Croatian President Zoran Milanović has slammed France for selling Zagreb secondhand fighter jets while providing its rival Serbia with a brand-new fleet. “We look like fools,” he raged last week, “because the French sell new Rafales to the Serbs and used ones to us.” Zagreb finalized a government-to-government deal with Paris in 2021 to modernize its air force by purchasing a dozen Rafale fighters valued at €999 million. The final aircraft, which were procured from France’s own stocks, were delivered last April, replacing Croatia’s outdated Soviet-era MiG-21 fleet. In August 2024, Serbia signed a deal to buy 12 Rafale jets from French manufacturer Dassault Aviation fresh from the factory. That transaction has enraged the Croatian president. Croatia fought Serbia in the 1990s in the bloody wars that followed Yugoslavia’s disintegration. While relations between the two countries have improved dramatically since then, non-NATO Serbia’s close ties with Moscow are a worry to Zagreb, which joined the Atlantic alliance in 2009 and the EU in 2013. Serbia’s own EU candidacy has largely stalled, with Belgrade ditching a Western Balkans summit in Brussels last month. Enlargement Commissioner Marta Kos called on Serbia in November to “urgently reverse the backsliding on freedom of expression.” French Europe Deputy Minister Benjamin Haddad, who was in Zagreb on Monday to discuss defense cooperation, defended the Serbia contract, saying Croatia should be pleased Belgrade was “gradually freeing itself from dependence on Russia and strengthening its ties with Western countries.” But Milanović hit back that the deal was “implemented behind Croatia’s back and to the detriment of Croatia’s national interests,” and showed “that every country takes care of its own interests, including profits, first and foremost.” The left-wing president added that the Croatian government, led by center-right Prime Minister Andrej Plenković, had erred by not confirming “whether France would sell the same or even more advanced aircraft models to one of our neighboring countries outside NATO.” DOMESTIC SQUABBLES Croatian officials are split over whether the president was right to react the way he did. One Croatian diplomat told POLITICO that Milanović had a point and that France was wrong to sell the newer jets to Serbia after fobbing off Croatia with an older model. But a second Croatian official said the deal was a good one for Zagreb and noted that the Croatian government had signed a letter of intent in December with Paris to upgrade its Rafale jets to the latest F4 standard. “From France’s point of view, the signing of the letter of intent on December 8 in France by the minister [Catherine Vautrin] and her Croatian counterpart aims to support the partner in modernizing its Rafale fleet to the highest standard currently in service in France,” an official from the French armed forces ministry echoed. “The defense relationship with Croatia is dynamic and not set in stone in 2021.” Croatia’s defense ministry said Milanović’s remarks “show elementary ignorance of how the international arms trade works.” “Great powers — the United States of America, France, the United Kingdom, Russia, China — have been selling the same or similar weapons to countries that are in tense and even openly antagonistic relations for decades,” the ministry added. “The USA is simultaneously arming Israel and Egypt, Russia [is arming] India and Pakistan, while the West is simultaneously arming Greece and Turkey. This is the rule, not the exception.” In Croatia, the president is also the commander-in-chief of the military but shares jurisdiction over defense policy with the government, which is responsible for the budget and the day-to-day management of the armed forces. Milanović and Plenković are often at odds, a third Croatian official said, arguing the president was using the issue to hammer his political rival. DIRT-CHEAP FIGHTER JETS France has looked to strengthen defense ties with Croatia, which spends over 2 percent of its GDP on defense and is transitioning its Soviet-era military stocks to Western arms. Some of those purchases are coming from France. Plenković was in Paris in December to sign a separate deal with KNDS France for 18 Caesar self-propelled howitzers and 15 Serval armored vehicles, with the equipment to be purchased with the EU’s loans-for-weapons SAFE money.  In the original fighter jet deal, Croatia bought airplanes that were being used by the French air force, meaning they were cheaper than new stock and were available quickly. At the time the decision was criticized in Paris by parliamentarians arguing France was weakening its own air force to seal export contracts. Serbia, meanwhile, reportedly paid €2.7 billion for the same number of jets, which are expected to be delivered as of 2028. China and Russia provide the vast majority of Belgrade’s weapons, with France a distant third.

