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

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

HOW DO BULGARIANS FEEL ABOUT JOINING THE EURO? The Balkan nation is sharply divided about bidding farewell to the lev.  Text by BORYANA DZHAMBAZOVA Photos by DOBRIN KASHAVELOV in Pernik, Bulgaria Bulgaria is set to adopt the EU’s single currency on Jan. 1, but polling shows the Balkan nation is sharply divided on whether it’s a good thing. POLITICO spoke to some Bulgarians about their fears and hopes, as they say goodbye to their national currency, the lev. Their comments have been edited for length. ANTON TEOFILOV, 73 Vendor at the open-air market in Pernik, a small city 100 kilometers from Sofia What do you think about Bulgaria joining the eurozone? We are a different generation, but we support the euro. We’ll benefit hugely from joining the eurozone. It will make paying anywhere in the EU easy and hassle-free. It would be great for both the economy and the nation. You can travel, do business, do whatever you want using a single currency — no more hassle or currency exchanges. You can go to Greece and buy a bottle of ouzo with the same currency. What do you think will change in your everyday life once the euro replaces the lev? I don’t expect any turbulence — from January on we would just pay in euros. No one is complaining about the price tags in euros, and in lev at the moment. Are you more hopeful or worried about the economic impact of switching to the euro? Why? The lev is a wonderful thing, but its time has passed; that’s just how life works. It will be much better for the economy to adopt the euro. It will be so much easier to share a common currency with the other EU countries. Now, if you go to Greece, as many Bulgarians do, you need to exchange money. After January – wherever you need to make a payment – either going to the store, or to buy produce for our business, it would be one and the same. What would you like politicians and institutions to do to make the transition easier for ordinary people? The state needs to explain things more clearly to those who are confused. We are a people who often need a lot of convincing, and on top of that, we’re a divided nation. If you ask me, we need to get rid of half the MPs in Parliament – they receive hefty salaries and are a burden to taxpayers, like parasites, without doing any meaningful work. Do you think joining the eurozone will bring Bulgaria closer to Europe culturally or politically? There are 27 member states, and we will become one with them. There will be no difference between Germany and us—we’ll be much closer to Europe. I remember the 1990s, when you needed to fill out endless paperwork just to travel, let alone to work abroad. I spent a year working in construction in Germany, and getting all the permits and visas was a major headache. Now things are completely different, and joining the eurozone is another step toward that openness. Advertisement PETYA SPASOVA, 55 Orthopedic doctor in Sofia What do you think about Bulgaria joining the eurozone? It worries me a lot. I don’t think this is the right moment for Bulgaria to join the eurozone. First, the country is politically very unstable, and the eurozone itself faces serious problems. As the poorest EU member state, we won’t be immune to those issues. On the contrary, they will only deepen the crisis here. The war in Ukraine, the growing debt in Germany and France … now we’d be sharing the debts of the whole of Europe. We are adopting the euro at a time when economies are strained, and that will lead to serious disruptions and a higher cost of living. I don’t understand why the state insists so strongly on joining the eurozone. I don’t think we’re ready. What do you think will change in your everyday life once the euro replaces the lev? Even now, when you go to the store and look at the price of bread or other basic foods, we see prices climbing. I’m afraid many people will end up living in extreme poverty. We barely produce anything; we’re a country built on services. When people get poorer, they naturally start consuming less. I’m not worried about myself or my family. We live in Sofia, where there are more job opportunities and higher salaries. I’m worried about people in general. Every day I see patients who can’t even afford the travel costs to come to Sofia for medical check-ups. Are you more hopeful or worried about the economic impact of switching to the euro? Why? I’m extremely worried. I don’t want to relive the economic crisis of the 90s, when the country was on the verge of bankruptcy. What would you like politicians and institutions to do to make the transition easier for ordinary people? No one cares what people think. Many countries held referendums and decided not to join the eurozone. I don’t believe our politicians can do anything at this point. I’m not even sure they know what needs to be done. Do you think joining the eurozone will bring Bulgaria closer to Europe culturally or politically? I feel offended when I hear this question. We’ve been part of Europe for a very long time, long before many others. We can exchange best practices in culture, science, education, and more, but that has nothing to do with the eurozone. Joining can only bring trouble. I remember years ago when I actually hoped Bulgaria would enter the eurozone. But that was a different Europe. Now things are deteriorating; the spirit of a united Europe is gone. I don’t want to be part of this Europe. Advertisement SVETOSLAV BONINSKI, 53 Truck driver from Gabrovo, a small city in central Bulgaria What do you think about Bulgaria joining the eurozone? I’m against Bulgaria joining the eurozone. We saw how Croatia and Greece sank into debt once they adopted the euro. I don’t want Bulgaria to go down the