With Social Security barreling toward insolvency, the government is increasing benefits in January.

On Wednesday, the Social Security Administration (SSA) announced that retirees will receive a 3.6 percent increase in Social Security benefits next year. The raise, which was unveiled shortly after the Bureau of Labor Statistics reported consumer prices rose 3.7 percent year over year in September, will amount to an increase of $75 per month for the average beneficiary. It also represents a cost-of-living adjustment (COLA) that will be 0.8 percentage points higher than last year's, which was 2.8 percent, and 0.9 percentage points higher than what was projected by the Social Security Trustees, according to the Committee for a Responsible Federal Budget.

"Social Security will implement this cost-of-living adjustment for 76 million Americans, giving them greater financial stability," said SSA Commissioner Frank J. Bisignano in a press release. "Under President Donald J. Trump, Social Security is delivering better, faster, higher-quality service for the American people."

But the announcement comes as Social Security faces a looming funding cliff.

The program has been spending considerably more than it receives for years, thanks in large part to the U.S. demographic problem: Birth rates have collapsed, life expectancy has risen, and there are fewer working-age people paying taxes to fund retirees. In 2025, the program collected $1.45 trillion in revenue and spent $1.61 trillion, leaving a $160 billion shortfall. Trust fund reserves covered the gap, but they are rapidly dwindling. In June, Social Security's Trustees projected that, without legislative changes, incoming revenue would cover only 78 percent of scheduled retirement and survivor benefits by late 2032—a 22 percent shortfall. Combined retirement and disability funds are expected to run out by 2034. There are a handful of fixes, including raising the retirement age, reducing benefits, raising the cap on earnings, means-testing the program, privatizing it, or getting rid of it altogether.

While many lawmakers have acknowledged reality, Congress remains divided on how to address the issue. In August, Sen. Ron Wyden (D–Ore.) blocked a proposal from Sen. Bill Cassidy (R–La.) to establish a congressional process to consider reforms, arguing that it would slash retiree benefits and help billionaires "avoid paying their fair share."

"People are objecting to doing their job," Cassidy complained in September. "Congress needs to fix Social Security this year."

What makes Wednesday's increase even more unjustified is the fact that older Americans are already among the wealthiest age groups in the country. According to the Federal Reserve's latest Survey of Consumer Finances released last week, households headed by someone aged 75 or older had a median net worth of $504,900 in 2025, compared with just $33,000 for households headed by someone under 35. Despite their relative wealth compared to working-age people, retirees are getting a COLA increase that is greater than the average worker, whose wages have risen by 3 percent in the last year.

For the very wealthiest beneficiaries, the 2027 COLA will constitute an enormous increase. According to the Committee for a Responsible Federal Budget, the highest-earning couples who retired this year will receive a combined increase of $3,600, meaning that their combined benefits would exceed $100,000 next year. However, without congressional action, Social Security recipients could expect a 22 percent cut that, in 2032, would wipe out the previous nine years' COLAs all at once.

Despite years of warnings about Social Security's deteriorating finances, Congress has yet to enact reforms to avert the looming shortfall. For now, beneficiaries can look forward to larger checks in January, even as the program moves closer to the day when it can no longer pay the benefits it has promised.

The post Social Security Is Running Out of Money. Benefits Are Rising 3.6% Next Year Anyway. appeared first on Reason Magazine.

The federal government just closed fiscal year 2026 with a deficit of nearly $2 trillion, according to figures the Congressional Budget Office (CBO) released last Thursday. Only the two pandemic years of 2020 and 2021 were worse. Today, though, there is no recession and no emergency. These enormous budget deficits are the new normal.

The usual response to a deficit warning is that the government just needs more money. It doesn't. Thanks to the remarkable strength of the private sector, federal revenue rose by 3 percent, to more than $5.4 trillion, over the fiscal year. But spending rose by 6 percent, reaching $7.4 trillion.

Some will blame the Supreme Court for striking down most of President Donald Trump's tariffs and forcing the government to issue refunds. But even if Washington had kept the $130 billion in illegal levies, it would cover less than one-tenth of the gap. Tariffs were never a serious revenue source at our insanely high level of spending.

Look at where the money went. Spending on the three main entitlement programs—Social Security, Medicare and Medicaid—grew by 7 percent. That's faster than total spending growth. Defense grew by 5 percent. Interest on the debt rose by 11 percent, exceeding $1.1 trillion. That last figure is the bill for every earlier year of borrowing—years when Washington was sending clear signals that it isn't serious about fiscal responsibility.

