Political leaders stepped up demands for new EU sanctions against the regime in Iran, in response to the violent suppression of mass protests across the country.  “Europe needs to act — and fast,” European Parliament President Roberta Metsola told POLITICO. “We will support any future measures taken at EU level.”  Metsola, German Chancellor Friedrich Merz and Irish Prime Minister Micheál Martin are among those who want Brussels to escalate sanctions against Tehran. The EU’s executive in Brussels is reviewing options and promised to come forward with a plan. Proposals under discussion include designating the Islamic Revolutionary Guard Corps as a terrorist organization and tougher measures against regime figures responsible for the violence.  Authorities in Tehran have sought to quell an uprising that has spread across more than 100 towns and cities in Iran since Dec. 28. The protests began as demonstrations against the dire economic situation, with rampant inflation and a plunging currency making daily life almost impossible for millions of Iranians. But they quickly grew into a nationwide uprising demanding, in many cases, the overthrow of the ayatollahs’ authoritarian regime. Accurate data is difficult to verify, after the regime shut off internet communications, but an Iranian official claimed around 2,000 people may have been killed, including security personnel, according to Reuters. Many thousands of protesters have been arrested.  “Political signals, support and solidarity are important — but we need to show that we are serious,” Metsola said. The EU must demonstrate it is watching the unfolding crisis, listening to the calls of those demonstrating against the regime, and most importantly “acting,” she added. “If we do not stand up and call out these injustices, we let all these brave people in Iran, [who] are marching for justice, down. We cannot let this happen.”  Metsola has announced she is banning all Iranian diplomats and officials from entering any of the European Parliament’s buildings or offices. She then set out her criteria for new sanctions. “Measures must be effective and targeted, ensuring that those responsible — politically, militarily or judicially — are held accountable,” Metsola said. “We need to make sure that these sanctions are far-reaching and hard-hitting, sending an unmistakable message that human rights violations will not be tolerated.” The German chancellor also indicated his team was working on a fresh EU package of sanctions. “The regime’s violence against its own people is not a sign of strength, but of weakness. It must end immediately,” Merz posted on X. “To underscore this message, we are working on further EU sanctions.” The European Commission has been weighing up further action. On Tuesday, Commission President Ursula von der Leyen promised plans for a new wave of sanctions would come soon.  “The rising number of casualties in Iran is horrifying,” she wrote on X. “Further sanctions on those responsible for the repression will be swiftly proposed. We stand with the people of Iran who are bravely marching for their liberty.” U.S. President Donald Trump announced any country doing business with Iran would face a 25 percent American tariff. He has promised to come to the aid of protesters and is weighing up options including potential military strikes.

LONDON — Reza Pahlavi was in the United States as a student in 1979 when his father, the last shah of Iran, was toppled in a revolution. He has not set foot inside Iran since, though his monarchist supporters have never stopped believing that one day their “crown prince” will return.  As anti-regime demonstrations fill the streets of more than 100 towns and cities across the country of 90 million people, despite an internet blackout and an increasingly brutal crackdown, that day may just be nearing.   Pahlavi’s name is on the lips of many protesters, who chant that they want the “shah” back. Even his critics — and there are plenty who oppose a return of the monarchy — now concede that Pahlavi may prove to be the only figure with the profile required to oversee a transition.  The global implications of the end of the Islamic Republic and its replacement with a pro-Western democratic government would be profound, touching everything from the Gaza crisis to the wars in Ukraine and Yemen, to the oil market.  Over the course of three interviews in the past 12 months in London, Paris and online, Pahlavi told POLITICO how Iran’s Supreme Leader Ayatollah Ali Khamenei could be overthrown. He set out the steps needed to end half a century of religious dictatorship and outlined his own proposal to lead a transition to secular democracy. Nothing is guaranteed, and even Pahlavi’s team cannot be sure that this current wave of protests will take down the regime, never mind bring him to power. But if it does, the following is an account of Pahlavi’s roadmap for revolution and his blueprint for a democratic future.  POPULAR UPRISING  Pahlavi argues that change needs to be driven from inside Iran, and in his interview with POLITICO last February he made it clear he wanted foreign powers to focus on supporting Iranians to move against their rulers rather than intervening militarily from the outside.  “People are already on the streets with no help. The economic situation is to a point where our currency devaluation, salaries can’t be paid, people can’t even afford a kilo of potatoes, never mind meat,” he said. “We need more and more sustained protests.” Over the past two weeks, the spiraling cost of living and economic mismanagement have indeed helped fuel the protest wave. The biggest rallies in years have filled the streets, despite attempts by the authorities to intimidate opponents through violence and by cutting off communications. Pahlavi has sought to encourage foreign financial support for workers who will disrupt the state by going on strike. He also called for more Starlink internet terminals to be shipped into Iran, in defiance of a ban, to make it harder for the regime to stop dissidents from communicating and coordinating their opposition. Amid the latest internet shutdowns, Starlink has provided the opposition