Germany’s two banking supervisory agencies have drafted a plan to ease the burden of regulation on Europe’s smaller banks and are now seeing if it will fly. An informal discussion paper drafted by the Deutsche Bundesbank and Bafin — which share responsibility for supervising German banks — proposes freeing banks across the EU of the need to report capital ratios based on complex calculations of the riskiness of their assets, as well as liberating them from various other obligations. The proposals are the first concrete result of a drive to simplify regulation that began earlier this year and are the clearest sign yet that the EU is — belatedly — ready to undo some of the stifling financial regulation it introduced over a decade ago. Regulation is currently based on the global Basel III accords that were agreed by regulators in 2010, two years after reckless lending by U.S. and European banks caused the biggest financial crisis in nearly 80 years and a wrenching recession across most of the world. Basel III drastically increased the amount of capital and liquidity that banks have to hold to protect themselves against a possible repeat. But the accords were aimed primarily at big international institutions whose operations were capable of destabilizing the global financial system; as the impact of the 2008-2009 disaster has faded, regulators have grudgingly come to accept that their response went too far. The U.S., Switzerland and the U.K. have already implemented less intrusive regimes for smaller banks with simpler business models. “With the proposal for an EU small banks regime, we have provided important impetus to the discussions on simplifying the regulatory framework,” Michael Theurer, the Bundesbank’s head of banking supervision, said in emailed comments, stressing that the proposal “does not represent a departure from the Basel framework.” The framework would be open to banks with less than €10 billion in assets and with a mainly domestic focus (at least 75 per cent of their business should be in the European Economic Area). Banks using it would not be allowed to hold any cryptocurrency assets such as Bitcoin, and would be allowed to hold only minimal amounts of derivatives or assets for trading purposes. They would also have to prove that their vulnerability to changes in interest rates is acceptably low. ‘PARADIGM SHIFT’ Under the Capital Requirements Regulation, which applies Basel III in the EU, banks are generally required to report two capital ratios — one adjusted for risk, and one unadjusted. The latter, known as the leverage ratio, was originally intended as a backstop to prevent larger banks from gaming the system by understating the risks on their books under internal models allowed by the accords The German proposals suggest that smaller banks would merely have to report a leverage ratio, albeit a “significantly higher” one than the present 3 percent. By comparison, U.S. community banks must keep their leverage ratios above 9 percent, which means they must hold at least $9 of capital for every $100 in assets. Theurer said the Bundesbank had deliberately refrained from suggesting a specific ratio at this time. This idea “is more than a technical detail,” Daniel Quinten, a member of the board at Germany’s Federal Association of Cooperative Banks, said in a post on social media. “It would be a paradigm shift — and a chance for more proportionality, more efficiency and less bureaucracy in regulation.” The proposals — and the feedback they get — are to be incorporated in a report that a high-level European Central Bank task force will recommend to the European Commission at the end of the year. | Florian Wiegand/EPA The proposals also simplify demands on liquidity coverage. They would exempt banks from the Basel III Net Stable Funding Ratio — a complex formula for guaranteeing liquidity over a one-year timeframe — and would replace it with a new requirement that would limit their lending to only 90 percent of their deposit base. Banks would also have to keep at least 10 percent of their assets in highly liquid form, such as cash, central bank reserves or short-term government debt. This, the discussion paper said, “would achieve similar potential outcomes with dramatically reduced complexity.” The proposals — and the feedback they get — are to be incorporated in a report that a high-level European Central Bank task force will recommend to the European Commission at the end of the year. Additional reporting by Carlo Boffa.

