Pedro Sánchez is the prime minister of Spain. It’s no secret the world is going through a time of turbulence. The principles that held it together for decades are under threat; disinformation is spreading freely; and even the foundations of the welfare state — which brought us the longest period of prosperity in human history — are now being questioned by a far-right transnational movement challenging our democratic systems’ ability to deliver collective solutions and social justice. In the face of this attack, Europe stands as a wall of resistance. The EU has been  — and must remain — a shelter for the values that uphold our democracies, our cohesion and our freedom. But let’s be honest, values don’t put a roof over your head. And at any rate, these values are fading fast in the face of something as concrete and urgent as the lack of affordable housing. If we do not act, Europe risks becoming a shelter without homes. The figures are clear: The housing crisis is devastating the standard of living across Europe. Between 2010 and 2025, home prices rose by 60 percent, while rental prices went up by nearly 30 percent. In countries like Estonia or Hungary, prices have tripled. In densely populated or high-tourism cities, families can spend over 70 percent of their income on rent. And individuals with stable jobs in Madrid, Lisbon or Budapest can no longer afford to live where they work or where they grew up. Meanwhile, 93 million Europeans — that’s one in five — are living at risk of poverty or social exclusion. This isn’t just the perception of experts or institutions: Around half of Europeans consider housing to be an “urgent and immediate problem.” Housing, which should be a right, has become a trap that shapes peoples’ present, suffocates their future and endangers Europe’s cohesion, economic dynamism and prosperity. The roots of this problem may differ from country to country, but two facts are undeniable and shared throughout our continent: First, the need for more houses, which we’ve been falling behind on for years. For nearly two decades now, residential construction in the EU has fallen short of demand. After a period of strong growth in the 1990s and early 2000s, the 2008 financial crisis triggered a collapse in housing investment, and the sector never fully recovered. The pandemic only widened this gap, halting permits, delaying materials and worsening labor shortages that further stalled construction. Second, and just as urgent, is that we must ensure both new construction and existing housing stock serve their true purpose: upholding the fundamental right to decent and affordable housing. Because as we continue to fall short of guaranteeing this basic right, homes are increasingly being diverted to fuel speculation or serve secondary uses like tourist rentals. In fact, according to preliminary European Parliament data, there were around 4 million short-term rental listings on digital platforms across the EU in 2025. In my home country, cities like Madrid and València have witnessed the displacement of residents from their historic centers, which are transforming into theme parks for tourists. For nearly two decades now, residential construction in the EU has fallen short of demand. | David Zorrakino/Getty Images At the same time, housing is increasingly being treated as a financial asset instead of a social good. In Ireland, investment funds have acquired nearly half of all newly built homes since 2017, while in Sweden, institutional investors now control 24 percent of all private rental apartments. Just as no one would dare justify doubling the price of a bowl of rice for a starving child, we cannot accept turning the roofs meant to shelter people into a vehicle for speculation — and citizens overwhelmingly share in this view. Seventy-one percent of Europeans believe that the places they live would benefit from more controls on property speculation, like taxing vacant rentals or regulating short-term rentals. This is what the EU stands for: When it’s a choice between profit and people, we choose people. That choice can’t wait any longer. Thankfully, with yesterday’s Affordable Housing Plan, the European Commission is starting to move on housing, taking steps that Spain has long advocated. Brussels now increasingly recognizes the scale of this emergency and acknowledges that specific market conditions may require differentiated national and local responses. This will help consolidate a shared policy understanding regarding housing-stressed areas and strengthen the case for targeted measures — which may include, among others, restrictions on short-term rentals. Crucially, the plan also stresses the need for EU financing to boost housing supply. The time for words is over. We need urgent action. A growing outcry over housing is resonating across Europe, and our citizens need concrete solutions. Any failure to act with ambition and urgency risks turning the housing crisis into a new driver of Euroskepticism. After World War II, Europe was built on two founding promises: securing peace and delivering well-being. Honoring that legacy today means taking decisive action by massively increasing flexible funding to match the scale of the housing crisis, and guaranteeing member countries can swiftly implement the legal tools needed to adopt bold regulatory measures on short-term rentals and address the impact of nonresident buyers on housing access. The true measure of our union isn’t just written in treaties. It must be demonstrated by ensuring every person can live with dignity and have a place to call home. Let us rise to that promise — boldly, together and without delay.

