LONDON — Green Party leader Zack Polanski is open to forming a discrete non-aggression pact with Labour in order to stop right-winger Nigel Farage from ever entering Downing Street, according to two senior Green officials. Polanski, the leader of the “eco-populist” outfit that is helping squeeze the incumbent Labour government’s progressive vote, has been keen to make the case that his radical politics can halt Farage — whose insurgent Reform UK is riding high in the polls — in his tracks. But the recently elected party chief, who has overseen a big boost to Green polling with his punchy defenses of leftist causes on social media and television, has told allies he “couldn’t live with myself” if he contributed to Farage’s victory, according to a second senior Green official, granted anonymity like others in this piece to speak about internal thinking. Such a move would stop short of a formal Green-Labour deal, instead tapping into tactical voting. Green officials are discussing the prospect of informal, local prioritizations of resources so the best-placed progressive challenger can win, as seen in elections past with Labour and the centrist Liberal Democrats. At the same time, Green advisers are keen to lean into the deep divisions within Labour about whether Starmer should be replaced with another leader to prevent electoral oblivion. Starmer appears deeply unpopular with Green supporters. One YouGov study has him rated just as unfavorably as Conservative chief Badenoch with backers of Polanski’s party. The first Green official argued there is “no advantage in working electorally with Labour under Starmer.” Instead, they’re eyeing up — even expecting — a change in Labour leadership. Polanski has talked up Andy Burnham, the Greater Manchester Labour mayor who is seen as one potential challenger to Starmer.  LABOUR: WE ARE NOT EVEN THINKING ABOUT THAT As the party in power, Labour — which has ramped up its attacks on the Greens in recent weeks — is keen to tamp down talk of working together. Asked about the Greens, a senior U.K. government adviser said: “We are not even thinking about that. We need to focus on being a viable government.”  They expect Polanski’s polling to plummet once there’s more scrutiny of his politics, including his criticism of NATO, as well as his more colorful comments. Back in 2013, as a hypnotherapist, Polanski suggested to a reporter he could enlarge breasts with his mind. “The hypnotist thing goes down in focus groups like a bucket of cold sick,” the government adviser added. There’s skepticism that a non-aggression deal could work anyway, not least because the Greens will be vying for the kind of urban heartlands Labour can’t afford to back down from. Neither party “has an incentive to go soft on one another,” as a result, Luke Tryl, a director at the More in Common think tank, said. “I really doubt they’re going to forgo taking more seats off us in London or Bristol in the greater interest of the left,” said a Labour MP with a keen eye on the polling. “They’re trying to replace us — they’re not trying to be our little friends.” The Labour MP instead argued that voters typically make their minds up in the lead-up to elections as to how best to stop a certain outcome, whether that’s due to past polling or activities on the ground. Zack Polanski has been keen to make the case that his radical politics can halt Nigel Farage — whose insurgent Reform UK is riding high in the polls — in his tracks. | Lesley Martin/Getty Images That can well work against Labour, as seen in the Caerphilly by-election in October. The constituency of the devolved Welsh administration had been Labour since its inception in 1999 — but no more. Voters determined to stop Farage decided it was the center-left Welsh nationalists of Plaid Cymru that represented the best party to coalesce around. Reform’s success was thwarted — but Labour’s vote plummeted in what were once party heartlands.  “There’s no doubt the Greens risk doing to Labour what Farage did to the Conservatives,” said Tryl of More in Common, who pointed out that the Greens may not even win many seats as a result of the fracturing (party officials internally speak of winning only 50 MPs as being a huge ask).   “Labour’s hope instead will have to be that enough disgruntled progressives hold their nose and opt for PM Starmer over the threat of PM Farage.” Labour and the Greens are not the only parties dealing with talk of a pact, despite a likely four-year wait for Britain’s next general election. Ever since 1918, it’s been either the Conservatives or Labour who’ve formed the British government, with Westminster’s first-past-the-post, winner-takes-all system across 650 constituencies meaning new parties rarely get a look in. But the general election in July last year suggested this could be coming apart. Farage has already been forced to deny a report that he views an electoral deal with establishment Conservatives as the “inevitable” route to power. His stated aim is to replace the right-wing party entirely. Conservative Leader Kemi Badenoch is publicly pretty firm that she won’t buddy up with Reform either. “I am the custodian of an institution that has existed for nigh on 200 years,” she said in February. “I can’t just treat it like it’s a toy and have pacts and mergers.” Robert Jenrick, the right-winger who’s widely tipped as her successor, has been more circumspect, however. That appears to be focusing minds on the left. Farage may be polling the highest — but there’s still a significant portion of the public horrified by the prospect of him entering No.10. A YouGov study on tactical voting suggested that Labour would be able to count on a boost in support from Liberal Democrat and Green voters to stave off the threat of Farage. Outwardly, Polanski is a vocal critic of Labour under Starmer and wants to usurp the party as the main vehicle for left-wing politics. The Green leader is aiming to win over not just progressives, but also disenchanted Reform-leaning voters, with his support for wider public ownership, higher taxes on the wealthy, and opposition to controversial measures like scaling back jury trials and introducing mandatory digital IDs. But privately, Polanski is more open to doing deals because in his mind, “at the general election, stopping Farage is the most important objective,” as the first senior Green adviser put it. “We expect to be the main challengers to Reform, but of course we are open to discussing what options exist to help in that central mission of stopping Farage,” they said.