BRUSSELS — The U.K. and the EU both want a Brexit reset. It seems like no one told the regulators. As top technocrats prepare to meet Wednesday for talks on financial services, cracks are beginning to form around the edges of the steadily improving relationship. And while it’s usually the politicians held responsible for resurfacing Brexit-era wounds, this time the pencil-pushers only have themselves to blame. Two major regulatory decisions taken by U.K. watchdogs have led to an outcry from Brussels, which could make for an awkward conversation as officials from the European Commission and the British Treasury meet in London Wednesday for the third in a now-regular series of U.K.-EU financial services talking shops. “The risk always in these discussions is that the politics plays a role,” said a senior EU official, granted anonymity to discuss sensitive talks. A combination of different leaders on both sides of the Channel, Donald Trump’s return to the White House and challenging national politics in the pursuit of growth means this week’s important talks will be held in an atmosphere tempered by jostling for global standing by the two sides. BANKING HEADACHES Five years after Brexit created a seismic shift in the EU’s finance sector by cleaving off its biggest market and most influential voice in financial services rulemaking, the wounds were beginning to heal on both sides. A partnership agreement had been signed, allowing for twice-yearly financial services talking shops, and top regulators were working together on issues from green finance to shadow banking rules to shortening the settlement cycle. But two decisions by British watchdogs, both of which have a direct effect on the EU, blindsided Brussels and threatened to derail the process. Just days before Trump returned to the Oval Office on Jan. 20, the U.K. surprised Brussels by delaying its introduction of global banking rules — rules that the EU had already enacted into law (with the exception of one part that was delayed). U.K. finance minister Rachel Reeves, in a volte face from a cozy meeting with her Eurozone counterparts in December. | Pool Photo by Peter Cziborra via Getty Images Officials on the EU side fumed that the U.K. was taking part in a race to the bottom on finance rules and anticipating a sweeping deregulatory agenda from Trump. “In a general sense we were not expecting it,” the senior EU official said, adding that the EU side had been operating on the basis that the U.K. would implement the global rules, known as Basel III, at the same time. U.K. finance minister Rachel Reeves, in a volte face from a cozy meeting with her Eurozone counterparts in December, said Britain has “gone ahead of other European countries,” at the World Economic Forum last month, adding: “We’ve had that flexibility. We can be more nimble. We are taking advantage of that.” Meanwhile, the U.K.’s tiny payments watchdog caused ripples across the Channel by plowing ahead with a proposal to cap fees charged on card transactions, which European payments companies have claimed will hike their costs. EU lawmakers say the plans could breach the Brexit deal. Even one area of potential good news for the U.K.’s financial services industry — the EU’s recent decision to extend the recognition of U.K. financial plumbing known as clearinghouses — has been met with mild exasperation. After its attempts to shift more clearing activity away from London’s dominant LCH and ICE Clear Europe to European clearinghouses fell flat, Brussels extended its recognition of U.K. clearinghouses to 2028 in a fast-tracked process which has caused political drama in the EU capital. Although British officials are pleased to have some relief from a looming mid-2025 deadline, they’re not happy that the 2028 date has, in the words of one U.K. official, “just created another cliff-edge” which will need to be re-negotiated in a few short years. HAPPILY EVER AFTER On both sides of the Channel, politicians are desperately trying to prove to voters that they can grow their respective economies — with Reeves and her Prime Minister Keir Starmer even using Britain’s sluggish growth as a stick to whack the watchdogs with, and each side more intent on protecting their own industries from possible Trump tariffs. So despite potential cracks in the relationship, the regulators have more in common than do their political masters: Both are more focused on financial stability than on “competitiveness,” despite political leanings toward the latter, the senior EU official said. “We’re not Pollyanna. We know this is going to be a long road, but are we seeing a small movement in terms of positive and constructive engagement? I think we can say yes,” said one City lobbyist, granted anonymity to speak freely. Meanwhile, another City of London lobbyist argued that Wednesday’s meeting will be a chance to air any grievances. The U.K. and the EU both want a Brexit reset. | Ben Stansall/Getty Images “There might be elements of the European side that would have liked the announcement around the U.K.’s decision on Basel to be undertaken a little bit differently. But these are the sorts of forums that are going to enable those things to be aired and discussed properly, rather than sort of fester in the background, as might otherwise be the case. “It would be great if the U.K. and the EU decided to take similar approaches on everything, and everyone lived happily ever after, but there’s always going to be differences in certain areas,” the lobbyist added. And there are glimmers of hope. Even though the U.K. could have moved faster than the EU, in what would have been a “Brexit dividend,” by implementing shorter settlement cycles for securities trades, known as T+1, it chose to wait for Brussels — with London officially proposing the same October 2027 date as the EU last week. Although in that regard, the U.S. is again driving the conversation — it made the change back in spring last year — the U.K. and EU are scrambling to keep up, as with other significant areas of financial rules. Whether they decide to make that climb together remains to be seen. Kathryn Carlson reported from Brussels. Fiona Maxwell reported from London.