If you want to see where such irresponsibility can lead, look at France. The country that big spenders from Paul Krugman to Sen. Bernie Sanders (I–Vt.) have cited as proof that big government is viable and full of upsides is now on the brink of a serious crisis. France's debt equals 120 percent of its gross domestic product (GDP), and interest payments are rising quickly. Slow growth and social unrest aren't helping.

The U.S., of course, has some advantages that France doesn't, largely because we're a country of innovators with a private sector unmatched at creating wealth. Nonetheless, debt that is swelling out of control should still worry us. First, the same anti-wealth and anti-growth forces that brought France to where it is now are gaining popularity here. Second, we too will see debt reach 120 percent of GDP in a few years, and our interest payments are already consuming an alarming share of resources.

A wise Congress would put us on safer footing if only because debt raises interest rates for everyone, from homebuyers to small businesses. This operates as a drag on growth, and hence on wages. In other words, controlling debt should be part of an affordability agenda in the same way as streamlining regulation.

When legislators decide to take affordability seriously, I recommend looking at a September Advancing American Freedom (AAF) report on this topic. Its section on fiscal restraint offers a useful menu of reforms, including targeting the programs that most drive the debt.

Start with Social Security. Under current law, benefits will be cut by roughly 20 percent when the program's trust fund runs dry in the early 2030s. Nobody believes Congress will actually let that happen, but we'd better hope its answer isn't to double down by borrowing the difference between payroll taxes and benefits.

Nor are tax increases an option. The payroll tax meant to fund entitlements is now 12.4 percent of wages. It began at 2 percent when Social Security was first rolled out. It is also the most burdensome tax for many Americans. Enough already. The fixes AAF fellow Rachel Greszler proposes are worth considering: Index the retirement age to life expectancy, use an accurate inflation measure for cost-of-living adjustments, and move gradually toward a flat universal benefit that protects lower-income retirees while ending Social Security's de facto welfare for the wealthiest.

Next is Medicare. More than 40 percent of its financing already comes from general revenue rather than from payroll taxes. The report recommends converting the program to premium support, giving beneficiaries a fixed contribution to spend on traditional Medicare or on competing private plans. It would also raise the eligibility age to 67, matching Social Security, and trim subsidies for well-off seniors. That's a start.

As for Medicaid, the problem is one of pricing. And yet competition based on price—the best cost-control tool—has never been seriously tried. Washington covers 90 percent of the cost of states' expanded Medicaid programs for adults. A state can buy a dollar of spending with just a dime of its own money. Changing the states' incentives would be key here. Implementing risk-adjusted per-capita caps, through which the federal government would give states a fixed amount per enrollee, would do just that. States would pay for their own inefficiencies or would be able to use every dollar they save by becoming more efficient.

The same logic supports returning more welfare programs to states, starting with the federal share of the Supplemental Nutrition Assistance Program. State governments have to balance their budgets in some form.

None of these reforms are painless. But the alternatives will prove far more painful. The U.S. will either continue paying a slow, unlegislated tax called inflation or face a fast, ugly fiscal crisis when bond buyers stop giving Washington the benefit of the doubt.

COPYRIGHT 2026 CREATORS.COM

The post The Federal Government Collected $5.4 Trillion. It Still Can't Pay Its Bills. appeared first on Reason Magazine.

Endless illegal immigration, unaffordable energy, draconian speech policing – we're being conditioned to accept outrageous things as normal, says Nick Rendell. Now add to that economic crashes.

The post This Shouldn’t Be Normal appeared first on The Daily Sceptic.

A federal court imposed a 14-day restraining order over allegations that the administration misused public funds for political advertising ahead of midterm elections.

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A federal judge in New York has blocked the Trump administration from entering into, renewing or expanding contracts for a controversial advertising campaign, freezing $20 million in funding allocated through the Department of Homeland Security (DHS) amid allegations that public money was being used for partisan political messaging.

RELATED: Trump Demands Leadership Change in Ukraine Amid Zelensky Rift

U.S. District Judge Jennifer Rochon of the Southern District of New York issued a 14-day temporary restraining order on Sunday, citing the risk of “irreparable harm” before publishing her full legal reasoning. The ruling came just over three weeks before the midterm elections.

The lawsuit was filed by a coalition of civic organizations, including the nonpartisan group Common Cause, represented by the legal firm Democracy Forward. The plaintiffs argued that the campaign violated federal restrictions on using funds appropriated by Congress for partisan advertising or propaganda.