movements with a vital lifeline. As the protests gathered pace last week, Pahlavi stepped up his own stream of social media posts and videos, which gain many millions of views, encouraging people onto the streets. He started by calling for demonstrations to begin at 8 p.m. local time, then urged protesters to start earlier and occupy city centers for longer. His supporters say these appeals are helping steer the protest movement. Reza Pahlavi argues that change needs to be driven from inside Iran. | Salvatore Di Nolfi/EPA The security forces have brutally crushed many of these gatherings. The Norway-based Iranian Human Rights group puts the number of dead at 648, while estimating that more than 10,000 people have been arrested. It’s almost impossible to know how widely Pahlavi’s message is permeating nationwide, but footage inside Iran suggests the exiled prince’s words are gaining some traction with demonstrators, with increasing images of the pre-revolutionary Lion and Sun flag appearing at protests, and crowds chanting “javid shah” — the eternal shah. DEFECTORS Understandably, given his family history, Pahlavi has made a study of revolutions and draws on the collapse of the Soviet Union to understand how the Islamic Republic can be overthrown. In Romania and Czechoslovakia, he said, what was required to end Communism was ultimately “maximum defections” among people inside the ruling elites, military and security services who did not want to “go down with the sinking ship.”  “I don’t think there will ever be a successful civil disobedience movement without the tacit collaboration or non-intervention of the military,” he said during an interview last February.  There are multiple layers to Iran’s machinery of repression, including the hated Basij militia, but the most powerful and feared part of its security apparatus is the Islamic Revolutionary Guard Corps. Pahlavi argued that top IRGC commanders who are “lining their pockets” — and would remain loyal to Khamenei — did not represent the bulk of the organization’s operatives, many of whom “can’t pay rent and have to take a second job at the end of their shift.”  “They’re ultimately at some point contemplating their children are in the streets protesting … and resisting the regime. And it’s their children they’re called on to shoot. How long is that tenable?” Pahlavi’s offer to those defecting is that they will be granted an amnesty once the regime has fallen. He argues that most of the people currently working in the government and military will need to remain in their roles to provide stability once Khamenei has been thrown out, in order to avoid hollowing out the administration and creating a vacuum — as happened after the 2003 U.S.-led invasion of Iraq.  Only the hardline officials at the top of the regime in Tehran should expect to face punishment.  In June, Pahlavi announced he and his team were setting up a secure portal for defectors to register their support for overthrowing the regime, offering an amnesty to those who sign up and help support a popular uprising. By July, he told POLITICO, 50,000 apparent regime defectors had used the system.  His team are now wary of making claims regarding the total number of defectors, beyond saying “tens of thousands” have registered. These have to be verified, and any regime trolls or spies rooted out. But Pahlavi’s allies say a large number of new defectors made contact via the portal as the protests gathered pace in recent days.  REGIME CHANGE In his conversations with POLITICO last year, Pahlavi insisted he didn’t want the United States or Israel to get involved directly and drive out the supreme leader and his lieutenants. He always said the regime would be destroyed by a combination of fracturing from within and pressure from popular unrest.  He’s also been critical of the reluctance of European governments to challenge the regime and of their preference to continue diplomatic efforts, which he has described as appeasement. European powers, especially France, Germany and the U.K., have historically had a significant role in managing the West’s relations with Iran, notably in designing the 2015 nuclear deal that sought to limit Tehran’s uranium enrichment program.  But Pahlavi’s allies want more support and vocal condemnation from Europe. U.S. President Donald Trump pulled out of the nuclear deal in his first term and wasted little time on diplomacy in his second. He ordered American military strikes on Iran’s nuclear facilities last year, as part of Israel’s 12-day war, action that many analysts and Pahlavi’s team agree leaves the clerical elite and its vast security apparatus weaker than ever.  U.S. President Donald Trump pulled out of the nuclear deal in his first term and wasted little time on diplomacy in his second. | Pool photo by Bonnie Cash via EPA Pahlavi remains in close contact with members of the Trump administration, as well as other governments including in Germany, France and the U.K. He has met U.S. Secretary of State Marco Rubio several times and said he regards him as “the most astute and understanding” holder of that office when it comes to Iran since the 1979 revolution.  In recent days Trump has escalated his threats to intervene, including potentially through more military action if Iran’s rulers continue their crackdown and kill large numbers of protesters.  On the weekend Pahlavi urged Trump to follow through. “Mr President,” he posted on X Sunday. “Your words of solidarity have given Iranians the strength to fight for freedom,” he said. “Help them liberate themselves and Make Iran Great Again!” THE CARETAKER KING  In June Pahlavi announced he was ready to replace Khamenei’s administration to lead the transition from authoritarianism to democracy.   “Once the regime collapses, we have to have a transitional government as quickly as possible,” he told POLITICO last year. He proposed that a constitutional conference should be held among Iranian representatives to devise a new settlement, to be ratified by the people in a referendum.  The day after that referendum is held, he told POLITICO in February, “that’s the end of my mission in life.”  