LONDON — U.K. Chancellor John Healey is set to deliver an unexpected increase in defense spending at his first budget on Wednesday, as Britain strains to reach its NATO commitment to spend 3.5% of GDP on defense by 2035.

Healey — who quit as defense secretary in the dying days of Keir Starmer’s government over a funding row — hopes he can show how Britain will start to reach that target now that he’s safely ensconced in the powerful Treasury.

Until last week, it was assumed that the top finance minister would defer decisions on ramping up funding until next year’s multi-year, government-wide spending review. So Wednesday’s move could represent an early win for the Ministry of Defence in Prime Minister Andy Burnham’s new government.

But with regular warnings in the press and in public about Britain’s unpreparedness for conflict, there’s much more to watch for beyond Wednesday’s headline hike. POLITICO walks through the seven key details and defense industry demands.

1) How will Healey play the numbers game?

Healey’s government-rocking resignation back in June was explicitly over a refusal in Downing Street and the Treasury to commit to spending 3% of GDP on defense by 2030.

Now that he is leading the Treasury, Healey is under pressure to deliver on that. But even that keeps Britain shy of the bigger NATO aim.

On existing plans, U.K. defense spending is set to rise to 2.7% next year and remain flat until 2030. Healey’s first move will be to fill the £4.7 billion black hole in defense funding in the Defence Investment Plan — meant to overhaul the armed forces and improve readiness — published earlier this year.

More money is now expected beyond this, briefed to the media in recent days as a “down payment” towards spending 3% on defense by 2030.

But two government officials, granted anonymity like others in this article to discuss internal thinking, said the pathway to meeting NATO’s larger, 3.5% target will only come in next year’s spending review, not the budget.

Even on the smaller measure, the margins for the chancellor are tight, with government spending rules and debt targets leaving little room for maneuver. Mike Martin, an MP on the House of Commons Defense Committee, told POLITICO: “They have got themselves into a straitjacket over defense spending and none of this will be resolved before the next election. This is why I think an early general election is inevitable.”

2) Will the chancellor move to funnel private capital into defense?

Britain’s defense industry has long called for more direct government spending on domestic contracts. But the sector also wants more private capital flowing into U.K. firms, and will be looking to Healey to set the conditions.

The Financial Times reported last week that Healey will allocate £15.4 billion to the country’s National Wealth Fund and £5 billion to the British Business Bank — a share of which could end up with defense companies.

Two key details to watch here are whether the government claims this money counts towards its wider defense spending commitments, or whether any cash is allocated purely for defense firms. Potential reforms to and incentives for pools of private capital, such as pension funds and venture capital funds, to invest in defense would also be welcomed by the sector in this budget — but the industry may be left waiting.

One of the government officials cited above said that a Defence Finance and Investment Strategy is slated for December, with a Defense Investment Summit coming December 1.

3) Where does Healey stand on global defense team-ups?

On Sunday evening, the Treasury disclosed that it would not join the Canadian-led Defence, Security and Resilience Bank (DSRB) — a proposed multinational financial institution with its own AAA credit rating that aims to provide cheap loans for countries to invest in defense.

The U.K. had previously considered joining the bank, or merging it with its own separate initiative, the Multilateral Defence Mechanism (MDM) — a planned scheme for joint defense procurement, stockpiling and supply chains for member countries.

But a joint statement with Ottawa said that the institutions will now work in partnership.

The MDM currently has £400 million allocated from June’s Defence Investment Plan, while none of the other member nations — the Netherlands, Finland and Poland — have confirmed whether they have contributed capital to the project.

Now that uncertainty over Britain’s membership of the DSRB has gone, the government will be looking to flesh out its plans for its own MDM.

4) Can the chancellor slash energy and manufacturing costs?

Two industry figures told POLITICO that one of the biggest barriers to doing defense business in Britain — making it less attractive than other nations — is the country’s comparatively high energy costs.

However, slashing costs for energy-intensive industries, including the industrial base of the defense sector is expensive, and schemes aimed at reducing costs — such as the British Industrial Competitiveness Scheme – already exist. Measures reportedly under consideration this time around appear to focus more on reducing households’ energy costs than on supporting businesses.

A third industry figure predicted that ministers would not offer immediate support for business energy bills because “every possible option” for instant help “is too expensive.” But a defense industry investor said the Treasury is, however, looking at reducing the financial burden of machinery — which they said is a key issue for small firms wanting to ramp up production as part of the supply chain.

5) What does Buy British actually mean?

The government has been consulting with the defense sector and wider British industry over what exactly constitutes a British company under its plans to implement a new “Buy British” scheme.

The plan aims to bring together Andy Burnham’s pledges of re-industrialization and more evenly-spread growth across the country, and comes after the EU proposed its own Made in Europe procurement plan to try and boost the bloc’s own firms.

The push is also designed to build sovereign capability, which has become increasingly important to Britain amid fears that the U.S. is an unreliable ally. The recent row over Ukraine’s constrained access to the Starlink satellite system has exacerbated such concerns.

Early suggestions indicate the government will take a broad definition — in a potential boost for multinational defense giants. Rupert Pearce, the Ministry of Defence’s National Armaments Director, told a recent industry event that, from his perspective, French defense company Thales, which has a headquarters in the U.K., “is a British company.”

6) Will Healey move further on AI and hybrid defenses?

Ahead of the budget, Healey’s Treasury announced a series of AI-specific policies with potential defense applications.