“There is no legal justification or precedent for the president to use the machinery of government and public funds to influence election results,” the plaintiffs said in a statement following the ruling.

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The advertisements, which began airing in late September, feature footage from Donald Trump’s previous presidential campaign, excerpts from speeches warning of the threat of communism and references to recent military operations, including U.S. military action against Iran and the abduction of Venezuelan President Nicolás Maduro.

The Justice Department argued late Saturday that the court order was unnecessary because the advertising campaign was scheduled to end on Sunday. The judge nevertheless imposed the restrictions.

The White House has defended the spending, describing the advertisements as “public service and educational messages” and rejecting allegations that they constitute electoral propaganda. Trump has maintained that the campaign promotes the United States rather than himself, noting that he is not a candidate in the midterm elections.

The president has also offered to cover the cost with personal funds or money from his political campaign if authorities determine that the expenditure was improper. Government officials, however, have said there are no immediate plans for reimbursement.

The controversy has drawn criticism across party lines. Republican Senate Majority Leader John Thune has questioned the use of taxpayer money to finance the advertisements, while the Democratic National Committee has filed separate lawsuits against the administration over the same issue.

A California state auditor found waste, mismanagement, and misuse of taxpayer money inside several state agencies, including the office of state Controller Malia Cohen, which is responsible for managing state finances and payroll. The investigation found that for over a year, senior officials in Cohen's office deliberately stalled the recovery of more than $33,000 in salary overpayments to two employees, canceling a required payroll deduction while considering an alternative plan to seek state payments on the employees' behalf. Officials never carried out that plan, and the auditor concluded that the office violated state law by failing to collect one employee's debt. The investigation also found that two managers worked remotely from Idaho, Tennessee, and Alabama despite rules restricting out-of-state telework. Across nine cases involving multiple state agencies, the auditor identified about $885,000 in wasted, misused, uncollected, or improperly spent public funds.

The post Brickbat: Not Counting Every Penny appeared first on Reason Magazine.

A heat pump subsidy scheme launched by Ed Miliband just nine months ago is facing cuts to help fund defence as the public continues to reject the technology and the quiet Net Zero rollback marches on.

The post Heat Pump Subsidies to be Scaled Back to Fund Defence appeared first on The Daily Sceptic.

Russia suffered vastly more casualties than Ukraine in September, a senior NATO military official told Bloomberg. Ukraine’s General Staff put the month’s Russian toll only slightly lower.

September’s toll lands on a recruitment system that was already falling short. Ukraine’s military intelligence (HUR) estimated that Russian losses outran new contracts in June and July, when monthly losses ran lower. In August, Ukrainian President Volodymyr Zelenskyy, citing military intelligence, warned that Russia is preparing a mass call-up after its parliamentary elections. That vote ended on 20 September.

Where the numbers come from

Russian casualties passed 50,000 in September, up to 28,000 of them killed, the official said. Ukraine’s losses over the same month came to about 5,000, according to the official, who spoke on condition of anonymity. Russia does not release casualty figures, Bloomberg noted. In late August, Pavlo Palisa, deputy head of Ukraine’s Presidential Office, put Russia’s July losses at 43,000 killed and wounded. Bloomberg could not confirm his figures.

To push forward, Russia keeps feeding troops into “kill zones,” the official said. These are stretches of ground saturated with armed drones, mines, and artillery fire. Maksym, call sign Rumyn, is a deputy company commander in the 46th Airmobile Brigade’s drone battalion. In April, he said the zone once ran 3–5 km deep and is now several times larger.

Rising stakes for Moscow

Russia’s defense spending is expected to near $199 billion this year, Bloomberg reported, citing two sources close to the government. That is about 40% above the plan the government set in late 2025.

Russian President Vladimir Putin would struggle to wind down the invasion without a political cost, Martin Jäger said last week. He heads Germany’s Federal Intelligence Service (BND).

An analysis published on Wednesday by ABC News estimated that companies backed financially by Donald Trump Jr. and Eric Trump have so far scored more than $6 billion in contracts from the US Department of Defense. As ABC documented, many of the investments into the defense firms come through 1789 Capital, a venture capital firm […]

The post Trump sons-backed firms bank $6 billion plus in Pentagon deals appeared first on Asia Times.

Russia is spending more on the war than at any point since it began. Russia's military funding is on track to hit a record this year after President Vladimir Putin added almost $60 billion to the outlays set in the budget, Bloomberg reports, citing people close to the government.

Defense spending is expected to approach about $199 billion by the end of 2026, roughly 40% above the plan Moscow announced in late 2025. That reverses the course of a year ago, when the Kremlin meant to slow military growth, narrow its deficit, and rebuild reserves drained by the war.

