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.

LONDON — The U.K. government is going all-out to get Brits putting their money in stocks and shares. The timing could definitely be better. Lead policymakers and City of London analysts are increasingly warning of an artificial intelligence-fueled correction in equities just as the U.K.’s top finance minister prepares a major new policy to push Britain’s savers into the stock market. Chancellor Rachel Reeves has made upping retail participation in stocks and shares a high priority, launching a campaign earlier this year to unite financial firms in an advertising blitz extolling the benefits of investing. At next month’s budget, she’s expected to push changes to the tax system that would encourage investors to swap their steady, tax-free cash savings products for a stocks and shares ISA. With AI stocks soaring, it’s caused some raised eyebrows in the City. AI stocks in the U.S. account for roughly 44 percent of the S&P 500 market capitalization, and Nvidia just became the first company in history to become worth $5 trillion. The meteoric rise in has led some experts to warn there’s only one way out: The bubble will burst. “It would, unfortunately, be poetic timing if a major correction arrives just as the government is trying to get more people into investing,” said Chris Beauchamp, chief market analyst at IG. ATLANTIC INFLUENCE This week, City broker Panmure Liberum found that 38 percent of the U.S. stock market’s value is based in a “speculative component” that AI companies will continue to build out data centers and spend billions more on chips — by no means a sure bet. “While this capital spending could deliver substantial productivity gains that might eventually spread to the broader market, there is still no clear evidence that this is happening and is difficult to forecast the size of an eventual impact,” said Panmure analyst Susana Cruz in a research note. The “Magnificent Seven” group of tech giant composed around 20 percent of the S&P 500 at the end of 2022, but now make up more than a third of it, having tripled in size over just three years. The American index’s price-to-book ratio (meaning a company’s market cap compared to assets and liabilities) is at an all-time high, with 19 of the 20 valuation metrics tracked by Bank of America more expensive than the historical average. Despite the vast valuations, an infamous MIT study published earlier this year found that 95 percent of companies using generative AI were getting zero return. In early October, the Bank of England’s committee which monitors risks to financial stability warned of a “sudden correction” in markets, saying that “equity valuations appear stretched” as valuation metrics reached levels comparable to the peak of the dotcom bubble that unfolded in the early millennium, when the Nasdaq fell 77 percent from its peak, wiping trillions of the stock market. It took 15 years for the index to recover. The U.K. central bank’s warning came a month after global body, the Bank for International Settlements, issued a similar caution. Kristalina Georgieva, head of the International Monetary Fund, has also drawn comparisons with the dotcom bubble. Even Jamie Dimon, chief executive of U.S. banking giant JP Morgan, has said he’s seriously worried about a market correction. Over most periods investment beats cash, as long as individuals are willing to lock their money away for several years. Savers could have doubled their money over the last decade by putting their cash in the stock market rather than keeping it in a savings account, according to Schroders. Nvidia is up 13 percent this month alone — rather than an index fund which tracks hundreds of stocks, they stand to lose a lot of money if things go sour. | Jung Yeon-Je/Getty Images “No one can time the market, definitely not a bulky institution like the government,” Oliver Tipping, analyst at investment bank Peel Hunt, said. “Big picture, the government is right to try to stimulate more retail investment.” But if an individual decides to put their hard-earned savings into stocks they perceive as doing particularly well — Nvidia, for example, is up 13 percent this month alone — rather than an index fund which tracks hundreds of stocks, they stand to lose a lot of money if things go sour. “If you think about your average Joe, they’re not going to go into a safe index fund, they’ll put all of their money in Nvidia or Facebook and could get in at the wrong time,” one financial analyst, granted anonymity to speak freely, said.  Yet even an index fund, like a global equities tracker, is made up of close to 20 percent of the “Magnificent Seven” companies, due to the massive size of the American stock market compared to the rest of the world. While these funds have suffered significant drops in the past — U.S. President Donald Trump’s threat of tariffs in April caused a drop of 10 percent in a week — they have then recovered over a period of months or years. That’s good news for investors willing to wait for the market to correct any possible downturn — but if retail investors panic and withdraw their funds at the first sign of a loss, they could end up with less money than they put in, possibly wiping out emergency savings. “There is clearly a risk here that government is pushing people to invest when maybe they don’t have enough of a cash buffer in order to do that, that you’re going to be setting up problems for the long term, and it’ll be interesting to see who’s on the hook for paying that compensation,” said Debbie Enver, head of external affairs at the Building