LONDON — Prime Minister Keir Starmer usually goes out of his way not to annoy Donald Trump. So he better hope the windmill-hating U.S. president doesn’t notice what the U.K. just did. In a fillip for the global offshore wind industry, Starmer’s government on Wednesday announced its biggest-ever down payment on the technology. It agreed to price guarantees, funded by billpayers to the tune of up to £1.8 billion (€2.08 billion) a year, for eight major projects in England, Scotland and Wales. The schemes have the capacity to generate 8.4 gigawatts of electricity, the U.K. energy department said — enough to power 12 million homes. It represented the biggest “wind auction in Europe to date,” said industry group WindEurope. It’s also an energy strategy that could have been tailor-made to rankle Trump. The U.S. president has repeatedly expressed a profound loathing for wind turbines and has tried to use his powers to halt construction on projects already underway in the U.S. — sending shockwaves across the global industry. Even when appearing alongside Starmer at press conferences, Trump has been unable to hide his disgust at the very sight of windmills. “You are paying in Scotland and in the U.K. … to have these ugly monsters all over the place,” he said, sitting next to Starmer during a visit to his Turnberry golf course last year. The spinning blades, Trump complained, would “kill all your birds.” At the time, the prime minister explained meekly that the U.K. was seeking a “mix” of energy sources. But this week’s investments speak far louder about his government’s priorities. The U.K.’s strategy — part of a plan to run the British power grid on 95 percent clean electricity by 2030 — is a clear signal that for all Starmer’s attempts to appease Trump, the U.K. will not heed Washington’s assertions that fossil fuels are the only way to deliver affordable bills and secure supply. “With these results, Britain is taking back control of our energy sovereignty,” said Starmer’s Energy Secretary Ed Miliband, a former leader of the Labour party. “With these results, Britain is taking back control of our energy sovereignty,” said Energy Secretary Ed Miliband. | Pool photo by Justin Tallis via Getty Images While not mentioning Trump or the U.S., he said the U.K. wanted to “stand on our two feet” and not depend on “markets controlled by petrostates and dictators.” WIND VS. GAS The goal of the U.K.’s offshore wind drive is to reduce reliance on gas for electricity generation. One of the most gas-dependent countries in Europe, the U.K. was hit hard in 2022 by the regional gas price spike that followed Russia’s invasion of Ukraine. The government ended up spending tens of billions of pounds to pay a portion of every household energy bill in the country to fend off widespread hardship. It’s a scenario that Miliband and Starmer want to avoid in future by focusing on producing electricity from domestic sources like offshore wind that are not subject to the ups and downs of global fossil fuel markets. Trump, by contrast, wants to keep Europe hooked on gas — specifically, American gas. The U.S. National Security Strategy, updated late last year, states Trump’s desire to use American fossil fuel exports to “project power.” Trump has already strong-armed the European Union into committing to buy $750 billion worth of American liquefied natural gas (LNG) as a quid pro quo for tariff relief. No one in Starmer’s government explicitly named Trump or the U.S. on Wednesday. But Chris Stark, a senior official in Miliband’s energy department tasked with delivering the 2030 goal, noted that “every megawatt of offshore wind that we’re bringing on is a few more metric tons of LNG that we don’t need to import.” The U.K.’s investment in offshore wind also provides welcome relief to a global industry that has been seriously shaken both by soaring inflation and interest rates — and more recently by a Trump-inspired backlash against net zero and clean energy. “It’s a relief for the offshore sector … It’s a relief generally, that the U.K. government is able to lean into very large positive investment stories in U.K. infrastructure,” said Tom Glover, U.K. country chair of the German energy firm RWE, which was the biggest winner in the latest offshore wind investment, securing contracts for 6.9 gigawatts of capacity. A second energy industry figure, granted anonymity because they were not authorized to speak on the record, said the U.K.’s plans were a “great signal for the global offshore wind sector” after a difficult few years — “not least the stuff in the U.S.” The other big winner was British firm SSE, which has plans to build one of the world’s largest-ever offshore wind projects, Berwick Bank — off the coast of Donald Trump’s beloved Scotland.

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

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

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.