LONDON — Donald Trump has already soured relations between the EU and U.K. — without even trying. For the U.K.’s City of London financial powerhouse, it’s taken years of painstaking diplomacy to get London and Brussels back around the table in the fallout from Brexit.  But the Friday before Trump’s inauguration as the 47th president of the United States, the Bank of England (BoE) made a shock move to delay the U.K.’s introduction of global banking rules. It was a solo decision from the U.K. amid concerns Trump’s new administration will embark on a deregulatory agenda for its financial giants. But it provoked immediate fury in Brussels over a lack of coordination. It’s an early sign of which way the U.K. may move on its prized financial services industry. Keeping pace with New York may be far more important than working hand-in-hand with Europe — even if London wants closer ties with Brussels, too. “We’ve gone ahead of other European countries,” Chancellor Rachel Reeves said at the World Economic Forum last month. “We’ve had that flexibility. We can be more nimble. We are taking advantage of that.”  It’s a message that clashes with the charm offensive Reeves embarked on in Brussels in December as the Labour government tries to “reset” relations with the bloc. Reeves told European finance ministers Britain wanted a “deeper, more mature relationship” and wouldn’t pick Trump over the EU. The U.K.’s vast financial services industry has been hoping improving political mood music would gradually rebuild closer ties that have soured substantially since Brexit. But Britain’s decision on banking threatens to undermine the slow and steady progress toward rebuilding trust with the bloc.  BASEL, WHAT? The new Brexit flashpoint stems from uncertainty around U.S. President Donald Trump’s plans for international banking reforms, known as the final Basel III rules or the Basel endgame. The reforms aim to make banks safer and keep taxpayers off the hook for any collapse in response to the bailouts seen in the 2008 financial crisis. The new Brexit flashpoint stems from uncertainty around U.S. President Donald Trump’s plans for international banking reforms, known as the final Basel III rules or the Basel endgame. | Jim Watson/AFP via Getty Images Even without Trump, the banking industries in the U.K. and EU have lobbied heavily to water down key aspects of the rules, warning of the potential impact of a capital hike on lending to the economy.  Now Washington is expected to rewrite or even rip up its proposals entirely — creating a dilemma in London and Brussels. The U.K. and EU could push on with their own plans regardless to shore up their banking sectors and show their faith in international rulemaking. Or, they could wait and see to avoid creating a competitive disadvantage with America’s banking giants. Amid searing political pressure from the U.K. Treasury for the country’s regulators to prioritize economic growth at all costs, the BoE chose to delay. In the surprise move three days before Trump reentered the Oval Office, the British banking regulator pushed back the U.K.’s plans to bring in the reforms by a year until Jan. 1, 2027 to allow “more time for greater clarity” in the United States. “We’re the two largest capital markets in the world, and until we know what the U.S. is going to do, let’s be cautious in cracking ahead too quickly,” said one U.K. banking lobbyist, granted anonymity to speak freely. “Most firms were probably taken a bit by surprise by this — but in a good way,” they added. DIFFERENT INCENTIVES It was not such a welcome surprise in Brussels. The EU already started bringing its reforms into effect at the turn of the year — and would have to reopen contentious legislation to delay further. “They [the U.K.] went for the whole package,” said a second banking lobbyist. “And that’s what the EU cannot do without a good amount of legal gymnastics.” The European Commission does have the power to delay part of the international rulebook that affects banks’ trading books — which will likely be the most impacted by Trump’s administration — without having to resort to more legislation. The Bank of England meanwhile wanted to give banks clarity and the breathing space of a least a year to get ready, as it was due to publish its final rules this January. | Carl Court/Getty Images But the EU executive has already delayed those measures by one year, until January 2026, and its own legislation only allows it to postpone the rules for up to two years. So Brussels has an incentive to find out exactly what Trump, and in turn the U.K., will do before deciding on its plan of action. The BoE meanwhile wanted to give banks clarity and the breathing space of a least a year to get ready, as it was due to publish its final rules this January. Plus, the resignation of the Federal Reserve’s top banking cop, Michael Barr — who left to avoid a clash with Trump — only raised the uncertainty for the U.K. central bank. WHO’S THE OUTLIER NOW? At the very top of the Brussels machinery, there was some knowledge of what was coming. A senior U.K. Treasury official, Gwyneth Nurse, gave the EU’s senior financial-services official, John Berrigan, a heads up of a week, according to an official with knowledge of the call. (Like others quoted in this story, the official was granted anonymity to speak freely.) But that hasn’t lessened the sting in Brussels. A senior EU official’s hopes of coordination on Basel before Christmas were dashed by the move. The U.K. regulator said it “consulted” the Treasury on the Basel decision, following weeks of intense and overt political pressure on the country’s regulators to pursue “competitiveness” over safety. | Rob Pinney/Getty Images One EU diplomat, messaging on the move, adopted a more neutral tone: “It took us by surprise but I think the other way around we don’t consult our legislative actions with them either,” they wrote, adding a winking face emoji. Yet it’s particularly galling for some on the EU side because of Britain’s attitude on Basel. The BoE has spent the last few years complaining about the EU’s plans — describing them as an “international outlier” — after the bloc created a series of loopholes to protect its banks. EU officials think that’s a bit rich given they are now implementing the rules while the U.K. gives its banks another year off. The U.K. regulator said it “consulted” the Treasury on the Basel decision, following weeks of intense and overt political pressure on the country’s regulators to pursue “competitiveness” over safety. Some EU officials now wonder if the U.K. will deregulate further to try to keep pace with Trump — including with potentially more substantive changes on the Basel banking rules once the U.S. plan takes shape. Whether or not that happens, the suspicions that dogged relations directly after Brexit aren’t far under the surface. Kathryn Carlson and James Fitzgerland contributed reporting.