Societies Association. ONCE BITTEN, TWICE SHY City analysts also express concern that investors entering the stock market for the first time could be forever turned off from shifting their cash over to equities if an immediate correction is nigh. Only 8 percent of wealth held by U.K. adults is in stocks and funds, four times lower than in the U.S., according to data from asset manager Aberdeen. “There is no doubt that the government would find it much harder to drive retail investment in a period of financial turbulence,” added Chris Rudden, head of investment consultants at Moneyfarm. “Appetite to invest is linked to strong recent market performance. If there was to be a bubble that bursts in the coming few months, then it could make their job impossible.” IG’s Beauchamp argued that the government would need to pursue a broader education plan “to help people through the inevitable pullback” and prevent them from avoiding the stock market permanently. “How you do that without scaring people witless is a Herculean task,” he added. Laith Khalaf, head of investment analysis at AJ Bell, suggested investment platforms could encourage regular incremental savings in the stock market, known as dollar cost averaging, rather than throwing one lump sum in, which he said “mitigates the risk of a big market downdraft.” One solution that appears to be under consideration by Reeves as part of the autumn budget is to introduce a minimum U.K. stock shareholding in ISAs — which she could argue would protect British savers from a U.S. downturn and pump more money into local companies. This too is not without risk. The FTSE 100 derives nearly 30 percent of its revenue from the U.S., according to the London Stock Exchange, and U.K. markets are generally incredibly sensitive to macroeconomic shifts across the Atlantic. The FTSE 100 derives nearly 30 percent of its revenue from the U.S., according to the London Stock Exchange. | Jeff Moore/Getty Images Meanwhile, if an AI-induced stock bubble isn’t enough cause for concern, worries of trouble in the private credit sector exploded this month after the collapse of sub-prime auto lender Tricolor and car parts supplier First Brands left some U.S. banks with significant losses, causing a spillover onto public markets. BoE governor Bailey recently drew similarities between risks in the asset class and the 2008 global financial crisis, saying it was an “open question” if the event was “a canary in the coal mine” for a market meltdown. If one domino falls, they all could — and that would leave Britain’s chancellor in a real bind.

European companies are still paying vastly more for energy than they would in the U.S. or China, a new analysis has found, a year after a landmark report warned inaction would condemn the continent to economic stagnation. The findings come on the anniversary of the publication of a report by former European Central Bank chief Mario Draghi, which found the EU was lagging behind rivals as a result of expensive power and gas, hampering firms’ competitiveness internationally. According to the new findings from the influential Center for the Study of Democracy think tank, set to be unveiled Tuesday in Washington, European countries have become more exposed to energy price shocks, with indicators surging more than fivefold in the past three years. “A year after Draghi called for stronger EU energy markets, our data shows affordability risks remain high, with retail prices still 40–70 percent above pre-crisis levels in much of Central and Eastern Europe,” said Martin Vladimirov, one of the report’s authors. Affordability is now by far the greatest threat to the EU’s energy resilience, outstripping the uncertainty created by Russia’s weaponizing of energy flows, by the climate transition and by system reliability. “It affects not only citizens’ trust, but also the capacity of businesses to compete globally,” the Center for the Study of Democracy assessment cautions. “For Europe to succeed in the next phase of its energy transition, it must ensure that clean energy is not only available, but accessible and economically viable for all.” Vulnerabilities in one domain also risk spilling over into others, adding to the major and often historical divides that already exist between EU countries, the report cautions. If the bloc fails to address the gulf between countries’ energy security, it threatens to entrench regional inequality and undermine its economic sovereignty and climate goals, it warns. In his report last September, Draghi wrote that “EU companies still face electricity prices that are 2-3 times those in the US. Natural gas prices paid are 4-5 times higher. This price gap is primarily driven by Europe’s lack of natural resources, but also by fundamental issues with our common energy market.” One key recommendation was a massive program of state and private investment in aging power grids, which experts warn are inefficient and a key source of extra costs. His inquiry called for €584 billion in additional funds for electricity infrastructure by 2030, and up to €2.29 trillion by 2050. It is unclear how much of that funding will be made available, but EU energy chief Dan Jørgensen has been tasked with planning an overhaul of Europe’s grids, to be presented later this year. However, one source of reassurance for officials will be the declining levels of exposure to geopolitical risk after efforts to diversify away from Russian oil and gas. Jørgensen has presided over the introduction of a new plan to phase out imports from the country by 2028, with new suppliers ramping up production to meet demand.

