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Euractiv
2 days ago
- Business
- Euractiv
France defends €2 trillion EU budget, as Germany and others raise doubts
The sheer amount of euros that the Commission is suggesting splashing has raised doubts at a ministerial meeting in Brussels. Euractiv is part of the Trust Project Eddy Wax and Jacob Wulff Wold Euractiv Jul 18, 2025 11:34 4 min. read News Based on facts, either observed and verified directly by the reporter, or reported and verified from knowledgeable sources. France's Europe Minister Benjamin Haddad defended the idea of a larger EU budget, after German Chancellor Friedrich Merz poured doubts on a proposal to spend nearly €2 trillion between 2028 and 2034. 'We need a strong EU that gives itself the means to act," Haddad said in Brussels today, where ministers are having their first talks about the European Commission's new proposal. Haddad argued that threats from Russia and uncertainty about American security guarantees to Europe are reasons to support an "ambitious" budget. France and Ireland have also expressed strong disapproval with the proposed cuts to the bloc's farm subsidy scheme, which is set to drop by around 20% and be partially merged with other payment envelopes. Haddad said Paris will fight for every centime of farm subsidies. Ireland's Europe Minister Thomas Byrne told a radio program this morning: 'It's not something that we agree with. What we want is a strong and separate common agricultural policy that protects not just direct payments to farmers but also protects rural development funding as well.' 'Fake news,' Budget Commissioner Piotr Serafin said of the 25–30% cut to farm subsidies. 'Direct payments will remain at current levels,' he told ministers, adding that the €300 billion earmarked for such payments is a floor, not a ceiling. The governments of Germany, Finland, Sweden, the Netherlands, and Austria have been pouring scorn on the Commission's historic proposal to increase the budget from €1.2 trillion to almost €2 trillion during the next seven-year cycle. "This proposal is very, very far removed from our Austrian position, [and] approval. In the beginning, we called for careful and smart use of Europeans' taxpayers' money, and this draft is neither careful nor smart," said Austrian Europe Minister Claudia Plakolm, who described it as "extraordinarily high." "It's an enormous amount," said Finland's European Affairs Minister Joakim Strand, adding the EU should look more closely at how it spends its funds. In a statement before the meeting, Sweden's EU Minister Jessica Rosencrantz said: "The focus is right, but the size is wrong. We need a better budget, not bigger." The disagreement also spans the Commission's proposed income sources. While France labelled new EU income sources a " sine qua non condition" in its position paper, Germany's Merz has already ruled out a new EU corporate tax as illegal. Even before von der Leyen's proposal was out Sweden called a new tobacco tax "completely unacceptable." Luxembourg's Foreign Minister Xavier Bettel said: "I know the EU: everyone would like to pay less and receive more but at a certain point that no longer works, especially if we have commitments to each other to respect." Overall, Serafin appeared unshaken by the irreconcilable views of member states, praising what he called an 'extremely constructive, informative' debate with 'a lot of pragmatism.' Serafin defended the budget size, arguing that both competitiveness and defence are more effectively financed at EU level. A larger common budget could help member states meet NATO's 5% defence spending benchmark, he added. No Catalan consensus At the same meeting, Spain is also reviving its push to get Catalan, Basque, and Galician recognised as official languages of the EU, but ran into familiar headwinds over the legal and financial implications of such a move. Fernando Sampedro, Spain's state secretary for EU affairs, said that it would amount to discrimination were countries not to accept Madrid's demands, and reiterated that Spain was happy to cover all the costs. Luxembourg's Bettel said it was difficult to agree to such a move when the EU had only just signed off on new sanctions against Russia and still can't find a unified position on Israel's continued war in Gaza. 'Momentum is really not the right one if we're not able to agree on anything else," he said. Nick Alipour contributed to reporting. (mm) UPDATE: The article has been updated with Serafin's comments.
Euractiv
5 days ago
- Business
- Euractiv
A huge new EU competitiveness fund?
