MILAN — On a Friday morning under the boiling Lombard sun, the old men of Italian banking descended on the country’s financial capital to bask in their industry’s astonishing recent run of success. But the avuncular embraces over sugared breakfast treats gave way to nervous gossiping when the time came to discuss — sotto voce — the latest twists and turns in a high-stakes game of ‘Risk’ that continues to convulse this tight-knit family of financial elites — and now threatens a protracted conflict between Brussels and Rome. Over the past six months, the Italian banking sector has been consumed by a convoluted series of bids and counter-bids involving almost every major player in the country. Recently, the drama has veered toward a climactic denouement as a seemingly heavy-handed response from Rome toward one takeover bid in particular set off a conflagration between the Italian government and the European Commission, exposing their contradictory visions for Europe’s financial future. It began last year, when Milanese banking giant UniCredit angered Prime Minister Giorgia Meloni’s government by attempting to take over crosstown rival BPM, which Meloni had hoped to merge with the partially bailed-out Tuscan lender Monte dei Paschi di Siena. In response, Rome deployed screening tools known as the ‘golden power’ — whose purpose is to prevent malicious foreign investment — to impose tough conditions on the bid, which UniCredit claims has effectively blocked it, prompting a court battle that unfolded earlier this week. But more broadly, Rome’s strong-arming has also come into conflict with the grand industrial vision of the Commission, which has placed consolidating Europe’s still-fragmented banking market at the center of Europe’s new — and what it describes as an increasingly urgent — competitiveness drive. Commission officials are readying a warning to the Italian government on its misuse of golden power to hamper UniCredit’s bid for BPM. At the annual assembly of the Association of Italian Banks (ABI) on Thursday, those tensions played out in real-time between financial officials and their industry counterparts — albeit in muted form. On the surface, it was more like an infrequent gathering of a fractious family that wants to keep up appearances over festivities, and there was no explicit mention of the drama in public comments. But on the industry and regulatory side, the speeches contained barely concealed paeans to free-market capitalism and the virtue of unmolested free markets. ABI Chairman Antonio Patuelli, a spry veteran of the scene, emphasized the importance of advancing the European banking union, calling for “common rules for corporate governance, markets, savings and investment.” In a conspicuous swipe at the Italian government — and its controversial alignment with construction billionaire Francesco Gaetano Caltagirone — he added that “competition must always be developed and safeguarded,” and that banks and “non-traditional financial actors … must be subject to the same rules.” But Italian officials painted a different picture, arguing that the EU and those sympathetic to its supranational vision of European industry misunderstand what Italy is doing. The government has already signaled in a recent court hearing that it will fight its doubters to the last, even through the European Court of Justice. Speaking to POLITICO, one Treasury official said Rome’s interventions into UniCredit’s adventures were a genuine matter of national security, as important as boosting defense spending. But as Italian Finance Minister Giancarlo Giorgetti told the ABI attendees, the banks’ pronounced growth has come at the expense of much of their regional character. | Riccardo Antimiani/EPA To him, it’s the EU being heavy-handed, not Rome. “The Italian people elected a sovereigntist government, why are people surprised when we do sovereigntist things?” the person said. Much of the concern over UniCredit’s move stems from broader discontent in Italy over the way its banks have failed to translate whopping gains into tangible benefits for average Italians. After teetering on the edge of cataclysm during the global financial crisis, Italian banks pulled off a dramatic turnaround, bolstering their capital and reducing their holdings of bad debt. But as Italian Finance Minister Giancarlo Giorgetti told the ABI attendees, the banks’ pronounced growth has come at the expense of much of their regional character. “The organizational, income and capital strengthening of Italian banks over the last 15 years has not always translated into more favorable credit conditions but rather into a reduction in lending to businesses,” he said. He highlighted that the “exceptional returns” to shareholders — with UniCredit hitting record profits in the first quarter of 2025 thanks to a major boost from high interest rates — “were made possible thanks to public guarantees… So it is legitimate to ask whether we’re witnessing an excess of ‘financialization.'” There are good reasons for the government to be concerned. Italy, which after Greece has the highest debt in the EU as a proportion of GDP,  is sensitive to large moves involving holders of its sovereign debt. Meanwhile, the country’s countless small and medium-sized enterprises, which make up a major part of the government’s electoral base, are reliant on the kind of easy credit access that BPM — a bank with strong ties to Northern Italy — might be less inclined to give if subsumed into the more international UniCredit. To others, Europe’s ambition to rival the United States on the financial stage might run counter to the more narrow interests of Rome and — more importantly — the Italian people. “The European Union doesn’t understand,” said one Italian regulatory official, speaking on condition of anonymity. “We’re dwarves, and we’ll never seriously compete with the U.S.” Giorgetti himself said much the same, calling on the nation’s banks to “focus as much as possible on doing their part: going back to being banks.” Francesca Micheletti contributed to this report.