same path. Greece had to take a huge loan to bail out its economy. When they still had the drachma, their economy was strong and stable. After entering the eurozone, many big companies were forced to shut down and inflation went through the roof. Even the German economy is experiencing a downturn.. What do you think will change in your everyday life once the euro replaces the lev? I worry that there will be speculation and rising inflation. Five years ago, I used to buy cigarettes in Slovakia at prices similar to Bulgaria. Now I can’t find anything cheaper than €5 per pack. They saw their prices rise after the introduction of the euro. We’ll repeat the Slovakia scenario. Are you more hopeful or worried about the economic impact of switching to the euro? Why? We can already feel that things won’t end well — prices have gone up significantly, just like in Croatia. I’m afraid that even in the first year wages won’t be able to compensate for the rise in prices, and people will become even more impoverished. I expect the financial situation to worsen. Our government isn’t taking any responsibility for that. What would you like politicians and institutions to do to make the transition easier for ordinary people? I hope they will make an effort. We are completely ill-equipped to adopt the euro—all the stats and figures the government presents are lies. We must wait until the country is ready to manage the euro as a currency. We’re doing fine with the lev. We should wait for the economy to grow and for wages to catch up with the rest of Europe. The only thing the state could do to ease the process is to step down. The current government is interested in entering the eurozone only to receive large amounts of funding, most of which they will probably pocket themselves. The Bulgarian lev is very stable, unlike the euro, which is quite an unstable currency. All the eurozone countries are burdened with trillions in debt, while those outside it are doing quite well. Do you think joining the eurozone will bring Bulgaria closer to Europe culturally or politically? I don’t think so. We’ve been part of Europe for a long time. The only difference now will be that Brussels will tell us what to do and will control our budget and spending. Brussels will be in charge from now on. No good awaits us. Elderly people won’t receive decent pensions and will work until we drop dead. Advertisement NATALI ILIEVA, 20 Political science student from Pernik What do you think about Bulgaria joining the eurozone? I see it as a step forward for us. It’s a positive development for both society and the country. I expect that joining the eurozone will help the economy grow and position Bulgaria more firmly within Europe. For ordinary people, it will make things easier, especially when traveling, since we’ll be using the same currency. What do you think will change in your everyday life once the euro replaces the lev? The transition period might be difficult at first. I don’t think the change of currency will dramatically affect people’s daily lives – after all, under the currency board, the lev has been pegged to the euro for years. Some people are worried that prices might rise, and this is where the state must step in to monitor the situation, prevent abuse, and make the transition as smooth as possible. As part of my job at the youth center, I travel a lot in Europe. Being part of the eurozone would make travel much more convenient. My life would be so much easier! I wouldn’t have to worry about carrying euros in cash or paying additional fees when withdrawing money abroad, or wondering: Did I take the right debit card in euros? Are you more hopeful or worried about the economic impact of switching to the euro? Why? I’m more concerned that the issue will be politicized by certain parties to further polarize society. Joining the eurozone is a logical next step – we agreed to it by default when we joined the bloc in 2007. There is so much disinformation circulating on social media that it’s hard for some people to see the real facts and distinguish what’s true from what’s not. What would you like politicians and institutions to do to make the transition easier for ordinary people? The state needs to launch an information campaign to make the transition as smooth as possible. Authorities should explain what the change of currency means for people in a clear and accessible way. You don’t need elaborate language to communicate what’s coming, especially when some radical parties are aggressively spreading anti-euro and anti-EU rhetoric. Do you think joining the eurozone will bring Bulgaria closer to Europe culturally or politically? Yes, I think it will help the country become better integrated into Europe. In the end, I believe people will realize that joining the eurozone will be worth it. Advertisement YANA TANKOVSKA, 47 Jewelry artist based in Sofia What do you think about Bulgaria joining the eurozone? If you ask me, the eurozone is on the verge of collapse, and now we have decided to join? I don’t think it’s a good idea. In theory, just like communism, the idea of a common currency union might sound good, but in practice it doesn’t really work out. I have friends working and living abroad [in eurozone countries], and things are not looking up for regular people, even in Germany. We all thought we would live happily as members of the bloc, but that’s not the reality. What do you think will change in your everyday life once the euro replaces the lev? I expect the first half of next year to be turbulent. But we are used to surviving, so we will adapt yet again. Personally, we might have to trim some expenses, go out less, and make sure the family budget holds. I make jewelry, so I’m afraid I’ll have fewer clients, since they will also have to cut back. Are