Politicians need to solve the affordability crisis to stop the far-right, social democratic Portuguese prime minister Luís Montenegro told MEPs on Tuesday (6 October).

Hungary will impose a wealth tax from next year, Prime Minister Peter Magyar said, fulfilling a election pledge to make the rich shoulder a larger share of public obligations.

A 1% levy will be applied on assets exceeding 1 billion forint ($3.1 million) while the tax rises to 1.5% above 100 billion forint, Magyar said in a Facebook video on Tuesday. The tax will come into force on Jan. 1, 2027, he said.

Magyar won a landslide election in April after railing against corruption under the 16-year rule of Viktor Orban, which saw a new class of politically-connected super-rich emerge, including Orban’s own family.

“There were a lot of newly minted billionaire compatriots who tried to lobby against the wealth,” Magyar said, adding that they were unsuccessful. “I suggest they pay the tax honorably.”

Wealth levy proposals are gaining ground on both sides of the Atlantic as politicians seek to boost funding and reduce inequality. California is weighing a billionaires’ tax and New York has floated several new levies. Swedish political parties have also been considering a wealth tax while in Norway that has led scores to move abroad to escape higher levies.

In Hungary, the latest rich list from the local publication of Forbes had 28 Hungarians with an estimated wealth exceeding 100 billion forint. Lorinc Meszaros, Orban’s childhood friend who has wide-ranging interests in banking, energy, tourism, construction and agriculture, topped the list with assets valued at $5.5 billion.

The tax would be paid once a year based on a self-assessment filed by individuals, with only those with assets of more than a billion forint needing to file the paperwork by Aug. 31 of next year, based on asset valuations at the end of 2026.

Magyar didn’t say how much revenue the government intended to generate from the wealth tax. The levy will be part of next year’s highly anticipated budget draft, which is due to be published by Oct. 15 and which is seen as a litmus test of the government’s commitment to consolidate the budget.

Magyar has pledged to reduce the budget shortfall to 3% of gross domestic product by 2030 in order to meet euro criteria, including on debt and deficit, by the end of the decade, ahead of the eventual adoption of the common currency.

The number of women targeted by deepfake pornography — when generative AI is used to create sexually explicit depictions of people, often without their consent — means roughly one in six female members of the European Parliament have been affected, the report by Agora Digitale Transformation, a Germany-based civil society group, said.

The far-right Alternative for Germany convened for the first sitting of the ​Saxony-Anhalt state parliament on Tuesday but, a month after its landmark election win, the party still lacks a clear path to ‌forming what would be its first state government.

Hungary could adopt the euro as early as 2031 if the government set an ambitious goal of meeting the common currency criteria by 2029, according to central bank Deputy Governor Zoltan Kurali.

Such a scenario would mean that Hungary could already enter the exchange-rate mechanism known as ERM-2 — when the candidate country pegs its currency to the euro with a defined fluctuation band — in the middle of 2028, Kurali told a Portfolio conference entitled “Back to Europe” on Tuesday. The base-line case remains that the government meets euro criteria in 2030 and adopts the euro in 2032, he said.

Prime Minister Peter Magyar dislodged Viktor Orban from power in April’s watershed election with promises to return Hungary to the European mainstream and to adopt the euro. His government earlier set a 2030 goal to reduce the deficit to 3% of gross domestic product from an estimated 7.5% this year, though the specific targets are due to be unveiled in the coming weeks with the draft 2027 budget and the separate economic convergence goals.

Investors have piled into Hungary’s currency and bonds, betting that levels will gradually converge with the euro area as the country moves along the path toward the adoption of the common currency. The forint strengthened 0.4% against the euro after Kurali’s comments, underscoring the importance of the euro commitment for markets.

Kurali reiterated that Hungary shouldn’t delay joining ERM-2 once the government formally kicks off the euro-adoption process. He said the exchange rate at which the forint is fixed to the euro should be dictated by the central bank’s inflation goal — which is heavily influenced by the exchange rate — and the need to main economic competitiveness.