These include £165 million for AI-driven detection and surveillance of biological threats — a move first teased by the boss of Britain’s MI5 intelligence service.

The government will also put £60 million into its Sovereign AI fund to invest in British tech companies, including autonomous systems, robotics, and advanced manufacturing.

Watch to see whether the chancellor waves around more promises of boosting British resilience to malign actors on Wednesday.

7) Will Donald Trump even notice?

Britain’s comparatively slow progress on defense spending has already caught the eye of the Trump administration.

Warren Stephens, the U.S. ambassador to the U.K., warned earlier this year that Britain must make “sustained investment” in defense, rather than focusing on “other spending priorities,” and warned against “backloading” defense spending to a later date. 

A lack of a meaningful movement on defense spending — or at least eye-catching claims from opposition parties that Healey has fumbled it — could grab the attention of Trump’s team this time around. The timing is tricky: the Pentagon is currently undertaking a review of American military assets stationed in mainland Europe and the U.K.

France has become the new sick man of Europe just in time for its next presidential election.

After two weekends that saw hundreds of thousands of protesters hit the streets demanding the government increase teacher salaries, fix run-down schools and help subsidize the rapidly rising cost of living, the European Union’s second-biggest economy is being dragged into a vicious cycle of twin fiscal and social crises that are fueling each other.

“France is on the brink of a financial crisis,” former Prime Minister Michel Barnier told POLITICO. “We need to send a signal to the markets.”

Authorities were able to prevent the type of rioting and looting this past weekend that marked the first round of demonstrations Oct. 17-18, but financial markets are spooked. Even before the demonstrations began, investors were dumping French debt or demanding historically high returns because of the government’s failure to significantly cut a stubbornly high budget deficit, bring down €3.5 trillion of debt, jumpstart growth and reform an unsustainable pension system.

The prospect of a presidential runoff next spring featuring far-right front-runner Marine Le Pen and her far-left rival Jean-Luc Mélenchon, who is in the mix for second place according to most polls, is further scaring investors. Both candidates want to spend billions to lower the retirement age.

The rioting, for now, is estimated to have cost tens of millions of euros, much of which will be covered by insurance. But the chaos is pouring fuel on an already explosive situation by sending worrying signals to investors, especially if the civil unrest continues. The Yellow Vest protests of 2018 to 2020, which came early in President Emmanuel Macron’s tenure, cost the French economy 0.1% of gross domestic product, with shops reporting losses of €2 billion.

“It is clear that protests have an impact on markets,” Eric Lombard, who served as economy and finance minister last year, told POLITICO.

Given that current Prime Minister Sébastien Lecornu’s proposed budget for 2027 already includes €43 billion in savings, leaving little room for more cuts, the government is faced with an impossible choice: Borrow more money and saddle the next generation with billions of euros in interest payments, or hope the protests die out on their own.

“We have a knife to our throats, and we can feel the drops of blood on our jugular,” said a government minister who was granted anonymity to discuss the current situation.

“We need to show that we’ve heard the outrage. But we have little margin for maneuver given the market situation.”

Playing with fire

Mario Monti, who faced a similar situation as Italian prime minister and managed to avert a financial crisis in 2011 with spending cuts and a pension reform, told POLITICO that “things can go very fast.”

Back then, the spread between Italian and German 10-year bonds — an indicator that measures how risky one country’s debt is compared to historically safe Germany — shot up from around 150 basis points to more than 500 within a few months, Monti recalled. The spread between French and German debt was 169 basis points when markets closed on Friday, while the yield on France’s benchmark 10-year bond hit 5.14% the previous day, the highest level since 2002.

France has long been seen as the EU’s “spoiled child,” Monti said, taking advantage of its political and economic weight to bend or break the bloc’s fiscal rules. But few had thought a country that big and powerful would end up on the front line of a European debt crisis.

While the ability of the European Central Bank to buy government bonds on the secondary market under certain conditions gives it a powerful tool to avert a eurozone crisis, Monti says French voters must recognize that a sovereign debt crisis in their country is no longer the stuff of fiction.

“The major problem is that the public is not concerned enough with this risk,” Monti said. “France is not psychologically ready to view itself as the target of a crisis or even as the starting point of a crisis that could spread.”

That malaise isn’t just economic: Many indicators show France has lost confidence in itself.

According to a poll last month, 9 out of 10 French people are pessimistic about the future and believe their children will be worse off than themselves. A pan-European study conducted earlier this year found that only half of French respondents feel pride in the democratic system, compared to two-thirds of Germans and close to 70 percent of Britons.

That pessimism has pushed voters toward more extreme candidates like Le Pen — whose economic platform has been panned by some economists as unrealistic and unserious — and Mélenchon, who wants to set French debt “on fire.” According to POLITICO’s Poll of Polls from earlier this month, Le Pen enjoys the support of 34% of voters while Mélenchon has 15% — meaning nearly 50% of the electorate intends to vote for an anti-establishment figure. Center-right candidate Edouard Philippe, arguably the best-placed mainstream figure to take on Le Pen, has tried to sell himself to voters as a candidate of fiscal discipline who is unafraid to address tough truths. But his campaign has struggled to find its footing.

Doom loop

The officials, lawmakers and diplomats POLITICO spoke with all agreed that France was not at risk of a Greece-like scenario forcing the government to stop paying officials and creditors. But it could very well experience a crisis similar to the one in Italy when Monti replaced Silvio Berlusconi in 2011.