Europe’s security does not depend solely on our physical borders and their defense. It rests on something far less visible, and far more sensitive: the digital networks that keep our societies, economies and democracies functioning every second of the day. > Without resilient networks, the daily workings of Europe would grind to a > halt, and so too would any attempt to build meaningful defense readiness. A recent study by Copenhagen Economics confirms that telecom operators have become the first line of defense in Europe’s security architecture. Their networks power essential services ranging from emergency communications and cross-border healthcare to energy systems, financial markets, transport and, increasingly, Europe’s defense capabilities. Without resilient networks, the daily workings of Europe would grind to a halt, and so too would any attempt to build meaningful defense readiness. This reality forces us to confront an uncomfortable truth: Europe cannot build credible defense capabilities on top of an economically strained, structurally fragmented telecom sector. Yet this is precisely the risk today. A threat landscape outpacing Europe’s defenses The challenges facing Europe are evolving faster than our political and regulatory systems can respond. In 2023 alone, ENISA recorded 188 major incidents, causing 1.7 billion lost user-hours, the equivalent of taking entire cities offline. While operators have strengthened their systems and outage times fell by more than half in 2024 compared with the previous year, despite a growing number of incidents, the direction of travel remains clear: cyberattacks are more sophisticated, supply chains more vulnerable and climate-related physical disruptions more frequent. Hybrid threats increasingly target civilian digital infrastructure as a way to weaken states. Telecom networks, once considered as technical utilities, have become a strategic asset essential to Europe’s stability. > Europe cannot deploy cross-border defense capabilities without resilient, > pan-European digital infrastructure. Nor can it guarantee NATO > interoperability with 27 national markets, divergent rules and dozens of > sub-scale operators unable to invest at continental scale. Our allies recognize this. NATO recently encouraged members to spend up to 1.5 percent of their GDP on protecting critical infrastructure. Secretary General Mark Rutte also urged investment in cyber defense, AI, and cloud technologies, highlighting the military benefits of cloud scalability and edge computing – all of which rely on high-quality, resilient networks. This is a clear political signal that telecom security is not merely an operational matter but a geopolitical priority. The link between telecoms and defense is deeper than many realize. As also explained in the recent Arel report, Much More than a Network, modern defense capabilities rely largely on civilian telecom networks. Strong fiber backbones, advanced 5G and future 6G systems, resilient cloud and edge computing, satellite connectivity, and data centers form the nervous system of military logistics, intelligence and surveillance. Europe cannot deploy cross-border defense capabilities without resilient, pan-European digital infrastructure. Nor can it guarantee NATO interoperability with 27 national markets, divergent rules and dozens of sub-scale operators unable to invest at continental scale. Fragmentation has become one of Europe’s greatest strategic vulnerabilities. The reform Europe needs: An investment boost for digital networks At the same time, Europe expects networks to become more resilient, more redundant, less dependent on foreign technology and more capable of supporting defense-grade applications. Security and resilience are not side tasks for telecom operators, they are baked into everything they do. From procurement and infrastructure design to daily operations, operators treat these efforts as core principles shaping how networks are built, run and protected. Therefore, as the Copenhagen Economics study shows, the level of protection Europe now requires will demand substantial additional capital. > It is unrealistic to expect world-class, defense-ready infrastructure to > emerge from a model that has become structurally unsustainable. This is the right ambition, but the economic model underpinning the sector does not match these expectations. Due to fragmentation and over-regulation, Europe’s telecom market invests less per capita than global peers, generates roughly half the return on capital of operators in the United States and faces rising costs linked to expanding security obligations. It is unrealistic to expect world-class, defense-ready infrastructure to emerge from a model that has become structurally unsustainable. A shift in policy priorities is therefore essential. Europe must place investment in security and resilience at the center of its political agenda. Policy must allow this reality to be reflected in merger assessments, reduce overlapping security rules and provide public support where the public interest exceeds commercial considerations. This is not state aid; it is strategic social responsibility. Completing the single market for telecommunications is central to this agenda. A fragmented market cannot produce the secure, interoperable, large-scale solutions required for modern defense. The Digital Networks Act must simplify and harmonize rules across the EU, supported by a streamlined governance that distinguishes between domestic matters and cross-border strategic issues. Spectrum policy must also move beyond national silos, allowing Europe to avoid conflicts with NATO over key bands and enabling coherent next-generation deployments. Telecom policy nowadays is also defense policy. When we measure investment gaps in digital network deployment, we still tend to measure simple access to 5G and fiber. However, we should start considering that — if security, resilience and defense-readiness are to be taken into account — the investment gap is much higher that the €200 billion already estimated by the European Commission. Europe’s strategic choice The momentum for stronger European defense is real — but momentum fades if it is not seized. If Europe fails to modernize and secure its telecom infrastructure now, it risks entering the next decade with a weakened industrial base, chronic underinvestment, dependence on non-EU technologies and networks unable to support advanced defense applications. In that scenario, Europe’s democratic resilience would erode in parallel with its economic competitiveness, leaving the continent more exposed to geopolitical pressure and technological dependency. > If Europe fails to modernize and secure its telecom infrastructure now, it > risks entering the next decade with a weakened industrial base, chronic > underinvestment, dependence on non-EU technologies and networks unable to > support advanced defense applications. Europe still has time to change course and put telecoms at the center of its agenda — not as a technical afterthought, but as a core pillar of its defense strategy. The time for incremental steps has passed. Europe must choose to build the network foundations of its security now or accept that its strategic ambitions will remain permanently out of reach. -------------------------------------------------------------------------------- Disclaimer POLITICAL ADVERTISEMENT * The sponsor is Connect Europe AISBL * The ultimate controlling entity is Connect Europe AISBL * The political advertisement is linked to advocacy on EU digital, telecom and industrial policy, including initiatives such as the Digital Networks Act, Digital Omnibus, and connectivity, cybersecurity, and defence frameworks aimed at strengthening Europe’s digital competitiveness. More information here.