BRUSSELS — The European Commission on Wednesday unveiled a €90 billion loan to Ukraine aimed at saving it from financial collapse as it continues to battle Russia while aid from the U.S. dries up. About one-third of the cash will be used for normal budget expenditures and the rest will go to defense — although countries still need to formally agree to what extent Ukraine can use the money to buy weapons from outside the EU. A Commission proposal gives EU defense firms preferential treatment but allows Ukraine to buy foreign weapons if they aren’t immediately available in Europe. While the loan is interest-free for Ukraine, it is forecast to cost EU taxpayers between €3 billion and €4 billion a year in borrowing costs from 2028. The EU had to resort to the loan after an earlier effort to use sanctioned Russian frozen assets ran into opposition from Belgium. The race is now on for EU lawmakers to agree on a final legal text that’ll pave the way for disbursements in April, when Ukraine’s war chest runs out. Meetings between EU treasury and defense officials are already planned for Friday. The European Parliament could fast-track the loan as early as next week. The financing package is also crucial for unlocking additional loans to Ukraine from the International Monetary Fund. The Washington-based Fund wants to ensure Kyiv’s finances aren’t overstretched, as the war enters its fifth year next month. The €90 billion will be paid out over the next two years, as Moscow shows no sign of slowing down its offensive on Ukraine despite U.S.-led efforts to agree on a ceasefire. “Russia shows no sign of abating, no sign of remorse, no sign of seeking peace,” Commission President Ursula von der Leyen told reporters after presenting the proposal. “We all want peace for Ukraine, and for that, Ukraine must be in a position of strength.” When EU leaders agreed on the loan, Ukrainian President Volodymyr Zelenskyy called the deal an “unprecedented decision, and it will also have an impact on the peace negotiations.” Adding to the pressure on the EU, the U.S. under President Donald Trump has halted new military and financial aid to Ukraine, leaving it up to Europe to ensure Kyiv can continue fighting. Once the legal text is agreed, the EU will raise joint debt to finance the initiative, although the governments in the Czech Republic, Hungary and Slovakia said they will not participate in the funding drive.  The conditions on military spending are splitting EU countries. Paris is demanding strict rules to prevent money from flowing to U.S. weapons manufacturers, while Germany and other Northern European countries want to give Ukraine greater flexibility on how to spend the cash, pointing out that some key systems needed by Ukraine aren’t manufactured in Europe. MEETING HALFWAY The Commission has put forward a compromise proposal — seen by POLITICO. It gives preferential treatment to defense companies based in the EU, Ukraine and neighboring countries, including Norway, Iceland and Liechtenstein, but doesn’t rule out purchases from abroad. To keep the Northern European capitals happy, the Commission’s proposal allows Ukraine to buy specialized weapons produced outside the EU if they are vital for Kyiv’s defense against Russian forces. These include the U.S. Patriot long-range missile and air defense systems. The rules could be bent further in cases “where there is an urgent need for a given defense product” that can’t be delivered quickly from within Europe. Weapons aren’t considered European if more than 35 percent of their parts come from outside the continent, according to the draft. That’s in line with previous EU defense-financing initiatives, such as the €150 billion SAFE loans-for-weapons program. Two other legal texts are included in the legislative package. One proposes using the upper borrowing limit in the current budget to guarantee the loan. The other is designed to tweak the Ukraine Facility, a 2023 initiative that governs the bloc’s long-term financial support to Kyiv. The Commission will also create a new money pot to cover the borrowing costs before the new EU budget enters into force in 2028. RUSSIAN COLLATERAL Ukraine only has to repay the €90 billion loan if it receives post-war reparations from Russia — an unlikely scenario. If this doesn’t happen, the EU has left the door open to tapping frozen Russian state assets across the bloc to pay itself back. Belgium’s steadfast opposition to leveraging the frozen assets, most of which are based in the Brussels-based financial depository Euroclear, promises to make that negotiation difficult. However, the Commission can indefinitely roll over its debt by issuing eurobonds until it finds the necessary means to pay off the loan. The goal is to ensure Ukraine isn’t left holding the bill. “The Union reserves its right to use the cash balances from immobilized Russian assets held in the EU to repay the Ukraine Support Loan,” Economy Commissioner Valdis Dombrovskis said alongside von der Leyen. “Supporting Ukraine is a litmus test for Europe. The outcome of Russia’s brutal war of aggression against Ukraine will determine Europe’s future.” Jacopo Barigazzi contributed to this report from Brussels.

