Governments should not go back and forth on energy policy and decarbonization targets if they want to attract investors, said Catherine MacGregor, the CEO of French energy giant Engie.
“Without trust, we cannot invest,” MacGregor said at POLITICO’s competitiveness summit in Paris on Tuesday.
In the French government’s 2027 budget proposal, French Prime Minister Sébastien Lecornu proposed backtracking on a number of renewable energy contracts, arguing that subsidies for green energy projects, particularly solar panels, were a major financial burden for the state.
MacGregor said such a move could imperil future investments in France.
“A contract is a contract,” she insisted, adding that “trust is very important” for investors to be able to spend money on energy projects in the long term.
France’s deteriorating public finances have become a central political issue ahead of the country’s presidential election next year. President Emmanuel Macron’s embattled minority government has been looking for ways to cut costs in a bid to bring down a stubbornly high budget deficit projected to come in at 5.4% of gross domestic product.
At the European Union level, Ursula von der Leyen’s second term at the helm of the European Commission has been marked by political pushback against the bloc’s core green policies, including Brussels’ landmark ban on combustion engines by 2035 and its emissions trading scheme.
But the bloc’s commitment to decarbonization gives investors the framework they need to plan ahead, MacGregor argued.
“Europe has one advantage: It moves slowly and that offers a certain level of stability which is very interesting for investors,” she said.
MacGregor defended the competitiveness of renewable energy projects as a means to produce energy locally and quickly, especially with gas prices so high.
“Renewable projects, when we do them well, in an organized manner and at scale … we are able to be competitive,” she added.
ATHENS — The U.S. and Greece are launching a new counterterrorism information-sharing program, U.S. Secretary of State Marco Rubio said Wednesday during an official visit to the Greek capital.
In a press conference alongside his Greek counterpart Giorgos Gerapetritis, Rubio said Greece was particularly exposed to threats posed by mass migration, human trafficking and different forms of terror.
“What we do not wish to see under any circumstances is that the birthplace of the West is threatened by bad decisions, by inaction, and by failure to address challenges,” he said, calling Greece a “strong and model NATO ally” and a “source of stability in an unstable world.”
Gerapetritis said Greece was willing to cooperate with the U.S. and provide maritime assistance in the Strait of Hormuz, if a viable peace process exists there.
Later Wednesday, Rubio will deliver a speech from Pnyx Hill, beneath the Acropolis, one of the most important sites of Athenian democracy. Assistant Secretary for Global Public Affairs Dylan Johnson said Rubio would use the opportunity to call for a “renewal of the Western spirit.”
Rubio will describe the shared inheritance of Americans and Europeans as stretching “from Athens and Rome to Christendom to the founding of the American Republic” and warn that Western civilization has forgotten some of its “essential qualities,” Rubio’s aide said.
The foreign policy chief stood by U.S. Ambassador to Greece Kimberly Guilfoyle after U.S. senators and Greek opposition parties expressed concerns over reports that she had threatened to use U.S. influence to topple the Greek government.
“Suffice it to say, our embassy here is doing a great job. Our ambassador has been a strong ambassador here,” Rubio said when asked whether Guilfoyle’s conduct is in compliance with State Department ethics.
France’s borrowing costs are surging as investors around the world wake up to the risk of a full-blown public debt crisis in Europe’s second-largest economy.
Stress in financial markets has now started to spread beyond its borders, raising fears that political dysfunction in France could cause a broader, regional problem.
Memories of the sovereign debt crisis that threatened the single currency’s survival 15 years ago are starting to stir. But is it really going to get that bad again?
Read on to find out. Alternatively, you can simply skip it and pretend it isn’t happening — but, hey, that’s what got us here in the first place …
Why is this happening?
France hasn’t run a balanced budget in more than 30 years.
It hasn’t been able to keep its budget deficit within the EU-agreed limit since 2019, due to the soaring costs of its pension system and challenges such as rearmament and the green transition. France’s debt burden is now so great — and growing so quickly — that some are starting to worry it can’t repay it all.
What happens if French woes get worse? Is Europe facing another existential crisis? Will the European Central Bank run to the rescue with “whatever it takes”? And will it be enough?
How bad is it?
Investor concerns about France’s fiscal and political impasse have ballooned.
For many years, investors considered Germany and France as roughly equivalent credits: The premium they demanded to hold 10-year French bonds over comparable German ones was measured in pennies. But since the pandemic, and more recently since President Emmanuel Macron’s disastrous gamble on early elections two years ago, it has started to increase — first gradually, now suddenly.
From 0.55 percentage points in mid-September, it had risen to 1.45 by Monday morning. It hasn’t been that high since the 2012 debt crisis. In absolute terms, the French 10-year bond yield is nearly at 5 percent, the highest it’s been since 2008.
Concerns are serious enough for Bank of France Governor Emmanuel Moulin to warn that “everything must be done” to avert a debt crisis ahead of the 2027 presidential election.
You said it was spreading to the rest of Europe?
Well, it’s starting to.
