Eurozone leadership battle
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Welcome to the Capitals, your concise and comprehensive summary of European news from Brussels by Eddy Wax, with Nicoletta Ionta. We welcome feedback and tips here. You can sign up here.
In today's edition:
Who gets to steer the Eurozone?
Orbán attacks Brussels after Budapest Pride.
France claims latest Russia sanctions are the toughest yet.
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Spain and Lithuania's socialist governments want to dislodge Ireland's centre-right Finance Minister Paschal Donohoe from his post as the chair of the Eurogroup at a vote a week today. But Donohoe will be a hard man to beat.
Since COVID, the 50-year-old has chaired the monthly meetings of the Eurogroup – an informal gathering of the 20 EU finance ministers whose countries' currency is the euro.
Pitching himself as a safe pair of hands, Donohoe is on course to secure at least 11 votes and win a third term, taking him close to surpassing Jean-Claude Juncker's record as the longest-ever head of the Eurogroup.
But Donohoe faces two challengers.
On Friday, Spain's Economy Minister Carlos Cuerpo threw his hat into the ring, while his Lithuanian counterpart Rimantas Šadžius is also competing, and will launch his bid today.
Spain's Cuerpo believes that more EU common borrowing – like the bloc did post-COVID – is a 'no-brainer'. That's a non-starter for more fiscally conservative countries and Cuerpo didn't mention it in the letter he wrote to finance ministers setting out his stall.
Cuerpo was a civil servant until he was appointed by Socialist Prime Minister Pedro Sánchez as economy minister in December 2023, taking over from Nadia Calviño when she went to run the European Investment Bank.
Framing himself as the change candidate, Cuerpo put in a barbed line in his letter that suggests he thinks Donohoe is leading the Eurogroup – whose main role is economic coordination between countries – as a mere talk shop, writing: 'The time has come to move from discussion to delivery."
'Cuerpo is pro more common borrowing and proposed the [EU common budget] should be funded at 2% of GNI!' one EU diplomat told my colleague Thomas Moller-Nielsen. 'This radical position has not gained support especially with Germany, Netherlands and other frugals."
Cuerpo's last-minute bid also comes just after Spain refused to meet NATOs' 5% spending target and at a rocky time for Sánchez's government, raising questions about whether Cuerpo could last the two-and-a-half-year term.
According to a second EU diplomat, there's little political appetite in the bloc to reward Sánchez with a win right now.
In fact, Cuerpo's bid will probably only underscore how isolated the Socialists are in Europe. Aside from his six EPP colleagues who are backing Donohoe, the Irishman has also secured Finland's support, and several finance ministers who are not themselves from EPP parties are governing in coalition with the centre right.
Donohoe is pitching himself as the candidate for stability in turbulent times. The Eurogroup gets a lot less attention these days than it did during the years of the Greek debt crisis. But with Donald Trump's tariff threats coming to a head on 9 July, a sluggish EU economy, wars, and who knows what other surprises around the corner, Donohoe might be a man we come to see a lot more of.
EU out in force at Budapest Pride
Viktor Orbán is seething after 100,000 people took to the streets of his capital city for an LGBTIQ+ Pride festival Saturday, in defiance of his government's threats and orders to ban it under the guise of child protection.
Reuters reported that Orbán said the event was 'repulsive', and accused the EU of directing opposition politicians to organise the event. It was actually organised by the city's green mayor Gergely Karácsony; Ursula von der Leyen had called for authorities to permit it.
There is nothing new about Orbán's claim that the EU is undermining his country's sovereignty – but those attack lines may well be set to go into overdrive ahead of the 2026 elections. Polls are putting EPP member Péter Magyar's Tisza party well ahead of Orbán's Fidesz.
Lots of EU folks did show up at Pride, including the leaders of the Socialists Iratxe García, the leader of Renew Valérie Hayer, and EU Equality Commissioner Hadja Lahbib.
New sanctions against Russia
'The moment has arrived to force Vladimir Putin to cease fire,' declared France's Europe Minister Jean-Noël Barrot in a sit-down interview on French channel LCI over the weekend. He claimed that the EU was preparing the 'heaviest sanctions that we have taken since 2022' in its upcoming package. The tough rhetoric is reminiscent of Emmanuel Macron's proclamation that Russia would face 'massive' sanctions if it didn't agree to an immediate ceasefire. That was back in early May.