Alaska was the turning point

Putin ordered the shift late last year, after concluding that talks with the US in Alaska would not produce an acceptable deal to end the fighting, the report says.

By January, the Kremlin judged an agreement with Ukraine to be out of reach, and the government began accelerating advance payments to defense firms and raising other war-related spending.

"The government is finally budgeting for a prolonged war in Ukraine, but still understates its cost," Bloomberg Economics economist Ekaterina Vlasova said.

The deficit nearly doubles

Paying for the war has blown out the budget. The projected 2026 deficit has climbed to more than $81 billion, up from about $44 billion as first planned, and the government covered the extra spending through increased domestic borrowing and gold sales.

The budget plans years of war

The spending is not set to fall soon. Under the budget plans, Russia's military outlays reach about $200 billion in 2027, then ease to $194 billion in 2028 and about $191 billion in 2029, a signal that Moscow is planning for a long war.

Earlier, Euromaidan Press reported that Russia was raising 2027 defense spending by 27% to a record, even as its deficit widens and oil and gas revenues fall.

More than 50 Russian companies could default on their bonds this year, the most since 2009, a rating-agency analyst told Russian newspaper Izvestia, which reported it on 6 October.

Russia's wartime economy is straining under high interest rates, and the budget is too: the 2026 deficit has nearly doubled from the earlier forecast to a record $88 billion, with more deficits planned for the next three years as Moscow raises taxes to fund the war and plans its biggest defense budget since the full-scale invasion began.

A default is a situation in which a company cannot make promised interest payments to investors on time or repay borrowed money. If a payment is not made by the agreed deadline, the company becomes delinquent, which under certain conditions is recognized as a default.

So far this year, 20 companies have defaulted for the first time, compared with 24 in all of 2025, said Mikhail Nikonov of the Expert RA rating agency. Most of the companies that missed payments are small issuers of high-yield bonds, Izvestia reported.

In 2026, Russian companies have missed payments totaling 41 billion rubles (about $490 million), compared with 34 billion rubles (about $410 million) the previous year, according to investment bank Sinara.

Russia faces a new wave of corporate defaults

By the end of 2026, the number of Russian companies unable to service their ruble-denominated debt on time could reach 40–50, the highest level since 2010, said Pavel Zholobov, junior managing director at the NRA rating agency.

The number of bond defaults in 2026 has already reached its highest level in a decade, Zholobov said. Similar figures were recorded in the mid-2010s: in 2014, 35 companies missed payments; in 2015, 52 did so; and in 2016, there were 44 issuers. This occurred in part after Western sanctions were imposed on Russia over its annexation of Crimea and its war in Donbas, as well as amid a halving of oil prices and a sharp weakening of the ruble.

There were more defaults only in 2009. At the time, amid the fallout from the global financial crisis, more than 100 issuers faced payment problems, while the volume of distressed debt reached nearly 200 billion rubles, Zholobov noted.

High interest rates put pressure on companies

This time, the main reason for companies' difficulties in making bond payments has been the prolonged period of high interest rates, which has continued since 2023. Companies are raising financing at high interest rates but are unable to refinance their debt on more favorable terms, explained Ekaterina Sidorova, head of the Foreign Exchange, Commodities and Debt Markets Department at SberCIB Investment Research.

At the same time, the situation does not yet resemble a systemic debt crisis: defaults are primarily being recorded among companies with low credit ratings and high debt burdens, Sidorova said.

If a company fails to repay bond debt, it is given 10 business days to meet its obligations. If it fails to do so, the company may offer investors a restructuring—for example, by postponing payments in exchange for a higher interest rate.

The number of defaults will remain high in 2027, Sidorova believes.

High interest rates were a response to accelerating inflation in Russia. Domestic demand was outpacing production, Russia's Central Bank said in October 2023. Sanctions over the war and rising defense spending had also hit the economy and the ruble, which had lost about 25% against the dollar that year. The bank raised its key rate from 7.5% in the first half of 2023 to 15% by the fall.

Ukraine targets Russia's oil industry to weaken its war economy

Ukraine is also seeking to weaken Russia's economy as part of efforts to reduce its ability to finance the war. In particular, Defense Minister Yevhenii Khmara said strikes on oil refineries are aimed at "bleeding the Russian war machine" and destroying its military and economic potential. According to the ministry, the attacks have knocked out more than 51% of Russia's oil refining capacity.