BRUSSELS — The European Commission appears to be slow-walking a decision to take action against Italy over its controversial use of national security powers to stall a banking merger between UniCredit, the Milan-based bank, and its crosstown rival BPM.  Officials at the competition and financial services directorates handed in their assessment of the case weeks ago to President Ursula von der Leyen’s Cabinet, but have yet to hear back, five people familiar with the matter told POLITICO. The assessment is not in favor of Rome, said one of the people, granted anonymity to discuss a private matter.  Commission insiders speculate that the delay has to do with broader political bargaining at the highest level between Brussels and Rome. According to another of the people, von der Leyen is taking care not to annoy Giorgia Meloni because she needs the Italian premier’s support to shore up the increasingly shaky political coalition that backed her for a second term last year. Earlier this year, Italy decided that UniCredit’s €10 billion takeover of BPM was a threat to national security. Under the government’s rules on screening foreign direct investments — known as its “golden power” — Rome imposed conditions on April 18 that effectively prevented UniCredit from completing the deal. The Commission opened a so-called EU Pilot procedure — carried out by its financial services directorate — to determine whether the use of national security measures in a bank merger is in line with EU banking regulations and single-market freedoms. The process can ultimately lead to an infringement procedure — as happened when the Spanish government obstructed BBVA’s acquisition of Catalan bank Banco Sabadell. The Commission’s competition directorate gave a conditional green light to the deal on June 19. A month later it warned Italy that by applying the golden power to a domestic deal, Italy may have violated merger rules as well as other provisions of EU law. The Commission is currently assessing Italy’s replies in both investigations, a spokesperson for the EU executive said. GOLDEN POWER The golden power equips Italy with wide-ranging screening tools to curb bids on national champions by foreign investors that are deemed risks to national security, such as those from China. The use of the tool to derail a domestic merger appeared to flout the EU’s push for greater banking consolidation across Europe — which it sees as necessary for the continent’s financial sector and for the economy more broadly — to compete with U.S. rivals. The largest American bank, JP Morgan, has a market capitalization more than four times that of its nearest European counterpart, Santander. Banking and Financial Services Commissioner Maria Luís Albuquerque has repeatedly spoken out in favor of banking consolidation across the bloc.  The competition and financial services teams had their assessment of the case ready shortly after Italy submitted its last round of responses to the Commission in August, said one of the people who spoke to POLITICO. But von der Leyen’s Cabinet, which ultimately has to sign off on a decision, has taken no action so far, they added. According to Italian media reports, Italy has been trying to buy more time and stave off an infringement procedure by suggesting it could amend its golden power legislation. Financial daily Milano Finanza reported on Tuesday that the Commission has set Nov. 13 for a decision. An Italian official with knowledge of the file said the Commission could very well be slow-walking action against Italy given that Unicredit’s withdrawal from the deal is by now irreversible. | Emanuele Cremaschi/Getty Images An Italian official with knowledge of the file said the Commission could very well be slow-walking action against Italy given that Unicredit’s withdrawal from the deal is by now irreversible. That would allow time to review whether Italy’s golden power is in line with EU competition rules without the pressure of a live deal. “A medium-term, out-of-the-spotlight agreement on golden power could be the best outcome,” this official explained. Reuters, citing sources familiar with the matter, reported last week that Italy could be willing to amend its golden power to address the Commission’s concerns over how it was used in the Unicredit-BPM case. All matters pertaining to the golden power are steered from von der Leyen’s office, said another Commission official who is not directly involved in the matter and was also granted anonymity to speak candidly. It is usually quite simple to perform a technical analysis of such files, but “politics always trumps it,” they added.  Spokespeople for Meloni and Italy’s economy ministry declined to comment.