It's B-Day! The European Commission will today unveil its seven-year spending plan, the so-called MFF. No, it doesn't stand for 'mutha-fuckin farmers' – though farm lobbies will be protesting in the streets of Brussels this afternoon. We got a glimpse of some numbers circulating late last night, suggesting that the total budget could be €1.7 trillion. A watershed moment, if it becomes reality! Today we are covering every centime on our live blog here. Welcome to the Capitals by Eddy Wax, with Nicoletta Ionta. Sign up here. Feedback is welcomed by email and do forward us to a friend or colleague. Also in today's issue: Scoop: Macron's MEPs change leader after infighting Spain and Ireland's drive to slap Israel with sanctions hits a wall Four Irish MEPs secured a meeting on Gaza with VDL Keffiyeh chaos in Parliament In the capital Now it all comes down to the cold, hard numbers. After interminable debates about the structure of the new EU budget and meetings late into the night in the Berlaymont, all eyes are on its final proposed size. When Ursula von der Leyen rings her little bell at the start of the commissioners' meeting this morning, many of them will be looking around the room with either schadenfreude or envy. Has his or her budget been cut more than mine? Are my funds ringfenced, or reduced with a sleight of hand? Piotr Serafin, the EU's budget chief (von der Leyen is the real budget chief, of course) will brief MEPs at 12:30pm, before the grand unveiling to the media and the world this afternoon. Is French Commissioner Stéphane Séjourné about to emerge as the big winner from the politicking over recent months? Peut-être. A document floating around last night purported to show that the budget would include a massive €522 billion for a new fund focused on boosting economic competitiveness. A huge competitiveness vault would suggest a major win for Séjourné, the industrial strategy chief. Read more. The €522 billion would be split between a research programme, currently at €96 billion, but expecting a boost, and various smaller programmes not likely surpassing €50 billion. That leaves room for a possible European Competitiveness Fund of over €300 billion, unheard of on the EU level, my colleague Jacob Wulff Wold tells me. The total size of the budget, according to the document – which may well have changed overnight – would increase to €1.717 trillion, but don't forget that the EU will also have to pay around €30 billion a year just to service its debt on the pandemic recovery fund loans. Let's see if these numbers survive contact with reality today. Von der Leyen's budget is a revolution in terms of its structure. Spare a prayer for regional authorities who are set to lose any direct role in shaping how billions of euros of cohesion funds are spent on improving struggling parts of the EU, writes my colleague Nikolaus J. Kurmayer in this must-read. What are they smoking? The European Commission is also planning to raise new funds by taxing e-cigarettes, Sarantis Michalopoulos exclusively reports. EU ponders Israel EU foreign ministers will go through their options about how to rework their relationship with Israel to pressure it to end the war in Gaza today. Some diplomats thought the Gaza aid deal struck by the EU's top diplomat Kaja Kallas last week would diffuse today's talks. But the humanitarian situation in Gaza suggests otherwise. "We do not see enough improvement on the ground. We need to really see that this, all this – what we have agreed – is also happening,' Kallas told reporters, including our own Alexandra Brzozowski last night. An EU diplomat said that while 'aid access has gotten better since the deal last week, distribution still remains difficult and of course the aid deal falls short of any full ceasefire." Yet, ministers will remain deeply divided on whether to take measures against Israel, which means no substantive action is expected. The bitter, if familiar reality for Europe, is that trajectory of Israel's war on Hamas will be decided in Jerusalem and Washington. Nonetheless, EU officials took solace in the fact that Israeli and Palestinian ministers came to Brussels for the EU-Southern neighbourhood ministerial dinner last night, the first time since the war in Gaza started. French reshuffle in Parliament Scooplet: French MEP Marie-Pierre Vedrenne is stepping down as the leader of the delegation of Macron MEPs, after a bust-up with her Renew Europe group leader Valérie Hayer. French journalist Emmanuel Berretta reported in a recent article in Le Point that Vedrenne had challenged Hayer's leadership of Renew, saying the group should stop whining about its diminished size after last year's election. In the same article Hayer pushed back, saying Vedrenne should also take some responsibility as delegation leader. Vedrenne confirmed she's now stepped down. Laurence Farreng will take over the role, we hear. It was a 'very personal conflict based on differences in political strategy,' a