BRUSSELS — U. S. Vice President JD Vance has hit out at the EU’s digital rules enforcement, saying the EU should not be “attacking American companies over garbage.” “Rumors swirling that the EU commission will fine X hundreds of millions of dollars for not engaging in censorship. The EU should be supporting free speech not attacking American companies over garbage,” Vance wrote on X overnight. X owner Elon Musk immediately thanked the U.S. official, commenting, “Much appreciated.”  The European Commission opened formal proceedings against X under its Digital Services Act in December 2023, roughly a year after Musk bought Twitter and rebranded it as X. But the EU has yet to finalize its probe, after accusing X of breaching its obligations around transparency and blue checkmarks in preliminary findings in July 2024. A decision could come as early as Friday, according to media reports Thursday. Under the EU rules, companies can be fined up to 6 percent of their annual global turnover. French President Emmanuel Macron last week voiced concerns about the slow pace of Brussels’ probes into American tech giants, adding to a growing chorus of criticism that the bloc has been too slow to enforce its flagship Digital Services Act amid U.S. pressure. Washington has repeatedly asked the EU to roll back its digital rule book as part of trade negotiations, and last week U.S. Secretary of Commerce Howard Lutnick put this on the table again as an explicit exchange for scrapping tariffs on steel and aluminum in ongoing talks. Asked earlier Thursday how she feels about a looming diplomatic showdown if she slaps a fine on a U.S. tech giant, Commission digital chief Henna Virkkunen told POLITICO: “I’m quite calm in different situations. I’m not surprised about anything. I’m protecting our laws. But at the same time we are going to make Europe faster and simpler and easier for businesses.” Asked if she’s afraid of the U.S.’s reaction to a fine under the DSA, Virkkunen responded with a single word: “No.”

Mario Monti is a former prime minister of Italy and EU commissioner. The European Commission sanctioned Google on Sept. 5, for abusing its dominant position in the bloc’s advertising technology market. The sanction had two components: a €2.95-billion fine, as well as the obligation of introducing changes to the company’s business model that will ensure the discontinuation of the abuse. In reaction, U.S. President Donald Trump issued a statement on how “Europe today ‘hit’ another great American company.” Taking to social media, he warned: “We cannot let this happen to brilliant and unprecedented American ingenuity and, if it does, I will be forced to start a Section 301 proceeding to nullify the unfair penalties being charged to these taxpaying American companies” — a proceeding that would presumably lead to the imposition of tariffs by the U.S. But, with all due respect, Trump is missing a key point: There is no discrimination here. The Commission sanctions cases of abuse of dominance that take place in the EU market, whether they’re carried out by EU or non-EU companies. More to the point, this is exactly what the U.S. antitrust authorities do with respect to the U.S. market. Incidentally, just yesterday, the Federal Trade Commission in Washington opened an investigation into the advertising practices of Google and Amazon, much along the lines set out by the Commission. We’ve been here before — and with the same players too. Let’s rewind 20 years to when I was Competition commissioner: In 2004, the Commission sanctioned Microsoft after a long investigation involving constructive discussions with Co-founder Bill Gates, then-CEO Steve Ballmer and then-General Counsel Brad Smith, among many others. Eventually, it imposed a fine of almost €500 million and, more importantly, ordered changes to the company’s business model. Interestingly, the complaints that prompted the investigation mainly came from U.S. companies, including the start-ups of the early days of the internet economy. They were complaining that Microsoft, which had — through its merits — legally earned a highly dominant position in operating systems for personal computers, was leveraging its position onto neighboring markets by obstructing other companies in a variety of ways, thus stifling innovation. In fact, I remember one such U.S. start-up — only about three years old when we began our investigation — had a rather intriguing name: Google. And I remember then-CEO Eric Schmidt visiting the Commission to praise our “courage.” The European Commission sanctioned Google on Sept. 5, for abusing its dominant position in the bloc’s advertising technology market. | Beata Zawrzel/Getty Images Incidentally, European corporate leaders, who sometimes urge the Commission to be less rigorous in its enforcement of competition rules, should also keep these past cases in mind — especially if they want a more innovative and competitive European economy, as we all do. Perhaps they should put the issue into a broader perspective and think twice. With its Microsoft decision, the Commission — followed