In the first half of July, Russian oil refineries processed about 3.9 million barrels of oil per day—the lowest level since March 2005. Due to the production cuts, Moscow was also forced to restrict fuel exports.

Marine Le Pen has set out plans to cut French public spending by €140 billion by 2032, reduce the deficit and impose a constitutional constraint on future borrowing, placing France’s deteriorating public finances at the centre of the campaign for the 2027 presidential election.

Marine Le Pen has presented a five-year fiscal programme under which a National Rally administration would seek €140 billion in net savings by 2032, restore France’s primary budget balance within 18 months and bring the headline deficit back below the European Union’s three per cent threshold by 2030.

The proposals, presented on Tuesday as Le Pen outlined the financial trajectory she would pursue during a presidential term, come as France faces rising borrowing costs and a public debt ratio approaching 120 per cent of GDP.

The scale of the problem was underlined on the same day by France’s Directorate-General of the Treasury. Its latest report on public debt projects the debt ratio at 119.3 per cent of GDP this year before rising to 121.7 per cent in 2027. Debt stood at 115.7 per cent at the end of 2025.

EU Today has already reported that French borrowing costs and concerns over the sustainability of the country’s finances have begun to weigh on the euro and widen the gap between French and German government bond yields.

Le Pen’s programme is therefore aimed not only at French voters but at financial markets increasingly focused on whether Paris can prevent debt from continuing to rise.

According to the proposals outlined on Tuesday, spending reductions would be concentrated heavily in the first three years of a Le Pen presidency. She would also seek to introduce what she calls a constitutional “golden rule”, requiring successive governments to reduce the budget deficit each year.

The measure would be put to a referendum and is intended to make deficit reduction binding beyond an individual government’s annual budget decisions.

Le Pen has also proposed reducing France’s public debt to around 112 per cent of GDP by 2032. That would reverse the trajectory currently expected by the French government, although the National Rally’s assumptions would depend on its ability to deliver the proposed savings and on economic growth during the next presidential term.

Among the most politically significant proposals is a plan to restrict France’s net contribution to the EU budget to €5 billion. The party argues that some European spending should instead be financed through harmonised taxes on products such as tobacco and alcohol.

Le Pen also expects substantial savings from tighter immigration controls and the introduction of the National Rally’s proposed “national preference” rules for access to parts of the welfare system. Her programme estimates that measures connected with immigration could eventually produce savings of as much as €29 billion annually.

Other elements include changes to pension policy, reductions in corporate and energy taxation, measures against VAT fraud, the abolition of more than 120 taxes and a reduction in the number of state agencies.

The programme marks an attempt by Le Pen to make fiscal policy a central part of a campaign that has until now been dominated largely by immigration, security and questions surrounding France’s political fragmentation.

The timing is significant. Prime Minister Sébastien Lecornu’s government has itself introduced a difficult fiscal consolidation programme. The 2027 budget presented by the Finance Ministry envisages €54 billion in measures to improve the public finances, including €43 billion contained directly in the state and social-security budgets.

The government expects the deficit to fall from 5.4 per cent of GDP in 2026 to five per cent next year. It forecasts growth of only 0.5 per cent this year before a recovery to one per cent in 2027.

The debt burden is becoming increasingly costly. Interest payments are expected to reach €91.2 billion in 2027, up from €79.2 billion this year, according to the Finance Ministry. By 2030, total public-sector interest costs are projected to reach 3.7 per cent of GDP.

That gives the presidential campaign an economic dimension that is difficult to separate from France’s relationship with Brussels. Paris remains subject to EU fiscal rules requiring a gradual reduction in its deficit, while any attempt to reduce the French contribution to the EU budget would require negotiations with the other member states.

Le Pen enters that debate from a strong electoral position. Recent polling examined by EU Today has placed her ahead in first-round scenarios for 2027, although the final field remains unsettled. EU Today reported in September that Le Pen was polling between 33 and 36 per cent depending on her opponents.

Her latest intervention shifts part of the campaign onto terrain traditionally associated with the centre-right: public spending, debt and the credibility of France’s finances.

With the government attempting to secure parliamentary support for its own austerity measures and French borrowing costs under closer scrutiny, the question of how the country pays for the state is now moving towards the centre of the contest to succeed Emmanuel Macron.

Italy expects its budget deficit to rise above the European Union’s three per cent reference level again next year as Giorgia Meloni’s government uses new EU fiscal flexibility to finance defence and measures responding to higher energy costs.

Rome’s latest multi-year fiscal projections put the 2027 deficit at 3.4 per cent of GDP, substantially above the previous target of 2.8 per cent.

