Harmonised not centralised. The European Commission will call for “efficient and harmonised” supervision of capital markets in its forthcoming communication on capital markets integration, according a draft document seen by Euractiv’s Thomas Moller-Nielsen.
 
The language – which stops short of calling for “centralised supervision” long urged by France – represents a concession to smaller member states that are staunchly opposed to integrating their supervisory authorities.
 
High uncertainty. Meanwhile, the European Central Bank has lowered its eurozone growth forecast for the fourth consecutive quarter yesterday, as weak consumption, global trade tensions, and geopolitical uncertainty continue to weigh on the bloc’s anaemic economy.
 
DMA vs. MAGA. Commissioners Ribera and Virkkunen responded to MAGA politician Jim Jordan's attack on the Digital Markets Act (DMA) today, one of the first defences of EU tech laws by the near-new Commissioners. A letter seen by Euractiv’s Anupriya Datta said it provided the Commission with an "opportunity to clarify" the objectives of the DMA.  
 
Debunked. In Ursula von der Leyen's Paris AI Summit speech and following press release, the Commission described a €10 billion public AI Factories initiative, but the precise figure is €1.96 billion. VdL’s desire to impress might have exceeded her access to capital, writes Jacob Wulff Wold
 
One of them is not telling the truth. The Italian government has dismissed reports of ongoing negotiations with the France-based satellite communications company Eutelsat as "unfounded," directly contradicting a statement made by Eutelsat CEO Eva Berneke on the same day, writes Théophane Hartmann. 
 
Pressure to recycle more. Brussels' growing pledges to expand Europe's domestic extraction of critical raw materials will be followed by increased pollution, experts say, which means a need to increase the amount that is recycled and reused, writes Bárbara Machado.
 
All rosy? European battery makers and recyclers see a brighter future after the EU automotive action plan released on Wednesday sent important signals to the sector, and placed the EU battery industry at the centre of its transport decarbonisation and industrial strategies, writes Stefano Porciello.
 
Zero alcohol. A slate of terms to describe low-alcohol and no-alcohol wines is set to be unveiled by the European Commission in a bid to support the growing market segment, according to a draft regulation seen by Euractiv’s Angelo Di Mambro.

BERLIN

Scholz and the shadow chancellor: Why Germany remains a liability for Europe. As European leaders gathered in Brussels to thrash out the bloc’s future defence policy, Germany’s recent election winner mingled with them as if he was already their equal. Read more.

STOCKHOLM

Gimme gimme gimme a jet. Sweden’s sending Gripen jets to Poland for NATO air policing, a historic first, Defense Minister Pål Jonson announced Thursday. From April to June, six to eight Gripens, backed by 110 crew, will patrol Polish skies, bolstering NATO’s northern surveillance. “It’s about deterrence—or defense if the alliance is attacked,” Jonson said. Come summer, up to eight more jets will shield NATO’s NSATU hub in Poland, securing arms deliveries to Ukraine. “This keeps support flowing,” Swedish Foreign Minister Maria Malmer Stenergard added. The move, pitched to parliament today, marked Sweden’s debut in NATO’s forward defense. Jonson downplayed risks, arguing that “our forces are trained for this” and insisting that Sweden’s home defenses won’t falter.

(Charles Szumski | Euractiv.com)

ROME

Giorgia Meloni is all in on ReArm Europe - well, except for two things: the name and the idea of using cohesion funds to pay for it. According to sources, at the European Council she made it clear that those funds have their own job and buying weapons isn’t part of it. Italy isn’t budging. Or, as Deputy Prime Minister Antonio Tajani put it before Thursday’s EPP summit: “As far as cohesion funds are concerned, we will not use them because they must be earmarked to do other things. There is not concern on this"

(Alessia Peretti | Euractiv.it)

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LISBON

Portugal’s PM urges stability but Calls for parliament to settle legitimacy doubts. Portuguese PM Luís Montenegro, argued on Thursday that it "would be desirable" for there to be “no political upheaval” in the country, but insisted that parliament must clarify if it has any doubts about the government's legitimacy.

“From the point of view of the country's economic and social reality, it would be desirable for there not to be any political upheaval, but democracy has to work,” said Luís Montenegro as he entered an extraordinary meeting of the European Council in Brussels.

Asked about the prospect of early parliamentary elections in Portugal, the prime minister recognised that, as the government “is always dependent on parliament, it doesn't have an absolute majority,” it “can always happen, at any time, that a motion of censure is passed or it can also happen, in the event that the government decides, as it did, to present a motion of confidence, that it may not be passed.”

Asked what explanation he would give to other European leaders about the political instability in Portugal, the prime minister said that the government "is not restricted" and is functioning “to the full”

The prime minister announced on Wednesday that the government will move forward with the proposal of a motion of confidence in the executive by parliament, it not having been clear” that the parties give the executive the conditions to continue.