BRUSSELS — Germany and the Netherlands are at odds with France in seeking to ensure Kyiv will be able buy U.S. weapons using the EU’s €90 billion loan to Ukraine. EU countries agreed the crucial lifeline to Kyiv at a European Council summit in December, but the capitals will still have to negotiate the formal conditions of that financing after a European Commission proposal on Wednesday. This sets up tense negotiations with Paris, which is leading a rearguard push to prevent money flowing to Washington amid a growing rift in the transatlantic alliance. French President Emmanuel Macron is keen to give preferential treatment to EU military companies to strengthen the bloc’s defense industry — even if that means Kyiv can’t immediately buy what it needs to keep Russian forces at bay. A majority of countries, led by governments in Berlin and The Hague, respond that Kyiv must have more leeway in how it spends the EU’s financial package to help fund its defense, according to position papers seen by POLITICO. These frictions are coming to a head after years of debate over whether to include Washington in EU defense purchasing programs. Divisions have only worsened since U.S. President Donald Trump’s administration threatened a military takeover of Greenland. Critics retort France’s push to introduce a strict “Buy European” clause would tie Kyiv’s hands and limit its ability to defend itself against Russia. “Ukraine also urgently requires equipment produced by third countries, notably U.S.-produced air defense systems and interceptors, F-16 ammunition and spare parts and deep-strike capacities,” the Dutch government wrote in a letter to other EU countries seen by POLITICO. While most countries including Germany and the Netherlands support a general “Buy European” clause, only Greece and Cyprus — which currently maintains a neutral stance as it is chairing talks under its rotating presidency of the Council of the EU — are backing the French push to limit the scheme to EU firms, according to multiple diplomats with knowledge of the talks. CASH FOR KYIV EU leaders agreed last month to issue €90 billion in joint debt to support Ukraine, after Belgium and others derailed a separate plan to mobilize Russian frozen state assets. Over two-thirds of the Commission’s funding is expected to go toward military expenditure rather than ordinary budget support, according to two EU diplomats briefed on the discussions. With only a few days until the Commission formally unveils its plan, EU capitals are trying to influence its most sensitive elements. French President Emmanuel Macron is keen to give preferential treatment to EU military companies to strengthen the bloc’s defense industry. | Pool photo by Sarah Meyssonnier via AFP/Getty Images Germany broke with France by proposing to open up purchases to defense firms from non-EU countries. “Germany does not support proposals to limit third country procurement to certain products and is concerned that this would put excessive restrictions on Ukraine to defend itself,” Berlin’s government wrote in a letter sent to EU capitals on Monday and seen by POLITICO. The Netherlands suggested earmarking at least €15 billion for Ukraine to buy foreign weapons that are not immediately available in Europe.  “The EU’s defence industry is currently either unable to produce equivalent systems or to do so within the required timeframe,” the Dutch government wrote in its letter. The French counterargument is that Brussels should seek to extract maximum value from its funding to Ukraine. Critics say that boosting Ukraine’s defense against Russia should take precedence over any other goal.    “It’s very frustrating. We lose the focus on our aim, and our aim is not to do business,” said a third EU diplomat. Another diplomat said that a potential French veto can be easily overcome as the proposal can be agreed by a simple majority of member countries. GERMANY FIRST In a further point of controversy, the German government, while rejecting the EU preference sought by France, still suggested giving preferential treatment to firms from countries that provided the most financial support to Ukraine. This would play to the advantage of Berlin, which is among the country’s biggest donors. “Germany requests for the logic of rewarding strong bilateral support (as originally proposed for third countries by the Commission) to be applied to member states, too,” Berlin wrote in the letter. Diplomats see this as a workaround to boost German firms and incentivize other countries to stump up more cash for the war-torn country. Giovanna Faggionato contributed to this report.