by several other competition authorities across the world — allowed for the emergence of Google and other start-ups to become hugely successful. In fact, it put pressure on Microsoft to change its behavior and embrace a corporate culture building on collaboration rather than monopolization, supporting open-source projects and fostering partnerships with other companies. And many analysts believe it is these changes, stimulated by the past determination of competition authorities, that help explain Microsoft’s success over the last decade, under the leadership of CEO Satya Nadella. Against this backdrop, Trump’s view that EU competition policy is driven by discriminatory motivations against U.S. companies is simply unfounded. What’s true is that in any national or supranational context like the EU, institutions such as competition authorities and central banks have been set up in the eminent American tradition — dating back to the late 19th century (with the Sherman Anti-Trust Act of 1890) and the early 20th century (with the Federal Reserve Act of 1913) — precisely with the goal preventing these abuses, whether by companies in the marketplace or by governments abusing future generations via high inflation. Of course, it’s no surprise that leaders with an autocratic vision wouldn’t feel at ease with institutions entrusted by governments and parliaments of the past with preventing power from becoming absolute. But it was the U.S. that set postwar Germany, and later the EU, on this track. When occupying the country after World War II, America imposed the creation of two institutions on the newly born Federal Republic of Germany: First, the Deutsche Bundesbank — an independent central bank modeled on the Federal Reserve System, meant to avoid a repetition of the hyperinflation that contributed to the advent of Nazism. Second, the Bundeskartellamt competition authority, modeled on the Federal Trade Commission and the Antitrust Division of the Department of Justice, with the power to prevent the reemergence of cartels and trusts in heavy industry — another factor that had contributed to Hitler’s aggression and World War II. Then, at Germany’s request — and on the basis of the country’s democratic and economic resurgence — these two institutions were transposed to the EU level. So, today we must thank the U.S. not only for its decisive help in saving the continent from Nazism and Fascism and protecting it from Soviet Communism, but also for injecting postwar Europe with such powerful antidotes to the aberrations of the past. Perhaps Trump might forgive us if we aren’t ready to give up this great American legacy.

Josep Borrell Fontelles is the former EU high representative for foreign affairs and security policy. Guy Verhofstadt is a former prime minister of Belgium and president European Movement International. Domènec Ruiz Devesa is a former MEP and president of the Union of European Federalists. It’s become tradition for pro-Europeans to chart their political course from Ventotene, where Altiero Spinelli wrote the manifesto “For a Free and United Europe.” Recalling that spirit has never been more urgent than it is now. Our union appears dangerously fragmented and weak, stuck in a hostile internal and external environment. Home to just 5 percent of the global population and a widening economic gap with other major powers, Europe isn’t just facing up to a world of continental empires but is at real risk of becoming America’s vassal. This became apparent after the nonreciprocal concessions made to U.S. President Donald Trump on defense spending and trade, as well as Europe’s acceptance of a junior role in handling the war in Ukraine. Moreover, from Gaza to Nagorno-Karabakh, the EU’s involvement in conflicts abroad has become largely irrelevant, either due to its lack of credible international standing or unity. Domestically, European Commission President Ursula von der Leyen’s second term has been counterintuitively marked by the undoing of the Green Deal — the flagship project of her first term — as if climate change isn’t getting worse. The Commission has also proposed an underwhelming Multiannual Financial Framework with no real increase, thus sacrificing cohesion policy to new priorities in defense products and research. Meanwhile, the Euroskeptic and Europhobic populist far right has never been stronger in member countries or EU institutions. The current EU chiefs suffer from a lack of long-term political vision, leadership and unity. For now, an unlikely alliance of Trump sympathizers and nostalgic Atlanticists appear to be dominating both the European Council and the Commission. Thus, the prevailing line has been to flatter and appease the U.S. president in the hopes of damage control, in turn fostering our political, strategic and even economic dependency on Washington — and it’s hardly working. For Trump, contracts only bind the other party — not him. And far from avoiding punitive tariffs or strengthening his support for Ukraine, agreeing to spend 5 percent of GDP on defense and buy more U.S. weapons and natural