French source in Parliament told us. Gaza, Brussels EU foreign ministers gathered on Tuesday for their first meeting since the bloc's top diplomat, Kaja Kallas, presented a list last week of ten potential measures championed by Spain, Ireland and Slovenia against Israel over its continued offensive in Gaza. But in the wake of Israel's recent agreement to ramp up humanitarian aid deliveries into region, a majority of countries abandoned the idea. Countries like the Netherlands that pushed Kallas to go further and review the EU-Israel association agreement gave up pushing further. More Irish-Israeli action Irish Fianna Fáil MEPs held a forty-minute meeting with Ursula von der Leyen, her chief of staff Björn Seibert and other cabinet members on the top floor of the Berlaymont yesterday, seeking to pressure her to end the EU-Israel Association Agreement or, failing that, restrict trade with Israel. Irish-Israeli relations have deteriorated severely since the beginning of the war, with Israel shuttering its embassy in Dublin last year citing the country's 'extreme anti‑Israel policies". The Renew Europe four said they had nothing personally against von der Leyen, but abhorred the Commission's position on Gaza, where they claim Israel has breached international law following the deadliest attack on Jews since the Holocaust. Von der Leyen listened as they told her that her public statements should make more references to international law and the so-called two-state solution. The MEPs secured the meeting ahead of the motion of censure against the Commission last week, where they were threatening not to vote it down. In the end three of the MEPs Billy Kelleher, Barry Cowen, Cynthia Ní Mhurchú voted against the motion, while Barry Andrews abstained. At a Tony Blair Institute event in Brussels last night, Ireland's EU Commissioner Michael McGrath also weighed in on the subject. "Gaza needs to be flooded with aid as quickly as possible,' he told the crowd. 'The situation is just existential for two million people.' Keffiyeh kerfuffle A meeting of the Parliament's foreign affairs committee on Israel-Palestine turned into a political flashpoint when two EPP MEPs took aim at a parliament official who was wearing a keffiyeh , the Palestinian headscarf popularised in the 1970s by Yasser Arafat, the deceased leader of the Palestinian Liberation Organisation. Spanish EPP lawmaker Antonio López-Istúriz White fumed: 'Civil servants are not here to make ideology,' his EPP colleague Andrey Kovatchev, from Bulgaria, concurred. That lit a fire under far-left lawmaker Marc Botenga, who shot back: 'I do not see the issue at all [...] I think that person is dressed completely normally.' He argued that the EPP never complained about Ukrainian symbols. Sebastian Tynkkynen, a hard-right Finnish MEP, jumped in accusing a translator present of wearing similar 'gear'. Tynkkynen was reportedly seen photographing the staffers, prompting outrage. Spanish Socialist Hana Jalloul, chairing the meeting, attempted to calm things down: 'We don't have authority on that.' One of the two parliamentary staffers in question was seen escorted out of the meeting room, whilst MEPs and their assistants went to don their keffiyehs for the rest of the hearing. EU-US 'Technical teams' of EU trade negotiators travelled to Washington on Tuesday for talks, per a Commission spokesman. The last time that was announced, EU trade boss Maroš Šefčovič duly announced a trip to the US. There's no word on that yet, but it begs the question: Why are American negotiators never coming over here? Šefčovič (pronounced Sheftchovitch, according to Slovaks) spoke to Commerce Secretary Howard Lutnick on Monday and Trade Rep Jamieson Greer on Tuesday. Amid rising pressure from France to respond to Trump's threats with countermeasures of our own, Germany's Friedrich Merz reiterated the need for caution. 'Over the weekend, I campaigned for us not to implement reciprocal tariffs for now,' the chancellor said at a press conference Tuesday. So far, von der Leyen has no meetings scheduled with the U.S. president before August 1, EU officials say. ECR keeps hold of migration files A last-ditch bid to overturn a controversial power grab by the EPP group, cheered on by the far-right, crashed and burned yesterday, leaving two key asylum files firmly in ECR and EPP hands. Liberals, Greens, Socialists and The Left lost out. The dossiers will form part of a highly-political asylum overhaul by the Commission. 