you more hopeful or worried about the economic impact of switching to the euro? Why? I’m terribly worried. The state promises there won’t be a jump in prices and that joining the eurozone won’t negatively affect the economy. But over the past two years the cost of living has risen significantly, and I don’t see that trend reversing. For example, in the last three years real estate prices have doubled. There isn’t a single person who isn’t complaining about rising costs. What would you like politicians and institutions to do to make the transition easier for ordinary people? There is nothing they can do at this point. Politicians do not really protect Bulgaria’s interests on this matter. The issue is not only about joining the eurozone but about protecting our national interests. I just want them to have people’s well-being at heart. Maybe we need to hit rock bottom to finally see meaningful change. Do you think joining the eurozone will bring Bulgaria closer to Europe culturally or politically? Not really. That’s up to us, not to Europe. I just want Bulgarian politicians to finally start creating policies for the sake of society, not just enriching themselves, to act in a way that would improve life for everyone. Advertisement KATARINA NIKOLIC, 49, AND METODI METODIEV, 53 Business partners at a ‘gelateria’ in Sofia What do you think about Bulgaria joining the eurozone? Metodi: For a small business like ours, I don’t think it will make much difference, as long as the transition to the new currency is managed smoothly. I can only see a positive impact on the economy if things are done right. I’m a bit saddened to say farewell to the Bulgarian lev — it’s an old currency with its own history — but times are changing, and this is a natural step for an EU member. Katarina: I have lived in Italy which adopted the euro a long time ago. Based on my experience there, I don’t expect any worrying developments related to price increases or inflation. On the contrary, joining the eurozone in January can only be interpreted as a sign of trust from the European Commission and could bring more economic stability to Bulgaria. I also think it will increase transparency, improve financial supervision, and provide access to cheaper loans. What do you think will change in your everyday life once the euro replaces the lev? Metodi:  I don’t think there will be any difference for our business whether we’re paying in euros or in leva. We’ve been an EU member state for a while now and we’re used to working with both local and international suppliers. It will just take some getting used to switching to one currency for another. But we are already veterans — Bulgarian businesses are very adaptive — from dealing with renominations and all sorts of economic reforms. I’m just concerned that it might be challenging for some elderly people to adapt to the new currency and they might need some support and more information. Katarina: For many people, it will take time to get used to seeing a new currency, but they will adapt. For me, it’s nothing new. Since I lived in Italy, where the euro is used, I automatically convert to euros whenever Metodi and I discuss business. Are you more hopeful or worried about the economic impact of switching to the euro? Why? Metodi: The decision has already been taken, so let’s make the best of it and ensure a smooth transition. I haven’t exchanged money when traveling in at least 10 years. I just use my bank card to pay or withdraw cash if I need any. Katarina: I remember that some people in Italy also predicted disaster when the euro was introduced, and many were nostalgic about the lira. But years later, Italy is still a stable economy. I think our international partners will look at us differently once we are part of the eurozone. Advertisement What would you like politicians and institutions to do to make the transition easier for ordinary people? Metodi: I think the authorities are already taking measures to make sure prices don’t rise and that businesses don’t round conversions upward unfairly. For example, we may have to slightly increase the price of our ice cream in January. I feel a bit awkward about it because I don’t want people to say, “Look, they’re taking advantage of the euro adoption to raise prices.” But honestly, we haven’t adjusted our prices since we opened three years ago. I’m actually very impressed by how quickly and smoothly small businesses and market sellers have adopted double pricing [marking prices in lev and euros]. I know how much work that requires, especially if you’re a small business owner. Katarina: It’s crucial that the state doesn’t choke small businesses with excessive demands but instead supports them. I believe that helping small businesses grow should be a key focus of the government, not just supervising the currency swap. My hope is that the euro will help the Bulgarian economy thrive. I love Bulgaria and want to see it flourish. I’m a bit more optimistic than Metodi, I think the best is yet to come. Do you think joining the eurozone will bring Bulgaria closer to Europe culturally or politically? Metodi: I think so. Despite some criticism, good things are happening in the country, no matter who is in power. We need this closeness to truly feel part of Europe. Katarina: The euro is a financial and economic instrument. Adopting it won’t change national cultural identity, Bulgarians will keep their culture. I’m a true believer in Europe, and I think it’s more important than ever to have a united continent. As an Italian and Serbian citizen, I really appreciate that borders are open and that our children can choose where to study and work. In fact, our gelateria is a great example of international collaboration: we have people from several different countries in the team.