European Plastics Converters (EuPC) is the EU-level trade association representing the European plastics converting industry. Plastics converters use plastics raw materials and recycled polymers to manufacture new products. EuPC totals about 45 national as well as European plastics converting industry associations and represents more than 50,000 companies, producing over 50 million tons of plastic products every year. More than 1.6 million people are working in EU converting companies (mainly SMEs) to create a turnover in excess of € 260 billion per year.  > The results are clear: imposing blanket reuse targets for pallet packaging > will do more harm than good — both environmentally and economically.   As part of the EU’s new Packaging and Packaging Waste Regulation (PPWR), policymakers have introduced mandatory reuse targets for plastic pallet packaging — like stretch wrap and hoods — under Article 29. To understand the real-world impact of this proposal, EuPC commissioned two independent studies:  * A life cycle environmental assessment by IFEU (Germany)1  * An economic impact analysis by RDC Environment (Belgium)2  The results are clear: imposing blanket reuse targets for pallet packaging will do more harm than good — both environmentally and economically.  What the environmental study found   IFEU’s life cycle assessment shows that switching from single-use plastic wrap and hood to reusable systems could actually increase CO2 emissions from 35 percent to up to 1,700 percent, depending on the specific use case. In every application studied, single-use solutions performed better than reusable alternatives across all environmental impact categories — from emissions to resource use.  What the economic study found   RDC’s economic analysis looked at eight key industrial sectors — including retail, agriculture, cement and glass — and found that mandatory reuse systems could result in up to €4.9 billion in additional annual costs just for these eight sectors alone.  Some sectors would be hit particularly hard, seeing potential increased production costs of:  * Retail: up to €400 million   * Glass: up to €780 million  To clarify, these figures refer exclusively to the eight industrial sectors analyzed in the study, which represent only a portion of the product categories transported on pallets in the EU. Since other sectors are not included, the overall EU-wide impact would exceed the €4.9 billion estimated for this limited sample.  Enterprises are likely to face the greatest challenges under mandatory reuse systems. Many lack the reverse logistics or automation needed for reuse systems. For exporters, the burden is even greater, as they would be forced to operate two parallel packaging systems: one compliant with EU reuse requirements and another for non-EU markets. Currently, there are no large-scale reusable packaging systems in place, meaning an entirely new infrastructure would need to be developed within an extremely short timeframe. This raises serious legal, operational and economic concerns, especially for the most vulnerable segments of the market.   What it all means  Both studies agree that replacing recyclable single-use pallet wrap with reusable alternatives is neither greener nor cheaper. If enforced, the proposed reuse targets could undermine PPWR’s goals of creating a truly circular and efficient packaging economy.  That’s why EuPC is calling for the exclusion of pallet wrap and straps from Article 29, using the flexibility allowed through delegated acts under Article 29(18a) and 29(18c).  > If enforced, the proposed reuse targets could undermine PPWR’s goals of > creating a truly circular and efficient packaging economy. The smarter way forward  Single-use, recyclable plastic pallet packaging is already a reality aligned with Europe’s sustainability goals. Solutions that truly work in real-world logistics that are efficient, scalable and sustainable are already an economic reality.  -------------------------------------------------------------------------------- Notes Disclaimer: This document reflects EuPC’s independent position and communication. The data and analysis cited are based on studies commissioned by EuPC. 1 Comparative life cycle assessment of various single use and reuse transport packaging  2 Economic impact of switching to reusable options for pallet wrapping 

LONDON — Keir Starmer hailed a “landmark deal” with the European Union back in May which he promised would slash red tape. One month on, however, and Starmer’s promises still seem like a distant dream in Northern Ireland, as businesses brace for yet more Brexit paperwork. From July 1, a whole raft of new food products sold in Northern Ireland will have to carry “Not for EU” labels as part of the third and final phase of a controversial labeling rollout. The rules — set out in the Windsor Framework deal between the U.K. and EU — are supposed to ensure that goods are not moved onward from Northern Ireland to the Republic of Ireland, an EU member country. But in light of the U.K. prime minister’s fresh EU deal, businesses are questioning why the new labels should be introduced at all. Under the terms of the deal agreed by Starmer, Britain is preparing to sign up to European single-market regulation on animal and plant health, known as sanitary and phytosanitary (SPS) rules, removing the need for the labeling. “We are being required to implement a very cumbersome and onerous regulation from July 1 until the date that the [SPS] deal is put into law, which may only be a matter of months,” said Roger Pollen, head of the Federation of Small Businesses in Northern Ireland.  “There will almost certainly be manufacturers who will say: ‘No, we’re not doing that’, and stop supplying the market, leading to gaps on shelves and broken supply chains, simply because the EU are sticking on a point of principle despite the imminent SPS deal.” ‘FRANKLY FARCICAL’ The labels are deeply controversial for businesses, who claim they are not only off-putting to consumers but costly for manufacturers and “cataclysmic” for food exports.  The latest rollout will cover some fruit and vegetables, fish, and composite products such as pizzas and quiches. Meat and dairy products sold in Northern Ireland already carry the labels. The requirement was originally supposed to apply U.K.-wide, but that plan was scrapped last year following a huge backlash from businesses — with the caveat that they could be reimposed if supplies to Northern Ireland are detrimentally affected.  