LONDON — Former U.K. Prime Minister Rishi Sunak has rejoined investment giant Goldman Sachs as a senior adviser. It is Sunak’s first senior outside role since he resigned as Conservative leader after Labour’s landslide election win last July. It marks a return to the investment bank he joined at the start of his career in 2001. “I am excited to welcome Rishi back to Goldman Sachs in his new capacity as a Senior Advisor,” Goldman Sachs chairman and CEO David Solomon said in a statement.  “In his role, he will work with leaders across the firm to advise our clients globally on a range of important topics, sharing his unique perspectives and insights on the macroeconomic and geopolitical landscape. He will also spend time with our people around the world, contributing to our culture of ongoing learning and development.” Sunak, who is still the MP for Richmond and Northallerton, served as prime minister between October 2022 and last July, when Keir Starmer won his thumping election victory.  The former PM was first elected in 2015 and served as chancellor during the height of the pandemic, before resigning from Boris Johnson’s government in July 2022.  In a letter to Sunak published on Monday, the government appointments watchdog said the role with Goldman Sachs is “likely to have a broad overlap with your access to information in office” and, as prime minister, he could have “been privy to a range of high-level sensitive information on more or less all government-related matters.” As a result, Acoba has restricted Sunak from some activities, including lobbying the U.K. government on behalf of the bank over the next 12 months. “Goldman Sachs has a significant interest in UK government policy. As the former Prime Minister, there is a reasonable concern that your appointment could be seen to offer unfair access and influence within the UK government,” Acoba wrote.

All 27 European Union member countries have agreed to push for radical cuts to ethical supply chain rules, setting the stage for tense negotiations with other EU institutions later this year. It continues a growing trend of cutting back environmental laws to reduce the regulatory burden on business and boost the bloc’s sluggish economy. On Monday evening, EU ambassadors endorsed the Council of the EU’s position on the first omnibus simplification bill, a proposal for sweeping cuts to EU green rules that is one of the first major bills of Ursula von der Leyen’s second term as European Commission president. Green groups and some European lawmakers already considered the Commission’s original proposal too weak — now, member countries want it to be even laxer. The Council’s final position adopts a French proposal to just ask companies with more than 5,000 employees and €1.5 billion in net turnover to police their supply chains for environmental and human rights abuses. The threshold on the current proposal is 1,000 employees and turnover of €450 million. If endorsed by the EU as a whole, this would mean that fewer than 1,000 European companies would be subject to the law, called the Corporate Sustainability Due Diligence Directive. EU countries in the Council also agreed that companies should only have to assess their direct suppliers — and not their entire supply chain, as originally stipulated. They also want to postpone the deadline by which EU countries must transpose the directive into national law by a year. Denmark, which will take on the presidency of the Council of the EU in July, will run negotiations with the European Parliament and Commission on this. It comes just days after the Commission announced it would kill anti-greenwashing legislation days before negotiations on the law with Parliament and Council were due to conclude, causing uproar among some groups in Parliament.