PARIS — The military recruitment center across from the Eiffel Tower, in the posh 7th district’s historic École Militaire, is filled with promotional posters for the armed forces. In the lobby, I met 26-year-old Charlotte, who currently works in marketing for a private company but is considering joining the French army. “The geopolitical context is inspiring me to sign up and serve, using my skills,” she told me. “I’m sometimes wondering why I am doing marketing when I could be a linguist in the army or an intelligence agency.” The geopolitical context she’s referring to is obvious to everyone in France, which has been at the forefront of Europe’s efforts to cope with the changing U.S. attitude toward its NATO and EU allies. Charlotte, who I agreed to identify by her first name to protect her privacy, told me that she studied Russian and recognizes that Europeans need to become more “sovereign” because they cannot rely on U.S. President Donald Trump to defend the continent against Russia. And she’s ready to help. Trump continues to antagonize the United States’ traditional European allies, deriding them as he did in an interview with POLITICO earlier this month as “weak” and a “decaying group of nations.” And for its part, France wants to prove him wrong. Like many other European nations, France sees Russia has a growing threat to the continent. So it is preparing to defend itself against what the country’s chief of defense staff, Gen. Fabien Mandon, called a “violent test” from Russia in the next three to four years that it would need to counter without much, if any, help from Washington. To do that, France is boosting military spending, increasing weapons production and doubling the reserve forces. As of next year, France will also reintroduce voluntary military service for young adults, primarily 18- and 19-year-olds. The goal is to enroll 3,000 new recruits next summer, 10,000 in 2030 and 50,000 in 2035. These defense efforts come as most of Europe’s nations are having to rethink their security posture in the most meaningful way since the Cold War ended. The challenge is even higher as it’s becoming increasingly clear they can no longer rely on the United States as a primary security provider. Successive U.S. presidents — including Barack Obama and Joe Biden — have warned over the past decade that Washington would eventually have to focus on the Indo-Pacific region instead of Europe, but the Trump administration has already matched those words with action. That is putting the spotlight on France, the EU’s only nuclear power and a country with independent weapons makers that has long warned the continent should become more autonomous in areas such as technology and defense. According to Guillaume Lagane, an expert on defense policy and a teacher at the Sciences Po public research university, the way France and Germany, the EU’s largest countries, respond in the coming months and years will determine whether other European countries will turn to them for Europe’s defense or try to retain bilateral ties with Washington at the expense of EU and NATO unity. “If France and Germany propose credible options, European countries may hesitate, otherwise they will not,” he said. “If only the American guarantee is credible, they will do everything they can to buy it.” To come across as a credible leader, he added, France could look into stationing nuclear-capable Rafale fighter jets in Germany or Poland; compensate for the capability gaps potentially left behind by the U.S.; and replace U.S. soldiers who are leaving Europe with French troops. They are going to need a lot of Charlottes. In Paris’ corridors of power, the French elite has always known this moment would come. “We’re neither surprised, in shock or in denial,” a high-ranking French defense official told me in an interview. “Our first short-term test is Ukraine. We Europeans must organize ourselves to face this reality and adapt without being caught off guard.” For the past week, I’ve been talking to French and European officials in Paris and elsewhere to gauge how they are metabolizing the antagonism from Washington. In many cases, I agreed to withhold their names so they could speak more candidly at a moment of high tension with the United States and among European allies. France’s distrust of America dates back to 1956, when U.S. President Dwight Eisenhower forced it and Britain to back down from a military intervention to regain control of the Suez Canal from Egypt, leaving Paris feeling betrayed and humiliated. Since then, unlike most other European countries, France’s defense policy has been based on the assumption that the U.S. is not a reliable ally and that the Western European nation should be able to defend itself on its own if need be. The memory of the Suez incident contributed to former French President Charles de Gaulle’s decision to leave NATO and develop its own nuclear program. Now, European capitals — who until now have been reluctant to think about the continent’s security architecture without the U.S. — are starting to increasingly realize France might have been right all along. “There is a kind of intellectual validation of the French position, which recognizes that interests do not always converge between allies and that the U.S. involvement in European security was the result of an alignment that was not eternal,” said Élie Tenenbaum, director of the Paris-based IFRI security studies center. Since Trump came back to power in January, the clues of Washington’s disengagement from — if not disdain of — Europe have been hard to ignore. Trump’s disparaging comments about Europe earlier this month came only a few days after a U.S. National Security Strategy made thinly-veiled calls for regime change in European countries. A leaked longer version of the document openly says the U.S. should pull Austria, Hungary, Italy and Poland away from the EU. In the months leading up to the strategy’s release, the Trump administration has repeatedly cast doubt on America’s commitment to NATO’s collective defense pact, Article 5 of the NATO charter, and announced a U.S. troop reduction from frontline state Romania. Even more strikingly, the U.S. threatened to annex Greenland by force and is cozying up to Russia, including in peace talks to end the war in Ukraine. Less than one year after Trump returned to the White House, influential German voices — in one of Europe’s most transatlanticist countries — are no