A message from Brussels to Google: Would you break yourself up, please? The search giant faces an early November deadline to say how it intends to comply with a European Commission decision in September, which found that it had illegally maintained its grip on the infrastructure that powers online advertising. With a €2.95 billion fine in the rearview mirror, the Commission and Google find themselves in an unprecedented standoff as Brussels contemplates the once unthinkable: a structural sell-off of part of a U.S. company, preferably voluntary, but potentially forced if necessary. The situation is “very unusual,” said Anne Witt, a professor in competition law at EDHEC Business School in Lille, France. “Structural remedies are almost unprecedented at the EU level,” Witt added. “It’s really the sledgehammer.” In its September decision, the Commission took the “unusual and unprecedented step,” per Witt, to ask Google to design its own remedy — while signaling, if cautiously, that anything short of a sale of parts of its advertising technology business would fall foul of the EU antitrust enforcer. “It appears that the only way for Google to end its conflict of interest effectively is with a structural remedy, such as selling some part of its Adtech business,” Executive Vice President Teresa Ribera, the Commission’s competition chief, said at the time. As the clock counts down to the deadline for Google to tell the Commission what it intends to do, the possibility of a Brussels-ordered breakup of an American tech champion is unlikely to go unnoticed in Washington, even as the Donald Trump administration pursues its own case against the search giant. (Google accounts for 90 percent of the revenues of Alphabet, the $3.3 trillion technology holding company headquartered in Mountain View, California.) Executive Vice President Teresa Ribera, the Commission’s competition chief. | Thierry Monasse/Getty Images Google has said that it will appeal the Commission’s decision, which in its view requires changes that would hurt thousands of European businesses. “There’s nothing anticompetitive in providing services for ad buyers and sellers, and there are more alternatives to our services than ever before,” Lee-Anne Mulholland, its vice president and global head of regulatory affairs, wrote in a blog post in September. PARALLEL PROBES The proposal for a voluntary break up of Google marks the culmination of a decade of EU antitrust enforcement in digital markets in which “behavioral” fixes achieved little, and a unique alignment in both timing and substance between the U.S. and the EU of their parallel probes into the firm’s ad tech empire. “It would have been unthinkable 10 years ago that there would be a case in the U.S.  and a sister case in Europe that had a breakup as a potential outcome,” said Cori Crider, executive director of the Future of Tech Institute, which is advocating for a break-up. The Commission formally launched the investigation into Google’s ad tech stack in 2021, following a drumbeat of complaints from news organizations that had seen Google take control of the high-frequency exchanges where publishers and advertisers agree on the price and placement of online ads.  Google’s control of the exchanges, as well as infrastructure used by both sides of the market, was like allowing Goldman Sachs or Citibank to own the New York Stock Exchange, declared the U.S. Department of Justice in its lawsuit in 2023. It also created a situation in which cash-strapped news organizations on both sides of the Atlantic saw Google eating an increasing share of revenues from online advertising — and ultimately posing a threat to journalism itself. “This is not just any competition law case — this is about the future of journalism,” said Alexandra Geese, a German Green member of the European Parliament. “Publishers don’t have the revenue because they don’t get traffic on their websites, and then Google’s algorithm decides what information we see,” she said. The plight of publishers proved hefty on the other side of the Atlantic too. In April, the federal judge overseeing the U.S. government’s case against Google ruled that the search giant had illegally maintained its monopoly over parts of the ad tech market.   A spokesperson for the company said that the firm disagrees with the Commission’s charges. | Nurphoto via Getty Images The Virginia district court held a two-week trial on remedies in September. The Trump administration has advocated a sale of the exchanges and an unwinding of Google’s 2008 merger with DoubleClick, through which it came to dominate the online ad market. Judge Leonie Brinkema will hear the government’s closing arguments on Nov. 17 and is expected to issue her verdict in the coming months. STARS ALIGN Viewed by Google’s critics, it’s the ideal set of circumstances for the Commission to push for a muscular structural remedy. “If you cannot go for structural remedies now, when the U.S. is on the same page, then you’re unlikely to ever do it,” said Crider. The route to a breakup may, however, be both legally and politically more challenging. Despite the technical alignment, and a disenchantment with the impact that past fines and behavioral remedies have had, the Commission still faces a “big hurdle” when it comes to the legal test, should it not be satisfied with Google’s remedy offer, said Witt. The U.S. legal system is more conducive to ordering breakups, both as a matter of law — judges have a wide scope to remedy a harm to the market — and in tradition, said Witt, noting that the U.S. government’s lawsuits to break up Google and Meta are rooted in precedents that don’t exist in Europe. Caught in the middle is Google, which should file its proposed remedies within 60 days of being served notice of the Commission decision that was announced on Sept. 5. A spokesperson for the company said that the firm disagrees with the Commission’s charges, and therefore with the notion that structural remedies are necessary. The firm is expected to lodge its appeal in the coming days. While Google has floated asset sales to the Commission over the course of the antitrust investigation, only to be rebuffed by Brussels, the firm does not intend to divest the entirety of its ad tech stack, according to a person familiar with the matter who was granted anonymity due to the sensitivity of the case. Ultimately, what happens in Brussels may depend on what happens in the U.S. case. While a court-ordered divestiture of a chunk of Google’s ad tech business is conceivable, U.S. judges have shown themselves to be skeptical of structural remedies in recent months, said Lazar Radic, an assistant law professor at IE University in Madrid, who is affiliated with the big tech-friendly International Center for Law and Economics. “Behavioral alternatives are still on the table,” said Radic, of the U.S. case. The Commission will likely want to align itself with the U.S. should the Virginia court side with the Department of Justice, said Damien Geradin, legal counsel to the European Publishers Council — of which POLITICO parent Axel Springer is a member — that brought forward the case. Conversely, if the court opts for a weaker remedy than is being proposed, the Commission will be obliged to go further, he said. “This is the case where some structural remedies will be needed. I don’t think the [European Commission] can settle for less,” said Geradin.