The discussion surrounding the digital euro is strategically important to Europe. On Dec. 12, the EU finance ministers are aiming to agree on a general approach regarding the dossier. This sets out the European Council’s official position and thus represents a major political milestone for the European Council ahead of the trilogue negotiations. We want to be sure that, in this process, the project will be subject to critical analysis that is objective and nuanced and takes account of the long-term interests of Europe and its people. > We do not want the debate to fundamentally call the digital euro into question > but rather to refine the specific details in such a way that opportunities can > be seized. We regard the following points as particularly important: * maintaining European sovereignty at the customer interface; * avoiding a parallel infrastructure that inhibits innovation; and * safeguarding the stability of the financial markets by imposing clear holding limits. We do not want the debate to fundamentally call the digital euro into question but rather to refine the specific details in such a way that opportunities can be seized and, at the same time, risks can be avoided. Opportunities of the digital euro:  1. European resilience and sovereignty in payments processing: as a public-sector means of payment that is accepted across Europe, the digital euro can reduce reliance on non-European card systems and big-tech wallets, provided that a firmly European design is adopted and it is embedded in the existing structures of banks and savings banks and can thus be directly linked to customers’ existing accounts. 2. Supplement to cash and private-sector digital payments: as a central bank digital currency, the digital euro can offer an additional, state-backed payment option, especially when it is held in a digital wallet and can also be used for e-commerce use cases (a compromise proposed by the European Parliament’s main rapporteur for the digital euro, Fernando Navarrete). This would further strengthen people’s freedom of choice in the payment sphere. 3. Catalyst for innovation in the European market: if integrated into banking apps and designed in accordance with the compromises proposed by Navarrete (see point 2), the digital euro can promote innovation in retail payments, support new European payment ecosystems, and simplify cross-border payments. > The burden of investment and the risk resulting from introducing the digital > euro will be disproportionately borne by banks and savings banks. Risks of the current configuration: 1. Risk of creating a gateway for US providers: in the configuration currently planned, the digital euro provides US and other non-European tech and payment companies with access to the customer interface, customer data and payment infrastructure without any of the regulatory obligations and costs that only European providers face. This goes against the objective of digital sovereignty. 2. State parallel infrastructures weaken the market and innovation: the European Central Bank (ECB) is planning not just two new sets of infrastructure but also its own product for end customers (through an app). An administrative body has neither the market experience nor the customer access that banks and payment providers do. At the same time, the ECB is removing the tried-and-tested allocation of roles between the central bank and private sector. Furthermore, the Eurosystem’s digital euro project will tie up urgently required development capacity for many years and thereby further exacerbate Europe’s competitive disadvantage. The burden of investment and the risk resulting from introducing the digital euro will be disproportionately borne by banks and savings banks. In any case, the banks and savings banks have already developed a European market solution, Wero, which is currently coming onto the market. The digital euro needs to strengthen rather than weaken this European-led payment method. 3. Risks for financial stability and lending: without clear holding limits, there is a risk of uncontrolled transfers of deposits from banks and savings banks into holdings of digital euros. Deposits are the backbone of lending; large-scale outflows would weaken both the funding of the real economy – especially small and medium-sized enterprises – and the stability of the system. Holding limits must therefore be based on usual payment needs and be subject to binding regulations. -------------------------------------------------------------------------------- Disclaimer POLITICAL ADVERTISEMENT * The sponsor is Bundesverband der Deutschen Volksbanken und Raiffeisenbanken e.V. , Schellingstraße 4, 10785 Berlin, Germany * The ultimate controlling entity is Bundesverband der Deutschen Volksbanken und Raiffeisenbanken e.V. , Schellingstraße 4, 10785 Berlin, Germany More information here.