EU flags fly outside the European Central Bank in Frankfurt, Germany on Dec. 15, 2022. | Andre Pain/EPA
France has been an outlier within Europe in recent weeks, but sovereign yield spreads — those country-specific risk premiums that investors demand — have also started to widen for Italy, Belgium and Greece. And there are signs that the markets are turning more negative on Europe in general as a result: the single currency hit a 17-month low against the dollar on Monday.
Are we in a crisis already?
The moves have been sharp, but the risk premium remains what one would consider crisis level.
The trouble is, bond prices — which move inversely to yields — can fall quickly when investors reassess risk. The ownership structure of French debt could also amplify a sell-off. Unlike Italy, where most government debt is held domestically, more than half of French debt is held by foreign investors who tend to head for the exit faster when things become shaky.
Sumitomo Mitsui DS Asset Management, one of Japan’s largest asset managers, said at the weekend it had sold all its French debt. In case of accelerated sales — or even worse, forced sales — the risk of contagion to other eurozone member countries rises further.
Who ya gonna call? Spread-busters!
The widening so-called spreads between national sovereign bond yields have raised questions about whether and how the European Central Bank might stop the rot. The ECB’s Transmission Protection Instrument (TPI) allows it to buy government bonds in the secondary market to counter “unwarranted, disorderly” market dynamics — but only under certain conditions. Before the ECB can use it, the Bank has to determine that a country is pursuing sound and sustainable fiscal and economic policies. For France, that would require big adjustment measures that will be nigh-impossible to pull off ahead of the 2027 elections.
“Help would likely require real commitment to stability, through fiscal discipline, reforms or both. Getting that support won’t be easy politically,” said Allianz Global Investors. Chief Economist Christian Schulz.
Stop (in the name of love for the euro)?
The ECB could also, in theory, intervene by using its balance sheet. For the last couple of years, it has allowed the bonds that it bought during years of “quantitative easing” to “run off” its balance sheet at the end of their lifetimes. That has forced governments to refinance the maturing debt in the markets instead. That increases the net supply of bonds to the market and adds to the upward pressure on yields.
Carsten Brzeski, ING’s global head of macro research, argued that the ECB could “pause quantitative tightening temporarily and reinvest maturing bonds in its portfolio ‘flexibly,’ sending a positive signal to bond markets.”
That possibility was also floated on Monday in an op-ed by Lorenzo Bini Smaghi, an Italian former member of the ECB’s board. It’s also at the heart of an appeal by Jean-Luc Mélenchon, the far-left’s presidential candidate in France, for the ECB to put a chunk of government debt “in the freezer.”
What about interest rates?
Should the wider region be affected, the ECB could also use its other big, blunt instrument — interest rates — to keep borrowing costs down, analysts say.
“ECB action still looks a way off, but an early step would be to talk back some of the hikes priced in the market,” analysts at Mitsubishi UFJ Financial Group wrote in a recent note. Markets have already sharply scaled back their bets on additional tightening, but ECB President Christine Lagarde took pains to leave the door open to further rate hikes at her last press conference — and with eurozone inflation hitting a three-year high of 3.8 percent in September, there will be a limit to how relaxed Frankfurt can be.
What’s the doomsday scenario?
As Brookings Institution Senior Fellow Robin Brooks put it in a recent Substack post, the ECB cannot rush into every bailout.
“There’s got to be a period of demurral, like a debutante at the ball playing hard to get,” he argued. “This is the period we’re in right now.”
But he added, if supporting France is the only way to keep the euro together, that is what it will do — even at the cost of “outright horror in Germany and the rest of Northern Europe.”
A senior diplomat will try to form a new government as Romania’s prime minister, in an attempt to end a five-month stalemate that threatens the country’s economic and political stability.
President Nicușor Dan named Luca Niculescu, secretary of state in the foreign ministry, as prime minister-designate on Monday. He is the fourth candidate tasked with leading a government since the coalition collapsed in May.
To be confirmed in the role, Niculescu will need to win a vote in Romania’s parliament within 10 days to show he has majority support for his new ministerial team and their program for government.
His task is formidable: Amid bitter divisions between the parties, lawmakers rejected two of Dan’s previous nominees, and a third didn’t even make that far. Dan made his announcement after holding talks with the parties at Cotroceni Palace on Monday afternoon.
After three previous candidates failed, the president is already facing calls to dissolve parliament for an unprecedented snap election. But he is reluctant to do so, fearing it would bring a far-right euroskeptic opposition party closer to power.
“My proposal for the position of prime minister is Luca Niculescu, a man who, as a diplomat, knows how to harmonize different positions,” Dan said on Monday evening. “It is necessary for Romania to have a government as soon as possible, because there are institutions that need rectification, and there is a need for a budget for next year. Prolonging the uncertainty will have effects on the lives of Romanians.”
One politician who refused to take part in talks with Dan on Monday was George Simion, leader of the hard-right Alliance for the Union of Romanians party, which currently leads opinion polls. Simion — who challenged Dan for the presidency last year — reiterated his demand for an election to end the chaos.