The increase follows a planned fall to 2.9 per cent this year, which would bring Italy below the EU’s three per cent threshold for the first time since 2019. The deficit stood at 3.1 per cent in 2025.

The change reflects Italy’s decision to use the EU’s national escape clause, allowing member states under specified conditions to deviate temporarily from their agreed expenditure paths.

Under the latest projections, Rome intends to use fiscal flexibility worth 0.6 per cent of GDP in both 2027 and 2028 for defence and energy-related spending. The additional expenditure amounts to roughly €29 billion across the two years, while the deficit is projected at 3.2 per cent in 2028.

The decision turns a long-running dispute over fiscal flexibility into a test of the EU’s revised budget framework.

The national escape clause was introduced in the 2024 reform of the Stability and Growth Pact. It permits a member state to deviate temporarily from its fiscal path when exceptional circumstances outside its control have a major effect on public finances, provided medium-term fiscal sustainability is not endangered.

The mechanism was subsequently used to give governments greater room to increase defence spending. In 2026, the Commission also moved to broaden its application to energy-security expenditure.

Italy has been among the governments pressing hardest for such flexibility.

In August, EU Today reported that Rome intended to use the available fiscal room fully for energy measures but only partly for defence. The decision illustrated the competition between longer-term military investment and the immediate political pressure created by household and industrial energy bills.

The latest projections make that trade-off larger.

Italy’s annual inflation rate increased to 4.1 per cent in September, from 3.2 per cent a month earlier. Meloni has sought additional room from Brussels to cushion the economic effect of elevated energy costs.

At the same time, the government has improved its growth forecasts.

GDP is now expected to expand by one per cent in 2026, compared with an earlier projection of 0.6 per cent. Growth for 2027 has been revised from 0.6 to 0.8 per cent.

Those figures provide some additional room, but Italy’s debt remains the larger constraint.

Public debt is projected to rise from 138.1 per cent of GDP this year to 138.5 per cent in 2027 before edging down to 137.9 per cent in 2028. The government now expects the debt ratio to begin falling a year later than previously planned.

That leaves Rome in an unusual position. It expects formally to bring its underlying deficit below the EU threshold while headline borrowing rises above three per cent once exceptional spending is included.

Economy Minister Giancarlo Giorgetti has said Rome is discussing with the European Commission how the calculation will affect Italy’s attempt to leave the EU’s excessive deficit procedure.

The Commission will therefore have to judge not only Italy’s fiscal trajectory but how extensively exceptional expenditure can be accommodated under rules Brussels itself has made more flexible.

That question has already generated concern.

EU Today reported last month that the European Fiscal Board had warned that exceptions were beginning to weaken the clarity of the revised rules. The watchdog has been particularly critical of allowing room initially associated with higher defence spending to be extended to energy-resilience measures.

Italy provides one of the clearest examples of the problem.

Rome is trying simultaneously to increase military capacity, protect households and businesses from energy costs and demonstrate that its very high debt remains manageable.

It has also argued that European rearmament cannot proceed unless governments have sufficient room to finance it. The same tension emerged in Italy’s debate over participation in the EU’s SAFE defence loan programme.

The EU has given governments more flexibility to manage those competing demands. Italy’s 2027 budget will show how far that flexibility can stretch before the argument returns to the credibility of the fiscal rules themselves.

Thousands of students across Germany were once again on strike against conscription and militarization on Friday, September 25. Actions took place in at least 100 localities as young people demanded a sharp turn from the government’s chosen path.

“We don’t want to be forced into military service and we don’t want to go to war,” the students wrote in declaration after their last strike in May.

Read more: German students expand their strike against conscription and militarization to 150 cities

This is the fourth time students have exchanged classrooms for streets since the end of 2025. The mobilization has strengthened in resistance to the Merz administration’s plans to build the “strongest conventional army in Europe” – including by drawing more people into the Bundeswehr, the German armed forces.

While authorities insist military recruitment remains voluntary, students have warned of a clear tendency toward outright conscription. Local strike committees and activists also emphasized the widespread repression ahead of actions. This included scheduling of exams on strike days and locking-in students on school grounds, they pointed out.

Billions for the Bundeswehr, cuts for schools and youth services

Over recent months, the government has sent thousands of questionnaires to map voluntary interest in joining the armed forces. According to German media, the response has been underwhelming: tens of thousands of students have disclaimed no interest whatsoever. Not even a multi-million-euro budget allocated to promoting the army has been able to shake this opinion.