gas hasn’t even increased his commitment to collective security. Instead, from minerals deals to weapons sales, this has largely become a purely transactional affair based on advancing U.S. economic gains — and luck. Paradoxically, the lack of serious engagement from Russian President Vladimir Putin in starting a negotiated settlement is preventing Trump’s attempted delivery of a deal on Moscow’s terms. Pool photo by Sergey Bobylev/Sputnik/Kremlin via EPA It should be clear by now that Trump isn’t, and never will be, an ally. His America constitutes a huge geopolitical, economic and cultural shock to Europe. But becoming a U.S. protectorate isn’t inevitable — especially given increasingly indignant public opinion over the series of concessions and humiliations we’re witnessing. There is an alternate path. A reinvigoration of a pro-European majority in the bloc’s three institutions — particularly the European Parliament — could still lead to the self-determination of our destiny. The Parliament has the constitutional role of controlling the Commission and could call for a new direction, as it holds the power to censure it. For a start, the Parliament could block the reduction of tariffs on U.S. products — a move that would surely be popular with voters and would signal that Europe’s readiness to stand up to blackmail. Furthermore, we need to strengthen our political union, overcome the veto-cracy that allows Hungarian Prime Minister Viktor Orbàn to block the EU’s military assistance to Ukraine, and build our own defense system — one that isn’t reliant on the U.S. and can instill fear in the Kremlin. Once again, these decisions will be quite popular with most EU citizens. As former European Central Bank President Mario Draghi said, we won’t be a geopolitical power just by relaunching our internal market and competitiveness agenda. We need to become a federal union that isn’t constrained by unanimity requirements or a lack of proper competencies in foreign and security policy. Leading member countries should immediately take the initiative to start activating its common defense clause and reform the Treaties in alliance with the Parliament, which holds the power to veto the budget. Otherwise, a coalition of the willing should launch a new “European Defense Community” with a parliamentary and fiscal dimension, and is open to all member countries interested in joining. If no action is taken, and we wait for the next crisis to improvise on hard decisions, Europe as a political project risks dying.

A threat from President Donald Trump to impose “substantial” tariffs on countries that regulate U.S. tech companies is riling up Europe. But the continent’s digital regulations were not Trump’s primary target. Trump’s Aug. 25 post threatening to penalize “all countries with Digital Taxes, Legislation, Rules, or Regulations,” did not specify any territory by name. However, four people familiar with the White House’s conversations on digital trade policy say it was largely a response to several pieces of tech-focused legislation under consideration in South Korea’s parliament. The people were granted anonymity to discuss ongoing negotiations. Trump’s threat is poised to complicate the talks between Seoul and Washington to nail down the details of the preliminary trade agreement their governments reached in July. At the same time, it has alarmed leaders in the European Union and United Kingdom, who worry Trump’s new demand could upend tentative trade agreements they have reached. “Trump’s post was a warning shot to South Korea and other countries weighing new rules on digital trade not to follow the European Union’s approach,” according to a person who spoke with Trump the day of his Truth Social post. Trump’s missive came shortly after he met with new South Korean President Lee Jae Myung at the White House, and after Lee’s government refused to sign onto a joint statement on the preliminary trade agreement that included a pledge to block legislation to regulate large tech companies operating in the country. While the South Korean government did not officially respond to the post, it drew an immediate response from EU officials, who declared it their “sovereign right” to oversee economic activities on their soil. Several EU leaders vigorously refuted the Trump administration’s claim that European restrictions unfairly target American tech companies. And EU Commission spokesperson Thomas Regnier said its regulation “does not look at the color of a company, at the jurisdiction of a company, nor the owner of a company.” But while Europe’s digital regulations are despised by U.S. tech giants, the White House is more focused on countries like South Korea, India, Turkey and Brazil, which are currently considering draft rules loosely modeled on Europe’s laws. Senior White House officials see South Korea’s response as a litmus test on whether they will be able to pressure other trading partners to abort pushes for new digital restrictions, three of the people said. “Part of it was the frustration that Europe hasn’t budged,” said another person