EU finance ministers have approved a compromise that would expand the European Securities and Markets Authority’s powers while exempting some major trading venues from centralised oversight. The agreement reflects continuing resistance to transferring financial supervision from national authorities to Brussels.

European Union finance ministers have reached an agreement to expand centralised supervision of financial markets, but Germany has secured provisions allowing important parts of Deutsche Börse to remain under national oversight, substantially narrowing the European Commission’s original reform proposals.

The compromise, agreed at a meeting in Luxembourg on 9 October, would transfer responsibility for supervising selected trading venues, clearing houses and securities settlement institutions to the European Securities and Markets Authority (ESMA).

However, the agreement introduces exemptions and thresholds that reduce the number of institutions automatically subject to direct European supervision.

The result is a significant political compromise between governments seeking deeper financial integration and those reluctant to surrender oversight of nationally important market operators.

Berlin secures its exemption

The most contentious element of the negotiations concerned Deutsche Börse, the German financial-market group that operates the Frankfurt stock exchange and provides trading, clearing and other financial infrastructure services.

Germany opposed arrangements that would place all major market operators under direct ESMA supervision, arguing that institutions with predominantly domestic activities should continue to be regulated nationally.

The agreed compromise refines the criteria for determining which trading venues qualify for centralised oversight.

These conditions allow certain Deutsche Börse operations to remain outside the new supervisory regime.

The exemption had already become a point of contention during negotiations among European governments.

As EU Today reported in June, Berlin had sought to protect Deutsche Börse from mandatory European supervision despite Germany’s broader support for integrating EU capital markets.

The October agreement formalises a narrower approach within the Council’s negotiating position, although the legislation remains subject to approval by the European Parliament.

Europe’s fragmented financial markets

The European Commission has repeatedly argued that fragmented national supervision weakens the EU’s ability to compete with financial markets in the United States.

Although the Union operates a single market, many financial institutions continue to face differing regulatory interpretations, procedures and supervisory relationships across member states.

These differences can increase operating costs and discourage financial businesses from expanding across borders.

The Market Integration and Supervision Package is intended to simplify those arrangements and strengthen common oversight of financial infrastructure with significant cross-border activity.

Under the Council’s position, ESMA would assume direct supervision of selected trading platforms and institutions involved in clearing and securities settlement.

Such institutions perform essential functions in financial markets, including managing transactions, transferring securities and controlling risks between counterparties.

Differences in supervisory arrangements can complicate the operation of financial services that increasingly function across national borders.

The Commission argues that greater consistency would allow European capital to move more efficiently between member states and provide businesses with improved access to investment.

Compromise reduces original ambitions

The Commission’s original approach envisaged broader centralisation of supervisory responsibilities.

The Council agreement of 9 October introduces more restrictive criteria governing the institutions that would fall under ESMA’s direct authority.

In addition to the treatment of trading venues, ministers agreed that direct supervision of crypto-asset service providers should initially concentrate on businesses with the most significant cross-border operations.

The Council also supported changes to ESMA’s governance arrangements, including the creation of a full-time executive board.

The proposed board would strengthen the authority’s ability to make supervisory decisions independently of individual national regulators, while preserving mechanisms for cooperation with those authorities.

The compromise also introduces arrangements allowing national supervisors collectively to challenge certain decisions.

These provisions reflect concerns about concentrating regulatory powers within an institution that must oversee financial businesses operating under different national legal systems.

Why capital markets matter for European investment

The supervision reforms form part of the EU’s broader Savings and Investments Union initiative.

European policymakers want to increase the availability of private capital for companies investing in technology, defence, infrastructure and industrial development.

The Union has substantial household savings, but much of that money remains in bank deposits or is invested outside the European economy.

Companies seeking capital for expansion may consequently face higher financing costs or more limited investment opportunities than comparable businesses operating in larger and more integrated markets.

The Commission’s Savings and Investments Union programme seeks to improve access to finance and make cross-border investment more attractive.

Financial-market supervision represents only one element of that programme.

Differences in taxation, insolvency law, national investment products and corporate governance requirements also influence where investors allocate their money.

Nevertheless, regulators regard consistent supervision as an important condition for reducing fragmentation.

Parliament faces a political decision

The agreement reached by finance ministers does not conclude the legislative process.

The European Parliament must adopt its position before negotiations can determine the final provisions.

Parliamentary discussions could revisit the exemptions secured by Germany and the criteria determining which institutions fall under direct ESMA supervision.

The debate will expose differences over whether European financial integration should proceed through incremental reforms or a more substantial transfer of regulatory authority.

Governments supporting national exemptions argue that supervision should reflect the actual geographic scope of a company’s activities.

Supporters of broader European oversight contend that major trading businesses can influence financial markets beyond their home jurisdictions even when individual operations appear predominantly domestic.

The Deutsche Börse exemption has become a prominent example of the conflict between those positions.

Europe’s largest economies broadly support the objective of deeper capital markets, but remain divided over the institutional powers needed to achieve it.

The final legislation will determine whether the expanded responsibilities granted to ESMA are sufficient to reduce fragmentation or leave important parts of Europe’s financial infrastructure operating under substantially different national supervisory systems.

EU ministers have reviewed reforms introduced by Prime Minister Péter Magyar’s administration but left the Article 7 proceedings against Hungary unresolved. The European Commission has acknowledged significant progress while warning that further changes are required to restore the rule of law.

The European Union has maintained its Article 7 proceedings against Hungary despite acknowledging significant improvements in the country’s rule-of-law situation since Prime Minister Péter Magyar’s government took office earlier this year.

Ministers meeting at the General Affairs Council in Luxembourg on Tuesday, 13 October, reviewed reforms introduced by the Hungarian administration and received an updated assessment from the European Commission.

The proceedings, initiated by the European Parliament in September 2018, remain open eight years after concerns over judicial independence, corruption, media freedom and democratic accountability first prompted action under the EU treaties.

No decision was announced to terminate the procedure following the latest meeting.

Brussels acknowledges progress

European Commissioner Michael McGrath said ahead of the discussions that Hungary had made substantial progress towards addressing the institutional problems inherited from the administration of former prime minister Viktor Orbán.

Speaking in Luxembourg, McGrath acknowledged improved cooperation between the Hungarian government and European institutions.

However, he also indicated that the reform process remained incomplete, noting that the new administration had been in office for only several months.

The Commission’s assessment reflects the changing relationship between Budapest and Brussels following Magyar’s election victory and the subsequent introduction of reforms intended to restore judicial and institutional independence.

As EU Today reported in June, the change of government created an opportunity to resolve long-standing disputes over the condition of Hungary’s democratic institutions and the suspension of European funding.

The latest Council discussions indicate that the EU is prepared to recognise reforms already undertaken without automatically treating them as sufficient to close the Article 7 procedure.

An eight-year institutional dispute

The European Parliament initiated the proceedings in 2018 after raising concerns over developments affecting Hungary’s constitutional system, judicial independence, corruption safeguards and civil society.

Article 7 of the Treaty on European Union provides mechanisms for responding when a member state is considered at risk of seriously breaching the Union’s fundamental values.

Under its preventive provisions, the Council can determine whether there is a clear risk of such a breach.

More severe measures, including the possible suspension of certain membership rights, require additional procedures and higher institutional thresholds.

Hungary’s case has remained within the preventive stage, with successive Council meetings examining the country’s legal and political developments.

The Council’s account of the 13 October meeting confirms that Hungarian representatives presented measures intended to address concerns raised by the European Parliament and member states during earlier proceedings.

The Commission also briefed ministers on its latest assessment.

The meeting did not produce a formal finding that the outstanding concerns had been fully resolved.

Magyar faces the consequences of Orbán’s legacy

Since assuming office, Magyar has sought to reverse elements of the institutional structure established during Orbán’s lengthy premiership.

The reforms have included measures concerning public administration, judicial accountability and the relationship between national institutions and European law.

The new government has also attempted to improve relations with Brussels after years of disputes that affected EU budget decisions, sanctions policy and cooperation over Ukraine.

EU Today has previously examined Magyar’s programme of institutional renewal and the political difficulties involved in changing institutions shaped by the previous administration.

Reforming legislation does not necessarily transform the institutions responsible for applying it.

Judicial appointments, regulatory structures, public procurement procedures and anti-corruption enforcement may all require additional measures before the effects of reform can be fully assessed.

The European Commission must therefore consider not only the laws adopted by the new government but also whether the institutions concerned operate independently and effectively.

EU funding remains a separate question

The Article 7 proceedings are closely associated with wider disputes over Hungary’s access to European funding, although the relevant legal mechanisms are different.