A senior retail figure, granted anonymity to speak freely, said industry was “furious at the government’s failure to stand up to the EU and demand that retailers be treated as trusted traders. If the U.K. and EU have agreed to align on SPS standards, then it is frankly farcical to proceed with phase-three labeling.” Meat and dairy products sold in Northern Ireland already carry the labels. | Janos Vajda/EPA A spokesperson for the Cabinet Office, tasked with the implementation of the Windsor Framework, acknowledged that the need for the labels would likely be “diminished” as a result of any SPS agreement. “In the meantime,” they said, “it is important to implement the existing arrangements for the Windsor Framework and we will continue to work closely with businesses across the United Kingdom to support them in implementing these arrangements.” That message was hammered home at a recent meeting of the Specialised Committee on the Implementation of the Windsor Framework — co-chaired by the U.K. government and the European Commission — where both sides reiterated their commitment to the “full, timely and faithful implementation of the Windsor Framework,” including the “correct implementation of the labelling safeguards.”  A Commission spokesperson said suspending the implementation of the Windsor Framework until an SPS agreement is reached “creates risks for the integrity of the EU internal market, which the EU does not accept. It is important to recall that the EU and the U.K. currently have different SPS rules. “Honouring existing agreements is a question of good faith, this is why the EU and the U.K. both committed to the full, timely and faithful implementation of existing international agreements between them,” they added. ‘EU HAS SHOWN NO COMPROMISE’ But the lack of flexibility has left industry disappointed — and in some cases blaming the EU.   “The EU has shown no compromise and insisted on ‘full and faithful’ implementation of the rules despite agreeing to probably remove them in the near future,” the retail figure said. “The government’s failure to resist this unreasonable behavior is extremely disappointing and U.K. consumers will end up bearing the costs [with] increased prices.” Pollen agreed. “The only people who can actually step in and be magnanimous about this are the EU and they’ve resolutely refused to do that so far.  “I think they should just be pragmatic and say: Look, we’ve reached this overarching agreement on SPS with the U.K. On that basis we are not going to require businesses supplying Northern Ireland to have to go ahead with phase-three labeling for a grace period of a year to 18 months. “Then, if the deal is ‘papered up’ in law by that stage, this bureaucratic labeling won’t be required at all.”  But a figure close to discussions about the future of the scheme — granted anonymity to speak freely — called for realistic expectations of when an SPS deal was likely to happen. “First of all, the U.K. needs to align itself to EU standards, where it has diverged,” they said. For example, the U.K. has authorized emergency use of certain pesticides that are banned in the EU. Some suppliers may decide to drop out of the Northern Ireland market altogether. | Mark Marlow/EPA “Then, on the EU side, the Commission will not have their mandate to get into technical discussions from the European Council until at least mid-Autumn and the European Parliament will want some sort of input into the technical process.  “Either way, those things aren’t going to happen overnight, and while relationships from the political agreement are still buoyant, the technical discussion will be much more intense and fervent.” ‘THROUGH-THE-LOOKING-GLASS POLICY’ Despite industry’s concerns, retailers are generally “well prepared — especially when it comes to own-brand products,” the same senior retail figure quoted earlier said. But they added that there are still a “considerable number of suppliers, including sizable brands who are not ready, and who don’t want to play ball.” While some suppliers may decide to drop out of the Northern Ireland market altogether, others are getting round the issue by bringing unlabeled goods through the “red lane,” a customs channel for goods entering Northern Ireland from Great Britain that are intended to move into the EU, where they face full EU customs checks. The absurdity isn’t lost on Pollen. “They [businesses] are prepared to go through that added bureaucracy just to ease a different type of bureaucracy. It’s through-the-looking-glass policy.” With the U.K. and EU unlikely to budge on labeling any time soon, Rod Addy, director general of the Provision Trade Federation, which represents food processing, manufacturing and trading companies, is pinning his hopes on a swift SPS deal.    “Our view would be that the government and industry need to quickly identify the most important sticking points and come up with quick fixes so the deal can be pushed through relatively quickly and business and government can enjoy the benefits in months, not years,” he said. 

LONDON — Banned snacks have been pulled from sale in the Eurostar departures area at Brussels Midi station after warnings they could breach United Kingdom biosecurity rules. Since April, it has been illegal to carry foods like cured meats, cheese and milk into Britain from the European Union in a bid to stop the spread of foot-and-mouth disease to British farms. But POLITICO this week reported that the duty free shop in the departures area was still selling EU pork products that could land travelers with a £5,000 fine if brought into Great Britain. The retail outlet, which Eurostar said is managed by Belgian public railway company SNCB, is only accessible to London-bound passengers. British pig farmers described the revelations as “alarming” amid concerns that a foot-and-mouth outbreak could ruin U.K. agriculture. On Friday, following the publication of the POLITICO report, a spokesperson for Eurostar said the products had been removed. “Following the UK Government’s decision to ban the import of meat and dairy products from the EU, Eurostar has communicated the new regulations to customers on its website and placed clear signage at relevant departure points,” they said. “The Eurostar terminal and retail concessions at Brussels-Midi are owned and managed by SNCB (and not by Eurostar). They have confirmed these products have now been withdrawn.” SNCB has been contacted for comment. The controls, launched on April 12, are “critical to limit the risk of foot-and-mouth disease incursion,” according to the U.K.’s deputy chief veterinary officer for international and trade affairs, Dr. Jorge Martin-Almagro. The shop, which sold items including a 40-pack of cured sausages, is five meters from a U.K. Border Force post where British border officials are permanently stationed checking passports. A U.K. government spokesperson said: “This government will do whatever it takes to protect British farmers from foot-and-mouth disease. We are working closely with Border Force, ports, airports and international travel operators, to increase awareness of the new restrictions including via prominent signs.” The ban on personal imports was introduced following the detection of foot-and-mouth cases in Hungary and Germany earlier this year. But experts have warned that U.K. health officials lack the funds to enforce the rules, as POLITICO reported in April. A 2001 outbreak in the U.K. saw 6 million cows and sheep slaughtered on farms and restrictions on access to the countryside introduced in a bid to halt the spread of the disease. The estimated cost of the episode to the British economy was £8 billion.