“We are not yet a banana republic which risks filing for bankruptcy,” said veteran centrist lawmaker and budget expert Charles de Courson.

But during rioting earlier this month, in front of the shattered window of an already ransacked supermarket in Paris’ hipster 11th arrondissement, a man with no apparent connection to the shop was encouraging passers-by to go in and steal what they needed. A few meters away, the owner of a Chinese restaurant locked the door behind each client to make sure the rioters couldn’t get in.

These are scenes one would expect in a country on the verge of a sovereign debt crisis, not a member of the G7. Watching from Brussels, Washington or New York, diplomats and economists recognize that Paris will likely fail to bring its budget deficit down to 3% of GDP by 2029 as it previously promised to the EU.

De Courson said France has “lost all credibility” with its European partners when it comes to fiscal issues. Lombard, the former economy minister, said “we failed to honor our commitments,” but held out hope that things could change.

“On behalf of the French people, we made commitments to get the finances back on track, but we didn’t keep them. I was very much in favor of honoring my commitments. But collectively, we didn’t do that,” Lombard said. “So we put ourselves in a position of weakness.”

Ist Deutschland wirklich der kranke Mann Europas oder steht ein wirtschaftliches Comeback bevor? Nach einem milliardenschweren Investitionsgipfel „Invest in Germany“ mit Tech-Größen wie Nvidia-Chef Jensen Huang zieht Martin Blessing, der persönliche Beauftragte des Bundeskanzlers für Investitionen, eine optimistische Bilanz. Es bleibt die entscheidende Frage, wie viel von den zugesagten Milliarden tatsächlich frisches Geld ist und ob die deutsche Bürokratie das Tempo der KI-Revolution überhaupt mitgehen kann.

Als ehemaliger Vorstandsvorsitzender der Commerzbank weiß Blessing, wie man durch existenzielle Krisen navigiert. Auf einem Spaziergang mit Gordon Repinski durch das herbstliche Berlin erklärt der Ex-Banker, warum das deutsche Rentensystem dringend eine Kapitaldeckung nach skandinavischem oder auch US-Vorbild braucht und wie ausländische Geldgeber auf den Aufstieg der AfD blicken. Dabei wird deutlich, warum der drohende Fachkräftemangel und überbordende europäische Regulierungen derzeit die größten Bremsklötze für den Standort sind.

Im Gespräch liefert Blessing einen Einblick in die wirtschaftspolitische Strategie der Regierung und fordert ein Ende der deutschen Larmoyanz. Am Beispiel der LNG-Terminals oder auch der Finanzkrise 2008 zeigt er auf, dass politischer Wille durchaus zu rasanten Genehmigungs- und Gesetzgebungsverfahren führen kann. Ein Tempo, das nun auch für den Ausbau der digitalen Infrastruktur und die Sicherung der globalen Wettbewerbsfähigkeit zwingend notwendig ist.

Das Berlin Playbook als Podcast gibt es jeden Morgen ab 5 Uhr. Rixa Fürsen, Maximilian Stascheit und das POLITICO-Team liefern Politik zum Hören – kompakt, international, hintergründig.

Für alle Hauptstadt-Profis: Der Berlin Playbook-Newsletter bietet jeden Morgen die wichtigsten Themen und Einordnungen. Jetzt kostenlos abonnieren.

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LONDON — When Prime Minister Andy Burnham arrived a few minutes late to a meeting with regional mayors on Thursday, his Cabinet ally Angela Rayner had a name for it. She joked they were on “Andy Time.”

The rest of Britain is beginning to learn what that feels like.

Burnham entered 10 Downing Street three months ago promising a “new economic model.” However, the prime minister’s first budget next Wednesday will ask voters to wait a bit longer for it.

John Healey, Burnham’s top finance minister, is expected to announce cuts to business regulation, new steps to move power out of Whitehall and targeted cost-of-living help as energy bills surge due to the wars in Iran and Ukraine.

But while London’s banking sector is resigned to a tax rise, Healey is broadly not expected to completely overhaul tax regimes that many in Burnham’s center-left Labour Party have long seen as unfair. These include business rates, which treat high street shops more harshly than out-of-town delivery warehouses; capital gains tax, which charges less on income from assets than from work; and council tax on homes, which is based on valuations from 1991. 

Healey and his allies are already rolling out a pitch for lower-key changes to tax and spending than his predecessor, Rachel Reeves, insisting budgets are about more than their bottom-line “scorecard.” They point instead to thinning the “sludge” of business bureaucracy and helping “bloody-minded” entrepreneurs.

The reason behind this is about much more than war dragging on the British economy and keeping inflation high. Many radical reforms just aren’t ready yet. 

Next Wednesday will mark just 100 days since Burnham took office, after a whirlwind special election that ended the Greater Manchester mayor’s decade-long absence from parliament.

Burnham’s much-touted “10-year plan” to rewire Britain’s public realm is far from finished; its publication date is edging closer to Christmas. And many granular details of his plan for reform — including higher defense spending, welfare reforms and ownership of the water sector — will only come at a multi-year spending review some time in 2027. Healey is still trying to decide when that will happen.

POLITICO spoke to 22 current and former government officials, MPs and people who speak regularly to Downing Street to map out Burnham and Healey’s strategy, most of whom were granted anonymity to speak frankly. 

Several offered the view that Healey’s budget was designed to act as a stepping stone toward the 10-year plan and spending review, while not spooking the bond markets — which Burnham complained Britain was “in hock to” last year. That is despite Britain inching closer to a general election that the prime minister must call by summer 2029.