longer looking at Washington as an ally. Denmark’s military intelligence service has now classified the U.S. as a security risk. In this context, smaller European nations expect the larger ones to step up. “We need the bigger countries to lead the way,” a European defense official from a mid-size nation emphasized in a private briefing. “France has been consistent on that for quite some time, Germany is also important. It’s always helpful if they lead by example.” A Paris-based European diplomat echoed that call for French leadership: “We need Macron to take the initiative [on European defense], who else is going to do it if not France?” Another European official said France could become a “political and military hub,” adding that Paris is ready to lead together with other capitals such as London, Berlin, Rome and Warsaw. Since the war in Ukraine started in 2022, Paris has pivoted to Europe and reinvested in NATO. For decades, Paris had neglected the alliance — rejoining its integrated military command only in 2009 — and focused mainly on faraway lands such as the African Sahel region, from which the French military ultimately had to withdraw after a series of coups d’état. Now, France is leading a multinational NATO battlegroup in Romania, has beefed up its military footprint in Estonia and is in talks to deploy soldiers in Finland. For frontline states, having a nuclear power present on their soil remains a crucial deterrent against Russia. In a first test for Europe’s ability to think about its own security without the U.S., Paris — otherwise a laggard in terms of military aid to Kyiv — has set up alongside London a so-called coalition of the willing to plan security guarantees for post-war Ukraine. That’s a significant step in European-led defense planning and France’s leadership role has been welcomed in European capitals. However, many of them are still reluctant to deploy military assets to Ukraine without American backing. While the French elite has seen this moment coming, not everyone in France is on board, at least not yet. At this year’s Congress of France’s mayors — an influential gathering held annually in Paris — Mandon told the country’s local elected officials to ready their constituents for a potential war against Russia in the coming years. Standing on a white, round platform in front of French and EU flags, he warned them that France is in danger unless it’s prepared to sacrifice. “If our country falters because it is not prepared to accept losing its children …[or] … to suffer economically because priorities will go to defense production,” he said, “If we are not prepared for that, then we are at risk. But I think we have the moral fortitude.” About 24 hours later, that was all the country was talking about. Far-right and far-left parties alike accused Mandon of war-mongering and overstepping. It’s not up to him to speak to the mayors, they argued; his job is to follow political orders. Even in Emmanuel Macron’s camp, lawmakers privately admitted the general’s wording was ill-advised, even if the message was valid. Eventually, the French president publicly backed him. France’s moment to demonstrate leadership is arriving at a challenging time for Europe’s heavyweight. “If you’re right too early, then you’re wrong,” a high-ranking French military officer told me. Macron’s ill-fated decision to call for a snap election in 2024 has embroiled the country in a political crisis that is still unresolved, and the far-right, NATO-skeptic, EU-skeptic National Rally is on the rise and could come to power as soon as 2027. “Intellectually, we are mentally equipped to understand what is happening in terms of burden shifting, but we don’t really have the means to lead the way at the European level,” said IFRI’s Tenenbaum, adding that Germany is currently in a better position to do so. “French leadership makes sense, it is logical given our relative weight, experience, and capabilities, and European countries recognize this, but there is a mismatch between words and deeds,” he added. Even as Macron pledged more defense spending, it’s very unlikely that France’s fragmented National Assembly will pass the 2026 budget by Dec. 31. The French president said France’s military expenditures will increase by €6.7 billion next year, bringing the country’s total defense spending to more than €57.1 billion. In comparison, German lawmakers this week greenlit €50 billion in weaponry procurement — Germany’s military expenditures are expected to reach more than €82 billion next year. “There will be a new balance between France and Germany in the coming years,” said a third Paris-based European diplomat. Since Macron’s snap election in 2024, European embassies in Paris monitor France’s political situation like milk on the stove — especially in the run-up to a presidential election in 2027 where the far-right National Rally is currently leading the polls. While Germany and the U.K. could also see nationalists come to power, their next general elections aren’t scheduled before 2029. Paris-based European diplomats speaking to POLITICO have compared a presidency by National Rally leaders Marine Le Pen or Jordan Bardella to Trump’s return to the White House in terms of changes for France’s security and defense policy. Just a day after Macron pledged that France would join a multinational force to enforce peace in Ukraine if a deal is signed with Russia, Bardella, leader of the National Rally, reaffirmed his party’s opposition to sending French troops. Marine Le Pen confirmed in September she would leave NATO’s integrated command if she’s elected president. A second high-ranking French military officer downplayed that pledge, arguing top French military brass would be able to convince her otherwise. However, he conceded, the National Rally’s refusal to send boots on the ground in Ukraine would “become a problem” for the coalition of the willing. Le Pen also vowed to completely overturn Macron’s offer to have a discussion with European countries about how France’s nuclear deterrent could contribute to the bloc’s security. In a bid to show leadership, the French president is currently engaging with some nations to talk about the role French nukes could play to deter Russia beyond the French borders. Asked whether she’d be open to storing French nuclear weapons in Poland and Germany (something even Macron hasn’t suggested), she replied: “Give me a break. It’s an absolute no, because nuclear