During Orbán’s administration, the Commission and Council used financial conditionality procedures to restrict access to certain EU resources because of concerns affecting the protection of the Union’s budget.

Magyar’s reforms have opened the possibility of reversing some of those restrictions.

As EU Today reported in September, the Commission moved towards releasing €4.2 billion following changes intended to address rule-of-law concerns.

The financial decisions involve compliance with conditions attached to EU funding and can proceed independently of the Article 7 mechanism.

Consequently, the release of money does not automatically establish that all the institutional problems identified in the original parliamentary proceedings have been resolved.

Likewise, the continuation of Article 7 does not necessarily prevent the Commission from recognising progress under separate funding arrangements.

Who can end the proceedings?

McGrath addressed the possibility of terminating the procedure during remarks before Tuesday’s meeting.

He explained that the Commission could provide its assessment but did not have unilateral authority to bring the Article 7 process to an end.

In his recorded statement in Luxembourg, the Commissioner pointed to the responsibilities of the European Parliament, which initiated the case, and the Council, which has conducted the subsequent examination.

The institutional arrangements mean that improved relations between the Commission and the Hungarian government cannot by themselves dispose of the proceedings.

The Council must consider the reforms and the remaining concerns within the framework established by the treaties.

Political agreement among member states will consequently be required to determine how the process develops.

A changed relationship with Brussels

The latest discussions take place against a substantially different political background from previous years.

Budapest has recently withdrawn objections to further steps in Ukraine’s EU accession negotiations following Ukrainian legislation addressing educational rights for Hungarian speakers and other national minorities.

The change has removed one obstacle to enlargement negotiations and reflects the government’s more cooperative approach towards other EU institutions.

Nevertheless, Hungary’s position on foreign policy and enlargement is distinct from the assessment of its domestic rule-of-law arrangements.

The Council’s examination remains focused on the institutional concerns that led to the procedure being initiated.

The Irish presidency’s summary of the October Council meeting confirms that ministers received an update rather than reaching a new formal determination.

The proceedings therefore remain open while the Commission and member states continue examining the measures introduced by Magyar’s administration.

The coming decisions will establish how European institutions respond when a new government undertakes reforms intended to reverse the conduct that originally led to action under Article 7.

For Hungary, the outcome will influence its relationship with Brussels well beyond the immediate debate over EU funding. For the Union, it will demonstrate how its rule-of-law procedures operate when political circumstances change and the member state concerned begins addressing previously identified institutional problems.

The European Commission is assessing changes to Google’s search engine and app-store practices after imposing two substantial fines in July. Regulators must now decide whether the company’s response satisfies EU competition requirements or leaves it exposed to further enforcement.

The European Commission is continuing discussions with Google over the company’s response to €890 million in penalties imposed under the Digital Markets Act, as Brussels examines whether changes to its search engine and app-store practices are sufficient to address infringements of European competition rules.

Commission spokesman Thomas Regnier confirmed on Wednesday, 14 October, that officials remained in dialogue with the American technology company. The Commission is assessing the measures Google has introduced, taking account of feedback from businesses affected by its services before reaching a conclusion on compliance.

The review follows two decisions adopted on 23 July, when the European Commission found Google in breach of the Digital Markets Act. A €460 million fine concerned preferential treatment for Google’s own services in search results, while a separate €430 million penalty addressed restrictions preventing app developers from freely directing customers towards alternative purchasing channels.

Search rankings remain under examination

The first infringement concerns Google’s treatment of competing online services offering hotel reservations, shopping comparisons, transport information and sports results.

Regulators concluded that Google had placed its own services in more prominent positions, sometimes providing them with enhanced visual features and search functions unavailable to competing businesses.

The Digital Markets Act prohibits designated gatekeepers from giving their own products preferential treatment when ranking services that compete with those offered by other companies.

Google has already modified its European search results in response to the Commission’s decision. The changes include revised presentations of commercial information and greater prominence for independent comparison services.

As EU Today reported following the introduction of the revised search format, Google has argued that the measures could make searches less convenient and increase dependence on intermediary websites.

The company maintains that direct information previously available through its search engine may become harder for consumers to obtain.

For competitors, however, the question is whether Google’s adjustments provide genuine commercial opportunities or merely alter the appearance of search results without changing the underlying distribution of traffic.

Google Play fees face scrutiny

The second case concerns the Google Play application marketplace, where developers have historically depended on Google’s infrastructure to distribute software and sell subscriptions.

Under the DMA, developers must be able to inform customers about alternative offers and direct them towards purchasing arrangements outside the platform, including their own websites.

The Commission found that Google’s restrictions and fees had limited that freedom.

Although the company may charge for certain services associated with acquiring customers, the Commission concluded that the level and duration of its steering-related charges exceeded what the legislation permits.

Google has since adjusted its external-offers arrangements. European officials are examining whether those changes provide developers with a commercially workable alternative to transactions processed through Google Play.

The issue has consequences for subscription services, digital publishers and software companies seeking to maintain direct relationships with their customers.

A formal ability to direct consumers elsewhere is of limited benefit if the financial conditions make such transactions uneconomic.

Enforcement enters a more demanding phase

The Digital Markets Act was designed to address market practices that conventional competition investigations often took years to resolve.

Rather than requiring regulators to establish a new infringement through lengthy proceedings in every instance, the legislation imposes specific obligations on companies designated as gatekeepers.

The Commission’s DMA enforcement framework allows regulators to examine whether those obligations are being followed and to impose financial penalties when they are breached.

Google’s July fines represented an important enforcement decision. The current review concerns the company’s subsequent conduct and the practical effects of its compliance measures.

The continuation of discussions does not itself establish a fresh infringement. Further penalties would require an additional regulatory determination.

Google also faces broader obligations concerning the sharing of search data with competing providers, an issue addressed in a separate Commission decision issued in July.

These obligations concern access to anonymised information about searches, rankings and user interactions that competing search engines may need to improve their own services.

Taken together, the measures represent a substantial intervention in how Google’s European business operates.

Transatlantic tensions complicate the dispute

The proceedings have acquired a political dimension because most of the largest companies affected by the DMA are American.

President Donald Trump has criticised European penalties against US technology companies and threatened trade measures in response to what his administration regards as discriminatory regulation.

Brussels maintains that the legislation applies according to market position and commercial conduct, regardless of nationality.

European regulators must nevertheless enforce their decisions in an environment where competition policy has become entangled with wider trade relations between the United States and the European Union.

Google’s financial exposure extends beyond the €890 million imposed in July. Continued non-compliance could lead to further regulatory proceedings, while changes to the company’s services may also affect advertising revenue and its relationships with commercial partners.

The immediate assessment will concentrate on whether competing search services receive fair treatment and whether application developers can direct customers towards alternative transactions without unjustified restrictions.

The Commission has not announced a date for its final assessment. Its decision will help establish how far Europe’s digital competition legislation can change the conduct of companies whose platforms occupy central positions in online commerce.

Ursula von der Leyen has the answer. Borrow even more money. Borrow like there’s no tomorrow.

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The most remarkable thing about the rapid demise of the U.S. is that when it hits the bottom of the ocean floor economically, it will be in a better state than the EU. The panic among EU leaders, in particular Ursula von der Leyen, is breathtaking. Barely a week passes before she makes another crackpot policy announcement, gives herself a salary increase, or makes a statement about needing to give even more money to Ukraine. But in recent months these announcements have become more radical and existential, and we are seeing a new dawn now in the EU where the only solution to cover up the feral spending and borrowing is to fabricate a war with Russia and then blame Putin for the whole fiasco.

Every now and again we get a sober reminder about the economic situation of the U.S., EU and Russia. The recent news that Putin is going to sell around 2 million tonnes of diesel oil to “global markets” (as U.S. media phrases it), the lion’s share going to the U.S. before, during and just after the midterm elections in a bid to stabilise the price to help Trump. We will have to assume that countries who buy some of their diesel from the U.S. will continue doing so, but it might, in fact, be Russian oil.

There’s a lot of fake news buzzing around originating from Trump, who likes to distract journalists away from the top issues. It’s hard to see how the American public will respond to Trump’s latest decision to buy Russian diesel, but it’s hard to see this being a solution to the global oil crisis, let alone Trump’s record-low ratings. Will Trump really go ahead with a new wave of strikes on Iran after the midterms, as he has said? Or is it that his own intelligence agencies have picked up information that Iran is poised for a massive strike, and so therefore he is obliged to send even more troops, plus a carrier, to the region?