BRUSSELS — Europe is finally firing back at Elon Musk. Aerospace companies Airbus, Leonardo and Thales said Thursday they had reached a preliminary agreement to combine their space activities to create the kind of European champion that Commission President Ursula von der Leyen has envisaged. Announcing “a leading European player in space,” the companies said they would combine their satellite and space systems manufacturing into a €6.5 billion business that will employ around 25,000 people across Europe.  The three-way deal seeks to create a challenger to Musk’s SpaceX — especially in low-earth orbit satellites of the type that power his Starlink internet service. SpaceX’s projected 2025 revenue is around $15 billion. The deal — initially named Project Bromo after a volcano in Indonesia — has been a long time coming. Talks among the three companies were complicated by the involvement of five governments as shareholders or partners. And winning antitrust approval was always going to be a tall order. France, Italy, Germany, Spain and the U.K. will all have an interest in the new company, which will be headquartered in Toulouse in southern France but will be split out into five different legal entities to preserve sovereign interests. The governance structure mirrors that of European missilemaker MDBA.  Airbus, the European aerospace giant, will own a 35 percent stake, while Leonardo of Italy and Thales of France will own 32.5 percent each. There will be a sole yet-to-be-named CEO and managing directors for each country, an Airbus spokesperson told POLITICO. French Economy Minister Roland Lescure hailed the announcement as “excellent news.” “The creation of a European satellite champion allows us to increase investment in research and innovation in this strategic sector and reinforce our sovereignty in a context of intense global competition,” he said in a post on Bluesky. Sounding rather less enthusiastic, a spokesperson for German Economy Minister Katherina Reiche said Berlin was following the possible consolidation of the European aerospace industry “with great interest” and was in touch with Airbus and its defense subsidiary. LEAGUE OF CHAMPIONS France and Germany have been vocal on the need to create continental champions — with industry chiefs from both countries recently issuing a joint appeal to Brussels to relax its merger rules to enable companies to gain scale and compete in a global setting. In a twist of irony, the deal involves a company — Airbus — that is widely seen as the only European corporate champion ever built. With roots dating back to 1970, Airbus was created in its current incarnation through a Franco-German-Spanish merger in 2000. France and Germany each own 10 percent stakes and Spain 4 percent. Italy has a 30 percent stake in Leonardo, which in turn owns 33 percent of Thales Alenia Space.  The new company will pool, build and develop “a comprehensive portfolio of complementary technologies and end-to-end solutions, from space infrastructure to services.” It is expected to generate annual synergies producing “mid triple digit million euro” operating income five years after closing, which is expected in 2027, according to a press release.  MERGER HURDLE The tie-up requires a green light from the Commission’s competition directorate, which will have to weigh the tension between its current rulebook for reviewing mergers and von der Leyen’s desire to pick European winners. The joint venture would compete with overseas players on satellites for commercial telecommunications. However, it would face scant competition for military and public procurement tenders in the EU, for example with the European Space Agency (ESA). These are typically restricted to home-grown bidders. Rolf Densing, ESA’s director of operations, has voiced concerns that the deal would leave the agency with limited options for sourcing satellite contracts. Germany’s OHB would be left as its last remaining competitor. OHB’s CEO Marco Fuchs has warned that the deal threatens to create a monopoly that would harm customers and European industry. That could herald a rerun of the tensions that the Commission faced when it blocked a Franco-German train industry merger between Siemens and Alstom in 2019 — although today the political environment is more favorable to the companies.  The Commission’s competition directorate is under pressure to broaden its views on mergers to take into account the bloc’s wider push for growth and an increased capacity to compete with U.S. and Chinese players. A review of the bloc’s merger guidelines is due next year, according to the Commission’s latest work program. Alexandre Léchenet in Paris and Tom Schmidtgen in Berlin contributed reporting.