close to the White House on Trump’s post. “But there was more a recognition … that South Korea was probably among three or four other jurisdictions potentially looking to be first followers of the EU — to mirror or mimic that approach. So he was like, ‘Okay, South Korea is here, their new president has said this is a priority, and we’ve got to nip this in the bud.’” A White House official told POLITICO that Trump has “consistently opposed” digital regulations from countries that target American tech companies. Those discussions are “part of almost every trade negotiation we’re having,” the official added. South Korean lawmakers in recent years have floated a series of proposals that could classify major U.S. tech companies as monopolies or gate-keepers, and open them up to steep fines, including the Platform Competition Promotion Act proposed in 2023. Those and similar proposals are drawing growing criticism from Trump allies in the U.S., including lawmakers like Sen. Bill Hagerty (R-Tenn.), who co-led a letter sent in late July warning that Seoul’s proposed rules could give Chinese tech companies an edge there. Leading MAGA voices have also taken note: conservative activist and podcaster Charlie Kirk shared a post on X on Aug. 24 complaining that South Korea’s government “still targets U.S. industry with regulations while giving Chinese companies a free pass.” “Only Trump can fix this, no more free passes for China while we get punished,” Kirk wrote. U.S. Trade Representative Jamieson Greer has brought up the legislation in trade talks with his South Korean counterparts, but digital trade wasn’t addressed in the limited trade agreement the two countries announced late July. The announcement — which Trump posted on social media — was scant on details, saying only that South Korea had agreed to a 15 percent tariff on its exports in exchange for a pledge of more than $350 billion in investment and an additional $100 billion in energy purchases. Ahead of the president’s meeting with Lee, however, senior Trump administration officials pressed the South Korean government to sign a joint statement on the deal that included language pledging to abandon proposals for digital trade restrictions, according to three people familiar with the discussions. South Korea rejected that draft language. Seoul insists it will press ahead with some form of digital regulation, though it has adjusted its approach to address expectations from the Trump administration. As a result of trade talks with Washington, South Korea’s liberal party will give up on at least one proposal, known as the Online Platform Regulation Act, according to a senior official quoted in local reports, and will instead consider pared back digital rules. Some South Korean officials say they would be willing to ease digital proposals that the Trump administration claims discriminate against American companies, and the Trump administration believes they are making progress toward convincing Lee’s administration to reject any digital legislation that hits American companies. “A lot is on the table and a lot of those demands are far tougher for South Korea than the digital issues,” said a person close to the White House. While South Korea’s legislation has long been on Big Tech’s radar, it only recently came to Trump’s attention, following days of briefings that highlighted Lee’s pledges to tighten digital regulations during the country’s presidential campaign earlier this year. High-profile Trump supporters have also recently taken note of the tech debate taking place in South Korea. Kirk’s X post was also shared with the president during a briefing ahead of the summit, as was an op-ed from former Trump national security adviser Robert O’Brien warning South Korea’s digital legislation, if passed, would be a “gift” to the Chinese government. Trump echoed that language in his Truth Social post, suggesting that other countries’ digital regulations “outrageously, give a complete pass to China’s largest Tech Companies.” “If Trump wants to go after Amazon, Google, or other U.S. tech firms here at home, that’s his prerogative, but other countries shouldn’t be messing with American tech firms. That’s clearly how folks like Charlie Kirk feel, and I think that’s how the president feels too,” said a former Republican official, who frequently meets with the president and senior White House officials. White House aides also presented Trump with letters from Republican lawmakers asking the administration to address the digital dispute as part of trade negotiations with South Korea, the people said. Ahead of Lee’s visit, House Ways and Means Republicans Adrian Smith (Neb.) and Carol Miller (W.Va.) released public statements calling on the administration to address the country’s digital proposals, and led a letter from more than 40 House Republicans warning that South Korea’s measures would disproportionately target U.S. tech firms. Said Miller: “President Trump is a known dealmaker, and I am confident that he will help secure fair market access for our digital companies operating abroad.”