As cost-of-living pressures continue, an increasing number of Brits are ditching traditional forms of credit and turning to buy now, pay later (BNPL) products as their preferred method of managing expenses. This burgeoning industry gives consumers the option to purchase what they need, receive the goods and then split the purchase into instalments over a set timeframe.  As BNPL has grown in popularity, a new study shines a spotlight on how UK consumers use the service, their financial literacy regarding traditional credit-based products and their opinions on regulation.  The study by Clearpay explored how 3,000 UK adults used BNPL. More than half of respondents said they used these services to spread the cost of purchases while almost two in five used them to manage their budget.1   Families lean on BNPL for big-ticket buys  The research suggested families were big proponents of BNPL, regularly taking advantage of their services to support their children’s hobbies and extracurricular activities. One in seven (15 percent) parents plan to use BNPL in the future to buy sports equipment while a further 9 percent plan to do the same with musical instruments.  The study also found that big-ticket items were high on the agenda for BNPL adopters, with furniture (39 percent), technology (39 percent), white goods (34 percent) and holidays (26 percent) being the top priorities for consumers.   > It’s clear that regulation is important to UK consumers with the majority (71 > percent) of adults agreeing that BNPL should be subject to financial > regulation, and 60 percent of respondents believing BNPL regulation will > improve consumer protection. Regulation underway   It’s clear that regulation is important to UK consumers with the majority (71 percent) of adults agreeing that BNPL should be subject to financial regulation, and 60 percent of respondents believing BNPL regulation will improve consumer protection. However, more than half (57 percent) are unaware that regulation is underway.   The future is bright though. With consumer financial protections and access to the Financial Ombudsman Service to be included within the sector-wide regulation, trust in and adoption of BNPL services are sure to increase.   Prioritizing customers, not debt  Clearpay was built with transparency and consumer protection in mind, with a mission to give UK consumers more financial flexibility in a landscape once dominated by high-interest credit cards.   Clearpay prides itself on capped late fees of £24 or 25 percent of the order value (whichever is less) and safeguards to stop long-term debt accumulating. Explaining their customer-oriented approach, Rich Bayer, UK country manager at Clearpay, says: “With 94 percent of our transactions incurring no late fees, we know that our customers use Clearpay to help manage their spending. If a customer does miss a payment though, we freeze their account to ensure they can get back on track and keep on top of their payments.”   > Clearpay was built with transparency and consumer protection in mind, with a > mission to give UK consumers more financial flexibility Regulation for BNPL products is now being debated and finessed by policymakers. It is expected to come into force from early 2026, a change that Bayer enthusiastically welcomes: “At Clearpay, we have always called for regulation that prioritizes customer protection, delivers much-needed innovation in consumer credit and sets high industry standards across the sector.”  More choice, more transparency  Credit cards have long dominated consumer spending, with 55 percent of respondents having a card in use, despite 13 percent paying interest on the product each month. In fact, one in five are actively trying to reduce their credit card usage.  The research found there is still confusion about financial products. Two-thirds of people do not understand what a credit card APR is and more than half are unaware that BNPL regulation is underway. However, Brits are clear on their priorities for financial products, with 44 percent wanting a product that charges no interest at all.   With the average household credit card debt sitting at £2,534* compared with £51 for the average active Clearpay customer, you can understand why Brits are gradually changing the way they pay.    More options mean more people can access exactly what they need. As money expert Ellie Austin-Williams comments: “A wider range of financial products benefits consumers by giving them the flexibility to choose options that suit their needs. It’s essential for people to understand their payment choices and select a product that aligns with their financial priorities, whether that means opting for an interest-free option or the ability to spread payments. The upcoming regulation of BNPL is a welcome change, offering consumers greater confidence in using the payment method that works best for them.”  For too long traditional credit systems have relied on consumers remaining and even accumulating debt. With the introduction of BNPL services and Clearpay leading the way after being awarded ‘The UK’s most trusted Buy Now Pay Later’, consumers are being prioritized for the first time.     > For too long traditional credit systems have relied on consumers remaining and > even accumulating debt. It’s not just consumers who will benefit either. From a business perspective, Clearpay and other providers help merchant partners reach new customers and retain existing ones.   With nearly half (49 percent) of respondents believing that BNPL regulation will encourage more UK retail spending and support economic growth, it’s clear that regulation could lead to better outcomes not just for consumers and businesses, but also for the UK’s retail industry as a whole.   1] Survey conducted by Censuswide for Clearpay, Feb 2025. Sample: 3,000 UK adults. *Credit & Charge Card balances – Oct 24 | The Money Charity.   Based on the Fairer Finance 2025 Gold award for Most Trusted in Buy Now Pay later.   Clearpay figures: Clearpay internal data Feb 2025. Clearpay is unregulated credit. Please use responsibly. T&Cs, late fees of up to £24 per purchase apply clearpay.co.uk/terms. 