power belongs to the French.” Some European countries want to do as much as possible with Macron now, in anticipation of a potential drastic policy change in 2027. Others are concerned about France’s political future, worrying how a leadership change could affect Paris’ commitments. According to an influential French lawmaker who works on defense policy, Poland’s recent decision to award a submarine contract to Sweden instead of France was partly driven by concerns in Warsaw about France’s political future. “The instability of French political life is frightening. Poland is scared to death of Bardella,” the lawmaker said. Countries such as Romania continue to see France as a crucial security provider and would welcome more troops to compensate for the outgoing U.S. soldiers. But officials from the southeastern European country know there could be an expiration date to Paris’ involvement. “There is an election in two years’ time, Macron’s successor will be less inclined to have troops outside of France,” one of them told me. Amid the uncertainty, the French military will continue to try to strengthen the ranks of its armed forces and attract young people like Charlotte. She is still deciding whether she actually wants to join, and regardless of who’s elected president in 2027, the geopolitical environment is unlikely to improve. “It is very important that our generation is aware and knows how to serve their country,” she said.

BRUSSELS — European Commission President Ursula von der Leyen said Thursday that EU governments are already asking Brussels to create a second edition of the bloc’s SAFE defense financing scheme, even before the first one has begun distributing money. Speaking at the POLITICO 28 event, von der Leyen said the EU’s flagship Security Action for Europe loans-for-weapons program has become the runaway success of the bloc’s rearmament push.  “I think the most successful is the €150 billion of the SAFE instrument,” she said. “It is so oversubscribed by the member states that some are calling for a second SAFE instrument.” SAFE is designed to help countries jointly buy arms and ammunition from European industry financed by low interest loans. Countries had to file national procurement plans this fall, and demand has exceeded available funds, the Commission president said. The Commission chief used the appearance to argue that the past year has reshaped the EU’s defense role at unprecedented speed.  “If you look at the last year when it comes to defense, more has happened than during the last decades in the European Union,” she said, pointing to the creation of the EU’s first full-time defense commissioner and the publication of its first defense readiness plan. She contrasted the bloc’s limited defense spending in the previous decade, when only €8 billion was invested in defense on the European level, with the surge now underway. “During the last year, we enabled an investment … of €800 billion till 2030,” she said. Von der Leyen’s acknowledgment that capitals want a “second SAFE” is part of an ongoing push to continue ramping up defensing spending. That is likely to create a major political clash for 2026, when countries will reopen negotiations over the next long-term EU budget as there are calls for defense spending to be 10 times larger than under the current budget. Any effort for countries to borrow jointly to fund defense will also spark pushback from frugal capitals.

LONDON — Scandal-hit Japanese tech firm Fujitsu has lost its grip on a lucrative contract to keep running Great Britain’s post-Brexit border with Northern Ireland, following mounting public pressure, two people with knowledge of the bidding process have told POLITICO. The firm at the center of the Post Office scandal — which saw faulty data from Fujitsu’s Horizon software lead to wrongful theft and fraud convictions of hundreds of innocent Post Office workers — had spearheaded a consortium bid for the £370 million contract to continue running the Trader Support Service (TSS), as reported earlier this year. The contract was awarded to another consortium late last month, according to the two people cited above. The 10-day cooling-off period after the contract was awarded ends on Tuesday. The Fujitsu-led consortium, which includes Liz Truss ally Shanker Singham’s firm Competere, has raked in more than £500 million since 2020 developing and operating the platform, which helps firms navigate the complicated post-Brexit customs arrangements between Great Britain and Northern Ireland under the Windsor Framework. While a new supplier will be taking control of TSS, Fujitsu retains the intellectual property rights to a core part of the existing platform, four people with knowledge of the process — including those cited above — confirmed. This means the new system will have to be built from scratch.  All of those cited in this story were granted anonymity to speak freely. There have been calls for Fujitsu to be stripped of its public contracts while sub postmasters affected by the scandal await full compensation. In August, more than 32 MPs and 44 peers wrote to U.K. Prime Minister Keir Starmer, urging him to block the firm from bidding for control of the TSS platform. In October, the government accepted all but one of the recommendations from Wyn Williams’ inquiry into the scandal, published in July, which concluded that at least 13 people may have taken their own lives after being accused of wrongdoing.  There has also been public scrutiny over the running of TSS. Cabinet Office Minister Nick Thomas-Symonds told lawmakers earlier this year he was investigating industry concerns about the service. “We are concerned to hear reports that the Trader Support Service is not providing a good quality of service,” cross-party peers on the Northern Ireland Scrutiny Committee wrote in an October report. Meanwhile, a report by the Federation of Small Businesses found current support relating to the Windsor Framework — including the TSS — was “falling short of expectations,” with 78 percent of Northern Irish businesses surveyed rating it as either “very poor” or “poor.” A spokesperson for HMRC, which awarded the contract, said: “We follow government procurement rules when awarding contracts, ensuring value for money for taxpayers. All bids underwent a robust evaluation and assurance process, and we will confirm the award in due course.” Fujitsu and Competere did not respond to requests for comment.