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

The Trump administration is lashing out at foreign laws aimed at clamping down on online platforms that have gained outsized influence on people’s attention — while trying to avoid launching new trade wars that could threaten the U.S. economy. Over the past month, U.S. officials have paused talks on a tech pact with the United Kingdom, canceled a trade meeting with South Korean officials and issued veiled threats at European companies over policies they believe unfairly penalize U.S. tech giants. Several tech policy professionals and people close to the White House say the recent actions amount to a “negotiating tactic,” in the words of one former U.S. trade official. As talks continue with London, Brussels and Seoul, the Office of the U.S. Trade Representative is pressing partners to roll back digital taxes on large online platforms and rules aimed at boosting online privacy protections — measures U.S. officials argue disproportionately target America’s tech behemoths. “It’s telegraphing that we’ve looked at this deeply, we think there’s a problem, we’re looking at tools to address it and we’re looking at remedies if we don’t come to an agreement,” said Everett Eissenstat, who served as the director of the National Economic Council in Trump’s first term. “It’s not an unprecedented move, but naming companies like that and telegraphing that we have targets, we have tools, is definitely meaningful.” But so far, the administration has shied away from new tariffs or other aggressive actions that could upend tentative trade agreements or upset financial markets. And the new tough talk may not be enough to placate some American tech companies, who are pressing for action. One possible action, floated by U.S. Trade Representative Jamieson Greer, would be launching investigations into unfair digital trade practices, which would allow the administration to take action against countries that impose digital regulations on U.S. companies. “I would just say that’s the next level of escalation. I think that’s what people are waiting for and looking for,” said a representative from a major tech company, granted anonymity to speak candidly and discuss industry expectations. “What folks are looking for is like action over the tweets, which, we love the tweets. Everyone loves the tweets.” Trump used similar investigations to justify raising tariffs on hundreds of Chinese imports in his first term. But those investigations take time, and it can be years before any increases would go into effect. Greer has also been careful to hedge threats of new trade probes, stressing they are not meant to spiral into a broader conflict. Speaking on CNBC’s “Squawk Box” last week, he floated launching a trade investigation into the EU’s digital policies, but said the goal would be a “negotiated outcome,” not an automatic path to higher tariffs. “I don’t think we’re in a world where we want to have some renewed trade fight or something with the EU — that’s not what we’re talking about,” Greer said. “We want to finish off our deal and implement it,” he continued, referring to the trade pact the partners struck over the summer. Greer also raised the prospect of a trade probe in private talks with South Korea earlier this fall, saying the U.S. might have to resort to such action if the country continues to pursue legislation the administration views as harmful to U.S. tech firms. But a White House official clarified that the U.S. was not yet considering such a “heavy-handed approach.” Even industry officials aren’t certain how aggressive they want the Trump administration to be, acknowledging that if the U.S. escalated its fight with the EU over their tech regulations, it could spark a digital trade war that would ultimately end up harming all of the companies involved, according to a former USTR official, granted anonymity to speak candidly. President Donald Trump has long criticized the tech regulations — pioneered by the European Union and now proliferating around the globe. But he’s made the issue a much more central part of his second-term trade agenda, with mixed results. While Trump’s threat to cut off trade talks with Canada got Prime Minister Mark Carney to rescind their three percent tax on revenue earned by large online platforms, his administration has struggled to make headway with the EU, UK and South Korea in the broader trade negotiations over tariffs. The tentative trade deal the administration reached with the EU over the summer included a commitment from the bloc to address “unjustified digital trade barriers” and a pledge not to impose network usage fees, but left the scope and direction of future discussions largely undefined. The agreement fleshed out with South Korea this fall appeared to go even further, spelling out commitments that regulations governing online platforms and cross-border data flows won’t disadvantage American companies. But none of those governments have so far caved to U.S. pressure to abandon their digital regulations entirely, and the canceled talks and threatening social media posts are a sign of Trump’s growing frustration. “You won’t be surprised to know that what we think is fair treatment and what they think is fair treatment is quite different and I’ve been quite frankly disappointed over the past few months to see zero moderation by the EU,” Greer said Dec. 10 at an event at the Atlantic Council. Last week, Greer’s office amped up the rhetoric further, threatening to take action against major European companies like Spotify, German automation company Siemens and Mistral AI, the French artificial intelligence firm, if the EU doesn’t back off enforcement of its digital rules. The threat came a week after the EU fined X, the company formerly known as Twitter, $140 million for failing to meet EU transparency rules. Greer’s office also canceled a meeting planned for last Thursday with South Korean officials, as South Korean lawmakers introduced new digital legislation and held an explosive hearing on a data breach at Coupang, an American-headquartered e-commerce company whose largest market is in South Korea. The South Korean Embassy denied any relationship between the Coupang hearing and the cancellation of the recent meeting. “Neither Coupang’s data breach, the subsequent investigation by the Korean government, nor the National Assembly’s hearing played a role in the scheduling of the KORUS Joint Committee,” said an embassy official. The canceled meetings and frozen talks are significant — delaying implementation of bare bones trade agreements and investment pledges inked in recent months. But the Trump administration has shown little interest in blowing up the deals its reached and reapplying the steep tariffs it threatened over the summer, which could trigger significant retaliation and, as concerns about affordability and inflation continue to simmer in the U.S., prove politically dicey. Launching trade investigations at USTR or fining specific foreign companies could be a less inflammatory move. “What is happening is that these issues are starting to come to a head,” said Dirk Auer, a Director of Competition Policy International Center for Law & Economics, who focuses on antitrust issues and recently testified before Congress on digital services laws. “At some point the administration has to put up or shut up. They need to put their money where their mouth is. And I think that’s what’s happening right now.” Gabby Miller contributed to this report.