“They want it to be a non-event,” one person who speaks regularly to both 10 and 11 Downing Street said of the budget. 

Expectation management

This narrative has already left Healey’s allies bristling.

People are “accusing us of not making decisions and kicking the can down the road when actually this budget is incredibly difficult,” said one government official. This person added: “This is the first budget of this country that will have come to the House of Commons for scrutiny while the war in the Middle East is raging and an illegal invasion of Ukraine continues by Russia. The idea that this is by any means small is quite difficult to stomach.”

A second U.K. government official argued the budget would be “as ambitious as possible within the political context.” But a third government official said they believed the budget would be more “steady as she goes” than finished solutions to Britain’s problems.

Ruth Curtice, a former Treasury official who is now chief executive of the Resolution Foundation, a think tank focused on living standards, added: “In some ways it’s quite surprising to have such a small budget, given we have a new prime minister and chancellor and quite a lot has happened in the world since the last one.”

The opposition Conservative Party is preparing to seize on this “deferral budget” theme. Tory strategists are ready to paint it as a cowardly act from an administration they claim prefers sweeping vision to hard decisions. “Why act tomorrow when you can act today?” said one shadow cabinet minister. “Have some balls!”

Cameron Brown, a former Tory special adviser in the Treasury, was more sympathetic. “There’s no need to crystallize any kind of savings or cuts now,” when the spending review is looming anyway, he argued. Brown predicted a “tight and concise” but “intellectually coherent” package: “[Healey] will have some buffer at the end, a nice little cost of living package, Labour MPs will be happy, he’ll target the bad people — gamblers and banks — and he’ll push things down the road a bit.”

A Labour official voiced concern that a cautious budget could lose the goodwill Burnham has built with the public — as happened to his predecessor Keir Starmer, who promised “change” in his 2024 manifesto.

And Reeves’ former Political Secretary Matt Pound urged “caution” on deferring too many decisions to the 2027 spending review. “The truth is that they could end up putting a monumental amount of pressure on that spending review,” he told POLITICO’s Westminster Insider podcast in an interview released Friday. “There are already a lot of pressures they will need to fund.”

Hard to get

“Energy” will be the key thread linking Healey’s messages for the budget, a fourth U.K. government official said — from “breathing space” help with bills to building a more resilient infrastructure network. 

There will also be a “fiscal devolution roadmap” on budget day, setting out terms of how regional mayors can get more power and money and drawn up partly by Burnham’s new Manchester outpost, No. 10 North. Legislation to let them impose tourist taxes will be published in the coming weeks. And officials have talked behind the scenes about procurement and boosting Britain’s heavy industries; the budget needs to find almost £5 billion to plug a hole in a defense investment plan unveiled under Starmer.

Targeted cost-of-living measures appear likely to include scrapping “standing charges” on domestic gas bills, which cost the average household just over £100 a year. Burnham said Wednesday that he had asked Healey to look at the issue — though any help could be eclipsed by a predicted £276 rise in domestic bills this January.

The other message will be that the Treasury can do big, consequential things without raising taxes. Healey will make “a political argument that actually there are other types of budgets that you can have,” said the first government official quoted above, “busting through some of that sludge and ripping up a lot of that red tape.” Cash-strapped chancellors have reached for regulatory reform before, with mixed success.

MPs are looking closely at cost-of-living support. One backbencher in an affluent seat said any help had to be significant, because even their well-off constituents were struggling to take the holidays they wanted. Defense, by contrast, barely comes up on the doorstep: “There are hardly any votes in it, but it’s just something we have to do.”

There has been heavy engagement with Labour MPs, whose detachment from No. 10 helped force Starmer out in July. Treasury ministers Torsten Bell and James Murray are among those engaging while Chief Secretary to the Treasury Emma Reynolds handles tricky negotiations with Cabinet ministers, alongside No. 10 chief of staff James Purnell.

Healey has negotiated with Cabinet ministers and spoken to union leaders, banks and MPs — though not lobbyists. “No one can get to Healey,” said one. “It’s very smart. Let him do his job.”

Markets will look at the “headroom” — a snapshot of the buffer between Healey’s five-year plans and his self-imposed fiscal rules. The fourth official quoted above said Treasury officials have considered having only a small “headroom” buffer compared to the £21.7 billion left by Reeves, as it could be increased in future years. 

Reeves’ former political secretary, Pound, warned against this, telling Westminster Insider: “If the headroom is so low that it’s clear that they can’t clear the defense investment plan, for example, or the wider defense pressures, then I think that that could then start to have a bit of a knock-on effect that would be quite negative.”

However, headroom is merely a snapshot, often out of date by the time it is published. It is likely to be buffeted further by any events in the Middle East arising from the U.S. midterm results on Nov. 3.

And as with all budget briefings, some opposition politicians believe there is an element of expectation management. Conservatives suspect that headroom will come out higher than predicted — which Healey can paint as a victory.

Time is ticking

Then it’ll all be over — and Westminster will immediately start preparing for the next step.

A date was never confirmed for Burnham’s 10-year plan (beyond the latter part of 2026), but some officials believe it has already slipped slightly from the original intention. 

Downing Street and Cabinet Office officials remain determined to publish it in December, though some in Whitehall worry it might be delayed. “Knowing the things on the horizon and how big they are, I genuinely don’t see how you could make space for it,” said one official in another department.