Regardless of how France and Germany get their diesel in the coming weeks, after Trump forced these governments to dip into their own reserves by threatening a U.S. export ban, it’s hard to see how the Achilles heel of most EU economies – crude oil products – can still be controlled by Moscow. While intellectually challenged figures like Mark Rutte make such stupid comments about how Russia could never win a war with NATO based on comparative GDP data, this latest move might be a huge wake-up call for Macron and Merz, the latter facing dismally low poll ratings. How do you continue to fund a war in Ukraine with the ‘frenemy’ relationship pushed to breaking point, such as is the case now with the U.S. having to buy diesel from Russia? EU countries loathe Putin, as the one hope they had to magically breathe new life into EU economies by taking Ukraine under its wing was shattered when Russian forces invaded. Putin is everything they are not. Nobody can deny Putin is a leader – the very thing that is so desperately lacking in EU countries. Leadership.

But the situation now has reached farce. With a global diesel crisis brought about by Trump’s war with Iran, EU countries are expected to buy diesel on the international market, topped up by Russia. In fact, buying oil from your enemy is nothing new. Countries have been doing this for decades. Even in Syria, we saw terror groups in the north-east of the country take over the oil infrastructure and then sell oil back to the Assad regime.

It’s hard to see how EU countries will draw a line in the sand between their geostrategic military objectives and their very realistic need for a stable oil supply. But in the midst of this chaos, Ursula von der Leyen has the answer. Borrow even more money. Borrow like there’s no tomorrow. Her latest proposal is to expand the current seven-year EU budget to 2 trillion euros, and there is only one way this can be achieved, as member states are never going to cough up more for the EU experiment. She will be forced to borrow from international banks to replace a previous loan of 750 billion euros for COVID. This is the solution for failing economies. Where once for so many years EU apparatchiks would defend the EU’s failure to implement its own rule book, in preference for constantly adopting new legislation, now this seems to have been replaced by ‘create a panic about Russia and make the EU a sort of executive of NATO without a single trace of democratic virtue’. Von der Leyen doesn’t stipulate what this massive increase is for, but we can assume some of it will be siphoned off for Ukraine. Madness on steroids. But hidden in the text is a new series of taxes which the EU itself could impose on individuals, and so in the smoke-and-mirrors confusion we see there is a back-door way to start taxing EU citizens, something Brussels never touched before. How long has the whole project got?

The European Union has reached an agreement with China to restrict imports of Chinese hybrid vehicles to 350,000 annually, introducing a significant new barrier to the expansion of Chinese manufacturers in Europe’s automotive market.

The arrangement, confirmed on 12 October, follows months of negotiations between Brussels and Beijing and reflects growing concern about the competitive position of European carmakers.

The import ceiling could reduce Chinese hybrid vehicle sales in the EU by more than half compared with previously anticipated volumes, although the actual effect will depend on demand, product classifications and implementation.

The agreement comes as manufacturers gather for the Paris Motor Show, where the future of European vehicle production, Chinese competition and industrial policy have become central subjects.

China’s Commerce Ministry has presented the outcome as a negotiated arrangement intended to preserve trading relations, while the European side has emphasised the need to prevent rapidly increasing imports from undermining domestic production.

Chinese manufacturers confront a new European barrier

Chinese carmakers have expanded aggressively in overseas markets as domestic demand has weakened. Chinese passenger vehicle exports rose sharply in September, with manufacturers increasingly targeting Europe, Latin America and Asian markets.

Hybrid vehicles have become particularly important because they offer consumers lower fuel consumption without requiring the same degree of dependence on charging infrastructure as fully electric cars.

This has allowed Chinese brands to compete in market segments where European manufacturers retain substantial established production capacity.

The new quota limits the number of eligible Chinese hybrid vehicles permitted to enter the European market each year. According to details of the import restrictions, shipments exceeding the permitted volume would face restrictions at EU customs.

The mechanism differs from a conventional tariff because imports beyond the ceiling cannot simply enter the market by paying a higher duty. Manufacturers and importers will need to consider both delivery costs and the availability of import allocations.

European manufacturers seek protection

The measures arrive amid growing pressure on the European automotive industry, which faces high production costs, expensive energy, competition from Chinese manufacturers and the capital requirements of shifting towards electrified transport.

Companies operating in Germany, France, Italy and other established manufacturing centres must fund the development of new vehicles while maintaining existing factories and employment.

Chinese manufacturers benefit from extensive domestic production networks, considerable scale and access to battery manufacturing capacity.

European policymakers have questioned whether competition takes place under equivalent economic conditions, particularly where Chinese producers receive support from state-directed industrial policies.

Beijing rejects allegations that its export performance results principally from unfair state assistance, arguing that Chinese companies have achieved competitiveness through investment, innovation and efficiency.

The quota represents a departure from the assumption that European consumers will necessarily have unrestricted access to the lowest-priced imported vehicles.

Its economic effects will depend partly on whether European manufacturers can use the additional protection to improve productivity and develop more competitive models.

Will Chinese manufacturers move production into Europe?

Restrictions on imports do not necessarily reduce the presence of Chinese-owned companies in the European automotive industry.

Several manufacturers are already developing production capacity outside China, including within the European Union. BYD’s investment in Hungary is one example of how Chinese companies can pursue access to European consumers through local manufacturing rather than relying entirely on imported finished vehicles.

The new arrangements could strengthen the commercial incentive to expand such operations.

For European governments, Chinese investment presents a difficult calculation. New factories may create employment, increase industrial activity and preserve automotive supply chains, while also expanding the influence of Chinese manufacturers within Europe’s domestic market.

The economic consequences depend on how much research, component manufacturing, battery production and other high-value activity takes place locally.

A Chinese-owned assembly plant using predominantly imported components would provide different benefits from a fully developed European production network.

The British dimension

The debate is also drawing attention to the position of the United Kingdom, whose automotive industry remains closely integrated with European supply chains despite Brexit.

Executives from Stellantis and Renault have supported including Britain within proposed European industrial protection measures, reflecting the importance of UK manufacturing operations to their broader businesses.

Such an arrangement would raise questions about regulatory alignment, trade preferences and the conditions under which non-EU production could qualify for European industrial support.

British manufacturers also face the challenge of Chinese competition, and decisions taken in Brussels could influence investment strategies across the wider European automotive sector.

Protection versus competitiveness

The restrictions may offer European manufacturers additional time to adapt, but they do not eliminate the structural challenges confronting the industry.

Energy prices, labour costs, the availability of batteries and the affordability of new vehicles remain important factors in the competitiveness of European production.

Nor will the quota necessarily prevent Chinese firms from gaining market share through investment, partnerships or vehicles manufactured outside China.

The EU’s approach combines restrictions on imports with the possibility of continued Chinese industrial participation inside Europe.

The outcome will depend on whether European manufacturers use the reduced competitive pressure to strengthen their technological and manufacturing position, or whether the restrictions primarily accelerate the relocation of Chinese-owned production into the EU.

European Union governments are entering a critical round of budget negotiations after the Irish presidency of the Council proposed cutting €141 billion from the European Commission’s long-term spending plans, exposing deep disagreements over how the bloc intends to finance its expanding responsibilities.

The revised proposal, circulated ahead of the European Council meeting scheduled for 15–16 October, would reduce the planned 2028–2034 financial framework by approximately eight per cent to around €1.6 trillion, calculated in constant prices.

Despite the reduction, the proposed budget remains approximately 30 per cent larger than the current seven-year framework. Germany, Sweden, the Netherlands and other governments concerned about national contributions have nevertheless argued that further restraint is necessary.

The compromise, detailed in negotiations over the EU’s next financial framework, reduces proposed spending across several areas while largely protecting the Union’s established agricultural and regional development programmes. The distribution of those cuts is becoming as contentious as the overall size of the budget.

Europe’s new priorities face the deepest reductions

Under the Irish proposal, agricultural and regional development allocations would decline by approximately three per cent compared with the Commission’s initial plans. By contrast, funding intended for competitiveness and security would be reduced by around 13 per cent, while external action and development cooperation face cuts of approximately 17 per cent.

The difference raises questions about whether the next EU budget can support the strategic ambitions repeatedly endorsed by European leaders.

The Commission has presented industrial competitiveness, technological development, defence readiness and economic resilience as central priorities for the remainder of the decade. Yet these sectors would absorb proportionately larger reductions under the revised framework than agricultural and cohesion programmes.

The consequences could extend to investments in advanced technologies, European industrial supply chains, research programmes and cross-border defence cooperation. They could also constrain the Union’s capacity to fund external partnerships and development initiatives.

The debate is particularly sensitive because the EU’s responsibilities have changed considerably since the previous budget was negotiated. Russia’s invasion of Ukraine has increased defence requirements, while competition with China and the United States has intensified demands for industrial investment.