BRUSSELS — The EU has hit back after Britain’s banking watchdog issued a surprise delay to global rules over fears incoming U.S. President Donald Trump will cull them. An EU official told POLITICO the bloc is “surprised and disappointed” by the Bank of England’s announcement Friday that it would further delay plans to bring in its version of global bank capital reforms because of uncertainty over whether Trump will delay or roll back the rules in the U.S. The official said the BoE’s move to delay the reforms, known as Basel III, by one year until Jan. 1, 2027, is “not in line with what the UK authorities have said over the last ten years on the importance to have high standards for market participants, agreed at international level.” The U.K. has previously called the EU “an international outlier” for deviating from the globally agreed standards too much. Brussels implemented its version of Basel III, the last piece of a major reform agenda dating back to the global financial crisis, on January 1 this year. But it has already delayed one part of the rules, which affects the international operations of big lenders, until 2026, which could be further postponed in response to the move from London. The EU official said the U.K.’s move creates “clear level playing field issues” that the bloc “will need to consider carefully.” “Implementing standards only when the last jurisdiction has implemented them is not the way to preserve financial stability in international markets, in particular for large financial centres,” the EU official said. The European Commission has noted the delay and said it is committed to implementing the bank standards on time.

Well, the Trump show’s just been rebooted. And Europe can’t look away. European policymakers have spent months preparing for Donald Trump’s potential return to the White House. But let’s be honest, they don’t really know how this will all unfold. For instance, Trump has promised to slap tariffs on every single European good entering the U.S. So the EU has preemptively locked and loaded some retaliatory measures. Seems logical — but that only works in a world where Trump is not erratic and impulsive. Also, remember Trump’s boast that he could instantly “end” Russia’s war in Ukraine? Whatever his bluster means, it has ramifications in Europe. And that’s just what’s consuming the headlines. Trump’s victory will inevitably affect every area of EU policy, from drug pricing to green technologies to artificial intelligence standards. So buckle up while POLITICO futurecasts what this all means for the EU. The remake will be unmissable, if nothing else. Energy Climate Trade Central banking Sustainability Financial services Health Mobility Defense Tech Competition Cybersecurity ENERGY Trump has boiled his energy policy down to three words: “drill, baby, drill.” His vow to boost oil and gas extraction, and ship more fossil fuels abroad, has raised eyebrows among environmentalists but has industry eyeing big profits. Despite American exports of natural gas hitting a record high last year, Trump wants to ax a Biden administration freeze on permits for new liquified natural gas (LNG) projects, a restriction that creates uncertainty for the European market. His crusade against the green transition could be less crowd pleasing. Some in Trump’s camp want him to scrap the Inflation Reduction Act (IRA), which allocates more than half a trillion dollars for projects like clean tech, hydrogen and renewable energy. That program, however, has created jobs in key states and drawn business away from Europe, giving the U.S. a head start over the EU in industries such as wind, solar, alternative fuels and electric vehicles. Its repeal could be a boon for Brussels as it sets its sights on competition with Washington. Back to the top CLIMATE Donald Trump’s victory spells environmental disaster. To avert catastrophic levels of global warming, the world has very little time to dramatically slash emissions. Yet under Trump — who plans to pull the U.S. out of the Paris Agreement once again and double down on fossil fuels — the pace of the green transition is projected to slow down rather than speed up.  With the U.S. responsible for more than a tenth of planet-warming pollution, any shift in American climate policy has global consequences. A hotter planet means more disasters, including within the EU, which has to prepare accordingly for worse climate impacts. And some fear Trump’s win may reduce momentum for climate action worldwide, putting the Paris Agreement goals even further out of reach.  Funding for climate action in poorer countries is the hot topic at this year’s global climate summit starting Nov. 11, and Trump’s victory may plunge the conference into uncertainty — with many looking toward the EU to step up and fill the leadership vacuum. Yet without U.S. backing for much-needed reforms of the global financial architecture to cope with the climate challenge, debt-distressed developing countries will struggle to raise the necessary funds to switch away from fossil fuels.  