BRUSSELS — The European Commission will scrap its proposed law to fight corporate greenwashing following a request from conservative lawmakers to kill the file on Wednesday. “In the current context, indeed the Commission intends to withdraw the Green claims proposal,” Maciej Berestecki, a spokesperson for the Commission told press on Friday. The Green Claims Directive was proposed in March 2023 and aims to stop companies from misleading consumers with unfounded claims that their products and services are good for the planet. The decision — announced just one working day before the final round of negotiations with EU countries and MEPs to reach a deal was due to take place — means the EU will not be asking companies to provide verified information to back up the green claims they make. “The European Commission has the right of initiative to make but also withdraw [a] proposal after its own assessment of the legislative process,” Stefan de Keersmaecker, another spokesperson for the Commission. On Wednesday, POLITICO reported that the center-right European People’s Party (EPP) had sent a letter to the environment Commissioner Jessika Roswall, asking the EU executive to withdraw its proposal, threatening not to support any deal coming out of the negotiations. On Tuesday, POLITICO also reported that the Commission was considering withdrawing another green law asking countries to monitor the health and degradation of forests. It is very unusual for the Commission to withdraw a legislative proposal and only happens if the co-legislators are not able to find a consensus, or if the Commission believes that compromise doesn’t respect the original idea of the law.

BRUSSELS — An increasingly desperate Olaf Scholz has issued an appeal to Brussels to support European industry, only to draw a rebuke from his conservative opponents that he is stealing from their policy agenda in a bid to stave off a general election defeat next month. In a letter to European Commission President Ursula von der Leyen obtained by POLITICO, the German chancellor calls on the executive to offer more cash for businesses and to slash red tape that he says is holding back the bloc’s industries. Echoing long standing demands from Europe’s center-right, Scholz, a Social Democrat, wants a delay on climate disclosure rules affecting businesses; the waiving of fines for car manufacturers that fail to meet new emission targets; and subsidized electricity prices. Scholz’s asks are not new and repeat demands made by his center-left government last year. But by putting them into a formal letter to von der Leyen, a fellow German, Scholz is making a last-ditch effort to recast his reputation as a pro-business leader with a plan to save Germany’s ailing economy and critical auto industry. His critics aren’t buying it. Scholz “seems to be slipping into schizophrenia towards the end of his term of office,” said Hildegard Bentele, a European lawmaker from Germany’s Christian Democratic Union (CDU), which is part of the center-right European People’s Party (EPP) group. All 3 Years 2 Years 1 Year 6 Months Smooth Kalman His suggestions are “almost 100 percent EPP policy,” Bentele argues, adding that she “wonders where he was last year” when von der Leyen was presenting her plans for her second term as Commission chief. With less than two months to go before a snap election on Feb. 23 that he’s expected to lose, Scholz is running out of time. Polls put his Social Democratic Party (SPD) in third place with 17 percent, well below the CDU (30 percent) and just behind the far-right Alternative for Germany party. German businesses have criticized Scholz’s government for unambitious reforms, uncompetitive energy costs and excessive bureaucracy at a time of stagnation in Europe’s largest economy. The Bundesbank has slashed its growth forecast for 2025 to just 0.2 percent, with U.S. President-elect Donald Trump’s threats to slap tariffs on all imports.  Germany’s export-based economy would suffer if it’s caught between Trump’s tariffs and Chinese industrial subsidies: the country’s companies have high exports to both the U.S. and China.  Scholz claims the EU’s policies should enable those exports and not anger trading partners. One such example is a planned EU carbon border tax, the Carbon Border Adjustment Mechanism (CBAM).  