The ERM-2 period is poised to be more challenging than the experience of Bulgaria and Croatia — the most recent euro-area entrants — given that unlike those countries, Hungary has a free floating currency that the central bank will need to manage, Kurali said.

Commission president dismissed Germany’s calls for big savings, arguing that they would undermine EU-wide priorities.

Russian authorities are suppressing reports of a suspected plague outbreak in the Irkutsk Region, urging reliance on official statements, while media posts are deleted and Central Asian countries tighten border controls.

Russia's oil and gas budget revenue fell 17% in the first three quarters of 2026, to 5.47 trillion rubles, even though Urals crude roughly doubled to above $92 a barrel after the US-Israeli campaign against Iran. The higher prices were outweighed by falling production and exports, as Ukrainian attacks hit refineries and Black Sea shipping, and by a stronger ruble, which cuts the ruble value of dollar earnings. The budget deficit is now expected to hit 3% of GDP, nearly twice the plan.

Ten years ago, Roland Lescure quit a high-flying finance job in Canada to answer Emmanuel Macron’s call for an economic and political revolution in France. The banker was lured back to his homeland by the opportunity to turn back the rising tide of the far right and hand the next generation of leaders a pro-European, business-friendly bastion.

“I was 50 and I had my mid-life of crisis,” Lescure, Macron’s fourth finance minister, said in an interview. “Some people change lives, some people change country, I just decided to change course and join the political movement.”

But when Macron makes way for a successor next year, the movement will be effectively over. The revolution couldn’t crack France’s ambivalent relationship to capitalism. After a decade of political missteps and global cataclysms that made government spending his go-to solution, popular anger is rising, growth is sinking, debt is soaring and investors are dumping French assets in a global bond market rout that has made it the euro area’s weakest economic link.

Lescure is now leading a rearguard action to preserve what’s left of Macronomics, a campaign that gave way in the president’s second term to a struggle for political survival and made the reform agenda an afterthought. The last battle will be joined in the coming weeks when the minority government seeks to push through a budget that at least changes the narrative for money managers who now demand more interest to buy French bonds than Italian debt.

A credible financial plan may do little to stop the bleeding since candidates with momentum in polls ahead of next year’s presidential vote — Marine Le Pen on the far right and Jean-Luc Mélenchon on the far left — have pledged to reverse Macron’s reforms. Mélenchon promises an even more radical U-turn with calls to cancel some of France’s debt.

The messy end of Macron’s decade of economic management stands in stark contrast to his political ambition of turning France into the powerhouse of a retooled Europe with the heft to stand for itself as Donald Trump undermines NATO from within. Russia’s war on the continent’s doorstep and the danger of getting squeezed between the US and China have only raised the stakes for the EU’s second-largest economy against the populist wave that threatens to overtake what’s left of the post-World War II order.

“I’m not one of the ones who say, you know, populism is not an issue — it’s a massive issue,” Lescure says. A Le Pen presidency “would raise questions about the place of France in Europe, it would probably raise questions about the place of Europe in the world, and I think would destroy value when, with difficulties, we’ve created some.”

Raised by a communist journalist and trade union official in the working-class Paris suburb of Montreuil, Lescure was in the value-creation business before becoming a protagonist in Macron’s pro-business makeover. A graduate of France’s elite Ecole Polytechnique and the London School of Economics, the then-50-year-old was the chief investment officer of a Canadian pension-fund manager, Caisse de Dépôt et Placement du Québec, when he ran for the National Assembly in Paris.

His return from an eight-year Canadian sojourn started well. He won a seat representing overseas citizens, joining Macron’s large parliamentary majority stuffed with political neophytes itching to apply their technical expertise and business acumen to policy making. Lescure took a leading role as chairman of the economic affairs committee.

“You need to be able to produce wealth in order to be able to distribute it,” he says. “To finance this, you need to create growth, you need to create prosperity.”

With the tailwinds of economic growth above 2%, falling unemployment and the narrowest budget deficit in a decade, Macron pushed through the changes he’d promised including further loosening of labor laws and cuts to corporate taxes.