“They sell us war service as an ‘adventure’ while we know that what awaits us is coertion, humiliation, sexism, right-wing extremism, and racism,” the student declaration adds.

Instead of taking the message seriously, authorities recently advanced the implementation of medical checks among their targeted population, drawing further frustration from students.

“We don’t want compulsory questionnaires, fines, draft physical examinations, conscription assessment centres across the country, nor planned integration of the Federal Volunteer Service into military service,” they wrote. “These are means to prepare the reintroduction of the draft and thus another war originating from Germany.”

“In case of conscription, we’ll be trained as cannon fodder, forced into the trenches,” students added. “War costs us our lives, while corporations like Rheinmetall make record profits.”

Read more: Ulrike Eifler: ‘The workplace is a place where we have to fight against war’

Students on strike have expressed solidarity with other ongoing struggles against militarization and budget cuts. They stated they would join peace demonstrations planned for early October in Berlin and Stuttgart, as well as a trade union-backed mobilization against budget cuts on Saturday, September 26.

Their decision reflects the widespread understanding that youth and education services are among those impacted by this round of austerity. According to junge Welt, the federal ministry responsible for education will face close to €1 billion in cuts – while €140 billion will be made available for so-called defense in 2027.

“Every tank, every rocket we pay for with dilapidated schools and social cuts,” students remarked.

The European Commission wants to cut the EU’s public procurement rulebook from around 900 pages to 200, in a sweeping reform that aims to simplify tendering while giving governments greater scope to favour European economic and security interests, writes Catherine Feore.

Executive Vice-President Stéphane Séjourné held up the existing body of rules alongside its much slimmer replacement, to illustrate his point. 

“These here are the European rules which currently govern public procurement in Europe: 900 pages,” he said. “And this is what we are proposing today… down to 200 pages.”

The proposed Public Procurement Act would replace three EU procurement directives with a single regulation, with a view to simplifying procurement provisions spread across 26 sectoral laws and cutting the number of procedures from five to three.

The Commission estimates the changes could save businesses and public authorities €650 million a year in administrative costs.

The reform matters because of Europe’s massive purchasing power involved. EU public procurement exceeds €2.5 trillion annually, around 15% of EU GDP, covering everything from trains and hospitals to energy infrastructure, schools and IT systems.

From lowest price to strategic purchasing

The proposal is not just about cutting red tape. Brussels wants governments to use their purchasing power more strategically.

The Best Price-Quality Ratio would become the standard method for awarding contracts, with quality normally accounting for at least 30% of the assessment and 50% for labour-intensive contracts. Authorities could consider environmental and social performance, innovation, security and resilience alongside price.

The commitment to a so-called European preference has been tempered by the EU’s international commitments, but access can be restricted when a country doesn’t reciprocate market access. Restrictions could also be imposed where reliance on foreign suppliers creates security-of-supply dependencies or threatens EU economic security.

“European public money should, wherever possible, create jobs, investment and opportunities in Europe rather than filling the order books of our competitors,” Séjourné said.

Five procurement procedures would become three: open, dynamic and innovation procedures. Each would allow negotiation between buyers and bidders.

The Commission also plans an integrated EU digital procurement marketplace connecting national e-procurement platforms. A company registered through one connected system should be able to bid elsewhere in Europe without repeatedly submitting the same documentation. This is intended to reduce bureaucracy and tackle one of the current system's weaknesses: too little competition, particularly from SMEs and companies bidding across borders.

National, regional and local priorities may appreciate this flexibility in theory, but constrained budgets often mean that price will remain the bottom line for many. This legislation offers greater freedom in determining needs, but it remains to be seen what its impact will be.

PHOTO CREDIT: European Commission Executive Vice-President Stéphane Séjourné says the rules reduced from 900 pages to 200 pages © European Union

European Commission President Ursula von der Leyen and NATO Secretary General Mark Rutte Photographer: Dati Bendo © European Union
European Commission President Ursula von der Leyen said on Wednesday (2 September) that Europe and NATO would increase pressure on Russia after Germany attributed an attempted attack on cargo planes at Leipzig/Halle Airport to Moscow, calling the incident a “new escalation” on European Union soil, writes Catherine Feore.

“This was an attack using military-grade material, carried out by Russian operatives on European Union soil. We will not tolerate it,” von der Leyen said alongside NATO Secretary General Mark Rutte in Brussels.

The German government said on Tuesday (1 September) that its investigation and intelligence findings established Russian responsibility for the attempted attack at Leipzig/Halle Airport last month. Russia has denied responsibility.