According to Scholz, the carbon tax needs to be reworked to boost the attractiveness of energy-intensive products, like steel, made in Europe. As it stands, the CBAM would only impose tariffs on incoming products, shielding European companies from cheaper products that don’t meet the same standards. German automakers, meanwhile, are highly exposed to the Chinese market — making Berlin a staunch opponent of the Commission’s duties on made-in-China EVs following an anti-subsidy investigation pushed for by Paris. Scholz again decried the duties in his letter, calling for a negotiated solution. FRANCO-GERMAN ALLIANCE While France and Germany are at loggerheads over the Made-in-China EV duties, Scholz highlighted the two’s unlikely partnership to lobby for an end to the fines that automakers face this year should they fail to hit new emission targets. A coalition of EU countries are advocating for the waiver, including a proposal from Italy and the Czech Republic that calls for an earlier review of the overarching 2035 legislation requiring zero-emission vehicle sales. France and Germany opted out of cosigning the mandate over disagreements about the use of biofuels, but conspired with Italy ahead of the EU’s competitiveness council meeting in November. “We didn’t agree on everything, but we agreed that we have a problem,” said a French government official with knowledge of the discussions who was granted anonymity because they were not permitted to comment on the matter. “We basically converged on the fact that we would act together on the competitiveness council to put forward the issue of the fines.” Such a move would be welcome news to major automakers like Volkswagen and Renault that have bemoaned the fines.  But it’s unlikely to win Scholz their votes. “Germany is at the top when it comes to tax and bureaucracy burdens. It is not enough to just talk about reducing bureaucracy,” German car lobby VDA commented on the letter. “And not only in Germany, but also in Brussels — this is where most of the new bureaucratic costs are now being incurred.” REHASHING OLD GRIEVANCES Another big request from Scholz is for a two-year delay on the EU’s incoming corporate sustainability disclosure rules, which the shaky French government also supports. Or at least, the old one did.  Adopted in 2023, the rules require businesses to report on climate risks their operations are exposed to, as well their own impact on the environment. So far, only the largest companies are expected to report this information. Ministers from Scholz’s coalition had already requested a delay in their own letter to the Commission back in December. That was after former Finance Minister Christian Lindner had said Berlin should seek to abolish the law altogether, and former French premier Michele Barnier suggested a moratorium on the text.      But again here, the EPP had gotten there first. Now officially expected in the new mandate, a major simplification of the disclosure rules was a campaign promise made by von der Leyen to the EPP. Scholz’s political opponents were quick to point out the similarities, with Julia Klöckner, the CDU’s economic policy spokesperson, calling the Scholz letter “a helpless election campaign maneuver” that “lacks credibility.”

DUBLIN — Ireland’s election battles are notoriously hard to forecast — and Donald Trump’s U.S. presidential triumph is reverberating in ways that make this month’s vote even more unpredictable. If voters choose Nov. 29 to return Ireland’s two perpetual parties of government to power, Fine Gael and Fianna Fáil, it would buck a worldwide trend this year of punishing incumbents for surging prices and record-high immigration. So far, polls show Prime Minister Simon Harris’ Fine Gael and Foreign Minister Micheál Martin’s Fianna Fáil on course to renew their parties’ partnership atop a new governing coalition. Their return to power would come at the expense of Mary Lou McDonald’s Sinn Féin, the opposition party that has spent decades moving away from its Irish Republican Army roots and seeking to enter government in Dublin for the first time. Should Fine Gael and Fianna Fáil prevail, it would defy a widely held view that their center-ground parties haven’t achieved nearly enough with Ireland’s exceptionally strong finances. That bonanza has been driven by record tax hauls from nearly 1,000 U.S. multinationals based here — a cash cow that Trump appears poised to butcher. But that’s only half of the story. The biggest and most incalculable new factor on the campaign trail is the rise of hardline micro-parties and “independents,” many of them inspired by Trump and seeking to fill the void on the thinly populated right of politics here. The latest poll makes the independents, on 21 percent support and rising, competitive with Fine Gael (23 percent), Fianna Fáil (20 percent) and Sinn Féin (18 percent). In a complex system that elects three to five lawmakers per constituency — and encourages voters to rate every candidate on the ballot in order of preference — it’s never been possible to predict with precision who will win the final seat up for grabs in many constituencies. So far, polls show Prime Minister Simon Harris’ Fine Gael and Foreign Minister Micheál Martin’s Fianna Fáil on course to renew their parties’ partnership