Germany and the net contributors demand restraint

The central disagreement concerns how much additional expenditure European governments are willing to finance through the common budget. Germany and other major net contributors face domestic fiscal constraints, rising borrowing costs and demands to increase national defence spending.

For these governments, accepting a substantially larger EU budget would add to financial commitments already being made through national budgets.

The Irish compromise therefore faces opposition from two directions. Some governments consider the reductions insufficient, while others fear that the remaining cuts will weaken programmes essential to their national economies.

Traditional recipients of agricultural and regional funding have an interest in protecting established expenditure. Governments seeking stronger European investment in defence, innovation and industrial competitiveness have different priorities.

The European Parliament is another obstacle. Its consent will be required before the final financial framework can enter into force, giving MEPs considerable leverage in negotiations with national governments.

New EU revenues remain controversial

The proposal also envisages approximately €55 billion in additional annual financing through new or revised EU revenue sources, including customs revenues, emissions-related income and corporate contributions.

The Commission’s framework for the next long-term budget reflects a broader debate over the extent to which the Union should develop independent financing mechanisms rather than rely predominantly on national contributions.

Such mechanisms would potentially give Brussels a more predictable revenue base. However, they also raise questions about fiscal sovereignty, the distribution of costs among member states and the political accountability of European taxation.

National governments remain reluctant to surrender substantial authority over revenue collection, particularly when proposed resources could impose costs on domestic industries or consumers.

Ukraine, enlargement and Europe’s strategic ambitions

The negotiations will influence the Union’s ability to respond to future enlargement. Ukraine and several Western Balkan countries are pursuing accession, but the financial implications of bringing additional members into the Union remain substantial.

Existing arrangements for agricultural subsidies and regional development assistance would require reconsideration if large new beneficiaries entered the budgetary system.

At the same time, the EU faces pressure to support Ukraine financially and strengthen defence production without depending indefinitely on extraordinary borrowing or ad hoc national contributions. These responsibilities cannot be addressed simply by preserving the structure of earlier budgets.

European Council President António Costa will seek to narrow the divisions among the 27 leaders, but agreement on the financial framework requires unanimity. Any government can withhold its consent if it considers the final distribution of costs unacceptable.

The forthcoming summit is therefore likely to establish the parameters of further negotiations rather than eliminate the underlying disagreements. The immediate political question is whether member states can reconcile their commitment to greater European strategic capacity with their reluctance to finance it collectively.

European Union leaders will meet in Brussels on 15–16 October under pressure to address surging energy costs, Russian hybrid attacks, continued support for Ukraine and the bloc’s next long-term budget. The summit comes as economic pressures expose growing differences between national governments.

European Union leaders are preparing for a two-day summit in Brussels dominated by the economic consequences of the Middle East conflict, Russia’s continuing war against Ukraine and mounting pressure on governments to reconcile defence commitments with deteriorating public finances.

The European Council meeting on 15–16 October will bring together the leaders of the 27 member states to consider immediate measures addressing high energy prices alongside longer-term decisions on competitiveness, enlargement, migration and the EU’s budget for 2028–2034.

European Council President António Costa has placed economic competitiveness and energy costs at the centre of the discussions, reflecting concerns that the disruption of global oil and gas markets is threatening the bloc’s industrial recovery.

The meeting also takes place against the background of renewed disputes over national spending limits, with Italy and Greece seeking greater freedom to finance energy relief and France facing increasing pressure over the credibility of its budget.

Energy crisis puts fiscal rules under pressure

The Middle East conflict has created a renewed energy shock for European economies, raising transport and industrial costs while pushing inflation higher.

The disruption of shipping through the Strait of Hormuz has also affected global oil supplies, exposing Europe’s continuing dependence on internationally traded fossil fuels despite efforts to diversify imports following Russia’s invasion of Ukraine.

European leaders are expected to consider targeted and temporary support measures for households and businesses, as well as longer-term policies intended to reduce energy dependence.

The political disagreement concerns how those measures should be financed.

The European Commission has resisted requests from Italy and Greece for further exemptions from the EU’s fiscal framework. Both governments argue that extraordinary energy costs require additional budgetary flexibility.

Brussels maintains that existing provisions already permit exceptional expenditure within defined limits.

The disagreement is particularly difficult for indebted governments that must simultaneously finance military expansion, maintain public services and protect their economies from energy inflation.

France’s position has added urgency to the debate. Its borrowing costs have increased sharply as investors question whether the government can adopt a credible budget ahead of the 2027 presidential election.

A summit agreement on emergency energy assistance would therefore have to accommodate substantially different national fiscal circumstances.

Ukraine and the changing transatlantic relationship

Support for Ukraine remains a central item on the summit agenda as Russia continues attacks against Ukrainian cities, energy infrastructure and industrial facilities.

EU leaders are expected to review military and financial assistance, the implementation of sanctions against Moscow and the resilience of Ukraine’s economy.

The discussions take place amid renewed uncertainty surrounding American weapons deliveries.

Washington’s reported threats to suspend supplies under the NATO-backed PURL procurement arrangement have raised further questions about Europe’s dependence on the United States for advanced military equipment.

European governments have increased defence expenditure and committed additional support to Ukraine, but replacing American capabilities remains difficult, particularly in air defence, precision-guided weapons and certain intelligence systems.

The summit is unlikely to resolve those industrial limitations, but the broader question of Europe’s ability to sustain Ukrainian defence over several years will influence discussions.

Member states must also consider how increased defence expenditure will be financed alongside other demands on national budgets.

Russian hybrid operations move higher on the agenda

The EU’s published summit agenda includes Russian-linked hybrid attacks within Europe.

The issue has gained prominence as European governments investigate sabotage, cyber operations, information interference and threats against infrastructure and defence-related industries.

Recent warnings concerning possible Russian assassination operations targeting European defence executives and employees of companies supplying Ukraine illustrate the changing nature of the security threat.

Such activities place additional demands on national intelligence services, police forces and European institutions responsible for cross-border cooperation.

The EU has strengthened its sanctions instruments against hybrid activities, but enforcement remains dependent on coordination between national authorities.

Any further measures would need to address intelligence sharing, protection of critical infrastructure and the relationship between internal security and the Union’s wider Russia policy.

A larger EU with a contested budget

Enlargement will form another important part of the discussions following the Commission’s proposals for preparing a wider Union.

Brussels has outlined possible institutional safeguards intended to prevent future members from undermining democratic standards or blocking common decisions.

Montenegro and Albania are advancing through their accession negotiations, while Ukraine and Moldova remain central to the EU’s geopolitical enlargement strategy.

The financial implications will become increasingly important as governments negotiate the next multiannual financial framework covering 2028–2034.

Existing members are already divided over how much the EU should spend, which programmes should receive priority and whether additional common resources should be raised.

Agricultural expenditure, cohesion funding, defence investment and support for Ukraine will compete for resources within the same budget negotiations.

The Commission argues that enlargement can be accommodated through targeted reforms, but securing agreement among member states will require decisions on future expenditure and the distribution of financial benefits.

Competitiveness and the single market

Leaders will also examine progress on the One Europe, One Market agenda, which aims to reduce barriers to economic activity within the EU and improve conditions for European businesses.

The initiative is intended to address structural weaknesses affecting investment, industrial development and the ability of European companies to compete internationally.

High energy prices have made those concerns more immediate, particularly for industries competing against producers in economies where electricity and fuel are cheaper.

The European Council will be asked to provide direction on measures planned for 2026 and 2027, but implementation will depend on subsequent legislation and decisions by member states.

The October meeting brings several unresolved European policy questions into the same negotiation: how to protect economic competitiveness, maintain fiscal credibility, finance defence, sustain Ukraine and prepare for enlargement.

The immediate test will be whether leaders can agree on a credible response to energy prices without reopening broader disputes over national budgets.

More difficult decisions concerning defence financing, institutional reform and the EU’s long-term expenditure commitments will extend well beyond the two-day summit.

Montenegro and Albania will hold separate accession conferences on 12 and 13 October as the European Commission introduces proposals for stronger safeguards against democratic backsliding, linking the next phase of EU enlargement to reforms within the Union itself.

Montenegro and Albania are preparing for another round of European Union accession negotiations this week, with meetings in Luxembourg scheduled to advance their membership bids as Brussels considers substantial changes to the conditions under which future countries will join the bloc.

Montenegro’s 29th accession conference will take place on Monday, 12 October, followed by Albania’s tenth conference on Tuesday. The meetings come less than a week after the European Commission presented a package of proposals intended to prepare the EU for enlargement while strengthening its ability to respond to breaches of democratic standards by newly admitted members.

