The head of the U.S. oil industry’s top lobbying group said Tuesday that American producers are prepared to be a “stabilizing force” in Iran if the regime there falls — even as they remain skeptical about returning to Venezuela after the capture of leader Nicolás Maduro. “This is good news for the Iranian people — they’re taking freedom into their own hands,” American Petroleum Institute President Mike Sommers said of the mass protests that have embroiled Iran in recent days. President Donald Trump is said to be weighing his options for potential actions against the Iranian government in response to its violent crackdown on the protests. “Our industry is committed to being a stabilizing force in Iran if they decide to overturn the regime,” Sommers told reporters following API’s annual State of American Energy event in Washington. “It’s an important oil play in the world, about the sixth-largest producer now — they could absolutely do more,” he said of the country. Iran’s oil industry, despite being ravaged by years of U.S. sanctions, is still considered to be structurally sound, unlike that of Venezuela’s. In order for companies to return to Venezuela, on the other hand, they will need long-term investment certainty, operational security and rule of law — all of which will take significant time, Sommers said. “If they get those three big things right, I think there will be investment going to Venezuela,” he said. Background: Experts who spoke earlier from the stage at API’s event also underscored the differences between Iran and Venezuela, whose oil infrastructure has deteriorated under years of neglect from the socialist regime. “Iran was able to add production under the weight of the most aggressive sanctions the U.S. could possibly deploy,” said Kevin Book, managing director at the energy research firm ClearView Energy Partners. “Imagine what they could do with Western engineering.” Bob McNally, a former national security and energy adviser to President George W. Bush who now leads the energy and geopolitics consulting firm Rapidan Energy Group, said the prospects for growing Iran’s oil production are “completely different” from Venezuela’s. “You can imagine our industry going back there — we would get a lot more oil, a lot sooner than we will out of Venezuela,” McNally said. “That’s more conventional oil right near infrastructure, and gas as well.” No equity stakes: Sommers told reporters that API would oppose any efforts by the Trump administration to take a stake in oil companies that invest in Venezuela. The administration has taken direct equity stakes in a range of U.S. companies in a bid to boost the growth of sectors it sees as a geopolitical priority, such as semiconductor manufacturing and critical minerals. “We would be opposed to the United States government taking a stake in any American oil and gas companies, period,” Sommers said. “We’d have to know a little bit more about what the administration is proposing in terms of stake in [Venezuelan state-owned oil company] PdVSA, but we’re not for the nationalization of oil companies or for there to be a national oil company in the United States.”

LONDON — Reform UK’s deputy leader Richard Tice has floated replacing the Office for Budget Responsibility with a rotating panel of experts to produce economic forecasts for the U.K. government.  In an interview with POLITICO, Tice attacked the OBR’s “woeful” forecasts and proposed replacing it with a revolving panel of the top economic forecasters in the country, who would produce their own estimates of the U.K.’s fiscal health. “What’s the point of them if you’re not going to do your job properly?” Tice said of Britain’s under-fire fiscal watchdog. “There is a turgid reluctance to accept the process of continuous improvement.” “If you didn’t have the OBR, what are you replacing [it with]? Well, maybe you could have a revolving panel of the top eight economic forecasters who have, twice a year, a mandate to produce their own estimate of the key six [to] eight metrics,” he added. His comments follow previous suggestions from Reform UK’s leader Nigel Farage to abolish the body, but it has not yet been clear what the party would propose to take its place. As Reform continues to top U.K. opinion polls, the development of the party’s economic agenda has been closely watched by the financial sector and beyond. The OBR has come under attack for its forecasting record from both sides of the political aisle. It faced significant scrutiny in November after its economic and fiscal outlook, which contained detailed information on the contents of Chancellor Rachel Reeves’ autumn budget, was accidentally made accessible hours before she began her official announcement. OBR Chair Richard Hughes stepped down as a result of the leak. The OBR has also been criticized for its outsized influence on government spending, given that its forecasts can have a significant impact on which policies the Treasury decides to include in the budget. “The OBR is literally telling the government how to run its policy,” Tice said. “The government comes up with an idea, and it says to the OBR ‘what’s the consequence of this?’” “[The OBR] say this is our forecast, so the government says I can’t do that or I can do that, and then you find out that the OBR forecast was useless, not worth the paper it’s written on.” Tice joins former Prime Minister Liz Truss in his criticism of the independent body. Truss, who also called for the OBR to be abolished, shunned the watchdog’s provision of an independent economic forecast and analysis for her 2022 mini budget, leading to market turmoil. One of the Labour Party’s first acts upon reaching government in July 2024 was to put in place a “budget responsibility” bill to enable the OBR to produce of its own volition a forecast on major government tax or spending plans.

Croatia, Estonia, Finland, Latvia, Lithuania and Portugal will face off for the European Central Bank’s No. 2 job, according to a statement from the Council of the EU. The crowded race for the vice presidency kickstarts a wider battle for a seat on the ECB’s coveted six-person executive board, the eurozone’s most powerful forum for economic and monetary policy. Four of the seats, including the presidency itself, will become vacant over the next two years. Competition will be fierce, as the eurozone’s largest economies will seek to maintain their influence on the board, leaving smaller countries with fewer seats to fight over. Eurozone finance ministers are set to pick the winner behind closed doors in a secret ballot when they meet in Brussels for this month’s Eurogroup meeting on Jan. 19. The winner will need at least 16 votes from the 21 ministers, representing around 65 percent of the eurozone’s population. Eurozone leaders formally propose the candidate to succeed the outgoing vice president, Luis de Guindos, whose eight-year term ends on May 31. The European Parliament and the ECB are entitled to an opinion about the final pick. Northern European applicants make up the bulk of the contenders, with Finland’s central banker, Olli Rehn, facing competition from Baltic neighbors. These include his central banking peers, Estonia’s Madis Müller and Latvia’s Mārtiņš Kazāks. Lithuania’s former finance minister, Rimantas Šadžius, completes the Baltic round-up. The other two applicants come from Southern Europe: Portugal’s ex-Eurogroup president, Mário Centeno, and the Croatian central bank governor, Boris Vujčić. The candidates are tentatively scheduled to face questions from MEPs behind closed doors before finance ministers meet on Jan. 19.