atop a new governing coalition. | Charles McQuillan/Getty Images The record-high number of independents in the contest even makes it a possibility that they will gain the balance of power in Dáil Éireann, Ireland’s parliament. More than a third of the 685 candidates in the field are independents or grouped into new brands, such as the conservative farmer-focused Independent Ireland and the hard-right National Alliance. MAKE IRELAND GREAT AGAIN? Unlike mainstream political parties here, the most extreme Irish voices admire and seek to emulate Trump, cheering his re-election and declaring they want to “Make Ireland great again.” They include overt neo-Nazis and earthy, unpolished political newcomers drawing inspiration from Trump’s ability to mobilize disaffected voters and bill professional politicians as the enemy of the people. They have adopted Elon Musk’s unmoderated X as a preferred platform. “The Irish government have flooded this country for decades now with people. The system is collapsing … and these slimy politicians try to put it back on you,” said Derek Blighe, an anti-immigration activist running for a parliamentary seat in Cork, in a hand-held vlog to his followers. Last week Blighe — a bricklayer and co-leader of the National Alliance running 33 candidates — was convicted of threatening and abusing the manager of a guesthouse being converted into housing for asylum seekers. He received a €350 fine. Blighe responded to what was his ninth conviction with Trump-flavored invective. He told his online followers that the judge who convicted him was “woke” and pursuing a pro-establishment “witchhunt.” For now, that establishment is trying to ignore the likes of Blighe, who in June failed to win election to Cork County Council and the European Parliament. Three of his anti-immigrant allies did achieve a breakthrough in those elections, winning seats on Dublin City Council — and all three now are running for the parliament, too. For Fine Gael and Fianna Fáil, the primary focus remains on competing with each other for top spot and keeping Sinn Féin stuck in third place. SINN FÉIN TAKES A HIT It’s been a tough year for Sinn Féin, which leads the U.K. region of Northern Ireland but has never been part of a government south of the border. The party sees gaining power in both Belfast and Dublin as the best platform for pursuing its ultimate dream: the political unification of both parts of Ireland. Until relatively recently, Sinn Féin appeared poised to make that breakthrough. The party had already won the popular vote in the last 2020 parliamentary election as the preferred choice of anti-establishment voters at that time. A chastened Fine Gael and Fianna Fáil responded by banding together in their first-ever coalition, a move that lifted Sinn Féin to unprecedented heights in the polls. But ever since Ireland’s long Covid-19 lockdown ended in 2022, far-right activists who gained social media traction during that crisis have turned their anti-government invective increasingly against Sinn Féin. The party, which also has suffered from recent scandals and infighting, has lost half of its support over the past two years, particularly since racist rioting struck McDonald’s own Dublin Central constituency a year ago. One of the far-right extremists’ popular memes is to relabel images of McDonald, donning a Muslim hijab, as “Sharia Féin” — a jab at the party’s staunch support for Palestinians and courting of Muslim votes. | Charles McQuillan/Getty Images One of the far-right extremists’ popular memes is to relabel images of McDonald, donning a Muslim hijab, as “Sharia Féin” — a jab at the party’s staunch support for Palestinians and courting of Muslim votes. “Sharia Féin, the Paedo Protection Party,” tweeted Hermann Kelly, a former Irish adviser to Brexiteer-in-chief Nigel Farage who now leads another far-right fringe voice, the Irish Freedom Party. Kelly is running for parliament in the border county of Louth, a longtime Sinn Féin power base, where 25 candidates are competing for five seats. Long used to waging anti-government offensives on social media with little pushback, Sinn Féin these days sometimes uses the “hide” tool to prune the nastiest replies from its own X posts. None of the three leading parties seem keen to confront their extremist critics — and have instead taken turns toughening their own immigration policies in a bid to see off the attacks. GETTING TOUGH ON IMMIGRATION Fine Gael and Sinn Féin now claim, if they enter the next government, they will reduce benefits and speed potential deportation orders for asylum seekers. Sinn Féin also is stressing the need to slash benefits further for Ukrainian war refugees, more than 82,000 of whom are receiving state support for shelter amid a dire housing shortage. McDonald, the Sinn