BRUSSELS — The U.S. must preserve and grow the dominance of its financial sector worldwide, President Donald Trump argues in his new National Security Strategy. The 33-page document is a rare formal explanation of Trump’s foreign policy worldview by his administration, and can shape U.S. policy priorities. “The United States boasts the world’s leading financial and capital markets, which are pillars of American influence that afford policymakers significant leverage and tools to advance America’s national security priorities,” the document states. “But our leadership position cannot be taken for granted,” it continues, calling on America to leverage “our dynamic free market system and our leadership in digital finance and innovation to ensure that our markets continue to be the most dynamic, liquid, and secure and remain the envy of the world.” The strategy lists the “world’s leading financial system and capital markets, including the dollar’s global reserve currency status” as one of the U.S. key levers of power. Trump’s comments come as Europe looks to grow its own finance system to reduce the continent’s dependence on Wall Street. The EU has put forward a broad plan to boost its own finance industry by strengthening its single market for investment, and it will draft policy plans in the coming months aiming to boost its banks’ ability to compete globally. It is also creating a digital version of the euro currency, which would reduce its reliance on the dollar and on U.S. payment giants.

SOFIA — The euro is more than just a currency: it’s a geopolitical insurance policy in a fragmenting world. That was the message the EU’s most senior economic leaders sent to a skeptical Bulgarian public during a pro-euro charm offensive in Sofia on Tuesday. Bulgaria is due to adopt the euro on Jan. 1, 2026, but only about half the population supports joining the single currency. Fears about inflation and centralization of power in Brussels and Frankfurt — exacerbated by alleged Russian disinformation campaigns — have turned many against the project. In a push to ease these concerns, Economy Commissioner Valdis Dombrovskis and European Central Bank President Christine Lagarde each stressed the geopolitical benefits of joining the euro. “Bulgaria is joining the euro … at a point when there is more volatility, at a time when we have more shocks, one after the other, compounded, and at a time where the global order, as we have known it, is more fragmented, and when friends are probably fewer,” said Lagarde, adding: “It’s important to close ranks and to be together.” Lagarde said that during the financial crisis, the single currency had proved a defensive shield against shocks and depreciation. Dombrovkis said that, in itself, the adoption of the euro could help Bulgaria compensate for growing geopolitical risks in investors’ eyes. “In Baltic countries, despite being geopolitically exposed, the borrowing costs were lower than in Poland, and to a large extent investors assessed that [the euro] is a stabilizing factor,” he said. Bulgaria’s accession to the euro has been planned for more than a decade, but as the date got nearer, it has spawned conspiracy theories and populist politics, alongside more justified concerns about the currency changeover. Investigative reports have identified Russian-funded social media campaigns to undermine support for the euro. Last April, the far-right party Revival, which arranged several anti-euro protests over the last year, signed a deal with Vladimir Putin’s Russia United. The percentage of Bulgarians who support the euro has slightly increased in the last few months. | Nikolay Doychinov/Getty Images Asked about Russian influence on public opinion about the euro, Dombrovskis said: “It is not a secret that Russia is waging a hybrid war against Europe and European member states. It is provocation, acts of sabotage, violation of European airspace, meddling in political processes in the European Union, also in other countries, and it is spreading disinformation.” The percentage of Bulgarians who support the euro has slightly increased in the last few months, reaching 51 percent according to a survey cited by Finance Minister Temenuzhka Petkova — up from 45 percent earlier in the year. European Stability Mechanism chief Pierre Gramegna highlighted risks coming from Washington’s new approach to monetary policy and cryptocurrencies: “The U.S. administration is changing its position on so many topics, including on finance and currency, that being part of a large bloc is a huge advantage,” he said, adding people in Bulgaria are not fully conscious of this. “The risk entailed in the digital currencies can be faced better if we are in the euro area,” he said.