Europe’s biggest ever trade deal finally got the nod Friday after 25 years of negotiating.  It took blood, sweat, tears and tortured discussions to get there, but EU countries at last backed the deal with the Mercosur bloc — paving the way to create a free trade area that covers more than 700 million people across Europe and Latin America.  The agreement, which awaits approval from the European Parliament, will eliminate more than 90 percent of tariffs on EU exports. European shoppers will be able to dine on grass-fed beef from the Argentinian pampas. Brazilian drivers will see import duties on German motors come down.  As for the accord’s economic impact, well, that pales in comparison with the epic battles over it: The European Commission estimates it will add €77.6 billion (or 0.05 percent) to the EU economy by 2040.  Like in any deal, there are winners and losers. POLITICO takes you through who is uncorking their Malbec, and who, on the other hand, is crying into the Bordeaux. WINNERS Giorgia Meloni Italy’s prime minister has done it again. Giorgia Meloni saw which way the political winds were blowing and skillfully extracted last-minute concessions for Italian farmers after threatening to throw her weight behind French opposition to the deal.  The end result? In exchange for its support, Rome was able to secure farm market safeguards and promises of fresh agriculture funding from the European Commission — wins that the government can trumpet in front of voters back home. It also means that Meloni has picked the winning side once more, coming off as the team player despite the last-minute holdup. All in all, yet another laurel in Rome’s crown.  The German car industry  Das Auto hasn’t had much reason to cheer of late, but Mercosur finally gives reason to celebrate. Germany’s famed automotive sector will have easier access to consumers in LatAm. Lower tariffs mean, all things being equal, more sales and a boost to the bottom line for companies like Volkswagen and BMW. There are a few catches. Tariffs, now at 35 percent, aren’t coming down all at once. At the behest of Brazil, which hosts an auto industry of its own, the removal of trade barriers will be staggered. Electric vehicles will be given preferential treatment, an area that Europe’s been lagging behind on.  Ursula von der Leyen Mercosur is a bittersweet triumph for European Commission President Ursula von der Leyen. Since shaking hands on the deal with Mercosur leaders more than a year ago, her team has bent over backwards to accommodate the demands of the skeptics and build the all-important qualified majority that finally materialized Friday. Expect a victory lap next week, when the Berlaymont boss travels to Paraguay to sign the agreement. Giorgia Meloni saw which way the political winds were blowing and skillfully extracted last-minute concessions for Italian farmers after threatening to throw her weight behind French opposition to the deal. | Ettore Ferrari/EPA On the international stage, it also helps burnish Brussels’ standing at a time when the bloc looks like a lumbering dinosaur, consistently outmaneuvered by the U.S. and China. A large-scale trade deal shows that the rules-based international order that the EU so cherishes is still alive, even as the U.S. whisked away a South American leader in chains.  But the deal came at a very high cost. Von der Leyen had to promise EU farmers €45 billion in subsidies to win them over, backtracking on efforts to rein in agricultural support in the EU budget and invest more in innovation and growth.   Europe’s farmers  Speaking of farmers, going by the headlines you could be forgiven for thinking that Mercosur is an unmitigated disaster. Surely innumerable tons of South American produce sold at rock-bottom prices are about to drive the hard-working French or Polish plowman off his land, right?  The reality is a little bit more complicated. The deal comes with strict quotas for categories ranging from beef to poultry. In effect, Latin American farmers will be limited to exporting a couple of chicken breasts per European person per year. Meanwhile, the deal recognizes special protections for European producers for specialty products like Italian parmesan or French wine, who stand to benefit from the expanded market. So much for the agri-pocalpyse now.  Mercosur is a bittersweet triumph for European Commission President Ursula von der Leyen. | Olivier Matthys/EPA Then there’s the matter of the €45 billion of subsidies going into farmers’ pockets, and it’s hard not to conclude that — despite all the tractor protests and manure fights in downtown Brussels — the deal doesn’t smell too bad after all.  LOSERS Emmanuel Macron  There’s been no one high-ranking politician more steadfast in their opposition to the trade agreement than France’s President Emmanuel Macron who, under enormous domestic political pressure, has consistently opposed the deal. It’s no surprise then that France joined Poland, Austria, Ireland and Hungary to unsuccessfully vote against Mercosur.  The former investment banker might be a free-trading capitalist at heart, but he knows well that, domestically, the deal is seen as a knife in the back of long-suffering Gallic growers. Macron, who is burning through prime ministers at rates previously reserved for political basket cases like Italy, has had precious few wins recently. Torpedoing the free trade agreement, or at least delaying it further, would have been proof that the lame-duck French president still had some sway on the European stage.  Surely innumerable tons of South American produce sold at rock-bottom prices are about to drive the hard-working French or Polish plowman off his land, right? | Darek Delmanowicz/EPA Macron made a valiant attempt to rally the troops for a last-minute counterattack, and at one point it looked like he had a good chance to throw a wrench in the works after wooing Italy’s Meloni. That’s all come to nought. After this latest defeat, expect more lambasting of the French president in the national media, as Macron continues his slow-motion tumble down from the Olympian heights of the Élysée Palace.  Donald Trump Coming within days of the U.S. mission to snatch Venezuelan strongman Nicolás Maduro and put him on trial in New York, the Mercosur deal finally shows that Europe has no shortage of soft power to work constructively with like-minded partners — if it actually has the wit to make use of it smartly.  Any trade deal should be seen as a win-win proposition for both sides, and that is just not the way U.S. President Donald Trump and his art of the geopolitical shakedown works. It also has the incidental benefit of strengthening his adversaries — including Brazilian President and Mercosur head honcho Luiz Inácio Lula da Silva — who showed extraordinary patience as he waited on the EU to get their act together (and nurtured a public bromance with Macron even as the trade talks were deadlocked). China  China has been expanding exports to Latin America, particularly Brazil, during the decades when the EU was negotiating the Mercosur trade deal. The EU-Mercosur deal is an opportunity for Europe to claw back some market share, especially in competitive sectors like automotive, machines and aviation. The deal also strengthens the EU’s hand on staying on top when it comes to direct investments, an area where European companies are still outshining their Chinese competitors. Emmanuel Macron made a valiant attempt to rally the troops for a last-minute counterattack, and at one point it looked like he had a good chance to throw a wrench in the works after wooing Italy’s Meloni. | Pool photo by Ludovic Marin/EPA More politically, China has somewhat succeeded in drawing countries like Brazil away from Western points of view, for instance via the BRICS grouping, consisting of Brazil, Russia, India, China and South Africa, and other developing economies. Because the deal is not only about trade but also creates deeper political cooperation, Lula and his Mercosur counterparts become more closely linked to Europe. The Amazon rainforest  Unfortunately, for the world’s ecosystem, Mercosur means one thing: burn, baby, burn. The pastures that feed Brazil’s herds come at the expense of the nation’s once-sprawling, now-shrinking tropical rainforest. Put simply, more beef for Europe means less trees for the world. It’s not all bad news for the climate. The trade deal does include both mandatory safeguards against illegal deforestation, as well as a commitment to the Paris Climate Agreement for its signatories. 