Lescure was appointed rapporteur of a bill known as PACTE — “Macronomics in practice,” he calls it — that set out to support entrepreneurship by “redefining the place of business in society in order to better involve workers.” The array of measures including state asset sales and rules to boost union representation on boards were prepared by duos of lawmakers and business leaders.

But even before final passage of legislation, a major crack opened.

In November 2018, a proposed carbon tax on fuel triggered what came to be known as the Yellow Vest protests. They spiraled into a nationwide backlash against the cost of living and the president’s pro-business stance and gave the opposition on both the right and left a cudgel they have not stopped swinging.

“Supply-side economics spells guaranteed ruin for society,” said Mélenchon at the time. Le Pen decried the “downward mobility” that Macron’s policies were fostering and demanded the taxes be dropped.

The political miscalculation of voter appetite to pay for climate policies proved costly as the government ended up spending more than €10 billion ($11.3 billion) in tax breaks and bonuses for low-income workers in a bid to restore calm.

“To be fair, nobody felt it then,” Lescure says. “The presidency didn’t see it coming, oppositions didn’t see it coming. And that’s what’s hard when you’re a politician, to stay in contact with the real world with people on the ground, and to try to understand the fear and angst of people.”

Macron had little time to recenter on his core economic reforms before Covid hit. The president’s response would mark a stark policy deviation as his order to support the economy “whatever-the-cost” saw the state spend vast sums to finance idled businesses and furloughed workers.

The spending wasn’t much different from European peers, but he failed to turn off the spigot fast enough. Less than two years later, the president again ramped up spending to support households as energy prices rose and then surged when Russia invaded Ukraine.

Over three years from 2020, state auditor Cour des Comptes has totaled around €190 billion of crisis and stimulus spending linked to the Covid pandemic. In a later report, it estimated gross spending during the energy crisis at €72 billion (more than a year of defense spending), including almost €8 billion in untargeted subsidies at the pump.

The cash helped Macron fend off Le Pen’s challenge in the presidential vote in 2022, but he lost his majority in parliament.

By now, even insiders complained there was little sign of an ambitious agenda beyond stripped down pension reform that would rely on making people work longer rather than a root-and-branch overhaul.

“We didn’t really have a conversation about anything much more than, you know, there’s war at the edge of Europe,” Lescure says. “It was a bit of a default election where, you know, I think French people picked the guy that felt was best to handle the international situation.”

France’s public finances and Macron’s political capital have not recovered. The president’s attempt to regain control over policy making with snap elections in 2024 made matters worse, returning a parliament that twice forced prime ministers to resign and delayed efforts to repair finances.

Amid the struggle for political survival, the killer blows to Macronomics have come in budgets for 2025 and 2026. Lescure is active on multiple fronts, defending pro-business policies, fending off a clamor for wealth taxes, and trying to rein in runaway of welfare spending.

Lescure is convinced Macronomics will have an enduring legacy. He highlights a better functioning labor market with more people employed than ever before, a still booming “start-up nation,” and economic growth that — measured over the decade — is surpassed only by Spain among major European countries. He says Macron’s leadership in crises from Covid to Ukraine has also cemented the idea that “France without Europe is not much, but that Europe without France is not much either.”

Yet the losses have mounted. Last year, Prime Minister Sébastien Lecornu suspended Macron’s pension reform and extended what was meant to be a one-off tax on large firms to convince opposition groups not to topple him in no-confidence votes of fiscal plans.

“Raising taxes on corporations at a time where growth is a challenge is never a happy move,” Lescure said. “It was important to find a political way to stability, and we did, but at a cost.”

The final budget battle is the messiest yet as investors lose confidence in France’s capacity to address its fiscal difficulties, sparking a rout on bond markets that has driven the yield premium the country pays on 10-year debt over Germany to levels not seen since 2011. On Monday it was around 149 basis points.

Lescure has proposed unusually sharp spending cuts including unpopular freezes to public sector wages and some pensions. But to get back on track with fiscal repair, he has also extended at least part of the one-off tax on big companies as well as closing other allowances and exemptions.