Féin chief, insists she is fundamentally opposed to the anti-immigrant activists who sometimes try to heckle and harass her as she goes door to door canvassing for support in her Dublin Central constituency. Yet she has just pivoted to meet one of the extremists’ populist demands — that asylum seekers should be kept out of poor districts and sent to live instead in Dublin’s wealthiest neighborhoods alongside “the establishment.” “We are making the simple, common sense argument that you do not bring more pressure for resources and services into communities where the well is dry,” she told a press conference publicizing how a Sinn Féin-led government would create an Immigration Management Agency. Mary Lou McDonald has just pivoted to meet one of the extremists’ populist demands — that asylum seekers should be kept out of poor districts and sent to live instead in Dublin’s wealthiest neighborhoods alongside “the establishment.” | Charles McQuillan/Getty Images For all their efforts to differentiate themselves on the campaign trail, Fine Gael, Fianna Fáil and Sinn Féin have maintained one striking if unspoken policy: Don’t volunteer what you really think about Donald Trump, for fear of drawing unwanted ire against the outsized American corporate investment here. All sidestep the issue by saying democratic outcomes must be respected. McDonald, in particular, has avoided repeating her 2018 assessment that Trump is “sexist, misogynistic and racist.” All, if leading the next Irish government, would expect to be invited to the Trump White House in March for St. Patrick’s Day, a diplomatic tradition that dates back to the Eisenhower administration. Typically, when asked about the threat that Trump could pose to U.S. multinational operations in Ireland, Harris and Martin deflect to their coalition’s cautious stockpiling of tax billions collected from the likes of Apple, Google, Microsoft and Big Pharma. DEBATING POINTS At Monday night’s first televised debate of the campaign, Martin and Harris sought to contrast their government’s creation of sovereign wealth funds — and plans to stockpile €50 billion more in the coming five years, equivalent to €9,000 for every man, woman and child in the country — with Sinn Féin’s spend-it-now approach. During a more than two-hour debate, Harris mentioned Trump only once by name, saying Ireland needed maximum financial firepower banked in case the incoming administration changed American tax rules that have made Ireland such a profitable base, particularly for a Who’s Who of American drugmakers that chiefly export to the U.S. market. Trump’s advocacy of lowering the U.S. corporate tax rate nearer to Ireland’s 15 percent, combined with potential 20 percent tariffs on Irish-produced goods, would undermine key reasons why these firms have made Ireland the world’s third-largest drugs exporter. “What are you going to do, Deputy McDonald, if President Donald Trump decides to impose tariffs on this country? What are you going to do if there is a transatlantic trade shock? Where are you going to have the money?” Harris asked the Sinn Féin chief .She countered that saving €15 billion should be enough to offset risk in a country that currently collects close to double that amount annually in corporate taxes. While the establishment parties brace for a possible trade war, the TV debate itself illustrated how Ireland may not be ready for its own Trump-tinged election surprise on November 29. Designed by state broadcasters RTÉ to be ambitiously inclusive — 10 party leaders shared the stage, interrupting each other incessantly — the line-up leaned heavily to the left, with Sinn Féin and five smaller parties embracing everything from trade-union liberals to dyed-in-the-wool Trotskyists. Combined, this badly splintered left represents barely a third of voters, according to the most recent polling. Right-wing voters angered by record immigration, amid strained state services and unattainable housing, were represented only by Aontú, a tiny conservative Catholic breakaway from Sinn Féin, and Independent Ireland. Left without a podium were many of the approximately 20 percent of voters who say they’ll back other independents, including anti-immigration agitators. Far away from the RTÉ studio in the posh southern suburb of Donnybrook, the most prominent hard-liners — already elected to Dublin City Council, now seeking a seat in the next 174-member parliament — offered their own contribution to the debate from the doors of their homes on Dublin’s immigrant-heavy northside. “They didn’t properly talk about the most important issue in this country — immigration,” councilman and cabbie Gavin Pepper told his X followers. “They are so out of touch with the people in this country, it’s unbelievable. We need to secure our borders the proper way.”