While some Cabinet Office civil servants were first tasked to work on the plan in August, others only joined the team this month as it has grown, according to one person with knowledge of the staffing. Burnham’s ally Louise Haigh, the first secretary of state, is leading three “task forces” ahead of the plan on the cost of living, public control of utilities and the renewal of run-down high streets.

The 10-year plan won’t have all the answers, though. POLITICO reported this week that while it will contain a high-level vision, priorities and principles for the water industry’s future, much of the granular detail of how future ownership models will work is expected in the 2027 spending review. 

One Labour figure who has spoken to the government about the water industry said they believed ministers will choose “different horses for different courses” — an array of ownership models for various firms depending on how stricken they are. A second Labour figure talking to the government said: “You can’t do this in two years.”

The Labour official quoted earlier in this story said they feared the 10-year plan would be a let-down. “These big plans governments are always throwing forward to have a habit of turning out quite thin,” this person said. “At which point we all realize there was never a big plan all along.”

There are other plans to come, including an imminent plan to reform the welfare system by the former Labour Cabinet minister Alan Milburn, and a white paper in December that is due to set out a timetable, legislation and borders for plans to move more power outside Whitehall.

Devolution is one area where Burnham has moved quickly, pleasing many regional mayors. But some officials in the union movement fear that Burnham’s initial focus on devolution risks taking up bandwidth that could have been spent on other issues. A fifth government official added that they were worried all the conversations between different public bodies could crowd out the push for growth. They said: “I sit on Teams calls that are 30 people, all from different arms of the state. Sometimes I think — ‘You do know none of us are making this money?’”

‘Rubber hits the road’

Then there is the 2027 spending review. 

It will set out how the state allocates money across its arms for the next three to five years — turning these plans and the difficult trade-offs they require into reality.

The Treasury has previously confirmed it will set out the entire pathway to lift U.K. defense spending from 2.6% of GDP this year to 3.5% by 2035. It is also likely to address questions about Burnham’s pledge to create a state-funded national service for social care, funded by reducing the rise in the state pension.

There will be months of to-and-fro between Whitehall departments and a Treasury looking for cuts, efficiency savings or both to balance the books.

“The spending review is when the rubber hits the road,” said the fifth government official quoted above. “It’s already beginning. Departments are beginning to work out sacrificial lambs to offer up.”

Three people with knowledge of the conversations said Healey still hasn’t decided when in 2027 he wants to hold the spending review, though it is broadly expected no earlier than the summer. He has been privately musing with allies about the options.

Curtice said Healey’s options are essentially to hold a small fiscal event followed by a spending review next summer, or to hold a spending review with an annual budget simultaneously in fall 2027.

She added: “The big question we’ve posed for this budget — that we’re not necessarily expecting an answer to — is what is the spending total for the spending review that we know needs to come next year? Until we know the answer to that question, we don’t really know whether we can believe the path of tax and borrowing that is set out in the budget.”

Senior Conservatives argue the spending review will be so difficult that Burnham could call a snap election before it is due. He has insisted he will only force it in 2029.

Until then, much of the spending review work will fall to Reynolds. Her predecessor Darren Jones argued the existence of the 10-year plan and spending review meant it would be sensible for next week’s budget to be a little low-octane.

“The prime minister’s been clear that the 10-year plan is going to be the political strategy for the government,” Jones told POLITICO. “So I think it makes sense to do all of your public spending decisions after the publication of the 10-year plan. It would be odd if this October’s budget tried to deal with all the big trade-offs on defense, mayoral budgets, or more ownership of public utilities.

“So I think in many ways, actually the 10-year plan is more interesting this autumn in terms of the political strategy of the government. 

“And then 2027 will be the year in which ministers will have to start thinking about how to implement that strategy operationally, including in public spending decisions.”

Much of that will fall to Burnham himself.

Crowdsourcing

Rayner’s joke about “Andy Time” was not without cause.

Unlike Starmer, Burnham gets into the weeds of an issue even if it derails his schedule. The prime minister chews things over with colleagues so much that some have joked they could just remove his Downing Street desk, said the third government official quoted above. By contrast, Starmer used to retreat to No. 10’s first-floor study to read away from the hubbub.

Burnham’s approach can lead to Downing Street making decisions late in the day. One former No. 10 official said: “A Prime Minister needs to do 80 things in a day and if that goes to 60, then you end up massively behind.”

The flipside is that ministers and officials know what their leader actually wants from them — even if they are left to work out the detail.

“It’s like we’ve woken up from a political coma,” one backbench MP enthused. “I know what the prime minister thinks,” added the third government official quoted above.

Aides used to complain that Starmer, by contrast, tried to be efficient but would end meetings without setting a clear political direction. “Keir was always a stickler for time, even if the issue wasn’t resolved,” as one former colleague put it.

Kemi Badenoch, the Conservative leader, suggested this week that Burnham was failing to flesh out the detail behind his vision. “Talking about it is not making a decision,” she said of social care reform at prime minister’s questions. Burnham was visibly frustrated—insisting he was making the long-term decisions other politicians duck.

And for the prime minister’s allies and most of his MPs, the vibes remain good. The No. 10 environment is more relaxed and open. Junior ministers, in meetings over bacon sandwiches, feel they can share their views and be heard.

“There’s definitely still a buzz,” said the person who talks regularly to Downing Street, who was quoted earlier in this story. “But you don’t want to spend too much time buzzing while Rome burns. There’s a reality check that I feel is going to come imminently.”