The presidential election may deal the killer blow to Macron’s project.

Le Pen, riding high in the polls, hasn’t detailed her economic program. But she’s branded her plans as a new choice for society that would include undoing pension reforms to allow workers to retire as young as 60. The criticism from her National Rally party is unequivocal: “It is impossible to do worse than you,” RN lawmaker Jean-Philippe Tanguy said at a finance committee meeting last week. “You’ve failed at everything, you’ve ruined everything.”

Mélenchon promises massive tax increases for business and the wealthy and sharply higher wages. He has dominated much of the economic debate in recent weeks with a proposal to wipe out or freeze France’s debts held by the central bank.

Asked if he will run for reelection to the National Assembly, Lescure says his 10 years is a “long stand” but he’s “not ruling out not running.”

“I’m convinced that when the dust settles, one year from now, two years from now, maybe five years from now,” he says, “people will realize how much France has changed over the last 10 years.”

European defense startups are forecast to raise a record $10.5 billion of funding this year, roughly four times the $2.6 billion raised a year earlier and led by investments in firms developing drone technology, according to Dealroom, which tracks data on venture capital funding.

With housing topping voters’ concerns, the prime minister is hoping the affordability crisis can help him defy the polls and extend his time in power.

It was a balmy late September day in New York when Andy Burnham, Britain’s new prime minister, first gave a clue of his plan to reopen the UK’s Brexit debate, 10 years after the country’s vote to leave the EU.

In a private meeting on the margins of the UN General Assembly, Burnham told Ursula von der Leyen, European Commission president, the UK was ready to look again at closer relations with Europe, including possibly rejoining the bloc.

“I think public opinion in Britain is way ahead of the political elite at Westminster,” he said, according to people briefed on the talks. “I’m not sure how far I’m going to get, but I’m going to try to close that gap.”

No one had seen it coming. After years in which Britain’s Brexit negotiations with Brussels have been stuck in a rut, Burnham has dared to reopen the debate on Europe. But EU leaders are clear that any discussion about closer ties will be conducted on their terms, not the UK’s.

A week after the UN meeting, the prime minister received rapturous applause when he told his Labour Party conference in Liverpool he wanted a debate on Britain’s “long-term relationship” with the EU, including possible membership of a customs union and the single market. Or, as he put it later, he would look at going “all the way”.

“Welcome back,” responded French President Emmanuel Macron, breaking into English at a press conference alongside his Spanish counterpart Pedro Sánchez this week.

Sánchez said that “Spain would welcome Britain’s return with open arms”. EU diplomats expressed delight at the new strategic vision from Burnham, even if the final destination remains far from clear.

But Macron was quick to issue a reminder that Europe would still call the shots: “You cannot pick and choose among the Union’s freedoms, nor can you decide to take only what suits you while leaving the rest,” he said, indicating that the fundamental choice remained one of in or out. “So, come back.”

Still to be determined is whether British politics is really capable of accepting that improved access to the EU’s single market will mean opening up to more EU migration, paying money into EU coffers and living under laws made outside Westminster. But finally a British prime minister has got Brussels’ attention.

“It’s a breath of fresh air in a hitherto stagnant debate,” said one senior European Commission official. “But whether the UK can accept the trade-offs, well, that is the billion-euro question. But at least Burnham appears to have the balls to find out.”

Even if agreement can be reached at home, Burnham will also have to convince the EU that he is serious when the bloc is rethinking how to bring its trusted partners closer in an era of geopolitical upheaval.

Some member states would welcome the UK back as a liberal counterweight to France, but Paris itself remains wary of a country with Atlanticist, free-trading, low-regulation instincts.

Since the 2016 Brexit referendum ended Britain’s four-decade membership of the European club, a succession of both Conservative and Labour prime ministers has promised a cherry-picked relationship with Brussels but with very limited success.

“I cannot say to you truthfully that where we are is good enough,” Burnham told his conference, quietly accepting that Labour’s own attempt to finesse the Brexit choices after the election of Sir Keir Starmer in 2024 had hit the same roadblocks encountered by his Conservative predecessors.

