PM not ‘giving up,’ as political storm unfolds
Greece’s Parliament is engulfed in a political storm as a no-confidence motion against the government unfolds, triggered by the tragic train disaster in Tempe two years ago. The motion of no confidence against the government is expected to reach its conclusion on Friday. Wednesday’s exchange between political leaders was marked by sharp personal attacks, highlighting the immense pressure the government is facing.
https://www.ekathimerini.com/politics/1263306/pm-not-giving-up-as-political-storm-unfolds
EU leaders holding emergency meeting in Brussels on defense, Ukraine
Greek Prime Minister Kyriakos Mitsotakis headed to Brussels on Thursday for an emergency meeting where European Union leaders will discuss ways to quickly increase their military budgets after the Trump administration signaled that Europe must take care of its own security and also suspended assistance to Ukraine.
Independent MP Pappas joins PASOK-KINAL Parliamentary Group
Independent MP Petros Pappas officially joined PASOK’s parliamentary group after a meeting with party president Nikos Androulakis on Wednesday.
https://www.amna.gr/en/article/888252/Independent-MP-Pappas-joins-PASOK-KINAL-Parliamentary-Group
New rally over the Tempi train accident
School and university students are increasing the pressure on the embattled government over its handling of the 2023 Tempe rail disaster, announcing a new protest rally for Friday.
https://www.ekathimerini.com/news/1263367/new-tempe-rally-planned-on-friday
ATHEX: Another record high for stocks
Bolstered mainly by the growth in the German stock market, Athinon Avenue enjoyed a session of strong gains on Wednesday that took its benchmark to a new 14-year high and its banks index to levels unseen since November 2015. The roller coaster of geopolitical developments and the global trade war is keeping investors on edge, with securities internationally turning particularly volatile since the start of this year, a factor that appears to have benefited the local bourse to date.
https://www.ekathimerini.com/economy/1263325/athex-another-record-high-for-stocks
KATHIMERINI: Government under pressure, incoherent opposition
TA NEA: French wrench for the railway
EFIMERIDA TON SYNTAKTON: The PM’s 23 lies
RIZOSPASTIS: Tempi rallies: Tens of thousands marched refusing to be dissuaded
KONTRA NEWS: The people’s message never reached the PM’s office…
DIMOKRATIA: The PM is a conspiracy theorist and insensitive
NAFTEMPORIKI: No VAT for small businesses’ extroversion
HAPPY SUMMIT DAY
EUROPE’S HOUR: EU leaders are arriving for a high-stakes summit to show that Europe is serious about defending itself — and Ukraine — as it confronts the reality that the United States is no longer the guarantor of peace for the continent.
Macron warning: In a televised address last night, French President Emmanuel Macron set out the stakes in stark terms. “Peace can no longer be guaranteed … the Russian threat touches Ukraine and touches Europe,” he said, warning that Russia continues to re-arm. Macron also announced that European army chiefs will meet next week in Paris.
Choreography for today: Leaders will fan out across the city for their traditional pre-summit pow-wows before heading to the Europa building for a 12:30 p.m. kickoff. Star of the show will be German election-winner Friedrich Merz, who will beef up the ranks of the center-right European People’s Party (EPP) group when he attends their pre-summit meeting at the Sofitel in Place Jourdan this morning.
Changing of the guard: Germany’s leader-in-waiting won’t be attending the European Council with outgoing Chancellor Olaf Scholz, but he did schmooze the great and the good around town last night, meeting with NATO chief Mark Rutte, European Commission President Ursula von der Leyen and EU High Representative Kaja Kallas. He’s due to meet Council President António Costa this morning.
Zelenskyy flies in: Despite initially planning to address leaders by video link, the Ukrainian president will now attend in person as he tries to shore up European support for his country’s war efforts following Washington’s decision to suspend military aid and intelligence sharing with Kyiv. (Antoaneta Roussi and Amy Mackinnon report that intelligence sharing among NATO countries is in danger as the U.S. shifts toward Russia under Trump.)
