security, resilience and its future. From the perspective of the power sector, the stakes are particularly high. Electricity operators live every day with the consequences of EU regulation, carrying both the costs of compliance and the opportunities of EU investment support. Data confirms that European funds channeled into the electricity sector generate immense value for the EU economy and consumers alike. Why? Because electrification is the backbone of Europe’s industrial transformation. The Clean Industrial Deal makes it clear: within a few short years, Europe must raise the electrification rate of its economy by 50 percent — from today’s 21.3 percent to 32 percent by 2030. That means the future of sectors as diverse as chemicals, steel, food processing and high-tech manufacturing is, in reality, a debate about electrification. If this transition is not cost-effective, Europe risks eroding its global competitiveness rather than strengthening it. > That means the future of sectors as diverse as chemicals, steel, food > processing and high-tech manufacturing is, in reality, a debate about > electrification. Electrification is also central to REPowerEU — Europe’s pledge to eliminate dependence on Russian fossil fuels. It is worth recalling that in 2024 the EU still paid more to Russia for oil and gas (€21 billion) than it provided in financial support to Ukraine (€19 billion). Only a massive scale-up of clean, domestic electricity can reverse this imbalance once and for all. But this requires a fresh approach. For too long, the power sector has been seen only through the lens of its own transition. Yet without power sector, no other sector will decarbonize successfully. Already today, electricity accounts for 30 percent of EU emissions but has delivered 75 percent of the reductions achieved from the Emissions Trading Scheme. As electrification accelerates, the sector — heavily reliant on weather-dependent renewables — faces growing costs in ensuring security of supply and system stability. This is why investments must also focus on infrastructure that directly enhances security and resilience, including dual-use solutions such as underground cabling of electricity distribution grids, mobile universal power supply systems for high/medium/low voltage, and advanced cyber protection. These are not luxuries, but prerequisites for a power system capable of withstanding shocks, whether geopolitical, climatic or digital. > For too long, the power sector has been seen only through the lens of its own > transition. Yet without power sector, no other sector will decarbonize > successfully. The European Commission estimates that annual investment needs in the power sector will reach €311 billion from 2031— nearly ten times more than the needs of industry sector. This is an unavoidable reality. The critical question is how to mobilize this capital in a way that is least burdensome for citizens and businesses. If mishandled, it could undermine Europe’s industrial competitiveness, growth and jobs. The MFF alone cannot deliver this transformation. Yet it can, and must, be a vital part of the solution. The European Parliament rightly underlined that completing the Energy Union and upgrading energy infrastructure requires continued EU-level financing. In its July proposal, the Commission earmarked 35 percent of the next budget — about €700 billion — for climate and environmental action. These funds must be allocated in a technology-neutral way, systematically covering generation, transmission, distribution and storage. Public-good investments such as power grids — especially local and regional distribution networks — should be treated as a top priority, enabling small and medium-sized enterprises and households to deploy renewables, access affordable energy and reduce energy poverty. > The debate is not only about money, it is also about the way it is spent. The debate is not only about money, it is also about the way it is spent.  A cautious approach is needed to the “money for reforms” mechanism. EU funds for energy transition must not be judged through unrelated conditions. Support for investments in energy projects must not be held hostage to reforms not linked to energy or climate. This caution should also apply to extending the “do no significant harm” principle to areas outside the scope of the Taxonomy Regulation, where it risks adding unnecessary complexity, administrative burden and uncertainty. The focus must remain firmly on delivering the infrastructure and investments needed for decarbonization and security. Moreover, EU budget rules must align with state aid frameworks, particularly the General Block Exemption Regulation, and reflect the long lead times required for power sector investments. At the same time, Europe cannot afford to lose public trust. The green transition will not succeed if imposed against citizens; it must be built with them. Europe needs more carrots, not more sticks. The next EU budget, therefore, must be more than a financial plan. It must be a strategic instrument to strengthen resilience, sovereignty and competitiveness, anchored in the electrification of Europe’s economy. Without it, we risk not only missing our climate targets but also undermining the very security and unity that the EU exists to defend.