LONDON — Choosing your Brexit camp was once the preserve of Britain’s Tories. Now Labour is joining in the fun.  Six years after Britain left the EU, a host of loose — and mostly overlapping — groupings in the U.K.’s ruling party are thinking about precisely how close to try to get to the bloc. They range from customs union enthusiasts to outright skeptics — with plenty of shades of grey in between. There’s a political urgency to all of this too: with Prime Minister Keir Starmer tanking in the polls, the Europhile streak among many Labour MPs and members means Brexit could become a key issue for anyone who would seek to replace him. “The more the screws and pressure have been on Keir around leadership, the more we’ve seen that play to the base,” said one Labour MP, granted anonymity like others quoted in this piece to speak frankly. Indeed, Starmer started the new year explicitly talking up closer alignment with the European Union’s single market. At face value, nothing has changed: Starmer’s comments reflect his existing policy of a “reset” with Brussels. His manifesto red lines on not rejoining the customs union or single market remain. Most of his MPs care more about aligning than how to get there. In short, this is not like the Tory wars of the late 2010s. Well, not yet. POLITICO sketches out Labour’s nascent Brexit tribes. THE CUSTOMS UNIONISTS  It all started with a Christmas walk. Health Secretary Wes Streeting told an interviewer he desires a “deeper trading relationship” with the EU — widely interpreted as hinting at joining a customs union. This had been a whispered topic in Labour circles for a while, discussed privately by figures including Starmer’s economic adviser Minouche Shafik. Deputy Prime Minister David Lammy said last month that rejoining a customs union is not “currently” government policy — which some took as a hint that the position could shift. But Streeting’s leadership ambitions (he denies plotting for the top job) and his willingness to describe Brexit as a problem gave his comments an elevated status among Labour Europhiles.  “This has really come from Wes’s leadership camp,” said one person who talks regularly to No. 10 Downing Street. Naomi Smith, CEO of the pro-EU pressure group Best for Britain, added any Labour leadership contest will be dominated by the Brexit question. MPs and members who would vote in a race “are even further ahead than the public average on all of those issues relating to Europe,” she argued. Joining a customs union would in theory allow smoother trade without returning to free movement of people. But Labour critics of a customs union policy — including Starmer himself — argue it is a non-starter because it would mean tearing up post-Brexit agreements with other countries such as India and the U.S. “It’s just absolutely nonsense,” said a second Labour MP.    Keir Starmer has argued that the customs union route would mean hard conversations with workers in the car industry after Britain secured a U.K.-U.S. tariff deal last summer. | Colin McPherson/Getty Images And since Streeting denies plotting and did not even mention a customs union by name, the identities of the players pushing for one are understandably murky beyond the 13 Labour MPs who backed a Liberal Democrat bill last month requiring the government to begin negotiations on joining a bespoke customs union with the EU. One senior Labour official said “hardly any” MPs back it, while a minister said there was no organized group, only a vague idea. “There are people who don’t really know what it is, but realize Brexit has been painful and the economy needs a stimulus,” they said. “And there are people who do know what this means and they effectively want to rejoin. For people who know about trade, this is an absolute non-starter.” Anand Menon, director of the UK in a Changing Europe think tank, said a full rejoining of the EU customs union would mean negotiating round a suite of “add-ons” — and no nations have secured this without also being in the EU single market. (Turkey has a customs union with the EU, but does not benefit from the EU’s wider trade agreements.) “I’m not convinced the customs union works without the single market,” Menon added.  Starmer has argued that the customs union route would mean hard conversations with workers in the car industry after Britain secured a U.K.-U.S. tariff deal last summer, a person with knowledge of his thinking said. “When you read anything from any economically literate commentator, the customs union is not their go-to,” added the senior Labour official quoted above. “Keir is really strong on it. He fully believes it isn’t a viable route in the national interest or economic interest.” THE SINGLE MARKETEERS (A.K.A. THE GOVERNMENT) Starmer and his allies, then, want to park the customs union and get closer to the single market.  Paymaster General Nick Thomas-Symonds has long led negotiations along these lines through Labour’s existing EU “reset.” He and Starmer recently discussed post-Brexit policy on a walk through the grounds of the PM’s country retreat, Chequers. Working on the detail with Thomas-Symonds is Michael Ellam, the former director of communications for ex-PM Gordon Brown, now a senior civil servant in the Cabinet Office. Ellam is “a really highly regarded, serious guy” and attends regular meetings with Brussels officials, said a second person who speaks regularly to No. 10.   A bill is due to be introduced to the U.K. parliament by summer which will allow “dynamic” alignment with new EU laws in areas of agreement. Two people with knowledge of his role said the bill will be steered through parliament by Cabinet Office Minister Chris Ward, Starmer’s former aide and close ally, who was by his side when Starmer was shadow Brexit secretary during the “Brexit wars” of the late 2010s. Starmer himself talked up this approach in a rare long-form interview this week with BBC host Laura Kuenssberg, saying: “We are better looking to the single market rather than the customs union for our further alignment.” While the PM’s allies insist he simply answered a question, some of his MPs spy a need to seize back the pro-EU narrative. The second person who talks regularly to No. 10 argued a “relatively small … factional leadership challenge group around Wes” is pushing ideas around a customs union, while Starmer wants to “not match that but bypass it, and say actually, we’re doing something more practical and potentially bigger.”  A third Labour MP was blunter about No. 10’s messaging: “They’re terrified and they’re worrying about an internal leadership challenge.” Starmer’s allies argue that their approach is pragmatic and recognizes what the EU will actually be willing to accept. Christabel Cooper, director of research at the pro-Labour think tank Labour Together — which plans polling and focus groups in the coming months to test public opinion on the issue — said: “We’ve talked to a few trade experts and economists, and actually the customs union is not all that helpful. To get a bigger bang for your buck, you do need to go down more of a single market alignment route.”  Stella Creasy argued that promising a Swiss-style deal in Labour’s next election manifesto (likely in 2029) would benefit the economy — far more than the “reset” currently on the table. | Nicola Tree/Getty Images Nick Harvey, CEO of the pro-EU pressure group European Movement UK, concurred: “The fact that they’re now talking about a fuller alignment towards the single market is very good news, and shows that to make progress economically and to make progress politically, they simply have to do this.”  But critics point out there are still big questions about what alignment will look like — or more importantly, what the EU will go for.  The bill will include areas such as food standards, animal welfare, pesticide use, the EU’s electricity market and carbon emissions trading, but talks on all of these remain ongoing. Negotiations to join the EU’s defense framework, SAFE, stalled over the costs to Britain. Menon said: “I just don’t see what [Starmer] is spelling out being practically possible. Even at the highest levels there has been, under the Labour Party, quite a degree of ignorance, I think, about how the EU works and what the EU wants.   “I’ve heard Labour MPs say, well, they’ve got a veterinary deal with New Zealand, so how hard can it be? And you want to say, I don’t know if you’ve noticed, but New Zealand doesn’t have a land border with the EU.”  THE SWISS BANKERS Then there are Europhile MPs, peers and campaigners who back aligning with the single market — but going much further than Starmer.  For some this takes the form of a “Swiss-style” deal, which would allow single market access for some sectors without rejoining the customs union.   This would plough through Starmer’s red lines by reintroducing EU freedom of movement, along with substantial payments to Brussels.  But Stella Creasy, chair of the Labour Movement for Europe (LME), argued that promising a Swiss-style deal in Labour’s next election manifesto (likely in 2029) would benefit the economy — far more than the “reset” currently on the table. She said: “If you could get a Swiss-style deal and put it in the manifesto … that would be enough for businesses to invest.”  Creasy said LME has around 150 MPs as members and holds regular briefings for them. While few Labour MPs back a Swiss deal — and various colleagues see Creasy as an outlier — she said MPs and peers, including herself, plan to put forward amendments to the dynamic alignment bill when it goes through parliament.  