For Montenegro, the immediate objective is to continue closing negotiating chapters after years of institutional and legal reforms. Albania’s meeting has a more precisely defined agenda: the provisional closure of Chapter 20, covering enterprise and industrial policy.

Both countries have made progress towards membership, but the Commission’s latest proposals indicate that the terms of accession could become more demanding as the EU considers admitting several new members.

Montenegro moves towards the final negotiating stage

Montenegro is widely regarded as the most advanced candidate among the Western Balkan countries.

Accession negotiations began in 2012, and all 33 negotiating chapters have been opened. Progress towards closure has accelerated as the government seeks to complete the process and secure an accession treaty.

At the end of 2025, Montenegro provisionally closed five chapters covering services, capital movements, company law, agriculture and fisheries.

As EU Today reported following that conference, the agreements brought the number of provisionally closed chapters to twelve at that stage, while the EU continued to emphasise the importance of judicial reform and sustained implementation.

Subsequent accession conferences have continued the negotiating process, with the 29th conference scheduled for 12 October.

The Commission has identified Montenegro as a country capable of concluding accession negotiations by the end of 2026, provided sufficient progress is maintained.

That objective does not mean membership would follow automatically. A completed negotiation must still lead to an accession treaty, which requires approval by all existing member states and ratification under their constitutional procedures.

Outstanding questions include the independence of the judiciary, enforcement of anti-corruption legislation and the capacity of state institutions to apply EU law consistently.

Albania advances in industrial policy negotiations

Albania’s accession process has also gained momentum, supported by renewed EU interest in incorporating the Western Balkans into European political and economic structures.

The conference scheduled for 13 October is expected to provisionally close Chapter 20, which covers enterprise and industrial policy.

The chapter concerns the legal and institutional environment in which businesses operate, including industrial competitiveness, entrepreneurship and policies supporting small and medium-sized enterprises.

Provisional closure would represent further progress in Albania’s alignment with EU legislation and policy, although it would not constitute a final agreement on accession.

As with Montenegro, the negotiating framework requires sustained progress on the fundamentals of membership, notably judicial independence, fundamental rights, corruption and organised crime.

Brussels prepares stronger safeguards

The latest accession conferences follow the European Commission’s proposals of 6 October, which address the institutional consequences of admitting new countries.

The Commission argues that enlargement can be accommodated within the existing treaties, but that the EU will need additional safeguards and improvements to decision-making.

Among the most consequential proposals is the possibility of suspending a new member state’s voting rights in the Council if it commits serious breaches of the Union’s fundamental values or the principle of sincere cooperation.

Such provisions would be incorporated into future accession arrangements, making some membership conditions enforceable after a country has joined.

The proposal reflects concerns that the EU’s existing mechanisms for responding to democratic backsliding can be slow and politically difficult to apply.

In June, EU Today reported on proposals advanced by five member states seeking stronger protections against governments that might undermine common decisions after accession.

The Commission’s October package develops that argument into a broader programme of institutional preparation.

Enlargement beyond the Western Balkans

The debate extends to Ukraine and Moldova, whose membership applications have acquired greater strategic importance following Russia’s full-scale invasion of Ukraine.

The Commission is examining how candidate countries can progressively participate in EU policies and programmes before obtaining full membership.

These arrangements could include greater integration in energy, transport, defence and selected areas of the single market, subject to the implementation of relevant reforms.

Brussels is also considering transitional arrangements affecting agricultural support, financial transfers and sensitive sectors of the economy.

The political challenge is to provide candidate countries with credible membership prospects while reassuring existing members that enlargement will not weaken common decision-making or create unsustainable budget commitments.

For Montenegro and Albania, the October conferences therefore take place at a pivotal point in the accession process.

Both governments are moving through the technical stages of membership negotiations while the EU is still determining how its next enlargement will operate.

The outcome will depend not only on their progress towards meeting accession conditions, but also on whether the existing 27 member states can agree on the institutional changes required for a larger Union.

The European Commission has rejected demands from Italy and Greece for additional exemptions from EU spending rules as the Middle East energy crisis drives inflation higher, exposing renewed divisions over how much financial assistance European governments can provide.

The European Commission has rejected requests from Italy and Greece for greater freedom to increase public spending in response to the energy crisis, resisting pressure from two member states that argue existing budget restrictions are limiting their ability to protect households and businesses.

The decision, confirmed on 8 October, follows renewed appeals from Italian Prime Minister Giorgia Meloni and Greek Prime Minister Kyriakos Mitsotakis for measures recognising the exceptional financial burden imposed by higher energy prices.

Meloni wants Brussels to take greater account of unexpected inflation when assessing national budgets and to permit additional tax revenue generated by rising prices to be used for energy relief. Mitsotakis has sought the exclusion of temporary support measures for consumers and businesses from the expenditure limits agreed under the EU’s fiscal framework.

Economic Commissioner Valdis Dombrovskis rejected the argument for further concessions, maintaining that the existing arrangements already take inflation into account and provide mechanisms for responding to exceptional circumstances.

The disagreement comes as Europe’s governments confront the economic consequences of the Middle East conflict, including higher fuel costs, inflationary pressures and increased demands for state intervention.

Italy’s increasingly difficult budget choices

For Italy, the dispute adds to a fiscal problem that has been developing throughout the year.

The government expects its budget deficit to rise to 3.4 per cent of GDP in 2027, reversing an earlier objective of reducing borrowing below the EU’s three per cent reference value.

As EU Today reported earlier this month, Rome plans to use additional fiscal room for defence and energy-related expenditure, while public debt is projected to remain close to 138 per cent of GDP.

The new request concerns the treatment of inflation and the financial support required to offset its effects.

Energy inflation creates an unusual budgetary problem. Governments can receive additional nominal tax revenue as prices rise, particularly through consumption taxes, while simultaneously facing public pressure to compensate consumers for higher living costs.

Meloni argues that such unexpected revenue should be available for targeted assistance without forcing equivalent reductions elsewhere in national expenditure.

Brussels is reluctant to accept arrangements that could turn temporary increases in tax receipts into an opportunity for permanent spending expansion.

Italy’s position also reflects the political competition between defence spending and domestic economic support. Rome has accepted the need for higher military expenditure but faces immediate pressure from households and energy-intensive industries.

That competition was already apparent when the government chose to prioritise energy relief over the full use of defence-spending flexibility.

Greece seeks different treatment for emergency support

Greece’s request is more narrowly focused on the treatment of temporary assistance under the EU’s expenditure rules.

Athens argues that measures intended to help businesses and households manage exceptional energy costs should not be counted against the normal spending limits.

The Greek government faces an economic environment in which higher imported energy prices threaten household purchasing power and business profitability, particularly in sectors dependent on transport and fuel.

Excluding temporary relief from expenditure calculations would give Athens additional room to intervene without breaching its agreed fiscal trajectory.

The Commission, however, has resisted establishing further exemptions beyond those already provided in the fiscal framework.

Its objection is institutional as well as financial. If additional categories of emergency expenditure are repeatedly excluded from fiscal calculations, the system becomes increasingly difficult to enforce consistently across the Union.

The limits of Europe’s reformed fiscal rules

The EU revised its fiscal governance framework in 2024, introducing nationally agreed expenditure paths intended to provide greater flexibility while maintaining sustainable public finances.

The Commission’s rules on exceptional circumstances permit member states to depart temporarily from normal requirements under specified conditions.

Those provisions have already been used to accommodate higher defence expenditure, while the Commission has also issued guidance on their application to energy-security investments.

Temporary financial assistance intended to reduce household energy bills, however, is not necessarily treated in the same way as investment in infrastructure that reduces Europe’s long-term dependence on imported fuel.

That distinction has become a source of friction between Brussels and national capitals.

Governments argue that the immediate economic effects of an international crisis require exceptional measures. The Commission is concerned that repeated concessions could weaken the credibility of the spending framework.

A wider dispute over Europe’s economic response

The Commission’s decision also comes as France faces increasing pressure over its debt and budget deficit.

The deterioration in French borrowing conditions has reinforced concerns about the risks associated with heavily indebted governments continuing to expand expenditure.

France, Italy and Greece have different fiscal positions, but the problems confronting them originate partly in the same combination of expensive energy, weak economic growth and competing spending commitments.

The dispute will now feed into preparations for the European Council meeting on 15–16 October, where energy prices and economic competitiveness are prominent agenda items.

EU leaders are expected to consider targeted and temporary measures to reduce the burden on businesses and consumers, alongside longer-term initiatives intended to reduce dependence on fossil fuels.

The Commission’s refusal to provide Italy and Greece with further fiscal exemptions establishes the limits within which those discussions will take place.