Back to the top Donald Trump’s victory spells environmental disaster. | Chip Somodevilla/Getty Images TRADE “America First” will again sum up Trump’s approach to trade policy.  He’s vowed to bring back jobs to the U.S. and punish friends and foes with across-the-board tariffs of 10 or 20 percent (and up to 60 percent on goods coming from China), despite economists’ warnings of a detrimental impact on U.S. economic growth and higher costs for consumers. Trump’s trade policy is focused more on reducing the sizable U.S. trade deficit than on opening up new market opportunities. Trade policy will mainly be seen through the national security and geopolitical lens.  The EU failed to capitalize on the détente with the Biden administration to fix lingering trade disputes on steel and aluminum tariffs, green subsidies on electric cars, and reviving the highest court of the World Trade Organization. These rifts are expected to worsen under Trump.  The most immediate stress tests for Brussels and Washington will be to find a solution to the EU’s paused retaliatory tariffs against Washington (the truce elapses in March 2025), as well as its aircraft dispute over subsidies for Airbus and Boeing by 2026.  Back to the top CENTRAL BANKING Call it Trumpageddon.  If the president-elect goes ahead with even half the ideas he’s floated on the campaign trail, expect serious pain for the European economy. Analysts at Goldman Sachs said the euro could drop as much as 10 percent against the dollar if the new administration enacts its across-the-board tariff plan, while earnings among a group of Europe’s largest companies could fall by more than 5 percent next year.  Trump has explicitly called for more White House interference into the working of the U.S. Federal Reserve — America’s central bank — which has made its independence from politicians into a calling card. That could have huge implications for the stability of the global financial system, as well as the continued dominance of the dollar as the world’s reserve currency. Less direct, but no less impactful, are plans to deport undocumented migrants by the millions. It’s not yet clear who will be in the crosshairs of the mass deportation program, but given the importance of migrant labor, even the undocumented kind, for key sections of the American economy, there will be an unavoidable upwards pressure on prices. That could translate to higher U.S. interest rates, and put pressure on the European Central Bank to follow, screwing with an already shaky economic recovery. Back to the top SUSTAINABILITY It’ll come as no surprise to Brussels that the president-elect is not a fan of green policymaking. While the Trump administration probably won’t impact Brussels’ own rule-setting on green issues, Trump’s animosity for environmental policy will widen the gap between the two blocs on the international stage and harm the EU’s ambitions to promote multilateral cooperation. Under Biden, efforts to mandate American businesses to report on their environmental footprint were already stalling, frustrating Brussels’ hopes of creating global standards so companies operating in Europe don’t feel unfairly burdened. Under Trump, Brussels can kiss that dream goodbye.  Waltzing into the Oval office for a second time, Trump could also start backtracking on international commitments made by the U.S. The Republican Party is strongly against the U.S.-backed proposal to limit plastic production as part of the ongoing negotiations for a global plastics treaty. This could crush the EU’s hopes of American support in the final round of talks later this month. Back to the top Domald Trump’s animosity for environmental policy will harm the EU’s ambitions to promote multilateral cooperation. | Chip Somodevilla/Getty Images FINANCIAL SERVICES Trump’s victory will set the teeth of the world’s finance regulators on edge. Many global rules aimed at preventing another global financial crisis are drawn up in international bodies like the Financial Stability Board, IOSCO and the Basel Committee on Banking Supervision – all of which could be under threat from an uncooperative U.S.  In the short term, the Trump win looks like bad news for the global rollout of bank capital rules known as Basel III, drawn up after the 2007-2008 crisis to make sure lenders have enough reserves to cope with economic shocks. The U.S. has already changed its plans and postponed its rollout of the global rules after massive lobbying from the banking industry, and now could well scrap the rules altogether, prompting fears of financial instability.  But Wall Street is likely to be happy with Trump’s “America First” economic policies which boost manufacturing and loosen regulations, particularly on competition. Trump didn’t rock the boat on financial services policy the first time around, stacking regulators with Wall Street grandees. But while campaigning this time he launched a crypto venture. So the jury’s out on that one.  