'The left's furious and virulent reaction to today's vote shows that the political balance on decisive files has shifted,' ECR chief Nicola Procaccini said. Around the bloc FRANCE | PM François Bayrou unveiled sweeping austerity measures for 2026, including a full freeze on public spending, cuts to healthcare, and the elimination of two public holidays. The move sets the stage for a tense autumn clash in parliament, where using the Constitution's Article 49.3 to force through the budget bill could spark a no-confidence vote and end his premiership. Read more. SLOVAKIA | PM Robert Fico has again called for a delay to the EU's latest sanctions on Russia, arguing that the Commission's energy guarantees are insufficient. Still heavily reliant on Russian gas, Slovakia is seeking an exemption until 2034 – a request Brussels continues to reject. Read more. ITALY | Italy is debating a planned 27 July concert by star Russian conductor Valery Gergiev, a close ally of Putin, at the Royal Palace of Caserta, in southern Italy. While critics warn that it will legitimise Kremlin propaganda, others defend cultural dialogue. Read more. SPAIN | Spain's Amnesty Law stems from a political pact tied to Sánchez's re-election, raising concerns over its legitimacy and EU financial implications, the European Commission's legal representative told the EU's top court on Tuesday. A ruling is expected by year's end. Read more. POLAND | Lublin Triangle turns five. The foreign ministers of Poland, Lithuania, and Ukraine are meeting in Lublin today to mark the fifth anniversary of the Lublin Triangle, which was launched in 2020. The alliance, forged to strengthen ties and back Ukraine amid Russian aggression, will be marked with a wreath-laying ceremony and a joint press conference. SWEDEN | Sweden's Green Party is calling the head of the Swedish Security Service, Charlotte von Essen, to appear before the justice committee after recent failures. Over the last weeks, reports revealed that the son of Migration Minister Johan Forssell was active in far-right circles and another investigation showed Security Service bodyguards used the Strava app, potentially exposing Prime Minister Ulf Kristersson's movements. IRELAND | Former European Commissioner and long-serving MEP Mairead McGuinness will be her Fine Gael party's candidate to become president of Ireland, Irish media reported. Europe's 2040 climate target isn't just for environmentalists A 90% emissions reduction positions the EU as a global frontrunner in clean energy, writes William Todts, Executive Director of The European Federation for Transport and Environment (T&E), highlighting Europe's responsibility to lead by example. The strategy prioritizes innovation and international cooperation but faces resistance from right-wing critics, who also oppose the Commission's anti-disinformation efforts. Meeting of college of commissioners; von der Leyen unveils proposal for the new multi-year financial framework, and commissioners discuss white paper on fighting fraud. Denmark hosts a meeting of research and industry ministers in Copenhagen. Commissioner Serafin presents the new Multiannual Financial Framework to the European Parliament's Budget Committee at 12:30 pm. presents the new Multiannual Financial Framework to the European Parliament's Budget Committee at 12:30 pm. Commissioner Hansen outlines the Commission's priorities for the post-2027 Common Agricultural Policy (CAP) in the AGRI Committee. outlines the Commission's priorities for the post-2027 Common Agricultural Policy (CAP) in the AGRI Committee. Commissioner Tzitzikostas presents priorities related to transport and tourism to the TRAN Committee. presents priorities related to transport and tourism to the TRAN Committee. Commissioner Mînzatu addresses the EMPL Committee on employment and social affairs priorities Contributors: Jacob Wulff Wold, Magnus Lund Nielsen, Nikolaus J. Kurmayer, Thomas Møller Nielsen, Martina Monti, Elisa Braun, Charles Szumski, Alessia Peretti, Natália Silenská, Sarantis Michalopoulos, Inés Fernándes-Pontes, Angelo Di Mambro, Nick Alipour, Laurent Geslin. Editors: Matthew Karnitschnig, Sofia Mandilara and Charles Szumski.
Euractiv
6 days ago
- Business
- Euractiv
New budget shows who runs Europe
In today's edition of The Capitals, read about the EU's new seven-year budget, the bloc pondering its stance on Israel, the Greens having no regrets, and the petrol car phase-out. Euractiv is part of the Trust Project Eddy Wax Jul 15, 2025 08:03 9 min. read News Based on facts, either observed and verified directly by the reporter, or reported and verified from knowledgeable sources. Welcome to the Capitals by Eddy Wax, with Nicoletta Ionta. Sign up here. Today: EU's new seven-year EU ponders Israel Greens have no regrets Petrol car phase out In the capital When Ursula von der Leyen outlines her plan for the EU's new seven-year budget on Wednesday it will be the purest expression of the true power balance across the union: National governments and the Commission are in charge, in that order. And as we'll explain, that's exactly why those in the know think it's doomed. Von der Leyen is tightening control over the trillion-euro fund and cutting out pesky MEPs and traditional interlocutors in Europe's regional governments. If this radical shake-up becomes reality, countries will need to submit a national plan and meet domestic reform targets to get their share of the EU's traditional cohesion and farming subsidies, worth