The president confirmed that the new government would have no place for parties that are anti-Western — which is his code for far-right groups, especially AUR. “I have the guarantee that a government with Luca Niculescu will maintain Romania’s pro-Western direction and will respect the financial targets and all the commitments that Romania has undertaken,” he said.
Dan said the uncertainty was affecting exchange rates, interest rates and investments in Romania. Over the past four years, Niculescu has led Romania’s accession process to the OECD, a major milestone in the country’s development. Dan said his candidate would have the freedom to decide whether the government was “political or technocratic.”
Accepting the nomination, Niculescu said Romania was grappling with a “long” period of uncertainty at a difficult time. “The first mission will be to build a parliamentary majority that will vote for a government that will be deeply anchored in Romania’s European and Euro-Atlantic direction,” he said. “I will have discussions with the parliamentary parties to build this majority and to agree on a realistic governing program.”
Decades ago, the world treated global trade as a neutral ground that helped energy markets in becoming more integrated, as we still see them today. The standard view in policy circles was that trade made countries more secure and stable. Governments therefore now use tariffs and export controls as a chokepoint of power. Today interdependence between countries became a double-edged sword. Europe, for instance, faced this back in 2022, when the Russian gas that it long treated as a reliable commodity became a prominent tool of pressure overnight.
Mouza Hasan Almarzooqi, director of the Economic Studies Department, TRENDS Research and Advisory
Despite the shifts towards digital economies and the massive investments that countries have been pouring in it, a major share of world trade still goes through narrow water ways. The Strait of Hormuz, Suez Canal, bab el-Mandeb Strait and many more corridors could lead to world trade disruption if partly closed. In 2023 attacks on merchant ships in the Red Sea led to big containers switching their usual route through the Suez Canal and going around Africa instead. It resulted in higher insurances, increased fuel consumption and longer delivery times. At the same time, extreme drought forced the Panama Canal to cut daily Transits. Two of the worlds key sea shortcuts were constrained at once. Securing energy and trade flows in geo-economic conflicts is no longer only about protecting ships and pipelines; it is also about building systems flexible enough to absorb shocks that are now certain to come. The Hormuz crisis of 2026 made that lesson costly, and the states that act on it now will set the terms of the next era of global trade.
Despite the shifts towards digital economies and the massive investments that countries have been pouring in it, a major share of world trade still goes through narrow water ways.
Two years later, on the 28th of February 2026 as the US-Israel-Iran war started, The Iran Revolutionary Guard shut the Strait of Hormuz to control the oil that was being exported from the Gulf Cooperation Council. Within two weeks, the International Energy Agency ‘IEA’ reported that the exports through the Strait of Hormuz had fallen to a tenth of normal flows. Asian importers took the worst hit, as they highly depend on the Gulf’s crude. The damage, however, showed up in prices other than oil; for instance, urea fertilizers also flow through the strait, and its supply disruption led to higher food prices. Gulf countries demonstrated their resilience by finding alternatives to exporting away from the strait of Hormuz. The UAE, for example, Created the Habshan-Fujeirah line, which started construction in 2008 and was finished in 2012, to secure energy trade even if faced by geographical obstacles. Securing energy and trade flows is a significant topic to be discussed at the TRENDS Annual Forum on October 12, 2026, under the theme “Sustainable Security: The Post-War Future of the Middle East”.
The Middle East plays a crucial role in the global economy. It’s often faced with exposure to regional conflict, but it can secure trade through several approaches.
Via TRENDS
The Middle East plays a crucial role in the global economy. It’s often faced with exposure to regional conflict, but it can secure trade through several approaches. First, spreading the risk by creating more routes through land. The India-Middle East-Europe Economic Corridor, currently in the developments phase, is one initiative that seeks to connect several countries through one line of trade. The second approach is “Friend-shoring”, which protects sensitive supply chains by moving them to ally countries. This can be high in cost but works most efficiently when a country is faced by war. This approach demonstrates the benefits of economic partnerships and investing in ports in different geographies to secure supply chains especially given that more the 80 percent of world trade moves by sea. The third option is stockpiling. In March of 2026 the IEA agreed to release 400 million barrels of emergency reserves. Those reserves will not end the whole crises but will provide time for diplomacy to act.
These matters influence not just local residents but also have global repercussions, affecting everyday experiences worldwide through shifting costs for fuel, farming, and food supplies.
Trends Global, operating as part of TRENDS Group, is organizing its Annual Forum to examine critical issues and inquiries impacting the security of the Middle East. These matters influence not just local residents but also have global repercussions, affecting everyday experiences worldwide through shifting costs for fuel, farming, and food supplies. By gathering a diverse group of political figures, scholars, and leaders from the corporate and defense sectors, the event intends to explore the ongoing transformation of the territory. Establishing lasting stability in the post-conflict Middle East requires a departure from past patterns, ensuring that future security is not merely a reaction to a continuous cycle of emergencies.
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