National governments remain free to introduce assistance, but Brussels is insisting that they account for its cost within the fiscal rules already agreed.

For Rome and Athens, the question is whether those rules provide sufficient room to respond to an energy crisis whose duration remains uncertain.

The European Commission has approved the registration of Olio dei Colli de Bologna from Italy as a Protected Geographical Indication (PGI).

Olio del Colli di Bologna is an extra virgin olive oil from the Emilia-Romagna region, located in northern Italy. The area is part of the ‘Evaporitic Karst and Caves of Northern Apennines' natural site, which was added to the UNESCO World Heritage list in 2023. The Olio del Colli di Bologna is characterised by very low free acidity levels. It is a balanced oil with medium fruitiness, bitterness and pungency intensity.

This new designation joins the more than 3,900 protected names already listed in the eAmbrosia database. More information is available on the Quality Policy pages.

The European Commission is empowered by the EU Treaties to borrow from the international capital markets on behalf of the European Union to finance selected EU policy programmes. The Commission has raised €11 billion of EU-Bonds in its 8th syndicated transaction for 2026.

The dual-tranche transaction concerned a €6 billion new 3-year EU-Bond maturing on 12 March 2030 and a €5 billion new 30-year EU-Bond maturing on 12 October 2056.

Building on the pricing of recent syndications against the EU Bond curve, both maturities were priced against reference points in the EU Bond curve. The approach reflects the growing liquidity of the EU-Bond curve, which can be used more frequently as a reliable reference point for pricing of syndicated issuances when deemed desirable.

The transaction is part of the Commission's €80 billion funding target for the second half of 2026.

More information is available in the press release online.

The European Commission has adopted the Fair Labour Mobility package to guarantee clear social rights for everyone, everywhere in the EU, regardless of where they choose to live and work.

The package will enable workers to prove and claim their social security and health insurance rights, and have their qualifications understood everywhere in the EU and formally recognised where the profession is regulated. New rules and tools will better protect mobile workers from abuse and remove slow and complex administrative procedures that hinder companies from recruiting talent or providing services across the EU. National administrations will benefit from more efficient cooperation to enforce workers' rights and to fight fraud.

Commission President Ursula von der Leyen said: “The single market must also become a genuine skills market with more opportunities for workers and businesses. And that is what this package sets out to do - tackling two of the Terrible ten barriers and making the most of the talent we have in Europe, and attracting more. Simplification and stronger enforcement go hand in hand - skills, recognition and protection will move seamlessly across borders. A win-win.” 

The package includes a Communication on fair labour mobility and five legislative proposals:

• A Regulation establishing a European Social Security Pass;
• A “Skills Portability Act”, a Regulation on digital and comparable qualifications;
• A Regulation to strengthen the European Labour Authority;
• An amending Directive on professional qualifications; and
• A Directive on qualifications of third-country nationals.

Once fully in place, the package will deliver an estimated €6 billion in benefits by 2040, by faster recognition of professional qualifications, real time verification of social security documents and other savings for business, workers and authorities, as well as by fraud avoidance.

Using digital documents across borders

The European Social Security Pass (ESSPASS) will enable people to request and receive social security documents fully online, including the European Health Insurance Card and portable document A1 for posted workers.

Through the EU Digital Identity Wallet, people moving to another EU country will be able to store and present these documents digitally, while administrations will be able to verify them quickly and securely. This digital space will be available to people and companies across the EU by the end of the year.

Over 12 years, digitalisation could save up to €64 million for businesses, €69 million for healthcare providers, and €72 million for labour inspectors through faster cross-border verification. Digital signatures could avoid up to €277 million in fraud over the same period.

Helping skills and qualifications travel across borders

Qualifications will be issued in a standardised digital format and be available in the EU Digital Identity Wallet. This will make it easier to verify the authenticity of qualifications. The Commission also proposes to provide a new EU qualifications comparison tool, drawing on information from national qualifications databases. This will give employers and workers a simple, free way to understand and compare qualifications across Member States.

The Commission has also proposed updating rules for recognising professional qualifications in regulated professions. A mandatory digital procedure will make cross-border recognition for professionals such as doctors, nurses, engineers and teachers faster (five weeks instead of three months), cheaper and more secure, while maintaining high public safety, consumer protection and professional standards.

Through common training frameworks, the Commission will extend automatic recognition to more regulated professions, notably those registering shortages based on a preliminary list of 10 additional professions. Today, the Commission adopted the first such framework for physiotherapists, one of the most mobile professions in the EU.  

New rules will also set common standards for recognising qualifications obtained outside the EU for EU citizens and for third-country professionals working in the Single Market or applying from abroad. Such procedures take today 14 months on average, while the common standards will bring them to 4 months, cutting by as much as half the administrative costs of hiring for employers. For seven professions where EU-wide training standards already exist, qualifications delivered by accredited institutions outside the EU and reviewed by European quality assurance bodies will be recognised automatically. Member States keep full control over who is admitted to their territory and over the standards to practise a profession.

Strengthening the European Labour Authority

Once adopted, the Commission's proposed regulation will equip the European Labour Authority (ELA) with stronger tools to support member states in enforcing EU law. It will allow ELA to improve its capacity to provide risk assessment for inspections to help national inspectorates better target controls. It also proposes to reinforce cross-border cooperation and expertise with dedicated national inspection liaison officers. It will further improve access to information on rights and obligations by providing grants to organisations that support people working in other Member States and employers providing services or recruiting across EU borders.

The proposal further expands the mandate of ELA to tackling abuses against third-country nationals working in the EU and combatting illegal employment. It will also simplify ELA's mediation procedure, helping Member States resolve cross-border disputes more quickly and avoiding litigation, thus reducing costs and uncertainty, and improving administrative cooperation.

Next steps

People will see the first practical benefits once the initiatives are adopted by the European Parliament and the Council and the main measures enter into force.

Social security documents will be digitalised in stages, starting with the portable document A1 for posted workers one year after the ESSPASS Regulation enters into force, followed by the European Health Insurance Card and other documents within three years.

Changes to qualifications and skills portability will also be phased in: simpler recognition of non-EU qualifications within two years of adoption, while digital qualifications in the EU Digital Identity Wallet and easier recognition for regulated professions within three years.

Once the revised mandate is adopted, ELA can begin implementing changes, with improvements expected over 2028–2030.

Background

In 2024, 14 million Europeans lived in another EU member state, including over 10 million people of working age (3.9% of the EU working-age population). At the same time, 18% of respondents in a recent Eurobarometer survey said they would like to work abroad.

At the March EU summit, EU leaders called for measures to enhance worker mobility by improving the mutual recognition of professional qualifications and strengthening the portability of skills, including through digitalisation. This package delivers on the One Europe, One Market road map, which identified the fair labour mobility package and the skills portability initiative as priority deliverables for a more integrated Single Market.

For more information

Questions and answers

Factsheet on European Social Security Pass

Factsheet on strengthened European Labour Authority

Factsheet on skills portability initiative

Communication on Fair Labour Mobility Package

ESSPASS Regulation

Regulation to strengthen the European Labour Authority (ELA)

Skills Portability Act

Amending Directive on professional qualifications

Directive on the recognition of qualifications of non-EU nationals

European Commission President Ursula von der Leyen at the podium Photographer: Dati Bendo © European Union

European Commission President Ursula von der Leyen used her State of the Union address on Wednesday (16 September) to make the case for a more independent Europe, confronting war, economic competition, AI disruption and climate change — while proposing Canada become the EU’s first associate member.

Opening her #SOTEU speech with Charles Dickens’ “best of times, worst of times”, von der Leyen described a Union stronger but also more exposed to external threats.

“The state of our Union is the strongest it has ever been,” she said, while acknowledging it could feel “as precarious as it has ever been”. “Europe has chosen to forge its own path. And a stronger, independent Europe is now emerging.”

Competitiveness and energy

Von der Leyen called kickstarting Europe’s economy her “number one priority”, promising faster permitting, less red tape and further integration of the Single Market.

The Commission will propose a new Banking Package and create a European Corporation on Critical Raw Materials to secure supplies needed for chips, batteries, clean technology and defence.

With high energy costs weighing on European industry, von der Leyen called for faster electrification and investment in grids, renewables and nuclear power to reduce dependence on imported fossil fuels.

Climate after a 'summer of truth'

After a summer of fires, drought and extreme heat, von der Leyen promised a climate resilience framework focused on 100 of Europe’s most vulnerable territories, alongside a Climate Insurance Alliance, European Heatwave Plan and Water Initiative.

She also floated a future European Firefighting Fleet, declaring that Europe “can, must and will stay the course” on its climate targets.