Listen on * Spotify * Apple Music * Amazon Music Just when we thought we could get a break for the summer, geopolitics had other plans. This week on EU Confidential, host Sarah Wheaton is joined by POLITICO colleagues Jordyn Dahl, Gabriel Gavin and Jan Cienski for a catch-up on what moved while the bubble was at the beach. From Alaska to the White House: Did anything real shift on Ukraine beyond choreography? We break down the EU-U.S. tariff framework and turn to Gaza — where Brussels is grasping for some sort of leverage — and how the politics split across capitals.

BERLIN — Germany’s Interior Minister Alexander Dobrindt invited European Union counterparts to a migration summit on Zugspitze, Germany’s highest mountain in the Bavarian Alps, to draft proposals for stricter migration rules. Dobrindt, the Bavarian conservative in charge of executing German Chancellor Friedrich Merz’s tough-on-migration turn, is set to host talks with interior ministers from France, Poland, Austria, Denmark and the Czech Republic on July 18. Also invited is the EU’s new migration czar, Austrian conservative Magnus Brunner, a spokesperson for the interior ministry in Berlin told POLITICO’s Berlin Playbook. “Citizens rightly expect order, and more control and cooperation from politicians instead of powerlessness. We want to send this signal,” Dobrindt told POLITICO. The aim of the summit is a declaration containing concrete ideas — including on border protection and deporting rejected asylum-seekers to so-called third countries, or countries outside the EU — that are to be jointly pushed forward at the European level, according to the interior ministry. Germany was long among the EU countries with a more liberal approach toward migration. But the current government, led by Merz, has vowed to drastically cut the inflow of asylum-seekers under pressure from the far-right, anti-immigrant Alternative for Germany (AfD), now the largest opposition party in Germany’s parliament. Just days after taking office this spring, Merz’s interior minister beefed up checks on Germany’s borders and vowed German police would turn away undocumented immigrants, including asylum-seekers — a move most experts deemed against EU law. The border crackdown fomented tensions between Germany and its neighbors, with politicians in France, Poland and Austria criticizing Merz’s government for inhibiting the free movement of people and goods within the Schengen Area. Earlier this week, Polish Prime Minister Donald Tusk said Warsaw’s patience with Germany “is becoming exhausted” as he announced new checks on his country’s borders with Germany and Lithuania. Dobrindt and Merz defended the national border checks by arguing they are a temporary step while they work toward migration reforms on the EU level. “We must strengthen the possibility of repatriation,” Dobrindt told German magazine Focus in an interview earlier this week. “This requires the removal of the connecting element, as entailed in the CEAS, according to which refugees must have a connection to the country to which they are returned,” he continued, referring to the Common European Asylum System. “We want to abolish this and at the same time expand our strategic partnerships with third countries,” he added, without naming specific countries. In a similar move in May, the European Commission proposed changing EU law to allow the deportation of migrants to countries outside the EU — a proposal that human rights groups sharply criticized. In separate comments, Dobrindt also told Focus he wants to close a deal with the Taliban-led government in Afghanistan to deport Afghans who were found to have committed crimes in Germany. He would consider making “agreements directly with Afghanistan to enable repatriations,” he said. All diplomatic and political ties between Berlin and Kabul were cut when the Taliban returned to power in 2021.