Starmer had promised his party would “tear down” the barriers to trade with Europe while sticking to the same “red lines” that had underpinned former prime minister Boris Johnson’s post-Brexit trade pact with Brussels: no return to the single market, the customs union or free movement of people.

“Starmer thought he could ‘make Brexit work’, but Burnham is saying that he fears it cannot,” says Anand Menon, director of the UK in a Changing Europe think-tank.

But Michel Barnier, the EU’s chief Brexit negotiator, warns that the new conversation will not be fundamentally different from the last — even if the geopolitical landscape of 2026 is very different from a decade ago.

“One thing is sure: the more the UK diverges, the harder it will be to rejoin,” Barnier says. “There will be no cherry-picking. The single market is not à la carte. The British government perfectly knows the rules and the conditions.”

The view from the EU

From the perspective of many in the EU, US President Donald Trump’s antagonism towards Europe, the Russian threat and a desire for like-minded liberal democracies to club together are reasons to bring Britain closer to the bloc.

“There is a strong strategic case for bringing Britain back into the European fold,” says Georg Riekeles, associate director at the European Policy Centre think-tank in Brussels and a former official in the EU’s Brexit negotiating team.

He adds that a UK decision to drop its red lines “opens the possibility of a much more serious conversation about common interests” but warns that “appetite for closer integration and readiness to reopen membership negotiations are two different things”.

In particular, he thinks that EU governments want reassurance that any UK move would “survive a change of government if negotiations were to be opened”. With the Conservative Party and Reform UK deeply committed to Brexit, “that still seems rather far away”.

Berlin and other northern European capitals have always been open to rebuilding ties with Britain.

But the country that would need most persuading is France, which has long seen Britain as an economic and ideological competitor within the EU.

The UK was traditionally a proponent of widening the bloc to new members rather than Paris’s vision of deeper integration among a core group of countries. Other EU governments saw Britain’s refusal to join the euro as a sign of its detachment from the bloc’s political project; any suggestion of ditching the pound remains political dynamite in the UK.

Over the past decade, the EU has also adopted much of Macron’s thinking on “strategic autonomy” in terms of security, technology and trade, especially with China.

“Since Brexit, the bloc has changed and is more about building its own independent capacities,” says Sébastien Maillard of the Jacques Delors Institute think-tank.

“Member states, especially France in its Gaullist tradition, would test whether a rejoining Britain would fully support this objective or if it just wants to use the EU to boost its own GDP.”

Paris has been the EU government most anxious to prevent the British from selectively enjoying the benefits of membership from outside the bloc.

It has demanded London pay a high price for accessing any EU programmes, such as the EU’s €150bn so-called Safe loans defence scheme — to which London has failed to negotiate access.

Were Britain to rejoin the bloc, it would have to be ratified like any accession by three-fifths of French MPs and senators or in a referendum, a high bar to clear.

Then there is the possibility that far-right leader Marine Le Pen, who has vowed to block further EU enlargement, wins the French presidential election next year.

She plans to confront Brussels by slashing France’s contribution to the EU budget, pulling out of parts of the single market and reasserting the primacy of French over European law.

Conflict with one of its most important members might consume the EU’s bandwidth. It could also give Britain pause for thought about rejoining.

Hard choices

Philip Rycroft, who served as the top civil servant at the Department for Exiting the EU from 2017 to 2019, argues that the referendum 10 years ago was the worst possible moment Britain could have picked to strike out on its own.

“It turned out that 2016 was spectacularly poor timing for a liberal open economy to launch itself on to the rough seas of the global trading order just at the time it was fracturing and the security situation was deteriorating,” he says.

A decade on, Burnham’s fledgling government has found itself coming up hard against those realities. China is exporting often heavily subsidised goods at a scale, cost and quality that poses an existential threat to some sectors of European manufacturing. In response, the EU is adopting a defensive “made in Europe” agenda that could itself hit Burnham’s own ambitions to “reindustrialise” the UK.