AI: Opportunity and threat

AI was presented as both an economic opportunity and an emerging security threat. Von der Leyen warned that advanced models could enable hacking “on a level we never thought possible” and pledged closer cooperation with Canada, the UK and others on AI security.

At the same time, Europe will expand computing capacity and push AI into health, transport, agriculture, manufacturing, defence and space. “Above all, we want AI with human agency,” she said.

Jobs, housing and social rights

The Commission plans a Quality Jobs Act before the end of the year and a European Care Deal, alongside measures tackling housing pressures.

Von der Leyen said technological change must benefit workers, while strongly defending women’s rights and Europe’s social model.

PHOTO  European Commission President Ursula von der Leyen and Canadian Prime Minister Mark Carney at the podium Photographer: Dati Bendo © European Union

Canada moves closer

One of the biggest surprises came with Canadian Prime Minister Mark Carney in the chamber.

Von der Leyen proposed an “Alliance for the Future” spanning technology, defence, energy, critical minerals, AI and the Arctic — before going further.

“I would like to work with you on opening the door for Canada to be the first associate member of the EU,” she told Carney. “We share one ocean, one set of values, one way of seeing the world.”

Security, defence and Ukraine

With drone incursions, cyberattacks and sabotage raising security concerns inside the EU, von der Leyen proposed a new European security strategy and an Emergency Security Protocol for incidents falling below the threshold of armed aggression.

She also wants to establish a European Security Council and strengthen joint European defence capabilities.

Ukraine faces what von der Leyen called the “toughest winter of the war”. She promised humanitarian and energy support, stronger air defences and deeper defence-industrial cooperation with Kyiv.

Borders, democracy and children online

The Commission will propose an Emergency Response Framework for exceptional migration crises and strengthen Frontex, while launching a Mediterranean Youth Skills and Jobs initiative.

Von der Leyen also announced an EU KIDS ACT, including no social media for under-13s and restrictions for children under 15, followed by a broader Digital Fairness Act.

Political groups draw battle lines

EPP leader Manfred Weber backed the focus on AI, defence and competitiveness but pushed against restrictive climate policies. “Climate change is a reality,” he said, arguing Europe needed “innovation and not bans.”

S&D leader Iratxe García Pérez demanded that von der Leyen turn “words into action”, backing climate investment, housing and worker protections while warning that simplification must not become deregulation.

Renew Europe leader Valérie Hayer made a pointed appeal for the Parliament’s pro-European majority, as the EPP has increasingly worked with parties further to the right on some legislation. “There’s only one possible majority. It’s our pro-European majority,” she said. “We need to do more. We need more Europe, and we need it more quickly.”

Greens/EFA co-chair Terry Reintke accused EU leaders of failing to respond urgently enough to extreme heat and wildfires. “We are in the middle of a climate emergency,” she said, demanding stronger Green Deal implementation while insisting: “We are not powerless. Europe is strong, and Europe can be even stronger.”

ECR co-chair Patryk Jaki struck a sharply different note, attacking the Commission over bureaucracy, energy costs and industrial competitiveness. Europe, he argued, was “as weak as it’s ever been.”

Von der Leyen closed on the central theme running through the speech: European sovereignty in an increasingly hostile world.

“The fate of Europe,” she said, “must remain in the hands of Europeans.”

This consultation invites stakeholders to propose changes to the VAT rules so that they  better support circular business models. 

The European Commission has launched a consultation on the alignment of VAT rules with the principles of the circular and low emission economy. This initiative, part of the upcoming Circular Economy Act, aims to support the transition towards a more sustainable and competitive European economy.

The Circular VAT consultation seeks stakeholder input on how VAT rules can be adapted to better support circular business models. The focus will be on three key areas: the treatment of second-hand goods, the destruction of  viable goods, and the VAT deduction rules for passenger cars used for business purposes.

The consultation is part of a broader evaluation and impact assessment process, which will run in parallel and is expected to conclude in early 2027. The findings from this process will inform a legislative proposal aimed at amending the VAT Directive to better align with the objectives of the circular and low emission economy.

The consultation is open for eight weeks and will be accessible via the Commission's 'Have your Say' portal. Stakeholders, including business federations, SMEs, trade associations, national tax authorities, academics, and the general public, are encouraged to participate and share their views.

This initiative is a crucial step towards creating a more coherent VAT framework that supports the circular economy and contributes to the EU's environmental sustainability objectives.

Businesses, tax experts & sustainability advocates – share your views by 4 November 2026.

Have your say!

On 9 September, the European Commission adopted a proposal for a new Regulation to modernize and simplify the EU's public procurement framework to support effective investments in public services and infrastructure in line with the Union's policy objectives.

Drawing on extensive consultations with public buyers, businesses, trade unions, and civil society, the Commission is proposing an ambitious reform to make public procurement simpler, more flexible, and more effective. It will help complete a Single Market for public procurement, which accounts for around 15% of the EU's GDP.

Public procurement is central to both the European economy and citizens' daily lives, covering
everything from transport, infrastructure, and energy systems, to schools and health care services. The proposal is expected to deliver significant administrative annual savings of €649 million, resulting from a burden reduction of €80 million for public buyers and of €570 million for economic operators.

The proposed Public Procurement Regulation builds on the strengths of the Single Market
in four key ways.

Simpler and clearer rules
The proposed Public Procurement Act makes the rules simpler and clearer by consolidating into one directly-applicable Regulation the three existing public procurement directives and procurement provisions currently spread across sector-specific legislation. This will create a more coherent and predictable procurement framework, reducing complexity, administrative burden, and inconsistencies in how the rules are applied with three procedures instead of five currently. It will reduce complexity and inconsistency resulting from separate legislative acts and divergent national transposition choices.

The new framework gives public buyers greater flexibility, allowing negotiations with the applicant during the procedures. It encourages better market consultation, simplifies administrative procedures and allows for negotiations, making public procurement more similar to private procurement. It also introduces an innovation procedure for the development and acquisition of innovative solutions not yet available on the market. One single platform for all procurement in the EU Key to simplification and administrative burden reduction is the creation of an integrated digital procurement marketplace consisting of interconnected and interoperable member states' eProcurement platforms.

The digital marketplace will simplify and facilitate procurement for public buyers (for example, through the automatic verification of exclusion criteria). It will allow companies to take part in procurement procedures and submit tenders across the EU through any of the connected eProcurement platforms applying the ‘once-only' principle, avoiding repeated requests for information and documentation requirements. This will promote access to new business opportunities and increase the number of offers public buyers receive, maximising the potential of the single market.

The digital marketplace will moreover streamline data exchanges between member states' eProcurement systems through the creation of a unified framework for data management, thereby strengthening transparency, accountability, and anti-fraud capabilities. Stronger support for environmental, social, and innovation goals The proposal makes the Best Price-Quality Ratio (BPQR) the standard award method, with quality criteria accounting for at least 30% (50% for labour-intensive contracts), subject to a ‘comply or explain' mechanism. Contracting authorities may deviate from this approach if they explain how quality will otherwise be ensured, for example through minimum quality requirements.

Public buyers will thus have to systematically consider not only price, but also quality, including environmental, social, innovation, security and resilience, and 'European preference' considerations. Public buyers will have full discretion over which quality criteria to apply and in which proportion in individual procurement procedures, with the proposal offering practical tools to support public buyers in this. Greater security, resilience and strategic autonomy In line with the recommendations of the Draghi report, the proposal reflects the growing geopolitical importance of public procurement. It enables, and in some cases requires, public buyers to address risks related to security and public safety of the Union or member states, sensitive information, cybersecurity, and undue third-country influence.

New provisions on resilience and security of supply would apply to contracts involving entities linked to critical infrastructures and aim to support diversification of supply chains, security of supply and crisis preparedness. Finally, the Regulation introduces a horizontal European preference framework for public procurement in line with the Union's international legal obligations. It clarifies which operators and products are covered by the Union's international procurement commitments and makes this easier to check. The Commission would be able to restrict such coverage where a market access analysis establishes that a third country has failed to grant Union operators fair market access in line with its commitments, or where restrictions are needed to avoid security of supply dependencies or protect our economic security interests.

Next steps
The proposed Regulation will be negotiated by the European Parliament and the Council of the European Union before its adoption and entry into force. Background The revision was announced in President von der Leyen's Political Guidelines. It responds to long-standing shortcomings identified by the European Court of Auditors , including declining competition, limited SME and cross-border participation, and the rise of single-bid procedures. It also follows calls from the Council of the EU and the European Parliament for a strategic, simplified, and competitive framework. It also responds to the recommendations of the Draghi and Letta reports, which highlight public procurement as a strategic tool to strengthen Europe's industrial base, support innovation, advance the green and digital transitions, and reinforce economic security.