The meeting took place as foreign ministers and the EU's High Representative for Common Foreign and Security Policy were meeting to discuss Russia and Ukraine among other issues.

“Had this attack succeeded, this would have resulted in enormous damage and possibly even loss of life,” von der Leyen said. “We stand in full solidarity with Germany.”

“If the intention was to make us think twice about supporting Ukraine, I can tell you it has only strengthened my resolve. Intimidation will not work.”

Von der Leyen said the Leipzig incident was part of a wider pattern of Russian activity confronting Europe, including airspace incursions, drones disrupting airports and interference with critical infrastructure.

“Leipzig marks a new escalation on European Union soil, directly attributed to Russia,” she said. 

Von der Leyen outlined three areas for a stepped-up European response: stronger protection of European infrastructure backed by additional sanctions on Russia, increased air-defence support for Ukraine, and an acceleration of Europe’s own defence build-up in close cooperation with NATO.

Infrastructure and sanctions

First, von der Leyen said Europe must strengthen the protection of infrastructure that could be targeted by Russian hybrid operations and be prepared to respond more quickly when attacks occur.

“We must treat our everyday infrastructure as frontline targets, and protect them accordingly,” she said.

The EU already has rapid response teams that can assist member states faced with such attacks, she said, arguing that Europe’s ability to prepare and respond would itself act as a deterrent.

Von der Leyen also said the EU was ready to intensify economic pressure on Moscow through sanctions. “Our sanctions have weakened Russia’s economy. We can use more sanctions and have them ready to impose as soon as such dangerous, life-threatening acts are attributed,” she said. “Every loophole Russia exploits is one we must close.”

European foreign ministers were discussing new listings in Ireland on Wednesday, she said, while the Commission was examining further ways to “cut deeper into Russia’s war chest”.

More air defence for Ukraine

Von der Leyen said her second priority was strengthening support for Ukraine, announcing that the EU had received a new request worth several billion euros for air-defence capabilities.

“Today, I can confirm that we have received a new payment request,” she said. “It is worth several billion euro, and would cover Ukraine’s air defenses, including the highly advanced PAC-3 Patriot air defense systems.”

Member states were considering the request, she said.

“I can say that it’s going in the right direction.”

Von der Leyen also pointed to European work with Ukraine on the FRIO project to develop anti-ballistic missile defences, as well as the EU’s €90 billion support loan.

“Since June, we have issued €8.5 billion for drones and missiles for Ukraine from this loan,” she said, adding that the funding could also be used to buy fighter aircraft from European industry.

Faster European defence build-up

Von der Leyen’s third priority was to accelerate Europe’s defence build-up alongside NATO, with air defence at the centre of the effort.

“Air defenses are critical,” she said. “We need a faster, more integrated alert system across Europe, and then we must intercept the threats faster.”

She pointed to the EU’s €800 billion defence investment plan, including €150 billion through the SAFE instrument, as a way for European countries to increase defence investment jointly.

“We are in a new era of European security,” von der Leyen said. “European investment in defense strengthens NATO and re-energizes our industrial base.”

Rutte backed von der Leyen’s assessment of the threat, saying Russia had become “increasingly reckless” as its war against Ukraine continued.

“We have seen more drones and missiles crossing into our airspace along our eastern flank, creating increased risk,” Rutte said.

“And we have also seen an increase in malign activities targeting our territory directly, whether it is fires set in factories producing defense equipment for Ukraine, or indeed the Russian hybrid attack in Leipzig.”

“The examples are many. The dangers Russia poses are clear,” he added.

Rutte said NATO was working “around the clock” to ensure it could protect its population and said Moscow would fail if it hoped attacks such as Leipzig would undermine Western backing for Kyiv.

“If Russia thinks we will be divided by the threat, or if they think we will be deterred from supporting Ukraine, they are mistaken,” he said. “Our unity is unshaken. Our support to Ukraine is clear.”

Rutte said NATO allies had agreed to provide at least €70 billion to support Ukraine this year and the same amount next year, with the EU loan forming a “crucial element” of that support.

The NATO chief also backed the push for additional air defence and increased defence production, saying higher spending had to translate into additional military capabilities and greater industrial capacity.

Von der Leyen said the EU and NATO would not be intimidated into reducing their support for Ukraine. “Europe and NATO will not just maintain our pressure on Russia; we will increase it,” she said. “We will not stop — not until Russia stops bombing and killing innocent children, men and women in Ukraine. We will continue, we will prevail, and we will deter anyone who attacks our freedom and our security.”