Back to the top HEALTH In his previous stint as president, Trump attempted to curb drug prices with little impact. Since then, the Biden administration has used the IRA to push through far-reaching drug price restrictions for people on Medicare, the health insurance for older Americans. Trump is unlikely to roll this back, meaning Big Pharma in the U.S. and Europe will be considering their investment options as both regions push to limit pharma profits. Global health advocates might also be fearing that Trump will once again withdraw from the World Health Organization (Biden overturned Trump’s previous withdrawal on his first day in office). The U.S. is the largest funder of the U.N. body, so its disengagement would have a huge impact on global health projects. Abortion has been one of the top voter concerns this election campaign. Trump, who claimed victory for overturning women’s right to abortion via Roe v. Wade, has since said he would veto a federal ban, leaving power with the states on the extent to which abortion is or isn’t allowed. Back to the top MOBILITY Donald Trump’s victory is likely to hurt European carmakers. “I want German car companies to become American car companies,” Trump recently told his supporters, promising “the lowest taxes, the lowest energy costs and the lowest regulatory burden” for automakers that choose to move production to the U.S. and “a very substantial tariff” on the others. Republicans also promised to cancel Biden’s electric vehicle mandate, which aims to ensure that half of all new cars and trucks sold in 2030 are zero-emission. Trump’s reelection could also spell bad news for Airbus and the rest of the European aircraft sector, with a possible wave of aerospace protectionism aimed at rescuing Boeing from troubled waters. It also remains to be seen if Trump will maintain his skepticism of green tech policies or continue to subsidize sustainable aviation fuels, which benefited massively from the Biden administration’s tax cuts under the IRA. As for shipping, which is most exposed to the negative effects of tariffs, the sector will be closely watching any type of trade war that a second Trump administration might launch. Back to the top DEFENSE A Trump win means Europe can no longer — or at least much less — rely on the U.S. for its defense and security. Donald Trump threatened during his first term to leave NATO and has repeatedly said on the campaign trail that Washington wouldn’t come to the rescue of allies who don’t invest enough in their military in case of a Russian aggression.  In a way, this may be a blessing in disguise for the EU, forcing European governments to work more closely together and make bold decisions — such as agreeing to joint borrowing to boost the bloc’s defense industry. France could revive discussions on the European aspect of its nuclear doctrine, while Brussels and London could accelerate talks for a defense and security agreement. Most countries would likely raise defense spending as much as possible.  On the other hand, we may see European capitals bilaterally try to curry favor with a Trump administration to ensure Washington remains interested in their security, namely by increasing even more purchases of U.S.-made weapons when the European Commission is trying to incentivize EU countries to buy local.  A Trump win means Europe can no longer — or at least much less — rely on the U.S. for its defense and security. | Chip Somodevilla/Getty Images The Trump win could mean the end of U.S. military aid to Ukraine and pressure on Kyiv to negotiate a peace deal with Russian President Vladimir Putin, even if the terms are more favorable for Moscow.  Back to the top TECH Under Biden, the EU was on speaking terms with the U.S. on tech. The Trump win could change that by spelling the end of the U.S.-EU Trade and Technology Council, the biannual transatlantic political gathering founded in 2021 as a place for the U.S. and the EU to discuss tech policy and coordinate on topics such as semiconductors and artificial intelligence standards. The collapse of such a diplomatic backchannel could come when international alignment on AI governance is needed the most.  Another liability is Trump’s proximity to Elon Musk, the owner of X, who has become a big Trump supporter. If the EU fines X for breaches of the bloc’s content-moderation rulebook, the relationship between Trump and the European Commission could sour very quickly and reinvigorate a well-known narrative that the EU is only trying to “take U.S. Big Tech companies down.”  