On the agenda: EU ambassadors meet again this morning for a final pre-Council meeting. Multiple officials characterized today’s summit as having two main pillars: Europe’s defense capabilities and what’s next for Ukraine.
Hungary problem: On the latter, Budapest has been resisting language committing to provide more aid to Kyiv in pre-Council discussions over the past few days. In a bid to win him around, Macron hosted Hungarian Prime Minister Viktor Orbán in Paris last night for eve-of-summit talks.
Taking stock: The bulk of today’s discussion will focus on Europe’s own defense capabilities — the summit is the first opportunity for leaders to respond to the REARM EU proposal unveiled by von der Leyen Tuesday. Potential fault lines are already emerging.
Among the sticking points to watch for today: Should the proposed €150 billion loan program be restricted to European companies? Can SMEs, as well as large companies, participate? And how much resistance is there to the plan to divert structural and cohesion funds to defense?
Parliament speaks: Max Griera reports that von der Leyen got an earful on Wednesday evening from senior figures in the European Parliament who accused the Commission of bypassing the institution by using a fast-track procedure to unlock the €150 billion loan program. Socialists and Democrats group Chair Iratxe García said that while MEPs understand the need for an immediate response in the short term, “we cannot take away the responsibility that the Parliament has [as] the budgetary authority.”
In their summit walk-up piece, Nicholas Vinocur and Camille Gijs examine how Trump is trying to destroy the EU and rebuild it in his image.
Follow along: POLITICO will have a stellar team of reporters on the ground, so make sure you keep up to speed throughout the day with our live blog.
FISCAL SPACE
OPENING THE PURSE STRINGS: The story that could dominate this summit is the explosive discussion that has emerged in the last 24 hours about changing the EU’s fiscal rules to facilitate defense spending. While the Commission’s proposal on Tuesday included an emergency clause allowing countries to temporarily increase their expenditures, Berlin says that’s not enough.
Dismantling the SGP: Outgoing German Chancellor Olaf Scholz is expected to float the idea of loosening the Stability and Growth Pact — the budgetary bible that requires EU countries to keep debt levels to 60 percent of GDP and deficits to 3 percent of GDP. It’s all about easing the path for greater defense spending following Berlin’s announcement of a massive €500 billion spending plan as it looks to ramp up investment in security.
The other Zeitenwende: Having been the undisputed leader of the frugal camp of the EU’s fiscal conservatives for years, Berlin has suddenly had a reawakening and become the unlikely cheerleader for looser fiscal strictures.
Schadenfreude: It’s a far cry from the days of the eurozone crisis when Berlin scolded others for splashing the cash and warned against the contagion effect of rising bond yields. On Wednesday, it was Germany’s turn for its bond yields to soar, as borrowing rates hit levels not seen since the months after the fall of the Berlin Wall. More on the implications of that by Johanna Treeck.
ECB watch: As it happens, European central bankers are meeting for their rate-setting meeting this afternoon, where another cut is on the cards. Expect ECB boss Christine Lagarde to face questions about Germany’s newfound profligacy in the post rate-decision press conference.
MARKET JITTERS: European finance ministers are due to meet Monday and Tuesday in Brussels for a scheduled Eurogroup and Ecofin meeting, where they’ll take stock of the rearguard action against Brussels’ fiscal rules. Already this morning there are signs of a further global selloff on the markets as Japan’s borrowing costs soar. Ministers will no doubt have a lot to say.
DEFENSE BONANZA
NEVER WASTE A CRISIS: One group relishing the EU’s newfound focus on security matters is arms-makers. As POLITICO’s Elisa Braun and Giovanna Coi reveal in this must-read investigation, defense companies have been beefing up their influence on EU institutions.
The details: The lobbying budgets of the largest European defense companies surged around 40 percent between 2022 and 2023, their data investigation found. Most have expanded their Brussels-based teams over the past three years to meet the growing demand for influence in the capital of European Union power.