two-thirds of the current budget, as Sofía Sánchez Manzanaro and Jacob Wulff Wold reported in this scoopy piece. The new framework will be modelled directly on the post-pandemic scheme, which sidelined Parliament and enraged auditors over its baked-in unaccountability. Despite soothing words to regions and farmers from von der Leyen in recent weeks, this nightmare – or much-needed modernisation, depending on how you see it – will set the frame for the upcoming negotiations with countries and MEPs. The EU's agriculture commissioner used to be a commanding figure in Brussels (think Franz Fischler). The current incumbent is fighting a rearguard action to stop rural investments from being subsumed into 'national and regional partnerships' – and made vulnerable to cuts, as Euractiv scooped on Monday. Christophe Hansen has insisted that per hectare farm subsidies be ring-fenced, but that doesn't mean the numbers will be at the same level. There is another view. Why should the Commission chew through 17 Spanish rural development plans, instead of just one? France and Germany, crucially, back a cash-for-reforms model, as made clear in this helpful overview of all EU countries' positions, and experts say streamlining the clunky budget is necessary. The model is no surprise. Since 2019, when von der Leyen first took over, Europe has become more governments-led, amid the need for quick Brussels-to-capitals decisions to support Ukraine and buy vaccines. Experts believe the budget's modest size could be its downfall. For all the talk of 'more Europe', Germany has ruled out spending more, and other big countries are hobbled by their budget problems, as Thomas Møller Nielsen writes in this analysis. EU ponders Israel EU foreign ministers will go through their options about how to rework their relationship with Israel to pressure it to end the war in Gaza today. Some diplomats thought the Gaza aid deal struck by the EU's top diplomat Kaja Kallas last week would diffuse today's talks. But the humanitarian situation in Gaza suggests otherwise. "We do not see enough improvement on the ground. We need to really see that this, all this – what we have agreed – is also happening,' Kallas told reporters, including our own Alexandra Brzozowski last night. An EU diplomat said that while 'aid access has gotten better since the deal last week, distribution still remains difficult and of course the aid deal falls short of any full ceasefire." Yet, ministers will remain deeply divided on whether to take measures against Israel, which means no substantive action is expected. The bitter, if familiar reality for Europe, is that trajectory of Israel's war on Hamas will be decided in Jerusalem and Washington. Nonetheless, EU officials took solace in the fact that Israeli and Palestinian ministers came to Brussels for the EU-Southern neighbourhood ministerial dinner last night, the first time since the war in Gaza started. INTERVIEW: Greens have no regrets Greens chief Bas Eickhout said he doesn't regret voting for the European Commission last year, even though the European People's Party is now squarely setting the agenda on all things climate and environment. "But things need to change,' the Dutch MEP told me in an interview, in which he lashed out at 'nasty' pharmaceutical lobbyists for pushing the EU simplification drive too far, and said that von der Leyen, in her 'heart', wants to work with the Greens. Read the full Q&A here. Stick with petrol car phaseout, Berlin says Bad news for Manfred Weber. Germany's new environment minister said the EU should stick to its target of banning new fossil-fuel powered cars from 2035. 'I don't believe in revisiting decisions that have been made and agreed upon ... at the moment when they become effective,' said the aptly-named Carsten Schneider, a Social Democrat, on his first visit to Brussels, Niko J. Kurmayer writes. Europe's right-wingers hate the EU's planned 2035 combustion engine ban and the centre-right EPP – whom Schneider sits in government with – even campaigned for the 2024 EU election promising to scrap it. Whether Schneider's view will ultimately carry the day in car-crazed Germany is another matter. Major news on minors Countries are now allowed to set their own legal age limits for kids to access social media, in a win for France which was pushing for this. On Monday, the Commission released new guidelines to protect minors online. Anupriya Datta has the story. EU fraud-buster race Three contenders are in the running to lead OLAF, the EU's anti-fraud agency that has the power to ruin Brussels careers. Elisa Braun was watching as they made their pitches in the European Parliament Monday. Petr Klement said OLAF shouldn't be a mere advisory body; it must push for binding recommendations and work smoothly with its rival crime-busting body, EPPO. He came first in a secret ballot of MEPs. Slovak ex-Eurojust president Ladislav Hamran pitched OLAF as an 'intelligence service' capable of spotting