President Donald Trump has publicly targeted companies which have expressed concerns surrounding the administration’s tariff plan in recent days, threatening major brands including Apple and Walmart. The latest target of his ire was iPhone manufacturer Apple, which Trump threatened with a company-specific tariff in a Truth Social post Friday morning. “I have long ago informed Tim Cook of Apple that I expect their iPhone’s that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else,” Trump wrote. “If that is not the case, a Tariff of at least 25% must be paid by Apple to the U.S.” This came despite Apple CEO Tim Cook making numerous attempts to curry favor with the administration since Trump took office. But Cook has also expressed concerns surrounding Trump’s tariff plan, saying earlier this month that it could increase the company’s costs by $900 million. He revealed in a company earnings call this month that Apple will shift some iPhone production from China to India, a country with which the U.S. has a better relationship with. Apple shares fell 2.3 percent following Trump’s post, as of Friday afternoon. Cook visited the White House and met with Trump earlier this week, POLITICO previously reported. Trump’s continued targeting of major consumer brands is the latest in the administration’s efforts to dominate global trade and prioritize U.S. manufacturing. While the president has claimed blanket widespread tariffs would encourage U.S. economic growth, markets have been volatile since his April “Liberation Day” tariff announcements and many Americans disapprove of his tariff plans. Other companies have also caught Trump’s anger. Toy manufacturer Mattel announced this month that prices of some of its toys in the U.S. would go up, and has also expressed disinterest in moving manufacturing to the U.S., prioritizing global diversification. CEO Ynon Kreiz told CNBC earlier this month that the company is aiming for no country to represent more than 25 percent of Mattel’s sourcing. Trump responded to the decision during remarks in the Oval Office this month. “Let him go and we’ll put 100 percent tariff on his toys and he won’t sell one toy in the United States and that’s their biggest market,” Trump said. Amazon, another company that’s sought a closer relationship with the administration, also faced tariff whiplash last month. After media reporting that the company would display price increases resulting from tariffs next to products, the administration called it a “hostile and political act.” “I just got off the phone with the president about this, about Amazon’s announcement. This is a hostile and political act by Amazon,” White House press secretary Karoline Leavitt said during a briefing last month. Trump spoke with Amazon founder Jeff Bezos following the announcement, and he said that Bezos “solved the problem very quickly.” A company spokesperson acknowledged at the time the idea was considered for one of its sites, but said the plan was “never approved and is not going to happen.” A number of companies have also strayed from giving profit revenue guidance for the quarter, citing uncertainty around tariffs. Walmart was the latest company to opt out of providing specific guidance. The company last week announced plans to pass tariff prices along to the consumer, announcing price increases on tariff-impacted merchandise this month and early summer. The move drew ire from Trump, who wrote that Walmart should “eat the tariffs.” “Walmart should STOP trying to blame Tariffs as the reason for raising prices throughout the chain. Walmart made BILLIONS OF DOLLARS last year, far more than expected,” Trump wrote in a Truth Social post May 17. “Between Walmart and China they should, as is said, ‘EAT THE TARIFFS,’ and not charge valued customers ANYTHING. I’ll be watching, and so will your customers!!!” Spokespeople for Apple, Walmart and Mattel did not immediately respond to a request for comment. The White House did not immediately respond to a request for comment. “We have always worked to keep our prices as low as possible and we won’t stop,” Walmart spokesperson Joe Pennington said in a statement to USA Today in response to Trump’s comments. “We’ll keep prices as low as we can for as long as we can given the reality of small retail margins.”