PARIS — Some signatories of a joint appeal by French and German business bosses to loosen merger rules and scrap environmental laws to promote European industrial “champions” have distanced themselves from the letter, saying they were encouraged to write it by their national governments.  The letter to French President Emmanuel Macron and German Chancellor Friedrich Merz, first reported by POLITICO a week ago, quickly drew rebukes from green NGOs and competition regulators, with France’s Benoît Cœuré challenging the notion that the bloc’s merger rules had prevented the creation of leading European businesses. Co-authored by TotalEnergies CEOs Patrick Pouyanné and Roland Busch of Siemens, the letter was written “in the name of” 46 chief executives who met with the two heads of state during a high-level, closed-door meeting between industry and the governments in Evian, France, in early September.   But since the letter came to light, some of the French companies it claims to speak on behalf of are backtracking.   The letter is a good summary of the discussion held at Evian, said BPIFrance, the French public investment bank. But its CEO, Nicolas Dufourcq, doesn’t consider himself bound by it, he told POLITICO in a written statement.  Dufourcq said the letter was “not a big effort.” Although he was in Evian, he did not see it before it was published, and therefore doesn’t consider that he signed it. The letter complained that the current European competition rules “often hinder the formation of European champions” and urged that, by the end of this year, the mandate of the European Commission’s Competition Directorate be widened to consider strategic mergers in the context of the global market. It also demands that EU leaders get rid of EU rules on supply chain transparency. ‘A LITTLE STRONG’ A representative from a second French company among the signatories said that the origin of the letter was “a little nebulous” and that they were not informed of the wording ahead of time. Granted anonymity to discuss the sensitive matter, they said that they did not disagree with the letter, but “the wording is a little strong.” Even TotalEnergies, one of the two top signatories, has sought to clarify how the letter came about. Shortly after POLITICO reported on it, the company reached out directly to provide “more context.”  “The CEO of Siemens and TotalEnergies were the co-chairmen of the Evian Franco-German meeting gathering 46 CEOs,” a spokesperson said. “They welcomed Chancellor Merz and President Macron during a special session, and they were encouraged by both leaders to express their priorities as CEOs to develop Europe’s competitiveness.”   The letter, he added, “summarizes the 5 top priorities and call for actions in the short term which resulted from the debates between the CEOs.”   Siemens declined to comment in response to TotalEnergies’ assertions.  NO GERMAN COMPLAINTS No criticism has emerged from German companies, which appeared to be aligned with the message. “The letter emerged from the group discussion, so [Deutsche Börse Group CEO] Stephan Leithner, who was among the participants, was involved, and we support the contents of the letter,” a spokesperson for Deutsche Börse told POLITICO. A spokesperson for Bosch — whose CEO is also listed among the participants — called the initiative one “spearheaded by companies from Europe’s two largest economies.” They added that a central pillar of the demands is “aimed at securing and strengthening the competitiveness of European industry.”  Neither the Elysée nor the German representation in Brussels responded to requests for comment.  Francesca Micheletti and Marianne Gros reported from Brussels, Alexandre Léchenet reported from Paris. Jordyn Dahl contributed reporting from Brussels, and Tom Schmidtgen from Berlin.

BRUSSELS — Ursula von der Leyen is beefing up competition capacity in her Cabinet, as antitrust gets dragged deeper into trade tensions with the United States and the EU continues to strive for a bloc-wide industrial policy. Michele Piergiovanni, an Italian official who advised former competition chief Margrethe Vestager, is set to join the European Commission president’s Cabinet, POLITICO first reported on Wednesday. A Commission spokesperson confirmed the move and said that Piergiovanni will advise the president on competition and economic issues. The move could signal an imminent departure of von der Leyen’s current antitrust and digital adviser, Anthony Whelan. The seasoned Irish official was appointed last year to lead the competition directorate’s state aid department, but never took up the role as he has been jealously guarded by the president’s Cabinet.  Piergiovanni’s appointment also signals the president’s heightened attention to a policy area that has become increasingly political, both externally, in the context of transatlantic trade tensions, and internally, as the bloc looks to revisit rules on mergers and public industry funding in an effort to boost economic growth. Earlier this week, the Commission halted an antitrust decision targeting search giant Google under U.S. pressure in trade talks. The EU executive is also under increasing pressure to bend rules on public industry funding — or state aid — to allow EU countries to funnel cash into their industries. There are also calls to relax merger rules to allow companies to become bigger and compete on the global stage as European champions. Piergiovanni, who joined the Commission in 2011 from a top American law firm in Brussels, knows a thing or two about European champions. In 2018, he was appointed to lead the competition department’s work on the most controversial merger of the decade, the Franco-German attempt to merge Siemens and Alstom to create a continental rail giant, which was ultimately blocked. The decision to deny the deal infuriated France and Germany while becoming the poster child of the competition directorate’s strict enforcement.  A loyal and rigorous official from Italy’s northern coastal region of Liguria, Piergiovanni will be a solid link between the top of the EU executive and the competition directorate, which recently said goodbye to its top official, Frenchman Olivier Guersent. “Don’t scratch the Rolls-Royce,” were Guersent’s parting words to his successor. The Rolls-Royce, is, of course, DG COMP, which the official described as the most prized directorate to work in, but also an area which should remain immune from political interference and corporate pressure. Giovanna Faggionato contributed to this report.