Patrick Baker, Sascha O’Sullivan, Esther Webber and Emilio Casalicchio contributed reporting.

BRUSSELS — Germany, France and at least six other EU countries are pushing against “associate membership” as the name for closer EU ties with Canada, six diplomats involved in the negotiations said.

The label is one of the main sticking points in talks over a joint declaration setting areas of deeper cooperation between Brussels and Ottawa ahead of the EU-Canada summit in Montreal on Oct. 29-30, the six diplomats and two EU officials told POLITICO. They were granted anonymity to discuss the sensitive negotiations.

The diplomats said the objections center on the wording of “associate membership,” not the broader goal of closer ties.

Five weeks after European Commission President Ursula von der Leyen first proposed Canada becoming an “associate member” of the EU in her State of the Union speech — to the surprise of both Ottawa and EU capitals — and one week out from the summit itself, the disagreements show the term remains a political and messaging hurdle.

The EU “is really keen to have close cooperation with Canada,” said Bernd Lange, chair of the European Parliament’s trade committee. But, he added, he too would avoid using the term “associate membership,” as it leaves too much room for confusion with other forms of EU partnerships, such as association agreements.

Germany is pushing hardest to remove the label from the draft declaration, five of the EU diplomats said, while France, Italy and Belgium were among those expressing skepticism about the phrasing.

The central concern among the capitals that object to the term is that the EU is labeling the relationship before agreeing what it would mean. They argue the name should have been defined before negotiations with Canada began, four diplomats said, with two others adding that the objecting capitals are annoyed that von der Leyen proposed the label without first consulting national governments.

“We’ve definitely put the cart before the horse,” one diplomat said. “We’re announcing something and then figuring out how to flesh it out.”

A representative for the German Permanent Representation to the EU declined to comment.

The European Commission will engage with skeptical capitals and work on acceptable language, an EU official said, adding that they believe the countries’ doubts stem from not yet understanding what the proposal means in concrete terms.

There is no disagreement over the aim of strengthening an already close relationship, including economic and defense cooperation, international engagement and institutional links, the official stressed. “What matters is what we do, not what we call it.”

What’s in a name?

The label aims to describe the EU-Canada relationship as closer than Brussels’ partnerships with other countries, without making Canada a member of the bloc, one of the diplomats said. Canada cannot become a formal member, as the EU’s founding documents limit that status geographically to Europe.

The distinction matters because existing arrangements with European neighbors, including the U.K., Switzerland and countries in the European Economic Area, center largely on access to the EU’s internal market. Canada, on another continent, is not seeking the same model or the four freedoms of movement, the diplomat said.

The idea is to identify practical areas for cooperation first, then decide whether new treaties or formal negotiations are needed, the same diplomat said.

Work on six priority areas is expected to begin after the summit, with progress reviewed after six months and then a proper stock-take one year later at the next EU-Canada summit, which will be held in Europe.

The stock-take would consider whether Canada has moved closer to the EU by becoming a full member of Horizon Europe and Erasmus, is building undersea cables and stockpiling critical raw materials with the EU, and is exploring pension-fund investment. If Canada meets those criteria, it could become the EU’s first associate member, the diplomat said.

The diplomat described the idea as an experiment, adding that “Canada might be the only one” to ever get associate membership of the EU.

The plan reflects changing calculations on both sides. Canada has long depended heavily on trade with the United States, but tariffs and political pressure from Washington have sharpened concerns about that reliance. Prime Minister Mark Carney wants to diversify trade and modernize the country’s infrastructure, including energy links that largely run north to south.

For the EU, a closer partnership with Canada is part of a broader effort to build relationships as pressure from the United States, China and Russia grows. The summit is intended to give the partnership a more distinctive political framework.

The declaration is still being revised, with EU ambassadors due to discuss it again on Monday. One of the EU officials cautioned that several parts of the declaration still had comments outstanding.

Another controversial element concerns energy cooperation, with Austria pushing back against any mention of deepening nuclear ties, while France, Romania, Slovakia and some other countries support its inclusion.

A spokesperson from the Canadian mission to the EU did not respond to POLITICO’s request for comment.

Neun Länder drängen in die Europäische Union, doch die Tür ist seit über einem Jahrzehnt verschlossen. Während Friedrich Merz in Montenegro die Beitrittschancen der Länder des Westbalkans auslotet, wäre ein Scheitern des nächsten Beitritts durch Montenegro, vor allem für Russland und China eine Genugtuung. Europa-Experte Hans von der Burchard analysiert, warum das kleine Land an der Adria zum Lackmustest für die Erweiterungspolitik wird und welche bittere Pille die Ukraine womöglich schlucken muss.

In Berlin entbrennt zeitgleich auf der Ministerpräsidentenkonferenz ein harter Verteilungskampf um die Energiekosten. Rasmus Buchsteiner beleuchtet die Milliarden-Forderungen von Hendrik Wüst zur Stromsteuer sowie die teuren Rentenpläne von Markus Söder. Die Konferenz beginnt ausgerechnet am Tag der Steuerschätzung. Die entscheidende Frage lautet: Wie sollen diese politischen Versprechen angesichts riesiger Haushaltslücken dauerhaft finanziert werden?

Antworten auf die angespannte Kassenlage liefert Sebastian Schäfer. Der Chefhaushälter der Grünen-Bundestagsfraktion erklärt im 200-Sekunden-Interview, warum er die Steuersenkungspläne der Union für unrealistisch hält. Stattdessen bringt er einen konkreten Sparvorschlag ins Spiel.