Back to the top COMPETITION A Trump win opens up an uncertain era, as he hasn’t expressed clear lines on industrial policy or antitrust regulation, beyond an “America First” approach. While no fan of Big Tech, he has expressed frustration over European efforts to rein in American companies. He told a podcast in October that Apple Chief Executive Officer Tim Cook had called him to complain about an EU antitrust fine and losing a court ruling that required it to hand over billions of euros in back tax. He appears to oppose U.S. and EU antitrust efforts to split off parts of Google’s business, saying that “China is afraid of Google.” Trump has been backed by tycoon Elon Musk who has run into several digital regulation battles with the European Commission. Ultimately, Trump’s win may speed up European efforts to rely less on the U.S. as a partner, pushing on with an economic security strategy that emphasizes European production and a wide range of international suppliers and markets. That could see more pressure within Europe for EU merger reviews to allow bigger European companies and for more government help to boost European champions. Back to the top CYBERSECURITY The biggest cybersecurity impact of a Trump win is that his administration could remove Israeli spyware firms from the U.S. entity list of companies deemed a national security concern. Some of them, like NSO Group, have already been lobbying Republicans. The U.S. could also abandon American-led international efforts to clamp down on the proliferation and misuse of commercial spyware, which would have a ricochet effect on global efforts to rein in the surveillance tool.  Any distancing of the U.S. from NATO under Trump could also affect the Western alliance’s cyber capabilities.  Back to the top Gabriel Gavin, Zia Weise, Camille Gijs, Marianne Gros, Kathryn Carlson, Helen Collis, Tommaso Lecca, Laura Kayali, Pieter Haeck, Aude Van Den Hove, Antoaneta Roussi and Cory Bennett contributed to this report.

Call it the evaluation before the job interview. Ahead of the aspiring commissioners facing a grilling from the European Parliament in early November, they must respond to lawmakers’ written questions. And the answers are in. Many of the incoming top brass are new to the Brussels’ policymaking machine. The written answers, in theory at least, are an opportunity to share their vision of their upcoming roles. Don’t get too excited though.  The majority of commissioner nominees rehashed previous statements from various Brussels institutions, whether from the political guidelines of European Commission President Ursula von der Leyen or the so-called mission letters that she sent to her future commissioners. The answers were also partly written by the Commission’s civil servants, who have crafted and executed EU policies for decades.  The real test will be facing unexpected questions from European lawmakers when commissioner nominees can no longer rely on advisers to whisper the answers.  Still, the written answers give some indications to how the newcomers want to set the tone or change direction — which makes them worth combing through.  And POLITICO got stuck into more than 400 pages of written answers so you don’t have to. Here are our key takeaways.  MARIA LUÍS ALBUQUERQUE Portugal’s Maria Luís Albuquerque, the commissioner candidate for financial services and the Savings and Investments Union, said the bloc must “not roll back” global bank capital standards — the so-called Basel III accords, which aimed to make the financial system safer following the 2008 global financial crisis — and “must implement the rules,” pushing back against calls from EU countries to scrap some elements of existing regulation. Albuquerque, who will answer questions from European Parliament lawmakers at her confirmation hearing on Nov. 6, said in written responses to MEPs’ questions that the EU is “giving banks ample time to adapt to the new rules.” VALDIS DOMBROVSKIS Latvia’s Valdis Dombrovskis, the commissioner candidate for economy, productivity, implementation and simplification, gave his strongest support yet for conditions to be attached to European Union funding in the next budget, saying the bloc may draw inspiration from the successful linking of investment and reform within its pandemic recovery fund. His remarks formed part of his written answers to European lawmakers ahead of his Nov. 7 confirmation hearing in the European Parliament, and follow a similar push from von der Leyen. The remarks of Valdis Dombrovskis formed part of his written answers to European lawmakers ahead of his Nov. 7 confirmation hearing in the European Parliament, and follow a similar push from von der Leyen. | Sajjad Hussain/AFP via Getty Images CHRISTOPHE HANSEN Luxembourg’s Christophe Hansen, the commissioner candidate for agriculture and food, said the European Commission won’t publish a flagship framework law on sustainable food systems, in written answers ahead of his grilling by lawmakers on Nov. 4. “Rather than new legislative proposals, we can achieve our objectives by better implementing and enforcing existing legislation while using incentives and new market-based tools to promote