The sanctions Barrot said are coming in days are the EU's 18th package, and its most ambitious component – further restricting the price of Russian oil – is both less demanding that what Volodymyr Zelenskyy wants and not acceptable to the US. There is so little big stuff left to sanction that the EU is now targeting gas pipelines that are no longer operating. Claiming that these are the toughest since Russia's full-scale invasion is obvious hyperbole.
What's more, the difficulties agreeing the new package as a 27-strong bloc persist. EU ambassadors are not going to sign off on the package today, because Hungary and Slovakia are still blocking them. This week Commission technocrats will visit Slovakia to assess the impact of the bloc's plan to phase out Russian energy – a concession Robert Fico squeezed out of the EU at last week's summit, as he maintained his stranglehold on the 18th package.
Grims reaper lives on
Slovenia's Branko Grims, the rebellious EPP lawmaker who initially put his name to a petition to bring down Ursula von der Leyen's EPP-led Commission withdrew his name under massive internal pressure. But there's no sign the EPP will rein in Grims or other MEPs from Janez Janša's party in Brussels ahead of Slovenia's 2026 election. In fact, they're getting a lot of support from the EPP group ahead of a vote in Strasbourg next month.
Grims wrote he removed his name to avoid 'malicious manipulation' and stop anyone linking it to a parallel endeavour from his party colleague Romana Tomc to push through a controversial resolution raking up Slovenia's 20th century history.
Critics say the resolution should not be discussed in Brussels and is mere point-scoring for a domestic audience. The Socialist, Renew and Green groups walked out of a vote on the topic in the petitions committee last week, before a right-to-far-right alliance carried it. The full-Parliament vote will be in July. Around the bloc
GERMANY| Germany plans to develop a 'cyberdome' in cooperation with Israel to defend the country against drones and cyberattacks. Interior Minister Alexander Dobrindt, who met Israeli PM Benjamin Netanyahu in Israel over the weekend, described it as a 'holistic' system, combining military and civil protection. He also wants to increase cooperation between German intelligence services and the Israeli Mossad and establish a centre for German-Israeli cyber research.
FRANCE | The bill on the reform of public broadcasting will be debated today and tomorrow in the National Assembly. Championed by the Minister of Culture, Rachida Dati, it aims to rationalise spending by bringing together France Télévisions, Radio France and the National Audiovisual Institute (INA) within a single holding company named France Médias, under the authority of one sole CEO. The proposal is deemed unacceptable by the trade unions, who argue that it jeopardises both the future of employees and the independence of news reporting. The stations of the Radio France group began an open-ended strike on Thursday, and are now being joined by employees of France's public television channels. The aim of the strike, as stated by the unions in a recent press release, is to 'force the government to back down'.
ITALY | The International Criminal Court prosecutor has formally asked judges to declare Italy non-compliant with its obligations under the Rome Statute, following the controversial release in January of a Libyan official accused of crimes against humanity. Read more.
PORTUGAL | Hundreds of people took to the streets of downtown Lisbon on Saturday in a demonstration for the right to housing, which mainly attracted young people. Read more.
POLAND | Some 40% of Poles say it is possible the recent presidential election may have been rigged, according to a new poll. Read more.