Asked if he wanted to see a monarchy restored, he said in June: “Democratic options should be on the table. I’m not going to be the one to decide that. My role however is to make sure that no voice is left behind. That all opinions should have the chance to argue their case — it doesn’t matter if they are republicans or monarchists, it doesn’t matter if they’re on the left of center or the right.”  One option he hasn’t apparently excluded might be to restore a permanent monarchy, with a democratically elected government serving in his name.  Pahlavi says he has three clear principles for establishing a new democracy: protecting Iran’s territorial integrity; a secular democratic system that separates religion from the government; and “every principle of human rights incorporated into our laws.” He confirmed to POLITICO that this would include equality and protection against discrimination for all citizens, regardless of their sexual or religious orientation.  COME-BACK CAPITALISM  Over the past year, Pahlavi has been touring Western capitals meeting politicians as well as senior business figures and investors from the world of banking and finance. Iran is a major OPEC oil producer and has the second biggest reserves of natural gas in the world, “which could supply Europe for a long time to come,” he said.  “Iran is the most untapped reserve for foreign investment,” Pahlavi said in February. “If Silicon Valley was to commit for a $100 billion investment, you could imagine what sort of impact that could have. The sky is the limit.”  What he wants to bring about, he says, is a “democratic culture” — even more than any specific laws that stipulate forms of democratic government. He pointed to Iran’s past under the Pahlavi monarchy, saying his grandfather remains a respected figure as a modernizer.  “If it becomes an issue of the family, my grandfather today is the most revered political figure in the architect of modern Iran,” he said in February. “Every chant of the streets of ‘god bless his soul.’ These are the actual slogans people chant on the street as they enter or exit a soccer stadium. Why? Because the intent was patriotic, helping Iran come out of the dark ages. There was no aspect of secular modern institutions from a postal system to a modern army to education which was in the hands of the clerics.”   Pahlavi’s father, the shah, brought in an era of industrialization and economic improvement alongside greater freedom for women, he said. “This is where the Gen Z of Iran is,” he said. “Regardless of whether I play a direct role or not, Iranians are coming out of the tunnel.”  Conversely, many Iranians still associate his father’s regime with out-of-touch elites and the notorious Savak secret police, whose brutality helped fuel the 1979 revolution. NOT SO FAST  Nobody can be sure what happens next in Iran. It may still come down to Trump and perhaps Israel.  Anti-regime demonstrations fill the streets of more than 100 towns and cities across the country of 90 million people. | Neil Hall/EPA Plenty of experts don’t believe the regime is finished, though it is clearly weakened. Even if the protests do result in change, many say it seems more likely that the regime will use a mixture of fear tactics and adaptation to protect itself rather than collapse or be toppled completely.  While reports suggest young people have led the protests and appear to have grown in confidence, recent days have seen a more ferocious regime response, with accounts of hospitals being overwhelmed with shooting victims. The demonstrations could still be snuffed out by a regime with a capacity for violence.  The Iranian opposition remains hugely fragmented, with many leading activists in prison. The substantial diaspora has struggled to find a unity of voice, though Pahlavi tried last year to bring more people on board with his own movement.  Sanam Vakil, an Iran specialist at the Chatham House think tank in London, said Iran should do better than reviving a “failed” monarchy. She added she was unsure how wide Pahlavi’s support really was inside the country. Independent, reliable polling is hard to find and memories of the darker side of the shah’s era run deep. But the exiled prince’s advantage now may be that there is no better option to oversee the collapse of the clerics and map out what comes next. “Pahlavi has name recognition and there is no other clear individual to turn to,” Vakil said. “People are willing to listen to his comments calling on them to go out in the streets.”

Ukrainian President Volodymyr Zelenskyy said that Kyiv is moving to step up pressure on Moscow with new operations targeting Russia, following a week of Russian attacks that knocked out power to Ukrainian cities as freezing temperatures set in. “Some of the operations have already been felt by the Russians. Some are still underway,” Zelenskyy said in his nightly address Saturday. “ I also approved new ones.” Zelenskyy said Ukraine’s actions include deep strikes and special measures aimed at weakening Russia’s capacity to continue the war. “We are actively defending ourselves, and every Russian loss brings the end of the war closer,” he said. He declined to provide details, saying it was “too early” to speak publicly about certain operations, but stressed that Ukraine’s security services and special forces are operating effectively. As part of Kyiv’s efforts to reduce Russia’s offensive capabilities, Ukrainian forces attacked the Zhutovskaya oil depot in Russia’s Volgograd region overnight Saturday, the General Staff said in a post on social media. Zelenskyy’s comments come after a week of escalating Russian strikes on Ukraine’s energy infrastructure, which left the regions of Zaporizhzhia and Dnipropetrovsk without electricity and heating as temperatures plunged well below zero. In the capital, renewed attacks killed at least four people and injured 25 others. The city’s mayor urged residents who could leave to do so, as roughly half of Kyiv’s apartment buildings were left without power or heat. Russia also launched a nuclear-capable Oreshnik ballistic missile at Ukraine’s Lviv region on Thursday, striking near the EU and NATO border as part of a massive barrage.