change,” Hansen said in reply to a question on whether the EU’s executive would propose the framework next year. COSTAS KADIS Cyprus’ Costas Kadis, the commissioner candidate for fisheries and oceans, made it clear he won’t compromise on environmental protection ahead of his Nov. 6 confirmation hearing. In his role, Kadis will have the delicate task of balancing the interests of the EU’s fishing industry with those of imperiled ocean biodiversity — which are often diametrically opposed. Kadis, who has a background in biology, said his “top priority” was to “ensure that the fishing and aquaculture sectors remain sustainable, competitive and resilient.” HADJA LAHBIB Belgium’s Hadja Lahbib, the commissioner candidate for preparedness, crisis management and equality, dodged MEPs’ questions over the future of the Health Emergency and Response Authority (HERA) and hinted funding for health crisis planning could be hard to come by, ahead of her hearing on Nov. 6. MEPs asked whether she foresaw an expansion of HERA’s capacity and how she would manage financing issues that have already affected its work. In her statement Lahbib didn’t answer directly but said she would draw on HERA’s expertise for the EU preparedness strategy and for the Critical Medicines Act. TERESA RIBERA Spain’s Teresa Ribera, the executive vice president candidate for the clean, just and competitive transition, promised “swift and effective state aid” to back the EU’s Clean Industrial Deal, pitching public funds as a way to unlock private sector investments in “considerable” decarbonization costs, she told the European Parliament ahead of her Nov. 12 confirmation hearing. The Clean Industrial Deal — a bill to help companies meet the EU’s ambitious carbon-cutting targets and boost climate-friendly technologies — is one of Ribera’s top agenda items. The EU has vowed to release the legislation within 100 days of Ribera taking office. Spain’s Teresa Ribera, the executive vice president candidate for the clean, just and competitive transition, promised “swift and effective state aid” to back the EU’s Clean Industrial Deal. | Javier Soriano/AFP via Getty Images JESSIKA ROSWALL Sweden’s Jessika Roswall, the commissioner candidate for environment, water resilience and a competitive circular economy, stressed her commitment to the farming, forestry and bioeconomy industries ahead of her hearing on Nov. 5. In doing so, the lawyer-by-trade and former European affairs minister made it clear the European Commission’s green agenda will no longer take priority over support for the agricultural sector — addressing what became one of the biggest controversies of the last mandate. STÉPHANE SÉJOURNÉ France’s Stéphane Séjourné, the executive vice president candidate for prosperity and industrial strategy, said that the European Commission will thoroughly assess the way it scrutinizes foreign subsidies impacting takeover deals and public procurement in the EU. He commits to a review of the implementation of the rules in responses submitted ahead of his confirmation hearing on Nov. 12 and highlights the “appropriateness of the level of the notification thresholds.” He also says that Brussels will come up with a possible legislative proposal depending on the outcome of this review, as planned in the text of the regulation. OLIVÉR VÁRHELYI Hungary’s Olivér Várhelyi, the commissioner candidate for health and animal welfare, was opaque on pushing ahead with front-of-pack labels in written answers to MEPs on how to tackle ever-rising rates of noncommunicable diseases such as diabetes, cancer and cardiovascular disease, ahead of his hearing on Nov. 6. While he acknowledged that mandatory food information “can help consumers to make healthier consumer choices,” he nonetheless favors a “comprehensive approach” (EU-speak for nonlegislative measures). This could signal a line in the sand over stalled European Commission proposals to introduce front-of-pack health labels for all foods in Europe, as well as for alcoholic drinks. Hungary’s Olivér Várhelyi, the commissioner candidate for health and animal welfare, was opaque on pushing ahead with front-of-pack labels in written answers to MEPs. | Joe Klamar/AFP via Getty Images EKATERINA ZAHARIEVA Bulgaria’s Ekaterina Zaharieva, the commissioner candidate for startups, research and innovation — who is also tasked with leading the EU life sciences strategy — only briefly mentioned the hotly anticipated proposal ahead of her hearing on Nov. 5. But in her nine-page replies to the questions posed by MEPs, published Tuesday night, Zaharieva only said she will “engage with the relevant players to develop a Strategy for European Life Sciences, which will cover also biotechnology … (to) support a faster green and digital transition.” Helen Collis, Rory O’Neill, Claudia Chiappa, Aude van den Hove, Francesca Micheletti, Camille Gijs, Leonie Cater, Marianne Gros and Louise Guillot contributed to this report.