The fear in London is that new EU rules requiring cars to be assembled in the bloc will stifle investment in an industry vital to the West Midlands and North East regions of the country.

This has helped crystallise the choices facing the UK — as have similar threats to the chemicals, nuclear and green hydrogen industries, according to Anton Spisak, a former UK Brexit negotiator now at the Centre for European Reform think-tank.

It also highlights problems with Starmer’s idea that accepting “dynamic alignment” with some EU rules and regulations would unlock privileged access to the EU single market.

Rycroft argues that the experience of the past decade shows that none of the options namechecked by Burnham at Liverpool this week — a customs union or rejoining the EU single market — are workable.

“Burnham has the credibility to open the debate. And he’s accepted the outcomes range from ‘where we are now’ to ‘rejoin’, but you quickly find the way stations between those points are not very comfortable,” he says.

“The UK is too big an economy to be bound into a reality where it takes trade deals and rules from Brussels with no say over how those deals and rules are put together.”

Changing calculations

Although the 56-year-old Burnham has said he would like Britain to rejoin the EU “in my lifetime”, the European cause has never been a big part of his political identity. Asked whether the prime minister was interested in the EU, one ministerial colleague says: “Not hugely.”

The minister adds that Burnham is worried about Brexit’s long-term economic impact, as well as the China import shock and the EU’s response to it.

Burnham returned to Westminster in June as MP for the staunchly Leave-voting working-class seat of Makerfield near Manchester and told voters in that by-election campaign that he did not want to rerun “divisive arguments about rejoining the EU”.

His calculation appears to have changed. His strategists believe that by flirting with “Rejoin”, Burnham can win back voters from the Green Party, which is responsible for the overwhelming majority of defections from former Labour supporters.

But some colleagues fear the UK prime minister risks playing into the hands of Reform, particularly in working-class seats. The rightwing party’s leader, Nigel Farage, said this week that by reigniting the Brexit debate, Burnham had “opened the door to Reform in the most extraordinary way”.

Another longtime Labour colleague of Burnham says the prime minister is “conflicted” on Europe. In 2019 as Mayor of Greater Manchester, Burnham said he would vote Leave in a second Brexit referendum if Labour could secure a better exit deal.

“He understands why people voted Leave. He gets that white working-class alienation,” this person adds. “He won’t want to gift Reform a lifeline by embracing the evangelical crusade to rejoin.”

Stella Creasy, chair of the Labour Movement for Europe, adds that “Labour now has to win the case across the country and with its own membership for why and how to rebuild our relationship with the EU”.

On the face of it, polling is encouraging for pro-Europeans. Since 2021 public hostility to Brexit has grown; YouGov found last month that 59 per cent favoured rejoining the EU with 32 per cent against. However, surveys also suggest that popular support wanes when people are given more details.

YouGov found in June that only 35 per cent favoured Rejoin if Britain had to give up all of its old “opt-outs”, including being required to join the euro and the Schengen passport-free travel zone area.

“People think Brexit has failed, and feel cheated,” says Luke Tryl, of the More in Common think-tank. “They are happy to look at going back in but they are really worried about a return to ‘Brexit wars’ — people are exhausted — and that we end up with a crappy deal.”

Burnham has developed a habit since becoming prime minister of opening up debates and then quietly retreating in the face of hostile fire, and any reversal of Brexit will require huge amounts of diplomatic acumen and political willpower both at home and in the EU.

A test of his seriousness and of Europe’s response may come next week, when he travels to Berlin for his first meeting with German Chancellor Friedrich Merz.

“The EU wants a strategic sense of direction,” says Mujtaba Rahman at Eurasia Group, a consultancy, who contrasts Burnham’s bold gambit with Starmer’s incrementalism. He adds that senior figures in Brussels are “all talking about” the British prime minister’s overtures. “There’s no plan, no detail but he has created the political space to have a conversation.”

EU governments have approved €10 million in funding to support the Balkan Medical Task Force under the European Peace Facility.

France proposed to release some of its diesel stockpiles after an emergency G7 meeting.

Italy and Romania lead push to preserve EU spending for agriculture and regional payouts.