CZECHIA | At a closed-door NATO dinner last week, European leaders pressed Donald Trump to get tougher on Russia, but the US president remained hesitant, Czech President Petr Pavel revealed in an interview on Sunday. Read more. Also on Euractiv
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But it's what to do about internal borders that's proving controversial, with more than 10 countries now imposing checks. In the latest development, Polish Prime Minister Donald Tusk announced temporary border checks with Germany (and Lithuania) starting 7 July, citing concerns over illegal migration. Tusk had come under pressure from the opposition Law & Justice (PiS) party to impose similar checks to those Germany has had in place on its side of the border since last fall. The controls – which the EU allows countries to impose only in exceptional circumstances – have been a festering sore in German-Polish relations, that is now worsening. The spat pits two of Europe's centre-right heavyweights – Tusk and Friedrich Merz – against each other. But they each have domestic reasons to look tough: Tusk, weakened by his party's loss to PiS in Poland's recent presidential runoff, faces a parliamentary election in just over two years, while Merz has made cracking down on migration a central pillar of his new government. A source close to the German centre-left SPD party told Euractiv's Nick Alipour in Berlin that they believed the measure was retribution for Germany turning people away at the border and that the main surprise was that the response came this late. Germany has sent thousands of migrants who entered illegally from Poland back east. Tusk, who only months ago called Germany's border checks 'unacceptable', is now raising eyebrows by introducing the very same restrictions, which according to EU law must only be imposed temporarily. That's not the only source of friction among EPP heavyweights. The Capitals can reveal that Tusk refused to sign up to a statement from the EPP leaders in the lead-up to last Thursday's European summit, which called for an ambitious yet pragmatic climate policy and reducing migration. Andrzej Halicki, an MEP from Tusk's party who sits in the EPP's executive committee, said: 'We didn't sign the document." Nick wrote last week that the Poles were fuming because some of their amendments to the statement weren't accepted. 'We don't see that these statements are needed before the summit. Especially if the points are not on the agenda,' Halicki said. It's a clear critique of Manfred Weber, who replaced Tusk as EPP chief and uses the pre-summit meetings to exert influence by organising the statement's drafting and coordinating the leaders' positions. Weber and Tusk have had tense relations in the past over Weber's flirtation with the ECR group – which contains PiS but also Giorgia Meloni's Brothers of Italy. The EPP declined to comment. So why were the Poles upset? Halicki wouldn't be drawn except to say that migration was one of the issues. 'I know that the general feeling was this statement opens up EPP to the right,' another EPP source told Nick. Yet another person said the differences were over climate. How will EPP react to 2040 climate goal? European commissioners will meet at 9 a.m. today to agree that by the year 2040 CO2 emissions should only be a tenth of their size in 1990. The EU-wide climate target is a staging post to the ultimate 2050 goal of climate neutrality in 2050. Taking into account the progress so far, the 2040 goal means slashing emissions to less than a sixth of today's levels in the space of 15 years. A big challenge. Commissioners are expected to propose that international climate credits could count towards the goal. All eyes are on the response of Manfred Weber's parliamentary group. The EPP has been gung-ho about gutting green legislation. 'We will not stand for further climate or environmental policy measures without corresponding initiatives to boost competitiveness,' said MEP Christian Ehler. He said the EPP has not yet decided its position on the target, creating jeopardy about the legislation's future in Parliament. Trouble is also ahead in the Council, where France, Italy and Poland have been asking the Commission to put more of an emphasis on how businesses can reach the targets. But Denmark, which will steer talks among countries, is a big fan of ambitious climate action. One to watch! Macron speaks to Putin Emmanuel Macron urged Vladimir Putin on Tuesday to agree to a ceasefire in Ukraine "as soon as possible" as the two held their first known phone talks since September 2022, the French president's office said. Read more. Von der Leyen's private jet Ursula von der Leyen took 16 private jet flights in 2024, according to data disclosed by the Commission on June 30 in response to a parliamentary question. The travel costs were fully covered by the Commission, according to an answer given to MEP Martin Schirdewan of The Left. Scrutiny over von der Leyen's travel habits has intensified since March 2023, when German outlets Bild and Spiegel revealed she'd taken 57 private flights over a two-year period. That led to criticism about her environmental footprint, especially because she was the face of the European Green Deal, Euractiv's Elisa Braün writes. Schirdewan noted back in 2023 that she travelled between the EU institutions in Brussels and Strasbourg three times on a private jet. Direct train connections take around four to five hours. Strasbourg appears five times on von der Leyen's private jet itineraries in 2024, including one direct flight from Brussels. The Commission said chartered planes were 'only' used out of logistical necessity, or because of security concerns or time constraints. "It is good to remember that she is a full member of the European Council, of the G7, the G20 and invited to world events [such] as the UN General Assembly, at the same level as a head of state or government and with an equivalent schedule and related work burden," a spokesperson for the Commission said. "The President travels as much as possible using commercial airlines and public transport." EPP gatecrashes Socialists' house The EPP is trying to plant its flag on housing – a file the Socialists have long claimed as their own. After securing the rapporteur post on Parliament's new special committee on the housing crisis, the centre right is now pressing its case with the Commission. In a letter sent Tuesday to Housing Commissioner Dan Jørgensen (a Danish socialist) and seen by Euractiv, EPP members call for a legislative clean-up to cut red tape, speed up permits, and drop EU rules they argue inflate housing costs without improving quality or sustainability. 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The probe concerns the use of EU funds amounting to €54 million for the modernisation of Sibiu International Airport. Also on Euractiv