Das Berlin Playbook als Podcast gibt es jeden Morgen ab 5 Uhr. Rixa Fürsen, Maximilian Stascheit und das POLITICO-Team liefern Politik zum Hören – kompakt, international, hintergründig.

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Es war eine Chaoswoche für den Kanzler Friedrich Merz. Das Rentenpaket entwickelt sich zur weiteren Zerreißprobe für die Koalition. Der neue Arbeitsminister Alexander Schweitzer macht es für den Kanzler nicht einfacher. Warum der SPD-Pragmatiker plötzlich auf Konfrontation geht und wie diese Machtkämpfe die Regierungsarbeit lähmen, steht im Zentrum der Analyse.

Gleichzeitig brodelt es an der SPD-Spitze. Gordon Buchsteiner und Rasmus Buchsteiner analysieren das personelle Vakuum der Sozialdemokraten und diskutieren, ob Hubertus Heil in die Bresche springen könnte. Zudem wird beleuchtet, welche Rolle die Ministerpräsidentinnen wie Manuela Schwesig und Anke Rehlinger im Hintergrund spielen.

Während die SPD mit sich selbst ringt, läuft der Deutschlandtag der Jungen Union in Bonn. Friedrich Merz positioniert sich in der Rentenfrage mit dem Versprechen stabiler Beiträge. Ob und wie das verfängt, diskutieren Repinski und Buchsteiner ebenfalls.

Das Berlin Playbook als Podcast gibt es jeden Morgen ab 5 Uhr. Rixa Fürsen, Maximilian Stascheit und das POLITICO-Team liefern Politik zum Hören – kompakt, international, hintergründig.

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POLITICO Deutschland – ein Angebot der Axel Springer Deutschland GmbH
Axel-Springer-Straße 65, 10888 Berlin
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Geschäftsführer: Christoph Eck-Schmidt, Carolin Hulshoff Pol, Mathias Sanchez Luna

**(Anzeige) Eine Nachricht von YouTube: Die Auffindbarkeit von Qualitätsjournalismus ist entscheidend für eine lebendige Medienlandschaft. 79 % der Medienunternehmen, die YouTube nutzen, an, dass digitale Videoplattformen ein wichtiger Vertriebskanal sind, so Oxford Economics. Und 81 % der Medienunternehmen mit YouTube-Kanal erreichen darüber weltweit neue Zielgruppen. Hier klicken und mehr erfahren.**

Friedrich Merz reist morgen zum Deutschlandtag der Jungen Union nach Bonn und trifft auf eine Parteijugend, die nach dem Rentenstreit des Vorjahres weiter voller Frust steckt. Die vielleicht nicht jungen, aber jüngeren Mitglieder um Johannes Winkel wollen endlich Reformen. Ob der Parteichef die Basis befrieden kann, ordnet Rasmus Buchsteiner von Bonn aus ein.

Im 200-Sekunden-Interview skizziert die Parlamentarische Geschäftsführerin der Unions-Fraktion, Catarina dos Santos-Wintz,, wie ein zukunftsfestes Gesamtpaket ihrer Meinung nach aussehen muss und warum die Junge Union und die Junge Gruppe der Fraktion beim Thema Generationengerechtigkeit keine faulen Kompromisse mehr akzeptiert.

Auf dem EU-Gipfel in Brüssel ringen die Staats- und Regierungschefs derweil um die wirtschaftliche Zukunft Europas. Hans von der Burchard analysiert das Treffen, sowie den neuen handelspolitischen Härtetest mit China. Zudem zeigt sich, wie dramatisch die Finanzierungslücke bei der Ukraine-Hilfe angesichts bröckelnder US-Unterstützung wirklich ist.

Das Berlin Playbook als Podcast gibt es jeden Morgen ab 5 Uhr. Rixa Fürsen, Maximilian Stascheit und das POLITICO-Team liefern Politik zum Hören – kompakt, international, hintergründig.

Für alle Hauptstadt-Profis: Der Berlin Playbook-Newsletter bietet jeden Morgen die wichtigsten Themen und Einordnungen. Jetzt kostenlos abonnieren.

**(Anzeige) Eine Nachricht von YouTube: Die Auffindbarkeit von Qualitätsjournalismus ist entscheidend für eine lebendige Medienlandschaft. 79 % der Medienunternehmen, die YouTube nutzen, an, dass digitale Videoplattformen ein wichtiger Vertriebskanal sind, so Oxford Economics. Und 81 % der Medienunternehmen mit YouTube-Kanal erreichen darüber weltweit neue Zielgruppen. Hier klicken und mehr erfahren.**

POLITICO Deutschland – ein Angebot der Axel Springer Deutschland GmbH
Axel-Springer-Straße 65, 10888 Berlin
Tel: +49 (30) 2591 0
information@axelspringer.de
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Geschäftsführer: Christoph Eck-Schmidt, Carolin Hulshoff Pol, Mathias Sanchez Luna

LONDON — The Liberal Democrats used to watch their rivals indulge in messy factional squabbles with glee. Now they are scrambling to project an image of unity.

Britain’s third-largest Westminster group could hold significant power after the next election if no party wins a majority of MPs and Prime Minister Andy Burnham is casting around for a deal.