Prime minister’s questions: a shouty, jeery, very occasionally useful advert for British politics. Here’s what you need to know from the latest session in POLITICO’s weekly run-through. What they sparred about: The year that was. Prime Minister Keir Starmer and Tory Leader Kemi Badenoch’s last hurrah of 2025 saw everyone’s favorite duo row about the turkey Labour’s record over the last 12 months — and who caused the nightmare before Christmas. Pull the other one: Badenoch wished everyone a festive break in the season of goodwill — but then the gloves came off. She raised the PM’s own frustration at pulling levers but struggling to get change (Labour’s favorite word). “Does he blame himself or the levers?” Cutting. Starmer used the free airtime to rattle through his achievements, stressing “I’ve got a whole list … I could go on for a very long time.” Comparisons to Santa write themselves. Jobbing off:  “The Prime Minister promised economic growth, but the only thing that’s grown is his list of broken promises,” Badenoch hit back. This list analogy was really gaining momentum. She lambasted rising unemployment under Labour, yet the PM was able to point to lower inactivity under his watch and, of course, mentioned the boost of falling inflation this morning. Backhanded compliment: Starmer, no doubt desperate for a rest, used the imminent break to “congratulate” Badenoch for breaking a record on the number of Tories defecting to Reform UK. “The question is who’s next,” he mused, enjoying the chance to focus on the Conservatives’ threat to their right, rather than Labour’s troubles to its left. Clucking their tongues: Outraged at her Shadow Cabinet getting called non-entities, Badenoch kept the seasonal attacks going by labeling the Cabinet a “bunch of turkeys.” She said Starmer was no longer a caretaker PM but the “undertaker prime minister.” Bruising stuff. Last orders: Amid all the metaphorical tinsel and bells of holly, Starmer adopted a lawyerly tone on Labour’s support for pubs (even though many greasy spoons have banned Labour MPs) and condemned ongoing industrial action by resident doctors. But the Tory leader went out on (possibly) a new low by arguing Starmer “doesn’t have the baubles” to ban medical staff from striking and said all Labour MPs want “is a new leader.” Grab the mince pies: The prime minister’s speechwriters clearly did their homework with Starmer, not a natural on the humor front, comparing the Tories to “The Muppets Christmas Carol” and joking that all the defections meant Badenoch would be “left Home Alone.” Penalty shootout: Hold the homepage — PMQs actually delivered a news line. The PM confirmed the government issued a licence to transfer to Ukraine £2.5 billion of Russian billionaire Roman Abramovich’s cash from his sale of Chelsea football club. Starmer told Abramovich to “pay up now,” or he’d be taken to court. Teal bauble: The end-of-year vibes allowed Starmer to deploy a festive jibe of advice to Reform UK: “If mysterious men from the East appear bearing gifts, this time, report it to the police!” Labour just won’t let ex-Reform UK Leader in Wales Nathan Gill’s conviction for pro-Russian bribery go. Even Nigel Farage, sat up above in the VIP public gallery, had a chuckle, admitting “that’s quite funny” to nearby hacks. Helpful backbench intervention of the week: Tipton and Wednesbury MP Antonia Bance commended the government’s efforts to support the West Midlands by striking the U.S. trade deal, ripping into Reform. The PM just couldn’t resist another attack line against his party’s main opponent. Totally unscientific scores on the doors: Starmer 8/10. Badenoch 5/10. The final PMQs exchange was never going to be a serious exchange, given the opportunity to make Christmas gags. The Tory leader followed a scattergun approach, highlighting the various broken promises, but none landed a blow. The PM, doubtless relieved to bag a few weeks away from the interrogation, brushed them off and used his pre-scripted lines to deliver a solid concluding performance.