The Commission has just confirmed that it is suspending certain payments under Cohesion funding and the European Regional Development Fund to the Czech Prime Minister’s company Agrofert, due to the apparent conflict of interest surrounding Andrej Babiš' (pictured) role as PM and his business holdings. The Czech Prime Minister is the owner of the massive agribusiness, for which he set up a ‘trust’ ahead of becoming Prime Minister for the second time. The Greens/EFA Group have long highlighted the conflict of interests surrounding the Czech Prime Minister.  

Daniel Freund MEP, Greens/EFA Group Coordinator in the Budgetary Control Committee said:  “The Commission has recognized that Czech PM Andrej Babiš is likely in conflict of interest and we applaud that the Commission has finally taken action here. It is totally unacceptable for a prime minister to be negotiating the EU’s next long term budget, when he decides how large a chunk of that money could end up in his own pockets. The trust fund that Babiš set up in no way is enough to prevent a conflict of interest and it’s welcome that the Commission has acknowledged this.  “However, the Czech people should not have to suffer due to the dodgy dealings of their prime minister. It is time that the Commission and Council forces Czechia to ensure that Babiš is not involved in any negotiations around the EU’s long term budget, which may benefit him or his family directly. Either Babiš is head of Agrofert or he’s Czech PM, he can’t have it both ways.” 

Markéta Gregorová, Greens/EFA MEP and Czech Pirate Member of the Committee on International Trade said: “I am glad that the European Commission has finally started addressing Andrej Babiš’ conflict of interest, as it promised in its response to my inquiry. This confirms that we were right to raise the alarm: Babiš has not resolved his conflict of interest, and, frankly, he never genuinely intended to do so. The Commission must now ensure that the rules are enforced and that European taxpayers’ money is protected from any misuse.”

Commission adopts EU Guidelines on exclusionary abuses of dominance

The European Commission has appointed Mihail Dumitru (pictured) as new chair of the Mission Board EU Mission “A Soil Deal for Europe”. M. Dumitru is a former Minister of agriculture and rural development of Romania and former Deputy Director-General in the Commission’s Directorate-General for Agriculture and Rural Development. He will bring his extensive experience on agricultural and soil issues, the Common Agriculture Policy (CAP), rural development and research and innovation to provide advice and help achieve the Mission’s objectives. 

M. Dumitru is starting in his new role on 1 September 2026 and will take part in the conference 'Mission forward: Shaping the future through mission-oriented policy' organized by the OECD on 24-25 September in Paris, and in the European Mission Soil Week to be held on 17-18 November in Dublin.

The Mission Soil Board is composed of the following members:

• Mihail Dumitru - Chair
• Adrian Ferrero Fernandez, Economistas de la Innovación Slne, Biome Makers Inc, Spain
• Anna Krzywoszynska, University of Twente, Netherlands 
• Diego Marazza, Università di Bologna, Italy
• Endre Dobos, University of Miskolc, Hungary
• Gabriele Broll, University of Osnabrueck, Germany     
• Harry Vereecken, Forschungszentrum Jülich GmbH, Germany        
• Iustina Boajă, National Institute for Research and Development in Environmental Protection, Geological Institute of Romania
• Mateusz Ciasnocha, Ciasnocha Family Farms, European Carbon Farmers, Poland
• Muriel Mambrini Doudet, Institut de recherche pour le développement, France
• Paloma Melgarejo, Ministerio de Agricultura, Pesca y Alimentación, Spain
• Pandi Zdruli, CIHEAM Mediterranean Agronomic Institute of Bari, Italy
• Teresa Pinto-Correia, University of Evora, Portugal

Background

The role of the Mission Soil Board is to provide strategic advice for the Mission Soil implementation and to promote its activities.

More information

EU Mission: A Soil Deal for Europe

On 1 September in Brussels, Fisheries and Oceans Commissioner Costas Kadis and Intergenerational Fairness, Youth, Culture and Sport Commissioner Glenn Micallef jointly hosted the Youth Policy Dialogue ‘How to make Arctic youth participation more inclusive’.

The ten young participants were selected via the EU-funded project Youth Together for Arctic Futures, a workstream under the EU Arctic Youth Dialogue initiative. During the discussion, they will share their experiences and ideas on how the EU can better support the inclusive participation of Arctic youth in decision-shaping processes on issues that matter to young people. During the dialogue, the Commissioners will also ask for the participants’ opinions on the forthcoming Blue Generational Renewal Strategy, a flagship initiative under the European Ocean Pact aimed at making careers in the maritime sectors more attractive.

The Dialogue took place in the framework of the EU Arctic Forum and the Arctic Youth and Indigenous Peoples’ Dialogues, which took place on 1-2 September opened by International Partnerships Commissioner Jozef Síkela and Kadis. The Forum came at an important moment as the EU is updating its Arctic policy in the context of evolving geopolitical, economic and environmental developments.

The EU Arctic Forum, Arctic Youth and Indigenous Peoples’ Dialogues, which bring together a range of Arctic stakeholders to discuss developments in the region and the future of the EU’s engagement in the Arctic, are integral parts of the EU Arctic policy. Youth Policy Dialogues are part of the European Commission's commitment to mainstream the voice of young people in EU policymaking, as set out in President von der Leyen's Political Guidelines for 2024-2029.

Good afternoon,

I want to start with a simple message – thank you, this is a message for all of you, at my side or in the background. Dear Commissioner, dear Director-General, to the staff from the ERCC and ECHO, thank you for being here when Europe needs you most. As you have said – and I learned a lot in this hour here - day and night, 24/7, weekends and on holidays, whenever a crisis strikes, the team is there. The work you do protects people and most importantly saves lives. When a country asks for help, within hours, that call becomes action. Aircrafts take off, firefighters cross borders, and Copernicus maps reach responders on the ground. What we have seen today and what the ERCC lives everyday is European solidarity in action.

This summer has shown once again how much Europe relies on you. The wildfire season started exceptionally early in late April and put national services under enormous pressure. Since April, the EU civil protection mechanism has been activated 10 times for wildfires in 8 different countries, sometimes with several happening at the same time. When national capacities are stretched, Europe steps in, you can count on Europe. Firefighting aircrafts, helicopters, ground teams with all their expertise, vehicles, satellites, all of this is needed and all of this is mobilised across the continent. And because every single moment counts in an emergency, we are acting before the worst fires begin. Another impressive figure is the nearly 800 firefighters that were pre-positioned in high-risk areas. They stood ready to reinforce local teams from the first critical hours. And over the summer, teams were deployed from 25 countries – Member States and partner countries. And for the very first time, this also included firefighters from Ukraine, helping here in the European Union. Rescue teams have worked heroically. Some tragically lost their lives while bravely protecting others. We honour their courage, we honour their service. Their memory will stay with us, and it will inspire our action moving forward.

The work of this centre goes far beyond the fires, and far beyond Europe. I was impressed to hear that when there was a Hantavirus outbreak on a ship, you prepared repatriation flights and mobilised medical evacuation services. As the earthquakes hit Venezuela, you coordinated the deployment of 750 responders and experts from 18 countries. When Colombia was struck by an earthquake, Europe provided tents, water filters and essential supplies, as well as expertise on the ground. And after the devastating floods in Nepal just last week, we saw the images from Copernicus, you immediately supported the response with Copernicus mapping.

Fires, earthquakes, floods, health emergencies, hybrid attacks, you name it. Each crisis is different and requires a specific response. But most important is that the principle is the same: when help is needed, you can count on Europe. And these crises also paint a bigger picture. The risks around us are changing. They are becoming more frequent, more complex and more severe. Changing global climate patterns are adding to this volatility. Around the world, we see higher temperatures and disrupted rainfall. For emergency services, this is not an abstract warning about the future, it is already changing the emergencies they are facing today. Extreme events happen more often, in more places, and at the same time. This centre has shown time and again that Europe can respond when crisis strikes. But we must also learn from every single crisis and we must turn those lessons into action. So that we adapt faster, strengthen prevention and act before an emergency becomes a disaster. Our civil protection mechanism is pooling and sharing this expertise and the emergency capabilities. When one country comes under pressure, we step in, because as Europe, we are greater than the sum of our parts. That is what this centre demonstrates every day,

I thank you very much for presenting to me the essence of this centre. Of course the time was way too short to speak and see enough. But for me it is also very important preparation for the State of the Union. I thank you for giving me the time, sharing with me your expertise and knowledge. From the bottom of my heart, Europe is grateful for what you're doing.

Thank you.