Tom Baldwin, Starmer’s biographer and the former communications director of the People’s Vote campaign (which called for a second referendum on Brexit), also suggests Labour could go further in 2029. “Keir Starmer’s comments at the weekend about aligning with — and gaining access to — the single market open up a whole range of possibilities,” he said. “At the low end, this is a pragmatic choice by a PM who doesn’t want to be forced to choose between Europe and America.   “At the upper end, it suggests Labour may seek a second term mandate at the next election by which the U.K. would get very close to rejoining the single market. That would be worth a lot more in terms of economic growth and national prosperity than the customs union deal favoured by the Lib Dems.”  A third person who speaks regularly to No. 10 called it a “boil the frog strategy.” They added: “You get closer and closer and then maybe … you go into the election saying ‘we’ll try to negotiate something more single markety or customs uniony.’”  THE REJOINERS? Labour’s political enemies (and some of its supporters) argue this could all lead even further — to rejoining the EU one day. “Genuinely, I am not advocating rejoin now in any sense because it’s a 10-year process,” said Creasy, who is about as Europhile as they come in Labour. “Our European counterparts would say ‘hang on a minute, could you actually win a referendum, given [Reform UK Leader and Brexiteer Nigel] Farage is doing so well?’”  With Prime Minister Keir Starmer tanking in the polls, the Europhile streak among many Labour MPs and members means Brexit could become a key issue for anyone who would seek to replace him. | Tom Nicholson/Getty Images Simon Opher, an MP and member of the Mainstream Labour group closely aligned with Burnham, said rejoining was “probably for a future generation” as “the difficulty is, would they want us back?” But look into the soul of many Labour politicians, and they would love to still be in the bloc — even if they insist rejoining is not on the table now. Andy Burnham — the Greater Manchester mayor who has flirted with the leadership — remarked last year that he would like to rejoin the EU in his lifetime (he’s 56). London Mayor Sadiq Khan said “in the medium to long term, yes, of course, I would like to see us rejoining.” In the meantime Khan backs membership of the single market and customs union, which would still go far beyond No. 10’s red lines.  THE ISSUES-LED MPS Then there are the disparate — yet overlapping — groups of MPs whose views on Europe are guided by their politics, their constituencies or their professional interests. To Starmer’s left, backbench rebels including Richard Burgon and Dawn Butler backed the push toward a customs union by the opposition Lib Dems. The members of the left-wing Socialist Campaign Group frame their argument around fears Labour will lose voters to other progressive parties, namely the Lib Dems, Greens and SNP, if they fail to show adequate bonds with Europe. Some other, more centrist MPs fear similar. Labour MPs with a military background or in military-heavy seats also want the U.K. and EU to cooperate further. London MP Calvin Bailey, who spent more than two decades in the Royal Air Force, endorsed closer security relations between Britain and France through greater intelligence sharing and possibly permanent infrastructure. Alex Baker, whose Aldershot constituency is known as the home of the British Army, backed British involvement in a global Defense, Security and Resilience Bank, arguing it could be key to a U.K.-EU Defence and Security Pact. The government opted against joining such a scheme.   Parliamentarians keen for young people to bag more traveling rights were buoyed by a breakthrough on Erasmus+ membership for British students at the end of last year. More than 60 Labour MPs earlier signed a letter calling for a youth mobility scheme allowing 18 to 30-year-olds expanded travel opportunities on time limited visas. It was organized by Andrew Lewin, the Welywn Hatfield MP, and signatories included future Home Office Minister Mike Tapp (then a backbencher).  Labour also has an influential group of rural MPs, most elected in 2024, who are keen to boost cooperation and cut red tape for farmers. Rural MP Steve Witherden, on the party’s left, said: “Three quarters of Welsh food and drink exports go straight to the EU … regulatory alignment is a top priority for rural Labour MPs. Success here could point the way towards closer ties with Europe in other sectors.”  THE NOT-SO-SECRET EUROPHILES (A.K.A. ALL OF THE ABOVE) Many Labour figures argue that all of the above are actually just one mega-group — Labour MPs who want to be closer to Brussels, regardless of the mechanism. Menon agreed Labour camps are not formalized because most Labour MPs agree on working closely with Brussels. “I think it’s a mishmash,” he said. But he added: “I think these tribes will emerge or develop because there’s an intra-party fight looming, and Brexit is one of the issues people use to signal where they stand.” A fourth Labour MP agreed: “I didn’t think there was much of a distinction between the camps of people who want to get closer to the EU. The first I heard of that was over the weekend.”  The senior Labour official quoted above added: “I don’t think it cuts across tribes in such a clear way … a broader group of people just want us to move faster in terms of closeness into the EU, in terms of a whole load of things. I don’t think it fits neatly.” For years MPs were bound by a strategy of talking little about Brexit because it was so divisive with Labour’s voter base. That shifted over 2025. Labour advisers were buoyed by polls showing a rise in “Bregret” among some who voted for Brexit in 2016, as well as changing demographics (bluntly, young voters come of age while older voters die).  No. 10 aides also noted last summer that Farage, the leader of the right-wing populist party Reform UK, was making Brexit less central to his campaigning. Some aides (though others dispute this) credit individual advisers such as Tim Allan, No. 10’s director of communications, as helping a more openly EU-friendly media strategy into being. For all the talk of tribes and camps, Labour doesn’t have warring Brexit factions in the same way that the Tories did at the height of the EU divorce in the 2010s. | Jakub Porzycki/Getty Images THE BLUE LABOUR HOLDOUTS  Not everyone in Labour wants to hug Brussels tight.  A small but significant rump of Labour MPs, largely from the socially conservative Blue Labour tribe, is anxious that pursuing closer ties could be seen as a rejection of the Brexit referendum — and a betrayal of voters in Leave-backing seats who are looking to Reform. One of them, Liverpool MP Dan Carden, said the failure of both London and Brussels to strike a recent deal on defense funding, even amid threats from Russia, showed Brussels is not serious.   “Any Labour MP who thinks that the U.K. can get closer to the single market or the customs union without giving up freedoms and taking instruction from an EU that we’re not a part of is living in cloud cuckoo land,” he said. A similar skepticism of the EU’s authority is echoed by the Tony Blair Institute (TBI), led by one of the most pro-European prime ministers in Britain’s history. The TBI has been meeting politicians in Brussels and published a paper translated into French, German and Italian in a bid to shape the EU’s future from within.   Ryan Wain, the TBI’s senior director for policy and politics, argued: “We live in a G2 world where there are two superpowers, China and the U.S. By the middle of this century there will likely be three, with India. To me, it’s just abysmal that Europe isn’t mentioned in that at all. It has massive potential to adapt and reclaim its influence, but that opportunity needs to be unlocked.”  Such holdouts enjoy a strange alliance with left-wing Euroskeptics (“Lexiteers”), who believe the EU does not have the interests of workers at its heart. But few of these were ever in Labour and few remain; former Leader Jeremy Corbyn has long since been cast out. At the same time many Labour MPs in Leave-voting areas, who opposed efforts to stop Brexit in the late 2010s, now support closer alignment with Brussels to help their local car and chemical industries. As such, there are now 20 or fewer MPs holding their noses on closer alignment. Just three Labour MPs, including fellow Blue Labour supporter Jonathan Brash, voted against a bill supporting a customs union proposed by the centrist, pro-Europe Lib Dems last month.  WHERE WILL IT ALL END?  For all the talk of tribes and camps, Labour doesn’t have warring Brexit factions in the same way that the Tories did at the height of the EU divorce in the 2010s. Most MPs agree on closer alignment with the EU; the question is how they get there.  Even so, Menon has a warning from the last Brexit wars. Back in the late 2010s, Conservative MPs would jostle to set out their positions — workable or otherwise. The crowded field just made negotiations with Brussels harder. “We end up with absolutely batshit stupid positions when viewed from the EU,” said Menon, “because they’re being derived as a function of the need to position yourself in a British political party.” But few of these were ever in Labour and few remain; former Leader Jeremy Corbyn has long since been cast out. | Seiya Tanase/Getty Images The saving grace could be that most Labour MPs are united by a deeper gut feeling about the EU — one that, Baldwin argues, is reflected in Starmer himself. The PM’s biographer said: “At heart, Keir Starmer is an outward-looking internationalist whose pro-European beliefs are derived from what he calls the ‘blood-bond’ of 1945 and shared values, rather than the more transactional trade benefits of 1973,” when Britain joined the European Economic Community.  All that remains is to turn a “blood-bond” into hard policy. Simple, right?