Israel’s foreign ministry accused New York City Mayor Zohran Mamdani of antisemitism on Friday, escalating tensions with the progressive leader within hours of him formally taking office. Israel’s criticism focused on Mamdani’s revocation of executive orders issued under his predecessor Eric Adams, including policies supportive of Israel. The Adams-era measures had prevented city officials from pursuing punitive economic policies such as boycotts, divestment and sanctions against Israel. They had also adopted the International Holocaust Remembrance Alliance definition of antisemitism, which the Adams’ administration said identified “demonizing Israel and holding it to double standards as forms of contemporary antisemitism.” “On his very first day as New York City Mayor Mamdani shows his true face: He scraps the IHRA definition of antisemitism and lifts restrictions on boycotting Israel. This isn’t leadership. It’s antisemitic gasoline on an open fire,” Israel’s foreign ministry said in a post. Mamdani became mayor just after midnight on New Year’s Eve, beginning a term that Democrats hope will energize the party ahead of the 2026 midterms. The 34-year-old democratic socialist campaigned on an ambitious but costly agenda, including universal free childcare and free buses, financed in part by higher taxes on corporations and the wealthy. Friday’s public rebuke from Israel’s government adds an international dimension to a controversy already unfolding at home. On Thursday, Jewish civil rights groups criticized the removal of posts related to combating antisemitism from the official @NYCMayor X account shortly after Mamdani assumed office, warning that the move risked sending the wrong signal at a particularly sensitive moment. Mamdani has repeatedly rejected accusations of antisemitism, arguing his criticism of Israel is rooted in human rights concerns. He has pledged to protect New York’s Jewish community, while maintaining his outspoken views on Middle East policy. That solidarity with New York’s Jewish community was repeated in his swearing-in ceremony, where celebrated the city’s diversity by quipping: “Where else could a Muslim kid like me grow up eating bagels and lox every Sunday?” Mamdani does, however, support bond disinvestment to pressure Israel, and says he does not believe Israel should exist as a “Jewish state.” Israeli officials have long viewed Mamdani with suspicion. Following his election victory in November Israel’s Deputy Foreign Minister Sharren Haskel described the outcome as “deeply concerning,” pointing to Mamdani’s past activism and rhetoric. Heritage Minister Amichai Eliyahu slammed Mamdani’s Jewish supporters, accusing them of having “raised their hands in support of antisemitism in the heart of America.”

KYIV — Russia attacked Ukraine with dozens of cruise missiles and kamikaze drones in the early hours of Tuesday morning, with strikes reported in Kyiv and in 13 other regions, after the U.S. mediators hosted what they called “constructive” peace talks in Florida last weekend. Moscow launched more than 650 drones and more than 30 missiles at Ukraine, President Volodymyr Zelenskyy said in a morning statement. “This Russian strike sends a clear signal about Russian priorities. A strike before Christmas, when people want to be with their families, at home, safe. A strike in the midst of negotiations to end this war. Putin can’t accept that the killing has to stop. And that means the world isn’t putting enough pressure on Russia,” Zelenskyy added. After Russia last week brushed off German Chancellor Friedrich Merz’s call for a Christmas сeasefire, Zelenskyy warned that Moscow is planning massive attacks over the holiday period. “The military must pay attention directly, protect as best they can — it’s not easy, because there is a shortage of air defense [equipment], unfortunately. And people need to pay attention — a lot of attention these days, because these ‘comrades’ can strike: nothing is sacred,” Zelenskyy said in an evening post on Telegram on Monday. The strikes on Tuesday morning injured five people in the capital Kyiv, reported Tymur Tkachenko, the head of the local military administration.  In the Kyiv region, one person was killed and three were wounded, the State Emergency Service of Ukraine said in a statement. Another person was killed in the western region of Khmelnytskyi. In the nearby Chernihiv region, first responders were fighting fires caused by drone attacks that lasted all night. The Odesa region, where Russian attacks on Dec. 13 knocked out power for thousands of residents, was attacked again on Tuesday morning. The Russian strikes damaged more than 120 buildings, as well as energy and port infrastructure, including a civilian vessel, the State Emergency Service said. In the western region of Zhytomyr, Russian drones injured six people, Governor Vitaly Bunechko said in a Telegram post. Later, the authorities reported that a child had died in the attack.

BRUSSELS — Diplomats are working on a long-shot 11th-hour compromise to salvage a deal on sending vital financial aid to Ukraine at Thursday’s high-stakes EU leaders’ summit. On Wednesday evening Europe’s leaders were split into irreconcilable camps, at least publicly, and seemed unlikely to agree on how to fund Kyiv, thanks partly to the reemergence of the same bitter north-south divisions over joint debt that torpedoed EU unity during the eurozone crisis. Only a few hours before the 27 leaders gather in Brussels, two opposing groups are crossing swords over whether to issue a loan to Ukraine based on frozen Russian central bank reserves, largely held by the Euroclear bank in Belgium. Germany along with Nordic and Eastern European countries say there is no alternative to that scheme. But they are running into hardening resistance from Belgium and Italy, which are gunning for Plan B: Support for Kyiv based on EU debt guaranteed by the bloc’s common budget. Bulgaria, Malta, Hungary and Slovakia are also against the use of the assets. In a stark illustration of the schism, Italian Prime Minister Giorgia Meloni said on Wednesday she would use the Council meeting to demand answers on the “possible risks” of leveraging the assets, while German Chancellor Friedrich Merz doubled down on the assets plan “to help end this war as quickly as possible.” ESCAPE PLAN The first contours of a potential route out of the impasse — one that would have to be hashed out during hours of negotiations — are beginning to take shape. European Commission President Ursula von der Leyen cautiously opened the door to joint debt on Wednesday morning during a speech at the European Parliament in Strasbourg. “I proposed two different options for this upcoming European Council, one based on assets and one based on EU borrowing. And we will have to decide which way we want to take,” she said. The key to such a plan would be carving Hungary and Slovakia — which both oppose giving further aid to Ukraine — out of the joint debt scheme, four EU diplomats told POLITICO. A deal could still be agreed at the Council among the 27 EU countries, but the ultimate arrangement would stipulate that only 25 would be involved in the funding. Agreeing such a scheme would give a crucial lifeline to Ukraine’s shattered public finances as its coffers risk running dry as early as next April. Hungary’s Viktor Orbán is already predicting the