The question isn’t whether globalization will continue, but who will lead it and on what terms, says BMW’s Frank Niederländer. With geopolitical tensions and uncertainty in the world market on the rise, the EU has an opportunity to shape the global trade agenda — if it gets out of its own way. “Europe had the ambition to lead with the Green Deal, setting the pace for the global economy,” says Niederländer, BMW Group Vice President, Government Affairs Europe. “But while we focused on regulation, others moved ahead prioritizing speed, investment and outcomes.” > We need to envision growth as an imperative again. > > Frank Niederländer, BMW Group vice president, government affairs Europe Europe’s auto industry has a sterling reputation globally for manufacturing high-quality vehicles, and the EU has a goal of zero emissions for all cars by 2035. But China’s drive for innovation has helped it lead the world market for electric cars. Only one of the world’s top 15 battery electric vehicles is made in the EU. “The share of EVs sold still depends heavily on national regulatory conditions. This fragmentation in the single market remains one of the greatest challenges to the uptake of electric vehicles. Political alignment, investment scale and the ability to react with speed is essential,” says Niederländer. POLITICO Studio sat down with Niederländer to discuss what shifts need to happen to create a climate-neutral, competitive Europe. POLITICO Studio: What is BMW’s outlook on international trade in this era of geopolitical tension? Frank Niederländer: The global trading system is shifting — and it has real consequences. It shapes investment flows, supply chains and the rules of competition in real time. Other regions are acting with intent ― investing heavily to secure their industrial bases through billions in subsidies, raw material lockdowns and strategic alliances that give them an edge. Access to energy, technology and key inputs is now, very openly, used as leverage. The risk for Europe isn’t deglobalization, it’s marginalization. It’s falling behind while others move with more speed and focus. Europe must remain open with a trade policy that reinforces our competitiveness, secures our supply chains and reflects our values, while recognizing and managing strategic dependencies. PS: Amid the United States’ increasingly isolationist trade policies, is there a new opportunity for Europe? FN: There could be, if the EU stops playing defense and starts thinking strategically about where it wants to lead. Europe has a chance to position itself as a stable, credible anchor for open and fair trade. For that, we need cohesion within the EU, and alignment of environmental, economic and trade policy. More free trade agreements with core partners (such as Mercosur) are essential today after a long period of insufficient EU engagement. Europe has what it takes to lead: a strong Single Market, technological leadership and a solid rule-of-law tradition. What’s missing is the will to shape the global trading system, not just manage its consequences. We should focus on areas where the need for collaboration is highest, such as climate-neutral industry, resilient supply chains and high-value innovation. The EU must be capable of swiftly recalibrating its priorities to keep pace with the evolving geopolitical environment, or it may find itself sidelined. We need to envisage growth as an imperative again. PS: What emerging technologies could define Europe’s competitive edge? How is BMW helping to accelerate them? FN: Europe’s edge will be defined by the convergence of climate ambition and industrial competitiveness. The winning technologies will be those that deliver both. At BMW, this is already shaping how we build, invest and compete globally. We have long embedded circularity into the core of our strategy ― in the design phase, material sourcing and end-of-life recycling. We are also investing heavily in battery cell innovation and scaling European production capacity while continuing to advance a broad range of powertrain technologies ― from electric drivetrains to highly efficient combustion engines running on renewable fuels. In fact, all diesel BMW vehicles produced in Germany are now delivered with HVO100, a renewable fuel that reduces life cycle CO2 emissions by up to 90 percent. Europe has the talent and industrial base to lead. The challenge now is to translate that potential into scale — with policy that recognizes and accelerates technological leadership. We need agile policy frameworks, public-private partnerships and an ecosystem that fosters innovation, rather than policies that dictate technologies. > Europe has the talent and industrial base to lead. The challenge now is to > translate that potential into scale — with policy that recognizes and > accelerates technological leadership. PS: How can Europe turn decarbonization into a long-term competitive advantage? What role does BMW play in that transformation? FN: Decarbonization can give Europe an economic edge if we scale up cost-effective, low-carbon technologies. While Europe led with ever tighter regulation, other regions ― notably the U.S. and China ― have advanced by mobilizing massive investments, securing critical resources and rapidly scaling technologies. Still, Europe has what it takes to lead this transition through choice and innovation, not restrictions.  