Changing focus: Traditionally, national governments were by far the largest military spenders — meaning it made sense to focus lobbying in the capitals. But since Russia’s full-scale invasion of Ukraine in 2022 and the increase of European defense spending, arms-makers have bolstered their efforts to influence EU institutions.
Digging down: In 2022, the combined spending by the top 10 defense companies — which includes Airbus, Leonardo, Thales, Rheinmetall and Fincantieri — was between €3.95 million and €5.1 million. (Most disclose a range, rather than a precise figure.) In 2023, that rose to between €5.5 million and €6.7 million. Swedish defense giant Saab doubled its spending, while Airbus and Dassault also significantly ramped up their lobbying efforts.
U.S. focus: American companies that have traditionally focused on European markets like Germany and Poland are also establishing a foothold in Brussels, Elisa and Giovanna write. Defense giant Lockheed Martin, for example, signed on the EU lobbying register for the first time last May, and has already deployed two lobbyists to the European Parliament. Meanwhile, U.S. aerospace firm RTX has two full-time lobbyists and four external representatives advancing its interests in Brussels.
Riding the wave: The effort by companies to get in on the act comes as defense stocks hit record highs earlier this week, with investors anticipating big European spending. As Carlo Martuscelli writes, the EU shouldn’t have any trouble finding takers to buy its debt once it goes to the market. More from Carlo here on how markets are hungry for war bonds.
MAKING RUSSIA PAY
DEFROSTING FROZEN ASSETS: As Europe scrambles to respond to Washington’s shock decision to cut military aid to Ukraine and negotiate directly with the Kremlin, the debate about using billions of euros of frozen Russian assets is back.
Background: Although the EU, as part of the G7, agreed last year to use the profits generated by Russia’s assets to help Ukraine, it has stopped short of tapping the principal, fearing that would set a legal precedent. Belgium, in particular, fears being left on the hook, given the vast bulk of the assets are held by Euroclear, the financial institution based in the country.
Time to act: Bill Browder, the financier who has campaigned against Vladimir Putin’s regime, says now is the time to act. “Putin started this war. Putin should pay for it,” he told Playbook. “The moral argument has always been clear. Now we have a situation where the U.S. has stopped funding Ukraine. For the EU to keep Ukraine from falling to Russia, either the bloc will have to call on taxpayers … to make up the shortfall or take this money. Calling on Putin’s money makes a lot more sense.”
Where things stand: France has warmed up to the idea, but any move to tap the underlying assets would come into play as part of a possible cease-fire deal in the future, three officials told POLITICO. While several countries, including the Baltics and Poland, support the idea, those in the eurozone are less comfortable because of concerns it could undermine the euro’s status as a reserve currency. The ECB has been one of the primary voices opposed to the move.
British cajoling: As our Pro colleagues report, the U.K. government is making the case to its European counterparts that the immobilized funds held in the bloc should be seized. “Eurozone leaders are being far too conservative about the risks,” said British Labour MP Joe Powell.
No white smoke: Three officials said they expect minimal discussion about the proposal today, noting that the debate hasn’t moved very far. “There’s absolutely no consensus,” said a senior EU diplomat. “I don’t think this will be an important topic [at the summit],” an Elysée official added.
DELAYED: The EU won’t release its long-awaited proposal to end reliance on Moscow’s fossil fuels and nuclear technology this month as planned, Gabriel Gavin reports.
NOW HEAR THIS: Oleksandr Merezhko, chair of the foreign affairs committee of the Ukrainian parliament and one of President Zelenskyy’s staunchest allies, told Power Play’s Anne McElvoy that Trump “is being used by Putin to impose elections in Ukraine with only one purpose: to undermine us from within.” Merezhko added: “Putin understands that an election campaign during times of war will be destructive for our unity and for our stability. The danger is that [Putin’s] using someone in Trump’s entourage to promote this idea.” Listen here.