assets will not be discussed in Brussels, and that negotiations have shifted to joint loans. Multiple diplomats, however, retorted that Orbán was wrong and that the Russian assets were still “the only game in town.” CRUNCH TIME Despite growing political pressure on the EU to prove it can rise to meet the existential challenges facing Ukraine, diplomats from the rival camps were often skeptical on Wednesday that a compromise could be found. The idea of EU joint debt has for years been anathema to the northern member countries, who have been unwilling to underwrite bonds for highly indebted southern countries. “The closest [situations] to what’s happening now with frozen assets are the 2012-2013 financial crisis and Greece’s bailout in 2015,” said a senior EU diplomat who, like others quoted in this story, was granted anonymity to speak freely. With respect to the Ukraine war, the northerners deny they oppose the use of eurobonds over concerns about the solvency of other EU countries, but argue they prefer the assets because they would provide a greater long-term cash infusion to Ukraine. “This is not about frugals versus spenders. It’s about being pro-Ukraine or not,” said a second EU diplomat, adding that northern and eastern European countries have taken the lead in bankrolling Ukraine’s war needs over the past four years. BACKING THE BELGIANS Despite weeks of painstaking negotiations over the assets, efforts to bring Belgium around are backfiring. The country adamantly opposes using the Russian money held by Euroclear in Brussels, and has now attracted allies. “[The Commission] created a monster, and they’ve been eaten by it,” said a third EU diplomat, referring to the assets plan. Germany and its allies, however, warn there is still no alternative to targeting the Euroclear money. “If you want to do something together as Europeans, the reparations loan is the only way,” a fourth EU diplomat said. The idea behind the assets-based loan is that Kyiv would not have to repay it unless Moscow coughs up the billions-worth of reparations needed to rebuild Ukraine’s pulverized cities — an unlikely scenario. Belgian Prime Minister Bart De Wever is expected to push the Commission to explore joint debt during Thursday’s summit of EU leaders — in the hope that others around the table will echo his demands. His supporters claim the model “is cheaper and offers more clarity,” said a fifth EU diplomat. But critics point out it will also require the political blessing of Hungary’s pro-Russia Prime Minister Orbán — who has repeatedly threatened to torpedo further financial aid to Kyiv. The impasse would require the Commission to concoct a workaround to keep Ukraine afloat while allowing Orbán to save face, according to the four EU diplomats. In exchange for his support the Commission could spare Hungarian and Slovak taxpayers from having to pay for Ukraine’s defense.   “The Commission now pushes joint loans, but we will not let our families foot the bill for Ukraine’s war,” Orbán wrote on X on Wednesday afternoon. He added that “Russian assets will not be on the table at tomorrow’s EUCO [European Council].” However, a senior EU official was quick to reject the Hungarian leader’s claim that the Russian reserves were no longer in play. “The reparations loan is still very much on the table,” they said. Bjarke Smith-Meyer, Gabriel Gavin and Gerardo Fortuna contributed to this report

Pedro Sánchez is the prime minister of Spain. It’s no secret the world is going through a time of turbulence. The principles that held it together for decades are under threat; disinformation is spreading freely; and even the foundations of the welfare state — which brought us the longest period of prosperity in human history — are now being questioned by a far-right transnational movement challenging our democratic systems’ ability to deliver collective solutions and social justice. In the face of this attack, Europe stands as a wall of resistance. The EU has been  — and must remain — a shelter for the values that uphold our democracies, our cohesion and our freedom. But let’s be honest, values don’t put a roof over your head. And at any rate, these values are fading fast in the face of something as concrete and urgent as the lack of affordable housing. If we do not act, Europe risks becoming a shelter without homes. The figures are clear: The housing crisis is devastating the standard of living across Europe. Between 2010 and 2025, home prices rose by 60 percent, while rental prices went up by nearly 30 percent. In countries like Estonia or Hungary, prices have tripled. In densely populated or high-tourism cities, families can spend over 70 percent of their income on rent. And individuals with stable jobs in Madrid, Lisbon or Budapest can no longer afford to live where they work or where they grew up. Meanwhile, 93 million Europeans — that’s one in five — are living at risk of poverty or social exclusion. This isn’t just the perception of experts or institutions: Around half of Europeans consider housing to be an “urgent and immediate problem.” Housing, which should be a right, has become a trap that shapes peoples’ present, suffocates their future and endangers Europe’s cohesion, economic dynamism and prosperity. The roots of this problem may differ from country to country, but two facts are undeniable and shared throughout our continent: First, the need for more houses, which we’ve been falling behind on for years. For nearly two decades now, residential construction in the EU has fallen short of demand. After a period of strong growth in the 1990s and early 2000s, the 2008 financial crisis triggered a collapse in housing investment, and the sector never fully recovered. The pandemic only widened this gap, halting permits, delaying materials and worsening labor shortages that further stalled construction. Second, and just as urgent, is that we must ensure both new construction and existing housing stock serve their true purpose: upholding the fundamental right to decent and affordable housing. Because as we continue to fall short of guaranteeing this basic right, homes are increasingly being diverted to fuel speculation or serve secondary uses like tourist rentals. In fact, according to preliminary European Parliament data, there were around 4 million short-term rental listings on digital platforms across the EU in 2025. In my home country, cities like Madrid and València have witnessed the displacement of residents from their historic centers, which are transforming into theme parks for tourists. For nearly two decades now, residential construction in the EU has fallen short of demand. | David Zorrakino/Getty Images At the same time, housing is increasingly being treated as a financial asset instead of a social good. In Ireland, investment funds have acquired nearly half of all newly built homes since 2017, while in Sweden, institutional investors now control 24 percent of all private rental apartments. Just as no one would dare justify doubling the price of a bowl of rice for a starving child, we cannot accept turning the roofs meant to shelter people into a vehicle for speculation — and citizens overwhelmingly share in this view. Seventy-one percent of Europeans believe that the places they live would benefit from more controls on property speculation, like taxing vacant rentals or regulating short-term rentals. This