But for now, the focus is on weathering an internal storm in the centrist outfit. MPs rallied around their leader Ed Davey this week at a marathon four-hour meeting — held days after one of his frontbenchers resigned in an ill-fated attempt to oust the party chief.

The botched coup comes as the Liberal Democrats try to answer a more existential question: what are they actually for and how do they make an impact in Britain’s fragmented political landscape?

POLITICO’s Poll of Polls shows the Lib Dems coasting along. After getting 12.2% in the 2024 general election — and bagging a record 72 members of parliament as a result — the party has slipped down, polling between 9% and 11% since Andy Burnham became prime minister. 

POLITICO explains why Lib Dems are now openly discussing Davey’s future; how much danger he is in; and exactly how the man known for a cheery demeanor and eye-catching paddle-board stunts could be capsized.

1) Why is Davey’s future in the headlines?

The surprise resignation of the Lib Dems’ Treasury spokesperson Charlie Maynard a week ago triggered the latest round of soul-searching about the leader’s future — but the grumbling goes back a bit further.

Maynard’s resignation followed costly tax-cutting pledges from Davey at the party’s conference in September and came hot on the heels of sharp responses — including from 2024-intake Lib Dem MPs Tom Gordon and Vikki Slade — to the way Davey defended an existing guarantee on state pensions. Some MPs believe the party isn’t adequately representing younger voters by opposing changes to the so-called triple lock, now targeted for reform by Burnham.

The immediate threat looks to have receded. Maynard’s resignation has gone down badly among a host of colleagues.

One Lib Dem frontbencher — granted anonymity to speak about internal matters like others in this piece — said the “vast majority of us think it’s beyond ridiculous and are really angry.” A second frontbencher said it was “bang out of order” for colleagues to brief internal policy discussions to the press.

2) So he’s safe?

Not quite — fizzled plots like this have a habit of still bringing grumbling to the surface (just ask Theresa May)

There remains frustration among some MPs over Davey’s perceived failure to exploit a gap in British politics opened up by voters’ deep dislike of Keir Starmer’s Labour government after the 2024 general election.

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  Labour Party

  Labour Party
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  Reform UK

  Brexit Party (relaunched as Reform UK in 2021)
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  Conservative and Unionist Party

  Conservative and Unionist Party
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  The Green Party of England and Wales

  The Green Party of England and Wales
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  Liberal Democrats

  Liberal Democrats
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  Restore Britain

  Restore Britain
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  Scottish National Party

  Scottish National Party
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  Plaid Cymru – The Party of Wales

  Plaid Cymru
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YouGov’s Anthony Wells explains that the party was stagnant “during a period where the Starmer government came in, became extremely unpopular [and] lost a huge amount of support” that “didn’t go to them.”

He contrasted this with how the Lib Dems gained traction in the 2000s when the Labour government was in big trouble. The Lib Dems are normally good at grabbing “the low-hanging fruit of unpopular left-of-center governments.”

“They haven’t nailed their colors really firmly to any mast,” says Wells. “They have been something to all men — and it means they may have suffered in comparison to people like the Greens under [leader] Zack Polanski, who’ve been much clearer about what they stand for.” 

Removing a Lib Dem leader remains reasonably easy — though a crunch meeting of the parliamentary party on Tuesday suggests there currently aren’t enough MPs to actually trigger a ballot of no confidence, let alone win one. 

Eighteen MPs (25% of the parliamentary party) would need to push for a vote of no confidence to be held. An absolute majority — 36 MPs — would then have to vote no confidence in Davey for a leadership election to be triggered. 

Davey could stand in that leadership election if he could secure nominations from 10% of Lib Dem MPs and 200 members from at least 20 different local parties. 

Unlike in the Conservatives, where a leader cannot be challenged again for a year after they win a no-confidence vote, Davey would be given no such grace period if he survived — meaning another ballot could take place just months after he saw off a coup attempt.

3) What’s the view from Davey world?

The arguments in the leader’s favor appear to have won out — for now.

For one, he has a record of winning. Davey can point to having taken the party to its largest number of constituencies in its modern form by focusing on a fight-by-fight, seats-first strategy. The 2024 campaign prioritized targeted campaigning in specific areas, rather than seeking a higher national vote share that doesn’t translate to a high number of MPs.

Loyal allies have come out to bat for their embattled boss this week. Deputy Leader Daisy Cooper, seen as a possible future leadership contender, said there’s a “real sense that we need to come together as a group” to stop the Tories and Reform UK “from forming the most right-wing government in our history.”

Subtext: let’s not mess around and let our real enemies in.

A third frontbencher told POLITICO Davey doesn’t “just have the support of the parliamentary party — there clearly aren’t anything like enough MPs to trigger a vote of no confidence.” They said Davey changing his top team earlier this year by appointing James Holt as director of political strategy and Ruth Younger as chief of staff “just needs time to percolate.”

4) So can Davey just keep calm and carry on?

Maybe.

Wells believes the party doesn’t “necessarily need to do much” to hold its current crop of seats at the next election — and that a middle-of-the-road approach against flashier, potentially more divisive opponents — might actually work in its favor.

While “their brand may be less distinctive, it also means they’re more coalition-able,” Wells says. He points out that there’s already much less objection from Labour about working with the Lib Dems compared to the Greens, who Burnham this week threatened to can local power-sharing agreements with amid a row over anti-semitism.

“There is a strategic advantage to them in terms of not offending people, but there’s also a strategic weakness in not defining yourself very clearly,” he says.

Sam Francis contributed reporting.