(André Campos Ferrão, edited by Cristina Cardoso | Lusa.pt)

PRAGUE

The Czech Parliament approved a long-debated treaty with the Vatican on Thursday, despite criticism over its handling of confessional secrecy. The deal, which recognises the Catholic Church’s right to uphold the seal of confession, sparked concerns that it could shield crimes, particularly in abuse cases. Despite Thursday’s vote, a group of Czech lawmakers is still opposing the treaty, calling for a Constitutional Court review. Among the most vocal critics is the opposition Czech Pirate Party (Greens/EFA). Supporters, including the ruling centre-right coalition, argue the treaty does not expand church protections beyond existing law. Justice Minister Pavel Blažek (ODS, ECR) insists the agreement does not grant absolute immunity, unlike similar treaties elsewhere. Meanwhile, critics warn that vague wording on “pastoral workers” could let the Church define who is bound by secrecy. The treaty has to be ratified by Czech president Petr Pavel who would like to wait for the potential court’s decision. If ratified, the Czech Republic will join 64 nations with Vatican agreements.

(Aneta Zachová | Euractiv.cz)

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WARSAW

Poland's three concerns with the EU defence proposals. Given PM Donald Tusk's (PO, EPP) long-standing push for EU defence investments, Warsaw should be pleased with recent European Commission proposals, including easing fiscal policies on defence spending and enabling common debt for defence initiatives.

However, Tusk's government has three issues with the Commission's plans, according to government officials, cited by Money.pl. First, loans under the new EU instrument would benefit from the national escape clause in the Stability and Growth Pact, allowing post-expenditure assessments by the Commission. The government prefers a list of specific cases eligible for this clause.

Second, Poland disagrees with France on whether joint purchases could be made outside the EU, such as in South Korea or the USA, with Poland supporting this option.

Third, Poland is concerned about redirecting part of cohesion funds to defence, as these funds have long supported infrastructure and healthcare.

(Aleksandra Krzysztoszek | Euractiv.pl)

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BRATISLAVA

Ukraine, Slovak politicians condemn MEP’s Russia comment. The Ukrainian embassy in Bratislava has issued a strong protest over the “shameful statements” of Slovak MEP Erik Kaliňák (Smer-SD/NI), who on Thursday said that if the Russians reached Uzhhorod, “we would finally have a reliable neighbour” - a comment that faced backlash even from government officials. Read more.

SOFIA

Trust in Bulgaria’s new cabinet quickly erodes. Since January Bulgaria has a new government after more than four years of political instability. However, according to opinion polls the public trust in the cabinet is eroding fast. Distrust in the cabinet is growing, according to a survey by the Market Links agency announced on Thursday. In January, when the cabinet took office, pollsters measured 42% distrust in the government of Rosen Zhelyazkov, and now it is 46%. Bulgaria’s cabinet is a three-way minority coalition consisting of Boyko Borissov’s GERB party, the Bulgarian Socialist Party and “There is Such a People”, a populist force. They are supported by DPS-DPS, a party representing the ethnic Turkish minority. Borissov enjoys 24% trust, but distrust in him is 58%. The greatest distrust, 79%, is in Delyan Peevski, the leader of the a political force that split from DPS, struggling for the same electorate. Peevski was sanctioned by the US corruption under the global Magnitsky act.

(Georgi Gotev | Euractiv.bg)

• EU: Justice and Home Affairs Council in its Justice composition expected to focus on insolvency, rule of law, and more;
• Commission Vice President Teresa Ribera receives CEO delegation of EU chemicals industry;
• Vice Presidents Teresa Ribera and Henna Virkkunen attend plenary meeting of high level group on the Digital Markets Act;
• Equality Commissioner Hadja Lahbib holds press conference following “Roadmap for Women’s Rights” adoption;
• Defence and Space Commissioner Andrius Kubilius hosts Minister of Defence of Ukraine Rustem Umerov;
• Trade and Economic Security Commissioner Maros Šefčovič has videoconference with Deputy Prime Minister of Moldova Dumitru Alaiba;
• Energy and Housing Commissioner Dan Jørgensen meets European Federation of Local Energy Companies (CEDEC) representatives;
• Internal Affairs and Migration Commissioner Magnus Brunner meets with International Centre for Migration Policy Development (ICMPD) Director General Michael Spindelegger.

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CORRECTION: Yesterday's edition of The Capitals suggested that European Commissioner for Migration Magnus Brunner said that a review of the safe third country concept would be brought forward to March. This was incorrect – as the article in question stated, Brunner said the review would come "earlier" than the June date originally planned, but did not specify the new date. Euractiv previously reported that the review would be brought forward to March, citing leaked documents.

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[Edited by Charles Szumski, Daniel Eck, Sofia Mandilara]