is what the EU stands for: When it’s a choice between profit and people, we choose people. That choice can’t wait any longer. Thankfully, with yesterday’s Affordable Housing Plan, the European Commission is starting to move on housing, taking steps that Spain has long advocated. Brussels now increasingly recognizes the scale of this emergency and acknowledges that specific market conditions may require differentiated national and local responses. This will help consolidate a shared policy understanding regarding housing-stressed areas and strengthen the case for targeted measures — which may include, among others, restrictions on short-term rentals. Crucially, the plan also stresses the need for EU financing to boost housing supply. The time for words is over. We need urgent action. A growing outcry over housing is resonating across Europe, and our citizens need concrete solutions. Any failure to act with ambition and urgency risks turning the housing crisis into a new driver of Euroskepticism. After World War II, Europe was built on two founding promises: securing peace and delivering well-being. Honoring that legacy today means taking decisive action by massively increasing flexible funding to match the scale of the housing crisis, and guaranteeing member countries can swiftly implement the legal tools needed to adopt bold regulatory measures on short-term rentals and address the impact of nonresident buyers on housing access. The true measure of our union isn’t just written in treaties. It must be demonstrated by ensuring every person can live with dignity and have a place to call home. Let us rise to that promise — boldly, together and without delay.

From Lisbon to Tallinn, Europeans are overwhelmed by soaring home prices. This week, Brussels intends to do something about it. “This is a real crisis,” said European Commissioner for Housing Dan Jørgensen in an interview with POLITICO, ahead of the approval of the bloc’s first-ever Affordable Housing Plan. “And it’s not just enough to talk about it.” To that end, the package will seek to free up public cash for the construction of new homes, track speculation in the housing market, and give regional and local governments tools to rein in the short-term rentals contributing to the housing shortage. “The plan will be a mix of concrete actions at the EU level and recommendations that member states can apply,” Jørgensen said, adding that the European Commission wants to give national, regional and local governments ways to make real changes on the ground — while not overstepping its role in an area over which it has no official competence. “This is a real problem affecting millions of people, and the inaction is playing right into the playbook of right-wing populists,” Jørgensen noted, citing the ultranationalist parties that have stoked discontent over sky-high home prices to score major victories in countries like the Netherlands and Portugal. “Normally the EU has not played a big role here,” he added. “That needs to change.” CASH, TOOLS AND TRANSPARENCY The most concrete action set to be announced this week is a revision of state aid rules to make it easier for national governments to build affordable housing. Member countries have long complained they can only use public cash to provide homes for low-income families. Reflecting the fact that even middle-class earners are now struggling to pay for shelter, the new regulations will allow funds to be used for all groups priced out of the housing market. The package will also give national, regional and local authorities tools to target the tourist flats exacerbating the housing shortage in cities like Barcelona, Florence and Prague. “I’m not on the side of the people who call for banning short-term rentals,” Jørgensen clarified, adding that such platforms have offered travelers the ability to experience Europe differently, and provided some families with a needed source of income. But the model has grown at a rate “no one could have imagined, with short-term rentals accounting for 20 percent of homes in some very stressed areas,” he noted. It has turned into a “money machine instead of what it was intended to.” The commissioner stressed that national, regional and local leaders would ultimately be the ones deciding whether to use the tools to rein in short-term rentals. “We’re not going to force people to do anything,” he said. “If you think the status quo is fine, you can keep things as they are.” In another first, a more abstract section of the package will also aim to address speculation in the housing market. “This is a real crisis,” said European Commissioner for Housing Dan Jørgensen in an interview with POLITICO. | Lilli Förter/Getty Images While insisting he’s “not against people making money,” Jørgensen said Europe’s housing stock was being treated like “gold or Bitcoin and other investments made for the sole purpose of making money” — an approach that ignores the vital role of shelter for society at large. “Having a roof over your head, a decent house … is a human right,” he argued. As an initial step, this week’s package will propose the EU track speculation and determine the scope of the problem. However, Jørgensen acknowledged that using the resulting data for concrete action to tackle the market’s financialization might prove difficult. “While no one is really arguing this problem doesn’t exist, there’s a political conflict over whether it’s a good or a bad thing.” But regulation is essential for the proper functioning of the internal market, he added. THE COMPETENCE QUESTION The Commission’s housing package will also include a new construction strategy to cut red tape and create common standards, so that building materials manufactured at competitive prices in one member country can be easily used for housing projects in another. Additionally, there will be a bid to address the needs of the over a million homeless Europeans, many of whom aren’t citizens of the countries in which they are sleeping rough. “We want to look at what rights they have and how these are respected,” Jørgensen said. “We’re talking about humans with needs, people who deserve our help and compassion.” The commissioner explained the complexity of the housing crisis had required a “holistic” approach that led him to work in tandem with Executive Vice Presidents Teresa Ribera and Roxana Mînzatu, as well as internal market boss Stéphane Séjourné and tech chief Henna Virkkunen, among others. He also stressed the package didn’t constitute a power grab on the Commission’s part, and that national, regional and local governments are still best positioned to address many aspects of the crisis. “But,” he said, “there are areas where we haven’t done anything in which we can do something.” While much of the plan will consist of recommendations member countries won’t be required to implement, Jørgensen warned against ignoring them. The Commission is providing solutions, he said, and “policymakers need to answer to their populations if they don’t do something that’s pretty obvious they could do.” “Normal citizens will use every opportunity to make their demands known, be it in local, national or European elections,” Jørgensen explained. “I’m respectfully telling decision-makers all over Europe that either they take this problem seriously, or they accept that they’ll have to hand over power to the populists.”