LONDON — Westminster discourse was blessed with a host of new words and phrases during a tumultuous 2025 — and some of them even made sense. Keir Starmer got to fight with tech bro Elon Musk, schmooze Donald Trump, endure frustration from his MPs over Labour’s dreadful polling, reshuffle his government, and preside over a stagnant economy — all while working out a “vision” some 18 months into office. As 2026 screams into view, POLITICO has looked back over the year and picked out all the weird phrases we’d rather forget. 1. Coalition of the willing: The body of nations that sprang up to support Ukraine as U.S. backing looked dicey. Defined by their “vital,” “urgent” and “pivotal” meetings, but often challenged by an unwilling dude across the pond. 2. Smorgasbord: Sweden’s given us IKEA, ABBA — and now the best way to explain an unsatisfying mix of tax rises. Thanks, chancellor! 3. AI Opportunities Action Plan: Never has a government announcement contained so many nouns. 4. AI MP: Why bother with constituency casework when ChatGPT’s around? Labour MP Mark Sewards bagged some help from LLMs … with mixed results. 5. “Beautiful accent”: Trump’s verdict on Starmer’s voice as the unlikely bromance blossomed. 6. Rent license: Everyone pretended to know about housing law as Chancellor Rachel Reeves faced scrutiny for not having one of these when renting out the family home. 7. Rod fishing license: One for the real hardcore license fans. Then-Foreign Secretary David Lammy faced questions for fishing with U.S. Vice President JD Vance without the right paperwork. In a totally unconnected event, he was reshuffled to the justice department shortly after. 8. Board of Peace: Tony Blair was on the list of people to preside over a post-war Gaza … until he very much wasn’t. 9. Golden economic rule: The Conservatives’ shiny and instantly forgettable plan to restore credibility in managing the public finances. Perhaps the No. 1 rule should have been keeping Liz Truss out of No. 10?   10. Lawyer brain: Starmer was frequently accused of acting like a lawyer, not a leader. At least he had a fixed term back when he was chief prosecutor. 11. Liberation Day: Trump’s big old chart slapped global tariffs on allies and sent Whitehall into a tailspin … before a TACO (Trump Always Chickens Out) retreat on some of them. 12. The Andrew formerly known as Prince: Andrew Mountbatten-Windsor had to settle for a hyphenated surname after outrage about his friendship with the late convicted sex offender Jeffrey Epstein. 13. Raise the colors: Politicians spent the summer showing how much they loved flags as Brits — including organized far-right groups — plastered the Union Jack on every lamppost and roundabout in sight. 14. Lucy Listens: Lucy Powell decided the best way to recover from getting sacked from government was to run for Labour deputy leader, win, and hear endlessly from irate Labour members. 15. Joe Marler: Health Secretary Wes Streeting compared himself to a rugby player from the Celebrity Traitors after he was accused of plotting to oust Starmer. Hanging out in a Scottish castle could be quite cushy if the running-for-PM thing doesn’t work out. 16. Driving the DLR: Starmer’s premiership was compared to steering the, er, driverless part of Transport for London. 17. Double Contributions Convention: National insurance became exciting for a brief second amid a row about the India trade deal. Let’s never make that mistake again. 18. Disruptors: What Starmer wants from his ministers. Alas, they slightly misinterpreted the memo and enjoyed disrupting his leadership instead of the Whitehall status quo. 19. Build Baby Build: Housing Secretary Steve Reed not only mimicked Trump’s words but also donned a red baseball cap. The merch was a treat at Labour conference, but it was all a bit cringe.  20. Trigger Me Timbers: Leaks from this imaginatively-named Labour WhatsApp group saw two MPs suspended for vile language. Remember, assume everything in a group is public.  21. Humphrey: Obviously the best-named AI tool ever, the government’s own tech overlord paid tribute to that most conniving of civil servants in the classic BBC sitcom “Yes, Minister.”  21. Humphrey: Obviously, the best-named AI tool ever, the government’s own tech overlord paid tribute to that most conniving of civil servants in classic BBC sitcom “Yes, Minister.”  | David Zorrakino/Europa Press via Getty Images 22. Right to Try: A phrase describing a new guarantee for people entering work — and which might double up as a stirring campaign slogan for the PM. 23. Patriotic renewal: Get those flags out again as No. 10 presses the jargon button to describe what this whole government thing is about. 24. Thatcher Fest: The celebrations marking the centenary of the Iron Lady’s birth knew no bounds. 25. One in, one out: Britain and France struck a treaty for small boat crossings — until one returned migrant recrossed the English Channel to Blighty.   26. Zacktavist: A new generation of Greens got behind “eco-populist” leader Zack Polanksi — and could treat themselves to a mug with his face on for £7 a pop. 27. Yantar: Russia made its meddling against Britain known by deploying a spy ship into territorial waters … although it failed to remain incognito.   28. Two up, two down: Chancellor Rachel Reeves mooted increasing income tax by 2p and cutting national insurance by 2p … before (probably) realizing it would mark the end of her time in the Treasury. 29. Island of strangers: The PM channeled Reform with a speech on migration featuring this phrase. It was compared to former Tory MP Enoch Powell’s infamous “Rivers of Blood” speech … and Starmer later retracted the whole thing. 30. Bob Vylan: A previously obscure rap duo was thrust into the spotlight after calling for “death, death to the IDF” [Israel Defence Forces] at Glastonbury. The BBC came under fire, because of course it did. 31. Persistent knobheadery: That’s one way for a Labour source to justify suspending the whip from four MPs. 32. Sexist boys’ club: Setting up a political party is harder than it looks. Who’d have thought it? Ex-Labour MP Zarah Sultana’s tough words for her fellow independent MPs as the flailing Your Party launched meant some of them left anyway. All’s fair in love and war.   33. F**king suck it up: Running a council is pretty tricky. Reform’s Kent County Council Leader Linden Kemkaran told her fellow councilors they’d have to cope with tough decisions in these colorful terms. Running a council is pretty tricky. Reform’s Kent County Council Leader Linden Kemkaran told her fellow councilors they’d have to cope with tricky decisions in these colorful terms. | Gareth Fuller/PA Images via Getty Images 34. Three Pads Rayner: Angela Rayner’s tenure as deputy PM and, erm, housing secretary came to an abrupt end after she failed to pay the correct amount of property tax — but not before earning this moniker. 35. Further and faster: How did the government react to its local elections shellacking? By vowing to carry on in exactly the same way, albeit more intensely. 36. Phase Two: Starmer’s much-hyped fall reset of his government was followed by one calamity after another. Not too late for Phase Three! 37. Danish model: Ministers decided migration could be solved by copying Copenhagen. Anything for a trip to the continent.   38. The Liz Truss Show: Britain’s shortest-serving former prime minister used extra time on her hands to woo MAGAland with yet another political podcast. Cannot be unseen.   39. I rise to speak: MPs deploying this phrase gave an instant red flag that they may, just may, have used AI to help write their speeches.  40. Judge Plus: Labour MP Kim Leadbeater’s assurance that her assisted dying bill still had plenty of legal safeguards, despite a High Court judge getting dropped from the process.   41. Pride in Place: After Boris Johnson’s “leveling up” (RIP), Labour tries a similar approach in all but name. 42. Waste Files: Elon Musk inspired a host of U.K. DOGE copycats keen to slash complex government budgets from their armchairs. 43. Project Chainsaw: No, Starmer isn’t suddenly a Javier Milei fan, but his government wanted to reshape the state — with some bandying about this subtle, civil service-spooking nickname. 44. Global headwinds: The ultimate euphemism for how the orange-colored elephant in the room changed everything.   