The Bank of England is set to cut interest rates on Thursday, after lower-than-expected inflation figures and signs of a weakening jobs market. Headline inflation slowed to 3.2 percent in November, from 3.6 in October, the Office for National Statistics said on Wednesday. That was the lowest since March and a much clearer drop than predicted by analysts, who had forecast a rate of 3.5 percent. “A cut tomorrow should be a no-brainer, with another to follow in February,” Peel Hunt chief economist Kallum Pickering said via social media, pointing to “No growth since summer, a labor market that is rapidly cooling, and a big downside surprise to inflation across the board in November.” The news comes only a day after labor market data from the ONS showed the unemployment rate rising to its highest level in over four years in October. The economy has struggled for growth in the second half of this year, after a sugar rush in the first quarter in which exporters rushed to get their goods to the U.S. before President Donald Trump could impose trade tariffs. The hangover from that — and the lingering uncertainty over the global economic outlook caused by Trump’s trade policy — has been severe. But at the same time, an unwelcome rise in inflation has stopped the Bank of England from cutting interest rates more quickly to support the economy. A raft of hikes in government- controlled prices such as energy bills and rail fares meant that inflation was rising for much of the year, leading it to peak at 3.8 percent in September. That was also partly due to companies passing on increases in labor costs due to a 6.7 percent hike in the National Living Wage and an increase in employers’ National Insurance contributions. Panmure Liberum chief economist Simon French said the wide range of goods and services now showing softening price trends showed that demand is now so weak that companies are having to absorb those price increases themselves instead. The government will be particularly relieved to have seen politically sensitive food prices, which have been a constant bugbear for the last couple of years, making the biggest contribution to the slowdown in inflation in November. Prices for clothing and footwear and for discretionary services such as restaurants and hotels also fell slightly. “As Christmas gifts go, this is a most welcome one,” said Danni Hewson, head of financial analysis at AJ Bell. “It’s the time of year when people put a few more things in their supermarket trolley, so news that food and alcohol inflation has fallen will be a boon for cash-strapped families.” The Bank has consistently said that inflation would fall once those factors passed out of the annual calculations, given that the underlying weakness of the economy. However, with the worst bout of inflation in half a century still fresh in everyone’s minds, it has been forced to keep the pace of policy easing “gradual and cautious”. Peel Hunt’s Pickering said that the scale of the slowdown could be enough to have some members of the Monetary Policy Committee voting for a half-point cut in the Bank Rate to 3.5 percent on Thursday. However, the consensus remains for a quarter-point cut to 3.75 percent. The pound still fell over half a cent against the dollar in response to the numbers, as traders penciled in more scope for easing next year, while the government’s borrowing costs in the bond market also fell.

EUROPE’S CENTER ISN’T HOLDING ANYMORE Despite recent election wins for moderates in the Netherlands, Germany and the U.K., the far right is stronger than ever. By TIM ROSS in Jaywick, England Illustration by Merijn Hos for POLITICO In recent elections, voters in Europe have given hope to embattled centrist politicians across the Western world.   Donald Trump may have romped back into the White House, but the international movement of MAGA-aligned populists has run into trouble across the Atlantic. At elections in the U.K., France, Germany, the Netherlands, Romania — and in a sprawling vote across 27 EU countries for the European Parliament — mainstream candidates defeated populist hardliners and far-right nationalists.  “There remains a majority in the center for a strong Europe, and that is crucial for stability,” European Commission President Ursula von der Leyen said, after the EU Parliament elections last year. “In other words, the center is holding.”   Sixteen months later, that hold is looking anything but secure.    Hard-right and far-right politicians are now leading the polls in France, the U.K. and even Germany. British Prime Minister Keir Starmer’s approval rating is a dire 21 percent. His French counterpart, Emmanuel Macron, is even lower, at 11 percent — and the mood is so grim that this fall’s spectacular theft at the Louvre is being treated by some as a giant metaphor for a country unable to manage its challenges.   Even von der Leyen’s own EU conservatives now rely on the votes of far right lawmakers to get her plans approved in Brussels. One outraged centrist likened the shift to those German politicians who enabled Adolf Hitler to take power. Populists at the extremes, meanwhile, cast themselves as the obvious alternative for populations that want change. And now they can expect Trump to help: In a brutal rupture of transatlantic norms, a new U.S. National Security Strategy aims to use American diplomacy to cultivate “resistance” to political correctness in Europe — especially on migration — and to support parties it describes as “patriotic.” Trump himself told POLITICO he would endorse candidates he believed would move Europe in the right direction. On that rightward trajectory, in the next four years the political map of the West faces its most dramatic upheaval since the Cold War. The implications for geopolitics, from trade to defense, could be profound.   “What [Europeans are] getting from Trump is the strategy of maximum polarization that hollows out the center,” said Will Marshall from the Progressive Policy Institute, the centrist American think tank that backed Bill Clinton in the 1990s. “The old established parties of left and right that dominated the post war era have gotten weaker,” he said. “The nationalist or populist right’s revolt is against them.”  Nowhere is this recent transformation more dramatic than in the U.K.   As the sun sinks toward the horizon over a calm sea one Thursday evening in November, half a dozen regulars huddle around the bar in the Never Say Die pub, a few yards from the beach at Jaywick Sands, on the east coast of England.   Built in the 1930s as a resort 70 miles from London, Jaywick is now the most deprived neighborhood in the country. The area had such a bad image that in 2018 a U.S. MAGA ad used a photograph of a dilapidated Jaywick street to warn of the apocalyptic future facing America if Trump’s candidates were not elected.   Jaywick was named England’s most deprived neighbourhood in October — for the fourth time since 2010. | Tolga Akmen/EPA It is here among the pebbledashed bungalows and England flags hanging limp from lampposts that a new political force — Nigel Farage’s rightwing Reform UK — has built its heartland.   At the bar, Dave Laurence, 82, says he doesn’t vote, as a rule, but made an exception for Farage, who was elected to represent the area last year. “I quite like him. He’s doing the best he can,” Laurence says as he sips his pint of lager, with ’80s pop hits playing in the background. “I’ll vote for him again.”  Laurence freely describes himself as “racist” and says he would never vote for a Black person, such as the center-right Conservative Party’s leader Kemi Badenoch. What troubles him most, he says, is the number of immigrants who have arrived in the U.K. during his lifetime, especially those crossing the Channel in small boats. Soon, Laurence fears, the country will be “full of Muslims and they’ll fucking rebel against us.”  With its anti-establishment, immigration-fighting agenda, Farage’s Reform UK offers voters a program tightly in tune with far-right parties that have gained ground across the West. According to opinion polls, Farage now has a real chance of becoming the U.K.’s next prime minister if the vote were held today. (A general election is not due until 2029).   It’s startling to note that as recently as July 2024, Starmer’s Labour Party won a historic landslide and some of his triumphant election aides traveled to the U.S. to advise Democrats on strategy. Today, Starmer is derided as “First Gear Keir” as he fights off leadership rivals rumored to be trying to oust him. And Reform isn’t the only force remaking British party politics. To the left of Labour, the Greens have also made recent gains in the polls under a new leader calling himself an “eco-populist.”   Farage’s stunning rise from the sidelines to the front of a political revolution carries lessons well beyond Britain’s borders. Europeans raised in the old school of mainstream politics fear that the traditional centerground — their home turf — will not hold.   ‘DURABLY UNSTABLE’   Macron, for his part, tried to counter the rise of the hard right by calling a snap election for the French National Assembly last year. The gamble backfired, delivering a hung parliament that has been unable to agree on key economic policies ever since. Macron is now historically unpopular.   French lawmakers’ clashes over the budget have toppled three of Macron’s picks as prime minister since the summer of 2024. A backlash against his plan to raise the pension age has forced ratings agencies to mull a damaging downgrade. Macron, who himself became president by launching a new centrist movement to rival the political establishment, now has no traditional party machinery to help bolster his position. “He’ll leave a political landscape that is perhaps durably unstable. It’s unforgivable,” said Alain Minc, an influential adviser and former mentor to the French president.  The chaos gives populists their chance. The main politicians making any running in conversations about the next presidential election belong to the far-right National Rally of Marine Le Pen and its youthful party president Jordan Bardella, who are riding high in the polls at 34 percent.   In Germany, too, the center ground is steadily eroding.   Though Chancellor Friedrich Merz’s conservatives won a snap election in February, his ideologically uneasy coalition, which consists of his own conservative bloc and the center-left Social Democratic Party (SPD), holds one of the slimmest parliamentary majorities for a government since 1945, with just 52 percent of seats. That leaves the Merz coalition vulnerable to small defections within the ranks and makes it hard for him to achieve anything ambitious in government. The far-left Die Linke party and the far-right Alternative for Germany (AfD) both surged at the last election, too, with AfD winning the best result in a national election for any far-right party since World War II.  Merz’s attempt to defang the AfD by moving his conservatives sharply to the right on the issue of migration seems to have backfired. The AfD has only continued its rise, surpassing Merz’s conservatives in many polls.   The rise of the far-right is a cultural shock to many centrist Germans, given the country’s deeply entrenched desire to avoid repeating its past. “For a long time in Germany we thought with our history, and the way we teach in our schools, we would be a bit more immune to that,” one concerned German official said. “It turned out we are not.”   Even in the Netherlands, where centrist Rob Jetten won a famous but narrow victory over the far-right firebrand Geert Wilders in October, there are reasons for mainstream politicians to worry. Wilders’ Freedom Party is still one of the biggest forces in the land, winning the same number of seats as Jetten’s D66. He could well return next time, just as Trump did in the U.S.   WHERE DID ALL THE VOTERS GO?   