The European Central Bank is preparing for its new digital version of the euro to take the payments market by storm — even though much of the public is unsure it wants anything to do with it. Internal ECB documents show the bank wants the digital euro system to be able to handle more than 50 billion transactions a year from the get-go, central bank officials told POLITICO. Such massive capacity suggests that ECB expects the digital currency to transform the retail payments market, pressuring a key revenue stream for current payment providers: If run at maximum capacity, the digital euro could snatch more than a third of the transactions currently done by payment cards. According to a presentation to the ECB’s governing council by the bank’s digital euro team last month, it needs a system that can handle 50.5 billion transactions annually, two officials said. While that is neither a target nor a forecast, it’s still a striking statement of confidence in the project’s potential. For context, payment cards were used in 84.6 billion transactions worth a total of €3.2 trillion across the eurozone last year, with card issuers and associated services providers taking a commission on most of them. Assuming annual growth of 10 percent as cash continues to lose ground, there could be close to 125 billion card transactions in 2028 — the year currently seen as the earliest possible launch date for the digital currency. At full capacity, the digital euro would thus have a market share of around 40 percent. A large part of payment fees currently goes to companies such as Visa and Mastercard and other fintech firms located outside Europe. The ECB wants the digital euro not just to stop such leakage, but to end Europe’s technological reliance on the infrastructure of U.S. payment giants more broadly, fearful of the shifting geopolitical environment. A whopping two-thirds of card transactions in the euro area are currently settled through international payment schemes and more than half of EU countries rely entirely on non-European solutions. The ECB has never publicly shared any estimates of what market share it expects the digital euro to take, but has always stressed that it has no plans to crowd out private-sector alternatives. The numbers in the presentation suggest the private sector may feel very squeezed. The ECB declined to comment. TAKING OVER, OR NO TAKERS? If the planning for broad and rapid adoption is accurate, consumers may see lower prices and Europe may bolster its strategic autonomy — but the region’s payments providers may see less reason to cheer. Industry bodies such as Payments Europe have warned the digital euro could wreck card-based revenue models, especially if its basic services are offered for free. Widespread use of the digital euro in transactions also suggests that consumers will opt to hold them in electronic wallets, draining deposits from the banking system. Bankers say that could limit the amount they have available to lend to households and business. “The impact on savings and retail banks of the digital euro taking a big chunk of card transactions will depend on the holding limits the ECB imposes, and [on] the underlying business model of the digital currency,” said Diederik Bruggink, senior director of payments, digital finance and innovation at the European Savings and Retail Banking Group. The higher the holding limits allowed for the digital euro and the lower the fees for payments between service providers, the worse it will be for banks, he explained. A large part of payment fees currently goes to companies such as Visa and Mastercard and other fintech firms located outside Europe. | Luong Thai Linh/EPA According to European Banking Authority estimates, fees and commissions account for around 30 percent of net operating income at the continent’s banks, and payment-related fees account for more than a quarter of that. The ECB has argued that the digital euro could offer fresh business opportunities for domestic service providers that are finding it increasingly difficult to compete with international card schemes and mobile payment solutions. Not only can banks serve as wallet providers and create other add-on services, but by embedding digital euro services, banks can retain customers who might otherwise migrate to Big Tech wallets, it argues. The question is whether the public can bring itself to care. After a slow start, recent surveys show awareness and interest may be taking off. A survey by consultants BearingPoint in February showed one-third of respondents across the eurozone would be willing to use the digital euro, a share that seems likely to rise with generational change. But a survey by Payments Europe showed that 56 percent of consumers today are unsure whether they ever would. While no decision on launching a central bank digital currency can be taken without legislation from the European Parliament, the project’s technical development continues to gather momentum. In the same presentation, the digital euro team argued that, should all legislative hurdles be cleared, the ECB governing council should approve close to €1.5 billion to bring the project to life.

BRUSSELS — The European Commission has backed drastic measures announced by the new Romanian government to bring down its borrowing and avoid a blow-up with Brussels. Newly-elected Romanian President Nicușor Dan is pushing a raft of measures including a public-sector pay freeze, an end to energy price caps, and a bumper VAT hike to bring down a deficit that in 2024 hit 9.3 percent of GDP, the widest in the EU. The overspending led the EU executive last year to begin an Excessive Deficit Procedure against Romania, putting it on its list of countries under strict orders to curb their borrowing or else face sanctions. The Council’s approval on Tuesday removes for now the threat of Romania losing financial support from the EU. Following a meeting of EU finance and economy ministers, European Commissioner Valdis Dombrovskis said Bucharest’s measures represented an “important and positive step toward complying with the new excessive deficit recommendation, provided all measures are swiftly legislated and implemented.” The Commission will produce a follow-up assessment by autumn, he added. In a speech given to parliament earlier this week Dan said he wanted to stop Romania’s debt falling to “junk” status, which would make the country essentially uninvestable. The move also marks a shift in the EU’s attitude to Romania after the country came close to electing anti-establishment candidate George Simion in its national election earlier this year. Dan’s proposed package of spending cuts and tax hikes is already proving unpopular, triggering street protests and prompting Simion to call for a no-confidence vote. The last meeting saw European ministers blast the previous Romanian administration for not taking “effective action” to fix the country’s finances. Elsewhere on Tuesday, Romania’s central bank said it expected the package of fiscal measures to push inflation up in the short term but would address some of its underlying causes. In doing so, it said the package would bring down Romania’s financing costs and support the leu’s exchange rate. The Bank had spent an estimated €6 billion in May — nearly 10 percent of its total foreign reserves — in calming what ultimately proved to be a brief crisis of confidence in the local currency.