45. Pan-Euro-Mediterranean Convention: Want Britain closer to the EU? Choose a trade agreement guaranteed to send even the most ardent Europhile to sleep. President Trump’s trade wars caused global headwinds throughout the year. | Andrew Caballero-Reynolds/AFP via Getty Images 46. Headphone dodgers: A nuisance to everyone, the Lib Dems went full throttle by pledging to fine the public transport irritants £1,000. It’s a wonder the party isn’t leading the polls. 47. StormShroud drones: All wars create an opportunity for futuristic tech that hopefully does what it says on the tin. 48. Return hubs: Ministers insist migration definitely isn’t getting outsourced to other countries by mooting third-party “processing” … something Albania won’t even take part in. See also: Deport Now, Appeal Later.  49. Far-right bandwagon: Starmer’s row with Musk reached a crescendo with the PM’s phrase lobbed at some proponents of an inquiry into grooming gangs operating in the U.K. 50. Impossible trilemma: Ahead of the budget, a top think tank warned that Reeves faced the unenviable task of meeting fiscal targets while sticking to spending promises and not raising taxes. No pressure. 51. Chief Secretary to the Prime Minister: Darren Jones’ prefect vibes were rewarded with a brand spanking new gig in the pre-shuffle right at the start of Phase Two. 52. Growth people feel in their pockets: One No. 10 press officer may have collected their P45 after publishing *that* press release. 53. Mainstream: This totally normal, nothing-to-see-here, soft-left Labour group definitely isn’t a vehicle for Andy Burnham’s return to Westminster.   54. Plastic patriots/plastic progressives: The synthetic material really got a kicking from Labour, who deployed the terms to slam Reform and the Greens respectively. Let’s hope voters have reusable bags. 55. Quint: Five lucky people (Starmer, Reeves, Lammy, Jones and Pat McFadden) who apparently decide how government operates. Great job, guys! 56. Hard bastard: The PM’s best effort to show he was “tough enough,” Ed Miliband-style. We all know how that ended.    57. Global Progress Action Summit: Progressives met in a desperate attempt to figure out how to avoid a trouncing from populists. More updates as we get them. 58. Contribution: Reeves’ framing of higher taxes, carefully sidestepping the fact that taxes aren’t optional. 59. Maintenance department: Deffo-not-future Labour leadership contender Wes Streeting’s description of how the party presents itself publicly. Stirring stuff. 60. Terminator: Home Secretary Shabana Mahmood earned an Arnie-inspired new nickname as she tried to show Labour is really, really tough on migration, honest. 61. Reverse Midas Touch: Anything the PM touches, including ID cards, is hit by this tragic affliction, according to his critics. 62. V levels: The natural successor to A and T level educational qualifications. Just a matter of time before there’s one for each letter of the alphabet. 63. Culturally coherent: Tory rising star Katie Lam’s justification for deporting legal migrants got her into some hot water. 64. 24/7 circus of sh*t: One former Tory aide’s pithy description of the Home Office. Who are the clowns? 65. Six seven: Nobody over the age of 11 understands this meme — yet the PM unleashed havoc in a classroom by joining in. 66. Civilizational erasure: America’s dystopian portrayal of what Europe is facing probably won’t feature in many tourist brochures. 67. Turning renewal into reality: Starmer’s ambition for next year in his final Cabinet meeting of 2025. Bookmark that one.

BRUSSELS — When cocoa farmer Leticia Yankey came to Brussels last October, she had a simple message for the EU: Think about the mess your simplification agenda is creating for companies and communities. It was just weeks after the European Commission said it might delay the EU’s anti-deforestation law, which requires companies to prove the goods they import into the region are not produced on deforested land, for the second time. But in Yankey’s Ghana, cocoa farmers were ready for the rules, known as the EU Deforestation Regulation or EUDR, to kick in. “How are we going to be taken serious the next time we move to our communities, our farmers, and even the [Licensed Buying Companies] to tell them that EUDR is … coming back?” Yankey asked.  Since then, the Commission has kept making changes to the plan. First by floating the delay, then backtracking but proposing tweaks to the law — only for EU governments and lawmakers to reinstate the postponement, pile on additional carve-outs and then leave open the door for further changes in the spring. All within three months. It’s not just smaller companies and remote communities that are rankled by the EU’s will-they-won’t-they approach to lawmaking. Bart Vandewaetere, a VP for government relations and ESG engagement at Nestlé, says that when he reports on European legislative developments to the company board, they “[look] a little bit at me like: ‘Okay, what’s next? Will you come next week with something else, or do we need to implement it this way, or we wait?’” Since the start of Ursula von der Leyen’s second term as European Commission President, the EU has been rolling back dozens of rules in a bid to make it easier for businesses to make money and create jobs.   Encouraged by EU leaders to hack back regulations quickly and without fuss, the Commission presented 10 simplification packages last year — on top of its plan to loosen the anti-deforestation law — to water down rules in the agricultural, environment, tech, defense and automotive sectors as well as on access to EU funding. COMPLICATION AGENDA Brussels says it is answering the wishes of business for less paperwork and fewer legislative constraints, which companies claim prevent them from competing with their U.S. and Chinese rivals. It also promises billions in savings as a result. “We will accelerate the work, as a matter of utmost priority, on all proposals with a simplification and competitiveness dimension,” the EU institutions wrote this month in a joint declaration of priorities for the year ahead. The ones who got ready to implement the laws already even go as far as to say the EU is losing one of its key appeals: being a regulatory powerhouse with policies that encourage companies to transition towards more sustainable business models. | Nicolas Economou/NurPhoto via Getty Images But for many businesses, the frequent introduction, pausing and rewriting of EU rules is, just making life more complicated. “What we constantly hear from clients is that regulatory uncertainty makes it difficult to plan ahead,” said Thomas Delille, a partner at global law firm Squire Patton Boggs, even though they generally support the simplification agenda. The ones who got ready to implement the laws already even go as far as to say the EU is losing one of its key appeals: being a regulatory powerhouse with policies that encourage companies to transition towards more sustainable business models. “The European Union unfortunately has lost some trust in the boardrooms by making simplifications that are maybe undermining predictability,” said Nestlé’s Vandewaetere. The risk is that the EU will shoot itself in the foot by making it harder for companies to invest in the region, which is essential for competitiveness.  “This approach rewards the laggards,” said Tsvetelina Kuzmanova, senior project manager as the Cambridge Institute for Sustainability Leadership, adding that it “lowers expectations at the very moment when companies need clarity and policy stability to invest.” INEVITABLE TURBULENCE Many of Europe’s decision-makers are convinced that undoing business rules is a necessary step in boosting economic growth.  The simplification measures “were needed and they are needed,” said Danish Environment Minister Magnus Heunicke, confirming that he believes the EU regulatory environment is clearer now for businesses than it was a year ago. Denmark, which held the rotating presidency of the Council of the EU for the last six months, had led much of the negotiations on the simplification packages, or “omnibuses” in Brussels parlance. Brussels is also receiving as many calls from businesses to speed up its deregulation drive as those urging caution. For example, European agriculture and food chain lobbies like Copa-Cogeca and FoodDrink Europe said in a joint appeal that the EU should “address the regulatory, administrative, legal, practical and reporting burdens that agri-food operators are facing.” These, they added, are major obstacles to investing in sustainability and productivity. Successive omnibus packages should, meanwhile, be “proposed whenever necessary.” But undoing laws requires as much work and time as drafting them. Over the past year, lawmakers and EU governments have been enthralled in deeply political negotiations over these packages. Entire teams of diplomats, elected officials, assistants, translators and legal experts have been mobilized to argue over technical detail that many were engaged in drafting just a couple of years earlier.   