BRUSSELS — The EU’s top banking cop says he’s “frustrated” by a domestic mindset that’s preventing cross-border banking mergers and undermining dreams of a united European financial sector. José Manuel Campa, chair of the Paris-based European Banking Authority, said he “would like to see more transactions that have a cross-border nature in their economic logic,” but that “we don’t see enough” now. “I feel frustrated because I continue to see domestic mergers with a domestic logic, not single-market mergers,” Campa told POLITICO in an interview. The creation of big pan-European banks is seen as key to creating a unified EU financial system that is open and deep enough to compete with the likes of the United States. But national capitals have repeatedly undermined this push. EU bodies have squared off against governments in recent months over politically motivated moves to block banking tie-ups. The European Commission is investigating Spain and Italy’s interference in big domestic banking mergers as it grows impatient with what it sees as unjustified attempts to block deals already approved by antitrust regulators. Meanwhile, Germany is trying to block Italian lender UniCredit’s takeover bid for the German Commerzbank, in a move the Commission’s outgoing competition chief described as “difficult to accept.” Governments may block banking marriages that they see as a threat to local interests, or to stave off another country’s influence over a national banking champion. But the EU executive, and Campa, want bigger, more efficient banks to help restore Europe’s competitiveness and foster a true single market for banking in the bloc. “The crucial issue is the single market — having a developed single market in the EU,” Campa said. “Being better means taking advantage of the single market.” KEEP IT SIMPLE The EU banking industry has been pushing for simpler rules and lighter capital requirements in recent months, particularly as the U.S. and U.K. pause or lighten their own standards for the sector. Campa said the EBA is “not in favor of deregulation” as “the existing rules have served us well,” with a resilient and profitable banking industry seeing high returns on equity. Germany is trying to block Italian lender UniCredit’s takeover bid for the German Commerzbank, in a move the Commission’s outgoing competition chief described as “difficult to accept.” | Ronald Wittek/EPA But the EU “can build better rules under the logic of the single market,” including completing the bloc’s banking union, he said. One source of complexity that is slowing progress toward a single market for banking in the bloc is the persistence of “home-host issues” — the question of whether banks should be overseen or hold regulatory capital at the level of their group’s headquarters, or throughout all of their subsidiaries. With 21 countries in the EU’s banking union, it’s a fraught issue, with countries with big domestic banking players preferring a lighter approach, while smaller countries that host subsidiaries of big foreign banks would rather lenders hold more capital in their jurisdictions. Fostering a more effective single market for banking would necessitate breaking down those barriers, Campa said. “There are things that we can do … but that requires a significant political consensus because those rules are there for a reason; home-host issues are there for a reason.” The EU’s latest update to bank capital rules, known as Basel 3, applies requirements at the level of individual entities and the consolidated group, as it was politically untenable to find a more simple way of implementing the reforms — a decision Campa said “leads to excess requirements.” The most recent piece of banking legislation negotiated in Brussels, a joint crisis management plan for mid-sized banks, ended up as “an effort in complexity” rather than “an effort in simplification” because political wrangling resulted in a very complex text, Campa said. In those negotiations, countries resisted a move to ease access to EU crisis funds for failing mid-sized banks, meaning that the political deal on the rules imposed myriad conditions for lenders to be able to tap the funds in a crisis. As for banks’ regulatory capital buffers — the cash they’re mandated to hold against risk to avoid future taxpayer bailouts if they fail — Campa said they are “complex in Europe because we have many authorities making decisions,” and that it would be “good to try to clarify” how buffers are set. “The EU system is very complex. It’s not about whether the level of requirements is high or low. It’s just that there are so many different buffers … and they’re set by different institutions. That just leads to complexity and to lack of clarity,” Campa said.

President Donald Trump isn’t closing the door on using force to attempt to annex Greenland and Canada. But he said the prospect of attacking Ottawa appears “highly unlikely.” Greenland on the other hand? “I don’t rule it out,” Trump told host Kristen Welker in an interview that aired Sunday on NBC’s “Meet the Press.” “I don’t say I’m going to do it, but I don’t rule out anything. No, not there. We need Greenland very badly. Greenland is a very small amount of people, which we’ll take care of, and we’ll cherish them, and all of that. But we need that for international security.” Since his November election, the president has made no secret of his desire to acquire Greenland. “We need it. We have to have it,” he told a radio host in March. That same month, White House officials led by Vice President JD Vance visited a U.S. Space Force base on the island, which boasts significant mineral reserves and a strategic spot in the Arctic. It’s been a similar story with Canada. The president has often mused about turning the country into a 51st state. Trump’s fixation was “a real thing,” warned former Prime Minister Justin Trudeau. “I don’t see it with Canada. I just don’t see it, I have to be honest with you,” Trump said of attacking the country in the NBC interview. But the patriotic fervor Trump’s repeated attacks unleashed in the True North helped propel former banker Mark Carney and the previously beleaguered Liberals back into government for the fourth consecutive term — the first three were with Trudeau at the helm. Conservative candidate Pierre Poilievre not only saw his party lose a double-digit lead, he even lost his own seat in last week’s elections. “These are not idle threats,” Carney of said Trump after his election victory last week. “President Trump is trying to break us so that America can own us. That will never, that will never, ever happen. But we also must recognize the reality that our world has fundamentally changed.” The two are set to meet at the White House on Tuesday. Trump downplayed the idea of using force on Canada with Welker. But he said he’d bring up a merger with Carney. “I’ll always talk about that,” Trump said. “You know why? We subsidize Canada to the tune of $200 billion a year. We don’t need their cars. In fact, we don’t want their cars. We don’t need their energy. We don’t even want their energy. We have more than they do.” Trump’s claim of a $200 billion subsidy, perhaps based in part on the U.S.-Canada trade deficit, appears firmly off base. But the president continues to cite the figure when discussing the two countries. “And, if you look at our map, if you look at the geography — I’m a real estate guy at heart. When I look down at that without that artificial line that was drawn with a ruler many years ago,” Trump said. “Was just an artificial line, goes straight across. You don’t even realize. What a beautiful country it would be. It would be great.”