Can the European Union offset the impact of trade tariffs, accelerate economic growth and compete with China and the United States to attract large businesses, all by fiddling with labeling requirements and online paperwork?  It’s damn well going to try.  On Wednesday, the Commission will publish its single market strategy, the latest in a long line of attempts to knock down all the little obstacles that make it impossible, or at the very least difficult, for businesses in one EU country to sell their wares in another. The bloc’s single market was launched in 1987 and in theory allows businesses to operate across the entire EU. In practice, however, a host of national regulations mean the union remains very much 27 separate markets. The economics of tearing down internal barriers to trade make sense: The Commission estimates that a 2.4 percent increase in trade among EU countries would cancel out a 20 percent tariff-induced drop in U.S. exports. The political winds are also blowing in the right direction: Two landmark reports in 2024 called for more integration to boost the bloc’s competitiveness; and EU countries — which are responsible for erecting the trade barriers in the first place — specifically tasked the Commission with drawing up this strategy. The plan, at least the draft POLITICO got its hands on, is dry, boring and full of seeming trivialities. But could it actually make a difference? Here’s what to expect. WHAT’S THE PLAN?  Every time a country implements individual sets of, say, nutritional labeling on packaging, or forms to fill out to display items on grocery shelves, it makes it much harder for businesses from another EU country to enter that market. The Commission wants to hack away at these obstacles bit by bit, reducing friction everywhere it can. There’s a planned regulation on packaging that seeks to make labeling more uniform. Current divergences “are forcing producers to develop different versions of the product for different markets or to relabel or even repackage products when moving them across borders,” the draft reads.   There’s a push to digitize paperwork so companies can easily submit the checks required to place their products on a European market. The Commission wants to expand the Digital Product Passport, a kind of digital product leaflet that contains all the necessary information required by EU rules to prove compliance. Can the European Union offset the impact of trade tariffs, accelerate economic growth and compete with China and the United States to attract large businesses? | Erik Lesser/EPA There are also plans to make it easier to set up a new business across the EU, something that in many countries remains slow and expensive. The draft strategy proposed the creation of a “28th regime” that would allow entrepreneurs to opt into a common digitalized procedure to start a company. The first step will be a pilot program that aims to get companies up and running in 48 hours, with a legislative proposal planned for the first quarter of next year.  WHAT WON’T BE INCLUDED?  Banks and other providers of financial services remain highly national industries. Cross-border takeovers are rare and politically fraught. Just look at the attempt by Italy’s UniCredit to buy out German rival Commerzbank.  A more cohesive financial sector could help get badly needed capital to young, tech-savvy startups. It would also mean better deals for investors and savers. But the financial sector is for the most part excluded from the single market strategy, as the Commission has shunted standardization and simplification of finance regulation onto a separate track, known as the savings and investments union. IS IT JUST ABOUT STUFF?  It’s services, not goods, that account for about three-quarters of Europe’s gross domestic product. A lot of these services will realistically never go beyond their national borders, or even their neighborhoods. No one is traveling internationally to get a haircut, after all.  But for plenty, there is scope for cross-border selling. Think of things like supermarket chains, or consulting. The strategy does include measures to smooth access to services among member countries. Construction makes up more than 10 percent of the bloc’s economy, but only a fraction of that, 1 percent of GDP, is conducted across borders. It’s a similar story with postal deliveries, a booming sector with the rise of e-commerce, as well as retail and telecoms. The Berlaymont is planning measures in all of these areas to deepen market access and allow for more cross-border competition.  WILL IT WORK?  In theory, everyone is a fan of the single market. At the macro level it really is win-win: Consumers get more choice, businesses get more buyers, and governments benefit from greater tax revenues. But at the micro level there are losers: Firms face more competitors and people get laid off. Those losers will lobby hard not to face the brunt of competition. In the end it’s up to member countries — who asked for the single market strategy but who are also responsible for many of the barriers it aims to remove — to play ball. The Commission has included a set of measures to ensure that the strategy has teeth. The draft calls for capitals “to appoint a high level Sherpa for the Single Market in their prime minister’s or president’s office with authority towards all parts of the government.” In effect, this would be the Berlaymont’s inside person, tasked with ensuring skittish governments don’t go back on their word. The Commission is also proposing to take stock of the situation at the end of 2026, and if necessary propose a new Single Market Barriers Prevention Act in 2027.  The single market has other issues that extend beyond mere politics. The world’s mega single markets, the U.S. and China, benefit from relatively uniform language and culture. Europe, meanwhile, contains 27 different member countries, with tastes, language, culture and weather all varying dramatically from place to place. The Commission can ensure the most frictionless trade rules in the world, but it will still be a challenge to get Italians to buy Birkenstocks, or for Poles to choose bacalao over sausages. 