BRUSSELS — It’s time for Europeans to stop trailing behind Donald Trump and instead draw up their own peace plan for Ukraine, Defense Commissioner Andrius Kubilius told POLITICO. The EU “needs to be independent or at least be ready to be strong in geopolitical developments, including to have our plans on how peace in Ukraine can be brought and to discuss them with our transatlantic partners,” Kubilius said. The EU is scrambling to respond after the U.S. president’s negotiators — real estate tycoon Steve Witkoff and Trump’s son-in-law Jared Kushner — were in Moscow Tuesday to talk over the latest peace proposal with Russian leader Vladimir Putin. Europe was caught off guard by the 28-point peace plan drafted by Witkoff and Russia’s Kirill Dmitriev, which included a ban on Ukraine’s membership of NATO and a limit on the size of the Ukrainian army. That draft was modified after a desperate intervention by European allies and Ukraine, but there is wariness about yet another Trump-led peace effort. European countries were not represented at the Kremlin during the meeting with Putin, despite Ukraine’s future being crucial to the continent’s security. EU officials worry that even if this new Trump plan doesn’t fly, in a few months, there’ll be a new one.  “Each six months, we’re getting new plans and in some way I feel that we are waiting here to know the plans that will come from Washington this year. The plans should come also from Brussels or from Berlin,” Kubilius said. The defense commissioner argued that it is “very much needed” for Europe to craft its own plan to end the war to secure a seat at the table. “We should have the possibility to discuss two plans: one that is European and another one, maybe, prepared by our American friends,” he said. The aim would be to “find synergies between these two plans and achieve the best outcome.” DEFENSE IS A TOP PRIORITY The former Lithuanian prime minister has been the bloc’s first defense commissioner for a year — a sign of how much has changed in the EU as it wakes up to the threat posed by Russia and ramps up its rearmament efforts, all while the Trump-led U.S. pulls back from the continent. The U.S. has been the linchpin of Europe’s security since the end of World War II, and Kubilius said, “We should always count on Article 5,” referring to NATO’s common defense provision. However, he argued that America’s shift toward the Pacific “is happening.” “The question is whether we need to have some kind of additional security guarantees and institutional arrangements in order to be ready — in case Article 5 suddenly is not implemented,” he said.   He also mentioned recent comments by U.S. NATO Ambassador Matthew Whitaker that Germany might take over NATO’s top military job, rather than keeping it in the hands of an American general. That “is a signal that really Americans are asking us to take care about European defense,” not only from a military point of view but also from an institutional perspective, Kubilius said. The geopolitical shift “pushed Europe to understand that defense is a clear strategic priority, which demands action from our side,” the commissioner said, mentioning some of the EU’s key legislative actions like the €150 billion SAFE loans-for-weapons program aimed at boosting the bloc’s military production. Next year, “we are planning to spend a lot of our efforts on the development of industry,” he said, including a communication on the single market. Defense companies are currently not fully integrated into the single market as governments have an opt-out for national security interests, but that is a cause of the bloc’s fragmented defense industry and is hampering rearmament efforts. Kubilius also said he wants to open a discussion on “institutional defense readiness,” including revamping the bloc’s mutual defense provision — often overshadowed by NATO’s more muscular promise. The EU clause needs procedural language that spells out the actions member countries must take to protect each other.