BRUSSELS — For decades, global finance has operated on a peculiar kind of authority — one without armies, enforcement powers, or a democratic mandate. Instead, the officials who govern the sprawling, interconnected financial system rely on something more intangible: trust, consensus, and the quiet credibility of technocracy. But now, under the Donald Trump administration, the U.S. — long a major voice in international rulemaking — is threatening to take a wrecking ball to that system.  Until now, these global bodies have generally flown below the radar, leveraging good relationships with governments and the technical obscurity of their work to avoid public scrutiny. But in the age of increased politicization of regulators and TV adverts bashing bank regulations, that way of doing business may no longer hold true.  America’s move to reject global standards and its threat to withdraw from the bodies that draft them risks pulling the rug out from global standard-setting as a whole. For such a seemingly technical topic, the stakes are high. With markets roiling from the U.S. government’s tariff bomb, the risks of financial turmoil are closer than ever — a message Wall Street titans have been trying to impress upon Trump, with figures such as JP Morgan head Jamie Dimon warning of diminished U.S. credibility and even a recession in response to U.S. policies. Yet, without the firepower of the U.S., global regulators would be hamstrung in their efforts to contain a crisis. AMERICA FIRST The U.S. will review its membership of “all international organizations” within 180 days to decide whether support or membership should be withdrawn, following a Feb. 3 executive order from Trump. Treasury Secretary Scott Bessent has said the U.S. wants a “sustainable international economic system” that better serves its interests, announcing on Wednesday that the U.S. will seek reforms rather than withdrawing outright from the International Monetary Fund and World Bank. Yet, it remains unclear whether that position will extend to global bodies like the Basel Committee on Banking Supervision, whose standards are toothless unless accompanied by national laws. The same applies to the Financial Stability Board, which was set up in the wake of the 2008 crisis to prevent another one from happening. Domestically, Trump has rolled out a major deregulation agenda for the finance sector. And while the U.S.’ plans to roll out global banking reforms agreed after the 2008 crisis, known as Basel III, were paused amid heavy lobbying during the Biden administration, the future of the package in the U.S. looks all but dead now under Trump, with industry players expecting a much lighter rewrite. Donald Trump has rolled out a major deregulation agenda for the finance sector. | Ken Cedeno/EPA If the U.S., a founding member of many of the bodies and the major player in the capitalist system, doesn’t put stock in the global rules anymore, their legitimacy comes into question. America’s approach to the Basel III standards has already sparked a race to the bottom with other major jurisdictions. The U.K, for example, has delayed its rollout of the standards until it knows what the U.S. will do, while the EU is delaying the application of some parts of the rules. STIFF UPPER LIP Publicly, global finance watchdogs are bullish about the U.S.’ continued participation. Jean-Paul Servais, chairman of the board of IOSCO, the global standard-setter for financial markets regulation, told POLITICO in March that he is “at ease about the capacity to work together” with the U.S. in future. “Frankly speaking, it’s not a problem or an issue for me, because I’m used to having excellent contact with my American colleagues,” Servais said. But behind the scenes, the mood isn’t so confident. In background conversations with POLITICO, three top officials at global standard-setters expressed their concerns and fears for the future if the U.S. decides to take a wrecking ball to international financial rulemaking.  One expressed frustration that global watchdogs have no enforcement power, and are reliant on the goodwill of member countries to roll out the rules that are created. That means that even when the vast majority of their members support and implement the rules, foot-dragging from one major jurisdiction can spark a race to the bottom from other members. The official said the situation is less an indictment of specific global bodies and more of the dwindling credibility of the U.S.-led international order. Another painted a picture of standard-setters in survival mode, aiming to preserve existing commitments from being watered down while acknowledging that future work on politically sensitive areas like climate risk will be more difficult. A third indicated that rules would likely be less ambitious to garner support of all members, as they said there would be no point agreeing to standards which are then not implemented by certain jurisdictions. But the existential threat of a full U.S. pullout appears to be too loaded an issue to address. None of the standard-setters POLITICO spoke with would comment directly, either on the record or on background, on whether they thought the U.S. would pull out, or what it would mean for their organizations. Treasury Secretary Scott Bessent has said the U.S. wants a “sustainable international economic system.” | [PHOTO BY Drago/EPA LIMPING ON For now, global watchdogs are waiting for the 180-day deadline for a decision on U.S. withdrawals to pass.  “It’s a guessing game right now,” said Thorsten Beck, an economist who heads the Florence School of Banking and Finance at the European University Institute. Although Beck did not predict a full U.S. withdrawal from the bodies, he said America is likely to “take less of an interest in being part of these discussions” and instead “concentrate more on what is supposedly best for them.”   If so, that would point to more regulatory fragmentation, meaning cross-border finance firms will have to contend with different rules in different countries. In a situation where the U.S. remains a member of these bodies, but no longer actively participates in creating and following global finance rules, “you do not have development of global regulatory standards anymore. Everybody does their own thing,” Beck said. If the U.S. does pull out, the global bodies would become “more of a social club, a talking club and not relevant anymore,” Beck added. Emerging powers like the BRICs, and in particular China, would likely play a larger role in global talks on finance regulation — a trend one of the top officials POLITICO spoke with echoed.  The difference would mainly be felt in a future financial crisis, Beck said. Without the U.S., the world’s regulators would be far less effective at coordinating and acting quickly — both actions which rely on trust and good relationships — to contain a crisis. “If you disengage from the world, then this trust cannot be built up anymore.” Ben Munster contributed reporting.