This article is also available in French and German. President Donald Trump denounced Europe as a “decaying” group of nations led by “weak” people in an interview with POLITICO, belittling the traditional U.S. allies for failing to control migration and end the Russia-Ukraine war, and signaling that he would endorse European political candidates aligned with his own vision for the continent. The broadside attack against European political leadership represents the president’s most virulent denunciation to date of these Western democracies, threatening a decisive rupture with countries like France and Germany that already have deeply strained relations with the Trump administration. “I think they’re weak,” Trump said of Europe’s political leaders. “But I also think that they want to be so politically correct.” “I think they don’t know what to do,” he added. “Europe doesn’t know what to do.” Trump matched that blunt, even abrasive, candor on European affairs with a sequence of stark pronouncements on matters closer to home: He said he would make support for immediately slashing interest rates a litmus test in his choice of a new Federal Reserve chair. He said he could extend anti-drug military operations to Mexico and Colombia. And Trump urged conservative Supreme Court Justices Samuel Alito and Clarence Thomas, both in their 70s, to stay on the bench. Trump’s comments about Europe come at an especially precarious moment in the negotiations to end Russia’s war in Ukraine, as European leaders express intensifying alarm that Trump may abandon Ukraine and its continental allies to Russian aggression. In the interview, Trump offered no reassurance to Europeans on that score and declared that Russia was obviously in a stronger position than Ukraine. Trump spoke on Monday at the White House with POLITICO’s Dasha Burns for a special episode of The Conversation. POLITICO on Tuesday named Trump the most influential figure shaping European politics in the year ahead, a recognition previously conferred on leaders including Ukrainian President Volodymyr Zelenskyy, Italian Prime Minister Giorgia Meloni and Hungarian Prime Minister Viktor Orbán. Trump’s confident commentary on Europe presented a sharp contrast with some of his remarks on domestic matters in the interview. The president and his party have faced a series of electoral setbacks and spiraling dysfunction in Congress this fall as voters rebel against the high cost of living. Trump has struggled to deliver a message to meet that new reality: In the interview, he graded the economy’s performance as an “A-plus-plus-plus-plus-plus,” insisted that prices were falling across the board and declined to outline a specific remedy for imminent spikes in health care premiums. Even amid growing turbulence at home, however, Trump remains a singular figure in international politics. In recent days, European capitals have shuddered with dismay at the release of Trump’s new National Security Strategy document, a highly provocative manifesto that cast the Trump administration in opposition to the mainstream European political establishment and vowed to “cultivate resistance” to the European status quo on immigration and other politically volatile issues. In the interview, Trump amplified that worldview, describing cities like London and Paris as creaking under the burden of migration from the Middle East and Africa. Without a change in border policy, Trump said, some European states “will not be viable countries any longer.” Using highly incendiary language, Trump singled out London’s left-wing mayor, Sadiq Khan, the son of Pakistani immigrants and the city’s first Muslim mayor, as a “disaster” and blamed his election on immigration: “He gets elected because so many people have come in. They vote for him now.” The president of the European Council, António Costa, on Monday rebuked the Trump administration for the national security document and urged the White House to respect Europe’s sovereignty and right to self-government. “Allies do not threaten to interfere in the democratic life or the domestic political choices of these allies,” Costa said. “They respect them.” Speaking with POLITICO, Trump flouted those boundaries and said he would continue to back favorite candidates in European elections, even at the risk of offending local sensitivities. “I’d endorse,” Trump said. “I’ve endorsed people, but I’ve endorsed people that a lot of Europeans don’t like. I’ve endorsed Viktor Orbán,” the hard-right Hungarian prime minister Trump said he admired for his border-control policies. It was the Russia-Ukraine war, rather than electoral politics, that Trump appeared most immediately focused on. He claimed on Monday that he had offered a new draft of a peace plan that some Ukrainian officials liked, but that Zelenskyy himself had not reviewed yet. “It would be nice if he would read it,” Trump said. Zelenskyy met with leaders of France, Germany and the United Kingdom on Monday and continued to voice opposition to ceding Ukrainian territory to Russia as part of a peace deal. The president said he put little stock in the role of European leaders in seeking to end the war: “They talk, but they don’t produce, and the war just keeps going on and on.” In a fresh challenge to Zelenskyy, who appears politically weakened in Ukraine due to a corruption scandal, Trump renewed his call for Ukraine to hold new elections. “They haven’t had an election in a long time,” Trump said. “You know, they talk about a democracy, but it gets to a point where it’s not a democracy anymore.” Latin America Even as he said he is pursuing a peace agenda overseas, Trump said he might further broaden the military actions his administration has taken in Latin America against targets it claims are linked to the drug trade. Trump has deployed a massive military force to the