Of the 10 omnibus proposals, three have already been finalized. The EU has also paused the implementation of the rules it’s currently reviewing so that companies don’t have to comply while the process is ongoing. “If you look at this from an industry perspective, there will be some turbulence before there is simplification, it’s inevitable,” said Gerard McElwee, another partner at Squire Patton Boggs.  Ironically, the EU has also faced criticism for making cuts too quickly — particularly to rules on environmental protection — and without properly studying the effect they would have on Europe’s economy and communities. Yankey, the cocoa farmer, said she understands the Commission’s quandary. “They just want to listen to both sides,” she said. “Somebody is ready, somebody is not ready.” But her community will need more EU support to help understand and adapt to legislative tweaks that impact them. The constant changes do not “help us to build confidence in the rules or the game that we are playing,” she said.

Britain’s biggest trade union body has called on the Labour government to consider rejoining an EU customs union, reopening a core Brexit fault line as the party grapples with weak growth and rising pressure from its traditional base. In an interview with the Guardian, Trades Union Congress (TUC) General Secretary Paul Nowak said Labour should seek the closest possible economic relationship with the EU to ease trade friction and support household incomes. “The government needs to do whatever it can to build the closest possible positive working relationship with Europe economically and politically … up to and including the customs union,” Nowak said. The U.K. left the EU customs union after the 2016 Brexit referendum, formally exiting the bloc in January 2020 under then-Prime Minister Boris Johnson. Britain remained aligned with EU trade rules during a transition period before fully leaving the customs union on Jan. 1, 2021, when the EU-U.K. Trade and Cooperation Agreement took effect.  The move restored Britain’s ability to strike independent trade deals but introduced customs checks, rules-of-origin requirements and new barriers for exporters. Prime Minister Keir Starmer has so far ruled out rejoining the customs union, framing it as a red line while promising a broader “reset” with Brussels. “We are getting a closer relationship with the EU on a number of fronts, including on trade and the economy,” Starmer told MPs earlier this month, adding: “We have clear red lines in relation to the single market and the customs union.”

After nearly a year of political paralysis, Kosovo returns to the polls on Sunday in a vote that could determine if the country makes progress on its stalled path toward the European Union. A February election saw a clear winner, caretaker Prime Minister Albin Kurti’s ruling Self-Determination party, which picked up 42 percent of the vote. However, it failed to secure an absolute majority and then was unable to form a coalition with another party. Kurti’s party has pushed Kosovo into deeper isolation, as its left-wing populist approach and efforts to assert Kosovo’s sovereignty in the Serb-majority north have strained ties with both the U.S. and the EU, leading to punitive measures. A spokesperson for Kurti declined to comment for this article. None of the major opposition parties wanted to work with Self-Determination, nor did they approve of Kurti’s multiple attempts to nominate a speaker of parliament. Kurti even offered to give up his position as prime minister to assuage the opposition, but to no avail. That meant President Vjosa Osmani was forced to trigger a snap election in November, making it Kosovo’s seventh parliamentary ballot since it declared independence from Serbia in 2008. Ahead of Sunday’s vote, opposition parties such as the Democratic League of Kosovo (LDK), Democratic Party of Kosovo (PDK), and Alliance for the Future of Kosovo (AAK) show no signs of changing their stance on Kurti. “LDK, PDK, and AAK see Kurti as a populist who has hampered relations with the West and sabotaged NATO membership and the EU integration process,” Haki Abazi, a parliamentary candidate for AAK, told POLITICO. Abazi was deputy prime minister under Kurti during his first term in 2019, but was later expelled from the party due to disagreements over political direction. “Kurti is seen as toxic and fragmenting,” said Abazi, adding that’s why none of the three parties will form a coalition with the Self-Determination leader. There is a possibility that all three opposition parties could form a coalition to prevent another political deadlock, with Abazi calling such a scenario “very likely.” However, MP Blerta Deliu-Kodra from PDK told POLITICO that “it remains to be seen what the numbers will be” — although she expects a government to be formed without Kurti as prime minister. PDK candidate Hajdar Beqa told POLITICO that “Kurti’s government has seriously harmed Kosovo’s European integration process,” stressing the need for a new government to “return the country on a secure path toward the EU.” However, acting deputy foreign minister and Self-Determination candidate Liza Gashi told POLITICO that during Kurti’s mandate, the ruling party “strengthened democratic institutions, improved key economic indicators, expanded social protection, and governed with integrity and stability. [Self-Determination] enters these elections with a strong governing record and broad public support.” Meanwhile, Kosovo’s application for EU membership remains “in the drawers of the European Union,” Osmani said, speaking during an EU-Western Balkans Summit last week. The country applied in 2022, but little progress has been made since. European Commission President Ursula von der Leyen announced at the summit that the EU will lift 2023 sanctions against Kosovo over tensions in the Serb-majority north and unblock over €400 million in financial aid. But if the country fails to form a government again, Kosovo risks losing access to the bloc’s €6 billion Growth Plan for the Western Balkans, as it needs to deliver reforms to unlock the funding. “Kosovo already faces an uphill battle because of five non-recognizer [EU] states, and the country cannot afford another year lost to the politicians’ inability to do what they were elected for — provide solutions, not create problems,” said Besar Gërgi, an expert in European integration at the Group for Legal and Political Studies, a Kosovo think tank. Cyprus, Slovakia, Spain, Greece and Romania do not recognize Kosovo. When asked by POLITICO what to expect from Sunday’s election, Osmani expressed confidence that it would meet “the best democratic standards,” deliver swift results and allow for the rapid formation of government institutions. Serbian President Aleksandar Vučić said he hopes “for a big and significant victory” for Kosovo’s largest ethnic Serb party, Serb List, expecting that it will secure seats to “represent the interests of Serbs, not Albin Kurti.” Serbia still does not recognize Kosovo and refers to the state as ‘Kosovo and Metohija,’ its former name as a Serbian province. The EU has attempted to remediate relations between Kosovo and Serbia through the Belgrade-Pristina Dialogue; however, despite years of talks, the intervention has produced few concrete results. Kosovo and Serbia signed a normalization agreement in 2023, which involves de facto mutual recognition of each other’s sovereignty. “We need to normalise relations with Serbia,” said Kurti in a recent interview with AFP. “But normalising relations with a neighboring authoritarian regime that doesn’t recognize you, that also doesn’t admit to the crimes committed during the war, is quite difficult,” he added. Kurti wants Serbia to “hand over Milan Radoičić,” a former Serb List politician who plotted a terrorist attack on northern Kosovo in 2023 that resulted in the death of a Kosovo policeman. Radoičić is wanted in Kosovo but is currently in Serbia.