BRUSSELS — U.S. Deputy Secretary of State Christopher Landau on Wednesday slammed European NATO allies for prioritizing their own defense industry over American arms suppliers, according to three NATO diplomats. The intervention came during Wednesday’s meeting of NATO foreign ministers — which was skipped by Landau’s boss Marco Rubio. Landau, a longtime NATO skeptic who spoke first at the closed-door meeting, told ministers not to “bully” his country’s defense firms out of participating in Europe’s rearmament. He then left the room soon after for other meetings, the diplomats said, though they noted that ministers only staying for a short time was not unusual. A U.S. State Department official said: “Deputy Secretary Landau delivered two key messages. One is the is the need for Europe to turn its defense spending commitments into capabilities. The second is that protectionist and exclusionary policies that bully American companies out of the market undermines our collective defense.” The EU has moved to scale up its historically depleted defense industry amid growing warnings by countries like Germany that Russia could attack Europe by the end of the decade. Brussels has unveiled strategies in several legal proposals seeking to encourage local industry. Those efforts include the new €150 billion loans-for-arms SAFE program, but third countries like the U.S. can only supply a maximum of 35 percent of the value of weapons systems. Landau’s broadside is the latest in a long list of blows by the current U.S. administration to its historic partners, which includes pressuring the EU into accepting a humiliating trade deal to stave off tariffs. President Donald Trump has repeatedly slammed the bloc for treating the U.S. unfairly — while the EU has said Washington’s demands on trade were tantamount to blackmail.  Landau’s comments are likely to leave a bitter taste in some capitals, coming as several European countries like Germany and Poland announced millions in new cash for a NATO-backed scheme that pays U.S. defense firms to supply critical weapons to Ukraine. In total, Europe and Canada have pledged $4 billion to the scheme, NATO chief Mark Rutte said Wednesday. Trump has in the past questioned NATO’s security guarantees even if he has largely lauded the alliance’s efforts to ramp up defense spending to 5 percent of GDP by 2035. Over the summer Landau posted a deleted social media comment stating, “NATO is still a solution in search of a problem.” Rubio’s absence marks the first time in more than two decades that Washington’s top diplomat hasn’t been present for a NATO ministerial meeting. “No one’s shocked by the U.S. line that Europe shouldn’t be protectionist,” said one NATO diplomat, while adding: “But what did you expect … tact or nuance from the U.S.?” NATO declined to comment. This article has been updated.

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.

BERLIN — Germany’s Bundestag budget committee is planning to sign off on over €2.6 billion in new military programs, according to a confidential list seen by POLITICO. The approvals, set for next week, mark another broad procurement round as Berlin ramps up defense spending and reenergizes its arms industry. The 11-item package includes almost every capability area: drones, long-range missiles, soldier systems, logistics vehicles and critical radar upgrades.  For Chancellor Friedrich Merz’s government, it’s another step toward making the Bundeswehr a war-ready force while giving German manufacturers a steadier pipeline of long-term orders. Some of the biggest checks are being written for drones. MPs will clear about €68 million for Uranos KI, an AI-enabled reconnaissance network built in competing versions by Airbus Defence and Space and German defense-AI company Helsing. Another €86 million will keep the German Heron TP, operated by Airbus DS Airborne Solutions and based on Israel’s Heron TP, flying into the 2030s. Roughly €16 million will go to Aladin, a short-range reconnaissance drone developed by Munich-based start-up Quantum Systems. Air power also gets a significant boost. MPs are set to approve around €445 million for a new batch of Joint Strike Missiles, produced by Norway’s Kongsberg Defence & Aerospace and integrated for Germany’s incoming Lockheed Martin F-35A fleet. Separate contracts worth €37 million will replace obsolete radar components on Eurofighter jets.  NH90 naval helicopters, built by NHIndustries — a consortium of Airbus Helicopters, Leonardo and Fokker — will receive a parallel radar upgrade, as the model returned to headlines after Norway settled a long-running availability dispute with the manufacturer. At the soldier level, the Bundeswehr will move forward with close to €760 million for new G95 assault rifles from Heckler & Koch, nearly €490 million for laser-light modules supplied by Rheinmetall Soldier Electronics, and about €140 million for headset-based communications systems produced by Rheinmetall Electronics with major subcontractors 3M and CeoTronics. And in a sign of Berlin’s effort to rebuild military logistics at scale, MPs will approve roughly €380 million for off-road military trucks from Mercedes-Benz and around €175 million for heavy tank-transport trailers built by DOLL. These contracts directly feed Germany’s defense-industrial base as Berlin pushes industry to deliver at wartime speed.