BRUSSELS — Spanish economy minister Carlos Cuerpo has dropped his bid to lead the Eurogroup, paving the way for incumbent Paschal Donohoe to secure a third term. “It became apparent that there was no guaranteed majority for Minister Cuerpo’s candidacy to be successful,” a Spanish economy ministry official told POLITICO, which reported the news first. Eurozone finance ministers will vote for the new Eurogroup chief later this afternoon, and Donohoe is expected to reach the 11 votes that will guarantee his reelection for a further two and a half years. The only remaining candidate in the race to lead the group of eurozone members is Lithuanian finance minister Rimantas Šadžius, who is unlikely to prove a challenge for Donohoe. “Therefore, in an exercise of responsibility, the minister has decided to step aside to favor an election based on consensus,” the Spanish official said. “The election process has been positive, and a widespread message has been conveyed about the need to strengthen the impact and effectiveness of the Eurogroup. Spain will continue to contribute constructively toward this objective, as it has done so far,” the official said.

The Justice Department on Monday announced the seizure of hundreds of financial accounts, fraudulent websites and laptops linked to a massive scheme by North Korean operatives posing as remote workers to infiltrate top tech companies and funnel money back to Pyongyang’s weapons program. The major government crackdown follows recent findings by cybersecurity experts revealing that several Fortune 500 firms were impacted by the intricate plot, which involves North Korean operatives using stolen identities and sophisticated AI tools to sail through the interview and hiring process. The cyber operation has grown more prolific as remote work in the U.S. has exploded, particularly in response to the Covid-19 pandemic. According to the DOJ, around 100 U.S. companies have unknowingly hired workers tied to the North Korean regime, who have also used their access to company systems to steal U.S. intellectual property and virtual currency. One company targeted was an unnamed California-based defense contractor that worked on artificial intelligence-powered equipment. Some of its technical data and files were compromised and sent abroad. “Any government contracting company utilizing remote work could be a potential victim in the future,” said an FBI official, granted anonymity as a condition of speaking to reporters ahead of the announcement. These North Korean agents are often aided by individuals running so-called laptop farms across the U.S. According to the DOJ, 29 known or suspected laptop farms across 16 states were searched. Around 200 laptops were seized by the FBI, along with dozens of financial accounts and fraudulent websites used to launder money. Individuals from the U.S., China, United Arab Emirates and Taiwan, helped North Korean agents successfully embed themselves inside U.S. companies, the press release states. U.S. national Zhenxing Wang was arrested and indicted for his involvement in a multiyear plot that allowed overseas operatives to obtain remote IT work with U.S. companies, generating more than $5 million in revenue. The scheme involved stealing the identities of around 80 U.S. citizens. “North Korean IT workers defraud American companies and steal the identities of private citizens, all in support of the North Korean regime,” Assistant Director Brett Leatherman of the FBI’s Cyber Division said in a statement. “Let the actions announced today serve as a warning: if you host laptop farms for the benefit of North Korean actors, law enforcement will be waiting for you.” In addition, four North Korean nationals were separately indicted for allegedly stealing $900,000 in virtual currencies from two unnamed companies based in Georgia. The DOJ has previously taken action against these schemes, including arresting multiple U.S. nationals running the laptop farms over the past year. One American woman pleaded guilty in February to hosting a laptop farm from her home, which allowed overseas IT workers to receive more than $17.1 million for their work. The State Department continues to offer a $5 million reward for information that could disrupt North Korean financial and other illicit activities.