STATE OF THE NATIONS
GREECE — EPPO PROBES FRAUD: European prosecutors filed indictments on Wednesday against 100 people suspected of being part of a wide-ranging Greek scheme to defraud the EU’s farm budget that was the subject of a recent POLITICO investigation. Read the full story here.
PORTUGAL — BACK TO THE BALLOT BOX: Less than a year after Portugal held a national election, the country appears to be headed back to the polls, writes Aitor Hernández-Morales. Embattled center-right Prime Minister Luís Montenegro intends to seek a confidence vote in the parliament to determine if his minority government still has sufficient support to remain in power. The two main opposition parties — the Portuguese Socialist Party and far-right Chega — have vowed to reject the motion. Portuguese President Marcelo Rebelo de Sousa says that if the PM flunks the vote, a new election will be held on May 11 or 18.
SERBIA — ANOTHER WARNING: Enlargement Commissioner Marta Kos said the EU is “very concerned” about the deepening political crisis in Serbia, where violence broke out in parliament this week after opposition politicians tried to block controversial laws and police raided NGO offices over alleged misuse of USAID funds. Danijel Apostolović, Serbia’s ambassador to the EU, told Playbook’s Šejla Ahmatović that the EU shouldn’t overlook that three MPs were injured and hospitalized in the violence at parliament. On the raids against civil organizations, he said “nobody is and should be above the law.”
MOZAMBIQUE — DUTCH LAUNCH INQUIRY: The Dutch government has launched an independent inquiry into human rights abuses by Mozambique’s security forces, after POLITICO reported last year that a military unit operating out of the gatehouse of a gas plant owned by French energy giant TotalEnergies carried out a massacre of civilians.
IN OTHER NEWS
BIG BROTHER BORDER SYSTEM: As we flagged in Wednesday’s Playbook, home affairs ministers agreed to phase in what Migration Commissioner Magnus Brunner said will be the “most technologically advanced border management system in the whole world,” Hanne Cokelaere reports. The entry-exit system will be used to record the passport data and fingerprints of non-EU travelers entering and leaving the bloc, with the Commission eyeing a rollout this fall.
UNION DUES: The EU’s largest union, R&D, has written to Budget Commissioner Piotr Serafin calling for the swift implementation of the Commission’s proposal on harassment agreed in December 2023. “It would be unacceptable to betray the trust and hopes of colleagues by implementing the decision too late or, worse still, ineffectively,” the letter states. It calls in particular for more resources for the new chief confidential counselor role.
LAWMAKERS PROBE EU CASH FLOWS: MEPs have significantly widened the list of EU grant contracts they want to probe, Max Griera reports, turning what began as a targeted fight over green NGO funding into an open battle between left- and right-wing forces in Parliament over when the Commission should be allowed to give out EU funds.
The list, obtained by POLITICO, includes contracts with the International Rescue Committee and NGOs working for the inclusion of LGBTQI+ migrants, at the request of center-right and right-wing groups; and with business giants such as Shell, automaker Volkswagen and the trade association BusinessEurope, at the request of left-wing groups. Pro subscribers can read the full story by Max, Giovanna Coi and Louise Guillot.
JOURNALISTS UNDER THREAT: Reporters covering the war in Ukraine face more safety risks than in any other country, according to the Council of Europe’s latest assessment of press freedom. The situation is worst in Russian-occupied territories, where “independent journalism has been almost entirely eradicated.”
TRUMP ON GAZA: Trump fired off a “last warning” to Hamas to release all remaining hostages being held in Gaza — “or it is OVER for you.” In a post on Truth Social, the president said he’ll be “sending Israel everything it needs to finish the job,” and added: “Also, to the People of Gaza: A beautiful Future awaits, but not if you hold Hostages. If you do, you are DEAD!” Earlier, the White House confirmed it’s holding direct talks with Hamas. The BBC has more.