According to polling firm Ipsos, a large proportion of voters in many Western democracies now have little faith in the political process. While they still believe in democratic values, they are dissatisfied with the way democracy is working for them.   A large survey questioning around 10,000 voters across nine countries found 45 percent were dissatisfied, fueling support for the extremes. Among voters on the far left (57 percent) and the far right (54 percent), levels of dissatisfaction were highest of all.   The countries with the highest rates of dissatisfaction in the Ipsos study were France and the Netherlands, where political upheaval has taken its toll on faith in the system.   Anti-riot police officers stand next to a demonstration called by far-right activist Els Rechts against the Netherlands’ current asylum policy, in September in The Hague. | Josh Walet/ANP via Getty Images Alongside the coronavirus pandemic and the aftermath of lockdowns, the biggest drivers of dissatisfaction were the cost of living, immigration and crime, according to Gideon Skinner from Ipsos. Trust in politics fell in the 90s and took another hit in the late 2000s at the time of the financial crash, he said.   “There may be specific things that have made it worse over the last couple of years but it’s also a long-term condition,” Skinner told POLITICO. “It’s something we do need to worry about and there is not a silver bullet that can fix it all.”  Perhaps the greatest problem for incumbent centrists is that in most cases their economies are so moribund that they lack the fiscal firepower to spend money addressing the issues disillusioned voters care about most — like high living costs, ailing public services and migration.  THE INEQUALITY EMERGENCY   The financial crisis of 2008 and the coronavirus lockdowns of 2020-21 left many governments strapped for cash. In the U.K., for example, the economy was 16 percent smaller than it should have been a decade after the 2008 crash if prior growth trends had continued, according to Anand Menon, professor of European politics at King’s College London.   “Crucially, the impact of the financial crisis, like the impact of so much else in our politics, was massively unequal,” Menon said. “Prosperous places with high productivity, with well-educated workforces suffered far, far less than poorer parts of the country.”   Nobel Prize-winning economist Joseph Stiglitz submitted a study to the G20 in November warning that the world was facing an “inequality emergency.” Fueled by war, pandemic and trade disruptions, the crisis risks preparing the ground for more authoritarian leaders, his report said.   In many Western countries, the centerground is more than just a metaphor. It is in capital cities like London, Paris and Washington that power and money accumulate and the economic and political elites seek to maintain their grip on the status quo.   The further you travel from these centers out to areas in decline, the more likely you are to find support for radical politics.   As Menon notes, Britain’s 2016 revolution — the referendum vote to leave the European Union after almost half a century of membership — can be mapped onto the culinary geography of the country.   “Pret a Manger” is a smart national chain of sandwich and coffee shops, catering for hungry commuters and office workers in wealthy, successful British cities. “Places that had a Pret voted Remain,” Menon said. Parts of the U.K. where median wages were lower were disproportionately likely to vote to leave the EU.   IMMIGRATION, IMMIGRATION, IMMIGRATION   After the Brexit vote in 2016, immigration slid from the top of the priority list for British voters and Farage himself took a step back. Both have now returned, as Farage rides a wave of headlines about irregular migrants landing in small boats from France.   From January to May this year, there were a record 14,800 small boat crossings, 42 percent more than in the same period in the previous year, according to Oxford University’s Migration Observatory.   For Laurence, in the Never Say Die pub, the small boats represent the biggest issue of all. “What’s going to happen in 10 years’ time? What’s going to happen in 20 years’ time when the boat people are still coming over?” he asked.   A decade ago, German Chancellor Angela Merkel opened the doors to hundreds of thousands of refugees arriving into Europe from Syria, as well as Afghanistan and Iraq. The AfD surged in the months that followed, permanently changing German politics. At February’s election, the AfD won a record 21 percent of the vote, finishing in second place behind Merz’s conservative bloc.  “The fundamental failure that is common to the whole [centrist] transatlantic community is on immigration,” said Marshall from the Progressive Policy Institute. “All of the far-right movements have made it their top issue.”   It is the perceived threat that waves of migration pose to traditional national cultures which drives much of the support for the far right. Trump’s White House is now primed to join the European nationalists’ fight. According to a new U.S. National Security Strategy document released in December, Europe is facing “civilisational erasure” from unrestricted immigration, as well as falling birthrates. The analysis draws on the so-called great replacement theory, a racist conspiracy theory. Free speech — in the MAGA definition, at least — is another casualty of conventional centrist rule in Europe, as political correctness veers into “censorship,” the U.S. document said. Protesters demostrate under the motto “Loud against Nazis” in early February in Berlin. After years of decline, The Left party  pulled off a stunning revival in the general election later that month. | John MacDougall via AFP/Getty Images In his interview with POLITICO earlier this week, Trump aligned himself fully with the strategy paper. European nations are “decaying” and their “weak” leaders can expect to be challenged by rivals with American support, he said. “I’d endorse,” he added. In Brussels, the double-punch of the president’s interview and the strategy document left diplomats and officials feeling bruised and alarmed all over again, after a period in which they allowed themselves to hope that the transatlantic alliance wasn’t dying. One EU diplomat was blunt in assessing Trump’s new method: “It’s autocracy.” THE STOLEN JEWELS  Sometimes, it takes a random news event — ostensibly unconnected to politics — to crystalize the national mood. In Paris, the theft of France’s priceless crown jewels from the Louvre provided just such an opportunity, morphing into an indictment of an establishment that can’t get the job done, even when the job simply involves thoroughly locking the windows at the world’s most famous museum. National Rally leader Jordan Bardella called the incident a “humiliation” before asking: “How far will the breakdown of the state go?”   