risks early. Polish EEAS candidate Joanna Krzeminska-Vamvaka positioned herself as a sort of technocratic glue, emphasizing protecting the EU budget and communicating more with the public. In a sure sign of OLAF's independence, the Commission has the final say on who will replace outgoing chief Ville Itälä at the end of the month. Šuica's pact takes shape A Dubravka Šuica-shaped plan to bind the EU more closely to its neighbours around the Mediterranean will come on 15 October, the commissioner told reporters Monday as talks kicked off. Her flagship initiative aims to deepen economic ties and tighten migration management across the Med. Around the bloc UKRAINE | US President Donald Trump said on Monday Europeans will buy US weapons to replace gear sent to Ukraine – a move aimed at increasing deliveries to the battlefield and boosting European purchases of American-made equipment. Read more. GERMANY | Merz claimed credit for the above deal, saying last night: "President Trump and I have discussed this several times in recent days. I have assured him: Germany will play a decisive role." ITALY | The European Commission has raised concerns about Italy's use of its 'golden power' mechanism in UniCredit's €10 billion acquisition of Banco BPM, warning that Rome's conditions may breach EU law. Read more. POLAND | A third major fire in less than a week broke out in Poland on Monday, prompting the authorities to suspect that the incidents may be linked to hybrid operations by Russian intelligence services. Read more. CZECHIA | A Czech journalist is facing a torrent of hate after exposing abuse allegations against far-right MEP Filip Turek, which he denies. Read more. SPAIN | Spain and Catalonia's regional government jointly unveiled a proposed fiscal scheme for Barcelona on Monday, amid concerns that the 'unique' financing plan could undermine the principle of solidarity among the country's autonomous regions. Read more. BELGIUM | Several properties, including an antique store, were searched in connection with the money laundering investigation into former European Commissioner Didier Reynders, Belgian media and Follow the Money report. Reynders had several of his properties raided by Belgian police in December last year, days after he left his EU job as justice commissioner. He is suspected of laundering money by purchasing large amounts of lottery tickets. ROMANIA | The government survived its first no-confidence motion on Monday after Parliament rejected a challenge from far-right parties, but the vote exposed growing tensions within the pro-EU ruling coalition. George Simion, who was behind the motion of censure against the European Commission last week, also spearheaded this push, with other far-right parties. Read more. SWEDEN | The Sámi Parliament election was declared invalid after 88 votes were disqualified, triggering a rerun. The Sámi – an Indigenous people of northern Scandinavia – elect their own parliament. Only 9,755 voters were registered for the election, a fraction of Sweden's estimated Sámi population of 20,000 to 40,000. Also on Euractiv MONEY MAP: We mapped where every single EU country stands on the EU budget. Read here. LE PEN FEELS THE HEAT: From alleged misuse of EU funds to questionable campaign financing, France's far-right Rassemblement National heads into the summer under intensifying judicial scrutiny. Read the story. QUIET PART OUT LOUD: A European Commission official involved in US trade negotiations, said Washington has urged Brussels to 'follow us 100%' on China policy. Read more. THE VISÉ GRAD'S COMEBACK: Regional power blocs like the Viségrad four (Poland, Czechia, Slovakia, Hungary) or the Baltic Triangle are playing an ever more strategic role, argues Angelo Valerio Toma, in this op-ed. Read the op-ed. Agenda Von der Leyen meets a delegation of Fianna Fáil MEPs meets a delegation of Fianna Fáil MEPs Foreign Affairs Council, chaired by Kaja Kallas NATO chief Mark Rutte continues his US visit continues his US visit Press conference by MEPs Siegfried Mureșan (EPP) and Carla Tavares (S&D) on the new EU budget at 09:30 (EPP) and (S&D) on the new EU budget at 09:30 Hearing in the Parliament's social affairs committee with Commissioners Roxana Mînzatu and Valdis Dombrovskis Entre nous Armez les diplomates, formez les working parties: António Costa was spotted belting out La Marseillaise at the French permanent representation to the EU's Bastille Day party last night. A Meeh exit: Katharina Meeh, spokesperson for the German perm rep, is leaving Brussels to become an adviser for German Foreign Minister Johann Wadephul. Contributors: Magnus Lund Nielsen, Jacob Wulff Wold, Niko J. Kurmayer, Anupriya Datta, Alexandra Brzozowski, Maria Simon Arboleas, Angelo Di Mambro, Thomas Møller-Nielsen, Elisa Braun, Charles Szumski, Catalina Mihai, Aneta Zachová, Nick Alipour, Aleksandra Krzysztoszek, Inés Fernández-Pontes, Alessia Peretti. Editors: Matthew Karnitschnig, Sofia Mandilara and Charles Szumski.