LONDON — Standing in Imperial College London’s South Kensington Campus in September, Britain’s trade chief Peter Kyle insisted that a tech pact the U.K. had just signed with the U.S. wouldn’t hamper his country’s ability to make its own laws on artificial intelligence.   He had just spoken at an intimate event to celebrate what was meant to be a new frontier for the “special relationship” — a U.K.-U.S. Technology Prosperity Deal.  Industry representatives were skeptical, warning at the time the U.S. deal would make the path to a British AI bill, which ministers had been promising for months, more difficult.   This month U.K. Tech Secretary Liz Kendall confirmed ministers are no longer looking at a “big, all-encompassing bill” on AI.   But Britain’s shift away from warning the world about runaway AI to ditching its own attempts to legislate frontier models, such as ChatGPT and Google’s Gemini, go back much further than that September morning.   GEAR CHANGE In opposition Prime Minister Keir Starmer promised  “stronger” AI regulation. His center-left Labour Party committed to “binding regulation” on frontier AI companies in its manifesto for government in 2024, and soon after it won a landslide election that summer it set out plans for AI legislation.   But by the fall of 2024 the view inside the U.K. government was changing. Kyle, then tech secretary, had asked tech investor Matt Clifford to write an “AI Opportunities Action Plan” which Starmer endorsed. It warned against copying “more regulated jurisdictions” and argued the U.K. should keep its current approach of letting individual regulators monitor AI in their sectors.  In October 2024 Starmer described AI as the “opportunity of this generation.” AI shifted from a threat to be legislated to an answer to Britain’s woes of low productivity, crumbling public services and sluggish economic growth. Labour had came to power that July promising to fix all three.   A dinner that month with Demis Hassabis, chief executive and co-founder of Google DeepMind, reportedly opened Starmer’s eyes to the opportunities of AI. Hassabis was coy on the meeting when asked by POLITICO, but Starmer got Hassabis back the following month to speak to his cabinet — a weekly meeting of senior ministers — about how AI could transform public services. That has been the government’s hope ever since. In an interview with The Economist this month Starmer spoke about AI as a binary choice between regulation and innovation. “I think with AI you either lean in and see it as a great opportunity, or you lean out and think, ‘Well, how do we guard ourselves against the risk?’ I lean in,” he said.  ENTER TRUMP The evolution of Starmer’s own views in the fall of 2024 coincided with the second coming of Donald Trump to the White House. In a letter to the U.S. attorney general the month Trump was elected influential Republican senator Ted Cruz accused the U.K.’s AI Security Institute of hobbling America’s efforts to beat China in the race to powerful AI. The White House’s new occupants saw AI as a generational competition between America and China. Any attempt by foreign regulators to hamper its development was seen as a threat to U.S. national security. It appeared Labour’s original plan, to force largely U.S. tech companies to open their models to government testing pre-release, would not go down well with Britain’s biggest ally. Instead, U.K. officials adapted to the new world order. In Paris in February 2025, at an international AI Summit series which the U.K. had set up in 2023 to keep existential AI risks at bay, the country joined the U.S. in refusing to sign an international AI declaration.  The White House went on to attack international AI governance efforts, with its director of tech policy Michael Kratsios telling the U.N. that the U.S. wanted its AI technology to become the “global gold standard” with allies building their own AI tech on top of it.  In opposition Prime Minister Keir Starmer promised  “stronger” AI regulation. | Jonathan Brady/PA Images via Getty Images The U.K. was the first country to sign up, agreeing the Technology Prosperity Deal with the U.S. that September. At the signing ceremony, Trump couldn’t have been clearer. “We’re going to have a lot of deregulation and a tremendous amount of innovation,” he told a group of hand-picked business leaders.   The deal, which was light on detail, was put on ice in early December as the U.S. used it to try to extract more trade concessions from the Brits. Kratsios, one of the architects of that tech pact, said work on it would resume once the U.K. had made “substantial” progress in other areas of trade.   DIFFICULT HOME LIFE While Starmer’s overtures to the U.S. have made plans for an AI bill more difficult, U.K. lawmakers have further complicated any attempt to introduce legislation. A group of powerful “tech peers” in the House of Lords have vowed to hijack any tech-related bill and use it to force the government to make concessions in other areas they have concerns about like AI and copyright, just as they did this summer over the Data Use and Access Bill. Senior civil servants have also warned ministers a standalone AI bill could become messy “Christmas Tree” bill, adorned with unrelated amendments, according to two officials granted anonymity to speak freely.   The government’s intention is to instead break any AI-related legislation up into smaller chunks. Nudification apps, for example, will be banned as part of the government’s new Violence Against Women and Girls Strategy, AI chatbots are being looked at through a review of the Online Safety Act, while there will also need to be legislation for AI Growth Labs — testbeds where companies can experiment with their products before going to market.   Asked about an AI bill by MPs on Dec. 3, Kendall said: “There are measures we will need to take to make sure we get the most on growth and deal with regulatory issues. If there are measures we need to do to protect kids online, we will take those. I am thinking about it more in terms of specific areas where we may need to act rather than a big all-encompassing bill.” The team in Kendall’s department which looks at frontier AI regulation, meanwhile, has been reassigned, according to two people familiar with the team. Polling by the Ada Lovelace Institute shows Labour’s leadership is out of sync with public views on AI, with 9 in 10 wanting an independent AI regulator with enforcement powers.   “The public wants independent regulation,” said Ada Lovelace Director Gaia Marcus. “They prioritize fairness, positive social impacts and safety in trade-offs against economic gains, speed of innovation and international competition.”  A separate study by Focal Data found that framing AI as a geopolitical competition also doesn’t resonate with voters. “They don’t want to work more closely with the United States on shared digital and tech goals because of their distrust of its government,” the research found.  Political leadership must step in to bridge that gap, former U.K. prime minister Tony Blair wrote in a report last month. “Technological competitiveness is not a priority for voters because European leaders have failed to connect it to what citizens care about: their security, their prosperity and their children’s futures,” he wrote.   For Starmer, who has struggled to connect with the voters, that will be a huge challenge.