In Britain, just a month after Starmer’s victory last year, riots broke out across the country, fueled by far-right extremists. The catalyst was the murder of three young girls aged 6, 7 and 9, in Southport, northwest England, by a Black teenager wrongly identified at the time on social media — in posts amplified by the far-right — as a Muslim.   At the time, Farage suggested the police were withholding the truth about the suspect, earning him the fury of mainstream politicians. While stressing he did not support violence, Farage railed against what he called “two-tier policing,” a phrase popular among far-right commentators who claim police treat right-wing protesters more harshly than those on the left.  It’s an opinion that resonates in Jaywick. Chennelle Rutland, 56, is walking her two dogs along the beachfront, admiring the view as the sun sets, flaring the sky orange, then purple. The colors catch the surface of the flat sea. “It’s one rule for one and one rule for the other,” she says. “The whites have got to shut up because if you do say anything, you’re ‘racist’ and ‘far right.’”   Far-right activist Tommy Robinson invited his supporters to attend the “Unite The Kingdom” rally in September. | Christopher Furlong/Getty Images It would be wrong to characterise residents of Jaywick as simply ignorant or full of rage. Many who spoke to POLITICO there were cheerful, happy with their community and up to speed with the news. But, just as they’d soured on their country’s centrist establishment, they were also tuning out its favored news sources.   In Jaywick, some of Farage’s voters prefer GB News, Britain’s answer to Fox News, which launched in 2021, or learn about current affairs from YouTube and other social media. The BBC — for decades the mainstay of the British media landscape — has lost a portion of its audience here. Right-wing commentators and politicians attack it as biased. Trump has lately joined in, threatening to sue over a BBC edit that he said deceptively made it look as if he was explicitly inciting violence. The BBC’s director general and head of news both resigned. In the process, another piece of Britain’s onetime centerground was giving way.   WHAT NEXT?   There are reasons for centrists to hope. In Rome, Giorgia Meloni’s hard-right Brothers of Italy party has become less extreme in power, and the worst fears of moderates about a group with its historic roots in neo-fascism have not come to pass. She remains popular, and while pushing a culture war at home, she has avoided the wrath of the EU leadership and kept Trump onside.   Populists and nationalists don’t always win. Trump lost in 2020. In the Netherlands, Wilders lost in October this year, though only by a whisker. Romania’s Nicușor Dan won the presidency as a centrist in May, but again only narrowly defeating his far-right opponent.   Structural obstacles may also slow the radicals’ progress. The U.K.’s first-past-the-post voting system makes it hard for new parties to do well. The two-round French system has so far stopped Le Pen’s National Rally from gaining power as centrists combine to back moderates. In Germany, a similar “firewall” exists under which center parties keep the far-right out.   After the Brexit vote in 2016, immigration slid from the top of the priority list for British voters and Farage himself took a step back. Both have now returned. | Tolga Akmen/EPA Even as he enjoys a sustained lead in the polls and wins local elections in the U.K., Farage has not convinced voters that Reform would do a good job. Even some of his supporters worry he will be out of his depth in government.   The problem, for the centrists who are in power, is that a lot of voters seem to think they, too, are out of their depth. And, whether that involves dealing with migration, combatting inequality, or just boosting the security around the Mona Lisa, it’s a reputation they’ll need to fix in order to survive — no easy task given the intractability of the challenges facing the rich world.  The next year will see more elections at which the centrists — and their populists rivals — will be tested. In Hungary Prime Minister Viktor Orbán, long seen as the far-right bad boy of EU politics, is fighting to keep power at an election expected in April. There are regional votes in Germany where the AfD is on track to prosper. France may require yet another snap election to end its political paralysis. Trump’s diplomats and officials will be ready to intervene. Farage’s party, too, will be on the ballot in 2026: It is expected to make gains in Wales, Scotland and local votes elsewhere next spring. After that, his sights will be on the U.K. general election expected in 2029, by which time European politics may look very different.   “Of course I know Mr. Orban and of course I know Giorgia Meloni, of course I know these people,” Farage told POLITICO at a recent Reform rally. “I suspect that after the next election cycle in Europe there will be even more that I know.” Natalie Fertig in Washington, Clea Caulcutt in Paris and James Angelos in Berlin contributed to this report.  