Euractiv
12-07-2025
- Business
- Euractiv
EU to tax tobacco, large companies to fund next budget
Whilst EU countries want an ambitious budget, they will also have to repay the bloc's €650 billion covid loans from 2028. The budget proposals must be approved unanimously. Euractiv is part of the Trust Project Eddy Wax and Jacob Wulff Wold Euractiv Jul 12, 2025 15:19 2 min. read News Based on facts, either observed and verified directly by the reporter, or reported and verified from knowledgeable sources. The European Commission is hoping all EU countries can agree on new taxes on tobacco, large companies, electronics waste and carbon emissions to fund the EU budget, according to a draft proposal seen by Euractiv. The bloc's members are straining their finances, but the Commission wants an ambitious 2028 to 2034 budget (MFF) to boost competitiveness and defence. Direct contributions based on GNI, which financed 56% of the previous budget, "will reach its limits as financing needs increase," writes the Commission in its draft, before presenting its proposal for five new EU-level income sources. A Tobacco Excise Duty Own Resource (TEDOR) would "generate significant revenue" and also help towards the EU's health policy objectives. The document does not detail the excise duties, but Euractiv previously reported that the Commission has considered a 139% tax hike on cigarettes. A Corporate Resource for Europe (CORE) would tax companies with a permanent establishment in the EU and over €50 million in annual net turnover. To aid its green ambitions, the Commission proposes new contributions based on electronics waste. Two carbon levies which have already been floated – ETS1 and CBAM – will tax emissions inside and outside the EU. These proposals will stir debate among EU countries, which must approve them unanimously. To sweeten the deal, most ETS revenues would go to national budgets, and a temporary "solidarity adjustment mechanism" would balance differences between winners and losers of the new system. Proposals from 2020 and 2023 have not progressed much in the council, but the next budget is a unique opportunity. It is very difficult to agree on new revenue sources without also discussing expenditure, one EU diplomat told Euractiv this week. Whilst EU countries want an ambitious budget, they will also have to repay the bloc's €650 billion covid loans – known as the Recovery and Resilience Facility – from 2028. The EU will dedicate roughly one-fifth of its current annual budget size to these repayments (equal to €25-30 billion each year). (ow) Euractiv is part of the Trust Project
Euractiv
10-07-2025
- Business
- Euractiv
The president who wasn't there
Welcome to the Capitals by Eddy Wax, with Nicoletta Ionta. We welcome feedback and tips here. Sign up here. In today's edition: VDL is safe, and long gone Race to run DG COMP Budget digest Today's edition is powered by CEN and CENELEC Standards support European competitiveness CEN and CENELEC welcome Denmark's Presidency of the EU Council. We are ready to leverage the strength of standards to help Europe complete the Single Market, drive innovation, strengthen competitiveness and ensure effective regulation across strategic sectors. Read more. À la carte Ursula von der Leyen is so chilled about today's motion of censure against her Commission that she's not even here. Rather than wait for a vote that will fail to topple her, von der Leyen left Strasbourg last night for the Ukraine Recovery Conference in Rome where she will also meet US Senator Lindsey Graham, whose tough sanctions bill against Russia is advancing through Congress. But that wasn't before making two concessions to the Socialists in Parliament, who had been threatening to abstain from today's midday vote. Abstaining would not bring down the Commission but could expose how little support there is for von der Leyen and the EPP in the centre of the political spectrum, and feed a narrative that the German Christian Democrat is losing her grip on the Parliament. Last night, after negotiating directly with von der Leyen, top Socialist MEP Iratxe García said she had got a cast-iron guarantee from the Commission that the European Social Fund+ – an instrument that funds things like job training and social inclusion schemes, and is projected to be worth around €150 billion over the next seven years – will be retained in the next EU budget. Until now, the Commission had been toying with the idea of simply earmarking money as societally friendly, an idea that was a non-starter for the centre-left, according to a Socialist official. Renew Europe will also vote down the motion rather than abstaining, but said in a press release last night that the next key moment will be von der Leyen's annual State of the Union address in September. 'It must mark a shift in leadership style – from unilateralism to partnership,' the liberals said. Fading Support for Ukraine Ukraine opens a high stakes Recovery Conference in Rome today, with Volodymyr Zelenskyy aiming to secure energy deals and defence investment. But Western allies admit options are dwindling, and a €100 billion EU support plan remains blocked by Hungary. A separate summit on security guarantees, chaired by France and the UK today, is also expected to deliver little. The resulting picture, a senior NATO official told Alexandra Brzozowski, is bleak. 'Ukraine continues to show a lot of innovative spirit,' they said. 