Take the supply chain. The largest levers for reducing CO2 emissions lie upstream from manufacturers. We prioritize renewable electricity, secondary materials and low-carbon production processes, and we actively invest in and source from suppliers that meet those standards. That creates real momentum on the demand side to accelerate the transition. This approach plays to Europe’s industrial strengths: advanced engineering capabilities, integrated supply chains and the ability to deliver premium solutions across multiple technologies. Let companies compete to deliver the best climate solutions — that’s how we’ll maintain global leadership. PS: How does life cycle assessment (LCA) affect BMW’s strategies? FN: At BMW, our strategic focus is clear ― achieving business success while reducing our climate footprint. To do that, we must look at the full life cycle of our products ― from raw material extraction to manufacturing, use and end-of-life recycling. This is essential if we want climate policy to reflect real impact. Tailpipe emissions cannot be the only measure of a vehicle’s environmental impact. We need to assess CO2 emissions across the entire value chain. This means designing with carbon footprint in mind from the start, and we’re already applying this approach with the Neue Klasse, a new, fully electric BMW model generation, where we are embedding circularity and carbon reduction every stage of development. The EU’s move toward LCA is welcome — but it needs consistency, transparency and practical application across sectors. Done right, LCA will reward innovation where it matters most: in cutting total emissions. PS: How is BMW future-proofing its global supply chain? FN: Europe’s future competitiveness will hinge on whether we treat supply chains as a strategic asset, not a logistical challenge. That’s especially true in areas such as the battery value chain, where industrial success depends on both resilience and global cooperation. This will require massive investments — just look at the figures in the Draghi report. This isn’t about reducing complexity. It’s about managing it. Engagement with partners such as China must be realistic and rules-based, because decoupling is neither feasible nor desirable. Europe cannot operate as an island. At BMW, our global production footprint is built upon a strong European foundation. We localize to serve markets more efficiently and to strengthen resilience, and our international presence amplifies Europe’s role as a hub for innovation, engineering excellence and high-value manufacturing. > Climate neutrality must be engineered — deliberately, collaboratively, and at > scale. PS: What can the EU do to ensure that companies like BMW remain globally competitive while leading the green transition? FN: Europe has the chance to define climate neutrality in a way that keeps Europe competitive and keeps jobs here. Stronger cooperation between governments and industry is key. The Strategic Dialogue launched by EU Commission President Ursula von der Leyen was an important step to this and must continue. The future will be shaped by many choices — smart regulation, strong industrial alliances and a shared commitment to progress that is measurable, not ideological. PS: What future does BMW imagine for a climate-neutral world? FN: A climate-neutral Europe is not just a moral responsibility — it’s a competitive imperative. It means rethinking how we power industries, design products and create value chains. The future will be built not on a single breakthrough but by thousands of decisions across technology, regulation and investment. Climate neutrality must be engineered — deliberately, collaboratively and at scale.   At BMW Group, we are engineering that future with purpose. Our 2030 climate targets are fully aligned with the Paris Agreement, which means reducing our CO2 emissions by 40 million tons by 2030 as compared to 2019. Europe has the potential to lead this transformation. But leadership requires the courage to move beyond outdated regulations, respond decisively to shifting geopolitical realities and streamline the path forward. This is the moment to lead with conviction.

The European Commission is threatening to withdraw new rules designed to protect the health of European forests — the second time in less than a week the EU executive has made such a threat. Last Friday the Commission threatened to withdraw another proposed green law, the Green Claims Directive, although for very different reasons. With green claims, the Commission said member countries were pushing for the laws to go too far. But this time, in a draft statement seen by POLITICO, the Commission said that member countries’ position isn’t ambitious enough. “The Commission hopes that its main concerns can be addressed in the course of the legislative procedure,” warns the statement. “If the current draft Council position were to be confirmed by the co-legislators, the Commission might consider withdrawing the proposal.” The forest monitoring law sets out rules for collecting data on the health of Europe’s forests, with the goal of improving management and protecting them from the effects of climate change. The proposed changes in the draft Council position, which is to be adopted Tuesday by EU agriculture ministers, include deleting key indicators that were meant to monitor forests’ health through the EU’s Copernicus earth observation program. Member countries also push for deleting requirements to share information, which the Commission said would mean countries were subject to “unnecessary burden” of data collection, without any of the benefits of data sharing. The option to abandon the file has been floated by the Commission during negotiations in recent months, POLITICO reported last week. Meanwhile, MEPs are still working on their position on the file. A vote on the Parliament’s report originally expected next month has been moved to Sept. 23, according to a Parliament official, to give extra time to resolve the deadlock around this piece of legislation.