Caribbean to strike alleged drug runners and pressure the authoritarian regime in Venezuela. In the interview, Trump repeatedly declined to rule out putting American troops into Venezuela as part of an effort to bring down the strongman ruler Nicolás Maduro, whom Trump blames for exporting drugs and dangerous people to the United States. Some leaders on the American right have warned Trump that a ground invasion of Venezuela would be a red line for conservatives who voted for him in part to end foreign wars. “I don’t want to rule in or out. I don’t talk about it,” Trump said of deploying ground troops, adding: “I don’t want to talk to you about military strategy.” But the president said he would consider using force against targets in other countries where the drug trade is highly active, including Mexico and Colombia. “Sure, I would,” he said. Trump scarcely defended some of his most controversial actions in Latin America, including his recent pardon of the former Honduran President Juan Orlando Hernández, who was serving a decades-long sentence in an American prison after being convicted in a massive drug-trafficking conspiracy. Trump said he knew “very little” about Hernández except that he’d been told by “very good people” that the former Honduran president had been targeted unfairly by political opponents. “They asked me to do it and I said, I’ll do it,” Trump acknowledged, without naming the people who sought the pardon for Hernández. HEALTH CARE AND THE ECONOMY Asked to grade the economy under his watch, Trump rated it an overwhelming success: “A-plus-plus-plus-plus-plus.” To the extent voters are frustrated about prices, Trump said the Biden administration was at fault: “I inherited a mess. I inherited a total mess.” The president is facing a forbidding political environment because of voters’ struggles with affordability, with about half of voters overall and nearly 4 in 10 people who voted for Trump in 2024 saying in a recent POLITICO Poll that the cost of living was as bad as it had ever been in their lives. Trump said he could make additional changes to tariff policy to help lower the price of some goods, as he has already done, but he insisted overall that the trend on costs was in the right direction. “Prices are all coming down,” Trump said, adding: “Everything is coming down.” Prices rose 3 percent over the 12 months ending in September, according to the most recent Consumer Price Index. Trump’s political struggles are shadowing his upcoming decision on a nominee to chair the Federal Reserve, a post that will shape the economic environment for the balance of Trump’s term. Asked if he was making support for slashing interest rates a litmus test for his Fed nominee, Trump answered with a quick “yes.” The most immediate threat to the cost of living for many Americans is the expiration of enhanced health insurance subsidies for Obamacare exchange plans that were enacted by Democrats under former President Joe Biden and are set to expire at the end of this year. Health insurance premiums are expected to spike in 2026, and medical charities are already experiencing a marked rise in requests for aid even before subsidies expire. Trump has been largely absent from health policy negotiations in Washington, while Democrats and some Republicans supportive of a compromise on subsidies have run into a wall of opposition on the right. Reaching a deal — and marshaling support from enough Republicans to pass it — would likely require direct intervention from the president. Yet asked if he would support a temporary extension of Obamacare subsidies while he works out a large-scale plan with lawmakers, Trump was noncommittal. “I don’t know. I’m gonna have to see,” he said, pivoting to an attack on Democrats for being too generous with insurance companies in the Affordable Care Act. A cloud of uncertainty surrounds the administration’s intentions on health care policy. In late November, the White House planned to unveil a proposal to temporarily extend Obamacare subsidies only to postpone the announcement. Trump has promised on and off for years to unveil a comprehensive plan for replacing Obamacare but has never done so. That did not change in the interview. “I want to give the people better health insurance for less money,” Trump said. “The people will get the money, and they’re going to buy the health insurance that they want.” Reminded that Americans are currently buying holiday gifts and drawing up household budgets for 2026 amid uncertainty around premiums, Trump shot back: “Don’t be dramatic. Don’t be dramatic.” SUPREME COURT Large swaths of Trump’s domestic agenda currently sit before the Supreme Court, with a generally sympathetic 6-3 conservative majority that has nevertheless thrown up some obstacles to the most brazen versions of executive power Trump has attempted to wield. Trump spoke with POLITICO several days after the high court agreed to hear arguments concerning the constitutionality of birthright citizenship, the automatic conferral of citizenship on people born in the United States. Trump is attempting to roll back that right and said it would be “devastating” if the court blocked him from doing so. If the court rules in his favor, Trump said, he had not yet considered whether he would try to strip citizenship from people who were born as citizens under current law. Trump broke with some members of his party who have been hoping that the court’s two oldest conservatives, Clarence Thomas and Samuel Alito, might consider retiring before the midterm elections so that Trump can nominate another conservative while Republicans are guaranteed to control the Senate. The president said he’d rather Alito, 75, and Thomas, 77, the court’s most reliable conservative jurists, remain in place: “I hope they stay,” he said, “’cause I think they’re fantastic.”