'But we are in for a stressful and difficult summer.' Parliament backs money laundering watchlist On Wednesday, the European Parliament approved an updated list of high-risk third countries for money laundering and terrorist financing, choosing not to oppose the European Commission's proposal. The revised list removes the UAE, Barbados, Gibraltar, Jamaica, Panama, the Philippines, Senegal, and Uganda. The move marks a shift from last year, when MEPs strongly opposed the Commission's bid to delist Gibraltar, Panama, and the UAE, citing evidence that the countries had failed to curb sanctions circumvention, particularly in relation to Russia. The competition to lead DG COMP The European Commission's powerful competition authority – responsible for slapping Google and Apple with billion-euro fines, probing Big Oil, and reining in corporate power across the EU – is facing a leadership vacuum. Oliver Guersent, the French civil servant who has led DG Competition since 2020, will step down on 31 July, setting off a scramble for one of the EU's most politically sensitive posts. Names like Anthony Whelan – acting economics advisor in von der Leyen's cabinet – and DG Energy chief Ditte Juul Jørgensen are being floated in Brussels corridors, as first reported by the FT. Whelan is seen as almost too qualified for the job. 'The president won't let him go that easily,' one senior EU official told Euractiv. Jørgensen, a former chief of staff to Competition Commissioner Margrethe Vestager, brings the advantage of coming from a smaller member state – a factor that would ease tensions around nationality balance and reduce friction with major capitals. A Frenchman, Guersent's exit also raises questions about the mix of nationalities at the top of the Commission. That also weakens the case for another French contender, Céline Gauer, who runs the Commission's Reform and Investment Task Force. She is widely seen as highly competent, having negotiated the recovery plans with EU capitals. Still, there are signs that the Commission will go for a simpler option: a DG-level reshuffle rather than promoting someone still finding their feet. In that regard, Linsey McCallum is seen as a strong contender. With a proven track record as deputy director-general for antitrust, she's already navigating the most politically charged files in the building. 'She's extremely respected, has the courage to act when needed, and knows how to be political while remaining deeply respectful,' an antitrust economist noted. MFF digest Less than a week before the Commission presents the bulk of its 2028-2034 Multiannual Financial Framework, virtually all parts of the proposal have been leaked. Our chief diplomatic correspondent Alexandra Brzozowski writes that the Commission will propose combining different external action programmes and funds into a single 'Global Europe Fund', divided between six regions. It will suggest, for the first time in a budget proposal, to directly link the EU's foreign aid to recipient countries' efforts in preventing migration into the bloc. Another key element of the EU executive's proposal will be a Ukraine fund to be incorporated into the EU budget, to guarantee long-term financing for Kyiv from 2028 to 2034. Likelihood of success on a scale from 1 to Hungary: Unlikely. Read more here. Chief defence correspondent Aurélie Pugnet writes that defence start-ups are to get a specific fund named "DARPA" under the Horizon Europe research programme. DARPA is the name of the US Pentagon's key agency channelling billions of dollars in defence innovation, which does not have an equivalent at EU level. A European DARPA (mimicking the US agency which invests in defence innovation) could help complete the EU defence fund currently marked at €8 billion. Euractiv's Claudie Moreau writes that the Commission is preparing to merge the Creative Europe and Citizens, Equality, Rights and Values (CERV) funding programmes. The new proposal, obtained by Euractiv, would fund culture, media, audiovisual services, and projects aimed at supporting EU values. This is a hit for cultural industries that rely heavily on Creative Europe and feared combining it with other funding objectives may dilute their own share of the EU budget. Read more. Meanwhile, Euractiv's Jacob Wulff Wold writes that there are few details so far on the two thirds of the budget reserved for farmers and the regions. The latter have been promised a "dedicated" budget with a preserved two pillar structure of direct farmer support and rural development funds. A Monday German parliamentary cable, seen by Euractiv, suggests only the direct payments will be truly ring-fenced within the national partnerships, with the rest of CAP and cohesion subject to 'horizontal flexibility'. But the fight may last until the final whistle on Wednesday. Around the bloc GERMANY | German Chancellor Friedrich Merz acknowledged trouble with France over the joint next-generation fighter jet project on Wednesday, but expressed confidence that the aircraft remains needed and will get back on track. Read more. FRANCE | The European Court of Human Rights on Wednesday rejected French far-right leader Marine Le Pen's request to suspend a Paris Criminal Court ruling that bars her from holding public office. The court found that "no imminent risk of irreparable harm to a right protected by the European Convention on Human Rights or its protocols has been established". ITALY | Italy's Tribunal of Ministers is weighing criminal charges against Prime Minister Giorgia Meloni and top officials over the government's controversial release of a Libyan general wanted by the International Criminal Court. Read more. SPAIN | Spanish Prime Minister Pedro Sánchez ruled out resignation on Wednesday, unveiling a sweeping anti-graft strategy as his Socialist party faces mounting scrutiny over corruption allegations. Read more. CZECHIA | Czech President Petr Pavel will present a plan for Ukraine's post-war reconstruction at Thursday's international recovery conference in Rome. The plan focuses on stabilising and modernising Ukraine's economy, attracting investment, facilitating the return of refugees, and accelerating Ukraine's EU accession path. Read more. Also on Euractiv