European Central Bank officials are growing increasingly jittery as Kevin Hassett — a close ally of President Donald Trump with very little central bank experience — emerges as the frontrunner to lead the U.S. Federal Reserve. A report last week by Bloomberg described Hassett, whom Trump picked at the start of the year to head the White House National Economic Council, as the “emerging front-runner” to replace current Fed Chair Jerome Powell.  Hassett’s rise has set off alarm bells in Frankfurt. European officials fear Hassett, under pressure from his boss in the White House, could push the Fed into cutting interest rates far more aggressively than Powell — even though that might risk unleashing another wave of inflation that could ripple out across the world. “If markets obtain a firm belief that the new [Fed chair] is subject to fiscal or any other dominance at the expense of the inflation target, there will be capital flight from the U.S. and an erosion of the value of the dollar with serious consequences worldwide — including higher inflation,” one ECB official said.  Like others interviewed for this story, the official spoke on condition of anonymity to discuss internal deliberations. “There is a possibility that the U.S. will have some inflationary bias … because of the political involvement,” a second ECB official warned. The Bloomberg report came just before Thanksgiving, after Treasury Secretary Scott Bessent had whittled down a long roster of candidates into a shorter list. Later during the holiday weekend, aboard Air Force One, Trump told reporters that “I know who I’m gonna pick,” but he told a cabinet meeting on Tuesday that he wouldn’t announce his decision until early in the new year.  Prediction markets such as Polymarket have made Hassett the odds-on favorite since then.  “For Trump, Hassett would be the best choice,” a third ECB official agreed, noting the candidate’s political proximity to the White House.  PRESSURE CAMPAIGN Trump has repeatedly attacked the Fed since returning to office in January, blasting Powell — whom he appointed as Chair during his first term — as a “numbskull” and a “major loser” for not cutting interest rates more quickly. The Fed withstood the pressure until September, when signs of a slowdown in the labor market emerged. It cut rates again in October, but Powell upset those expecting more easing soon by warning that another cut in December is by no means “a done deal.” Since then, several of his colleagues on the Federal Open Markets Committee have expressed reluctance to cut any further in December, pointing to an inflation rate stuck above the 2 percent target. More recently, as Jerome Powell has come under fire from the White House, European colleagues have rushed to defend him. Usually, when the labor market weakens, so does inflation, but that hasn’t happened this time. At both of his last two press conferences, Powell noted that the Fed’s dual mandate of keeping prices stable while pursuing full employment were currently “in tension” with each other.  Hassett has presented a very different view, telling CNBC in November that “inflation has come way down” from the 5 percent that it averaged during Joe Biden’s presidency andthat “the trajectory is really, really, really good if you look at it.” That’s despite U.S. headline inflation actually rising in four of the last five months.  MY GOOD FRIEND BEN That is why many in Frankfurt see alternative candidates — including the dovish but experienced Fed Governor Christopher Waller — as far safer choices. Also still in the running, according to various sources, are former Fed Governor Kevin Warsh, BlackRock fixed-income chief Rick Rieder, and sitting Governor Michelle Bowman. For decades, relations between the Fed and the ECB have been collegial and cooperative. Members of the small, globally connected circle of central bankers have long seen themselves as a kind of fraternity. During the height of the 2008 financial crisis, then-ECB President Jean-Claude Trichet liked to emphasize that closeness by repeatedly referring to Fed Chair Ben Bernanke as “my good friend Ben.” More recently, as Powell has come under fire from the White House, European colleagues have rushed to defend him. Lagarde told a Washington Post event in April that “I have … enormous respect for Chair Powell, and I know that he’s doing exactly what’s expected of him to serve the American people.”  Deutsche Bundesbank President Joachim Nagel echoed such comments more recently. Outside the eurozone, Bank of England Governor Andrew Bailey — another central banker anxious about the risk of financial volatility — called Powell “a man of the utmost integrity.” With Powell’s departure looming, ECB officials increasingly fear that this long-standing, trust-based relationship may be nearing its end, a fourth official told POLITICO. These concerns have already begun to influence the ECB’s strategic considerations in other areas, including liquidity policies and its own leadership succession. The ECB declined to comment. (Additional reporting by Ben Munster)