OTTAWA — Only this campaign could have produced Prime Minister Mark Carney. The former banker with the sober demeanor of a natural technocrat persuaded millions of Canadians he was the guy to lead the nation amid an unprecedented onslaught of threats and ridicule from the brash President Donald Trump. “Good luck to the Great people of Canada,” Trump messaged on Election Day, imploring Canadians to take his side over anybody actually on the ballot. The outburst from the White House in the 11th hour of a snap election campaign served up yet another reminder to Canadians why they were prioritizing calm and competence above everything else. Since returning to the White House, Trump has poked and prodded Canadians, enraging them with tariffs and annexation talk while whipping up patriotic sentiment. When Justin Trudeau announced his resignation in January amid deep unpopularity, Carney was not yet a politician. By March, he’d been chosen by the Liberals to take over as leader and prime minister — and on Monday, millions of Canadians elected the seasoned banker as the antidote to Trump. “My message to every Canadian is this,” Carney said early Tuesday morning with results still being counted. “No matter where you live, no matter what language you speak, no matter how you voted, I will always do my best to represent everyone who calls Canada.” BORING MAN TAKES THE PLUNGE Carney doesn’t ooze charisma. But that is exactly the point, says the first Liberal lawmaker to back Carney’s party leadership bid following Trudeau’s stunning exit announcement. “We’re not looking for charisma, we’re looking for competence and someone who’s real and someone who’s authentic,” Ali Ehsassi told POLITICO in his Toronto campaign office on the final weekend before Election Day. Ehsassi met Carney about a year and a half ago. He was also in the room last April, when Carney delivered a keynote at a think tank event in a Toronto hotel ballroom. What he saw was an explainer, not a campaigner. “It wasn’t political language. It wasn’t sloganeering. So I was a bit concerned, to be honest with you, at that particular event,” Ehsassi says. On the hustings, Carney’s voice occasionally rises an octave or two, but much of his tone and cadence on the stump resembles a speech he might’ve delivered in recent years to a global conference on green finance. One step above a lecture. “I think that’s very deliberate,” Ehsassi says. Most political observers did not predict that a numbers guy who lacked political experience could turn around his party’s fortunes. When Trudeau finally announced his resignation, the Liberals had reached a depressing nadir in the polls. Conservative Leader Pierre Poilievre was 25 points ahead, all but assured of a win at the next opportunity. Liberal staffers had been jumping ship for months, and many of those who remained had lost hope of a comeback. “Bankers are very cautious personalities,” Ehsassi says. “But despite the challenges that were quite obvious to everyone … he had the backbone to take the plunge.” In January, transformative events rolled out at remarkable speed. A newly inaugurated Trump ratcheted up his tariff fight with Canada and intensified his musings about absorbing the country. Carney was battling for the leadership with former Finance Minister Chrystia Freeland, whose resignation in December supercharged calls for Trudeau’s exit. He out-fundraised Freeland and racked up endorsements, running away with the leadership when all the votes were counted on March 9. Nine days later, after a whirlwind trip to Europe and a spate of high-profile Trudeau-era policy reversals, Carney called an election. By the time he boarded his campaign bus, the Liberals had their first polling lead since 2023. He’d barely had time to measure the drapes, let alone hire a staff. The polls kept getting better as a curious trend emerged: Progressive New Democratic Party voters were abandoning their flock for the centrist banker. Even Francophone voters in Quebec didn’t seem to mind Carney’s rudimentary French. Everything, all at once, seemed to be breaking his way. But don’t call that simple luck, says Seamus O’Regan, a former Cabinet minister who left politics before the election. “There were a number of things that lined up for him, no question. But there’s always an opportunity to get that wrong,” O’Regan told POLITICO. “The onus is on [him] not to screw that up. There were all sorts of opportunities where he could have and he didn’t, and he’s proven himself to be a lot more adept at retail politics and strategy than a lot of people were giving him credit for at the beginning.” THE ‘EXISTENTIAL ECONOMIC THREAT’ Carney’s emergence as a leadership candidate was enough to convince Anita Anand, a Cabinet minister who was on her way out of politics in January, to return for a second act. In a late-March interview with POLITICO, the former law professor at the University of Toronto insisted her decision to run again only two weeks after announcing her return to academic life was not influenced by the upturn in her electoral prospects. In the first week of the campaign, she felt the difference at the doorstep with voters. “Six months ago, eight months ago, we did not have the Canada-U.S. situation that we have had, and have right now, and people thought, ‘the Liberals have had their chance, and now it’s time for change,’” she said. What changed? “It’s the threat. The existential economic threat.” LONG TIME COMING When Trump was elected last November, Carney was still officially on the political sidelines, a perpetual politician-in-waiting looking for the moment to pounce. For years, the banker with heaps of experience in both the private and public sectors had privately confided his interest in the Prime Minister’s Office. Rumors first surfaced in 2012, when the then-Bank of Canada governor vacationed at the Nova Scotia cottage of Scott Brison, a prominent Liberal and fellow banker. Those particular whispers amounted to nothing. When he returned from a seven-year stint atop the Bank of England, Carney’s tip-toeing into politics commenced in earnest. In 2020, when Trudeau dumped his first finance minister, Bill Morneau, The Globe and Mail’s sources mused about Carney making the jump. Carney later came out as a Liberal at a party convention in 2021. He honed his centrist message at ballroom keynotes — like the one Ehsassi heard last year — that increasingly fascinated curious Liberals hungry for a change. Still, the forever-maybe candidate held off openly auditioning for Trudeau’s job. Last summer, The Globe published reports of friction between Trudeau and Freeland. Both denied any trouble was brewing, but that jarring episode reignited rumors that Trudeau was courting Carney for a Cabinet role. In September, he took on an economic advisory role with the party — another baby step into rough-and-tumble politics that timed to a brewing caucus rebellion in the fall. By November, the internal fracas had failed to oust Trudeau. Then came the bombshell that instantly transformed Canadian politics. On Dec. 16, hours before Freeland was set to deliver her government’s latest economic plan, she abruptly quit Cabinet. Again, the Globe reported that the PM had offered Carney a Cabinet job as minister of finance. WIthin weeks, Trudeau was on the way out and Carney was in. “He was very, very adept at dancing, yeah,” O’Regan says of the prime minister’s sense of political timing. “And when the opportunity came, he went for it, and none of that’s easy.”