The Arctic is becoming a geopolitical battleground — and the EU wants a bigger role.
The European Commission is unveiling a new strategy focused on security, as Russia builds up its military presence, China explores new shipping routes, and Donald Trump’s Greenland ambitions raise tensions.
Also on the show, hosts Zoya Sheftalovich and Nick Vinocur discuss signs of progress in the EU’s long-term budget negotiations: Emmanuel Macron and Friedrich Merz appear to be finding common ground, while Kaja Kallas warns that proposed cuts could undermine Europe’s global influence.
Slashing the EU’s humanitarian aid budget risks wrecking the bloc’s dominance and influence in international discussions, warned the head of the world’s largest food aid organization.
As Europe’s leaders clash over just how much they’re prepared to fund the EU and its programs in the next seven-year budget, initial funding plans for global development have already been cut.
The latest compromise position presented by the Irish rotating presidency of the Council of the EU would carve €38 billion out of the Global Europe envelope — which funds development and external aid — shrinking it by roughly 17% to €177 billion.
The European Commission “has remained a predictable donor when others have cut,” Carl Skau, acting chief of the U.N. World Food Programme said. This has earned Europe “a lot of trust, a lot capital, a lot of leverage in the international system,” he added.
That influence has helped the EU shape WFP priorities, including commitments to gender equality, climate action and protecting vulnerable populations in its 2026-2029 Strategic Plan.
Now, Brussels risks throwing that advantage away, Skau warned.
World Food Programme donations are unloaded in Chichiriviche de la Costa, Venezuela on July 16, 2026. | Raul Arboleda/AFP via Getty Images
It will be “unfortunate also to do away with that muscle that Europe benefits from,” he said, urging the EU to protect the “ambitious budget.” Compared with the billions being poured into defense, he argued, humanitarian aid amounts to “peanuts.”
Talks on squeezing the EU’s contribution land as other international powers have also cut their global development budgets.
The World Food Programme’s global funding has plunged by 40% over the past two years, according to its official records. Its largest donor, the United States, halved its contributions in 2025 under President Donald Trump compared with the previous year. Germany, France, and the United Kingdom also tightened the purse strings.
Record need for aid
Funding cuts to the organization come when the need for its programs has never been higher. According to WFP projections, as many as 363 million people could face acute food insecurity this year — nearly 90% more than in 2021.
“We see the consequences of the cuts that we’re now going through. They are human, because we are cutting [food programs for] women and children, who are likely to die in South Sudan, in Afghanistan, in Somalia, off our support because of these deep funding cuts we’ve been going through,” said Skau.
The world’s largest food aid agency is now running dangerously short of cash and has to make “impossible choices,” such as “choosing between the starving,” Skau said. Moreover, wars, extreme weather, the looming threat of El Niño and disruptions to global trade routes are deepening hunger crises worldwide.
Some officials previously warned that cuts to development aid risk fueling more migration into Europe, something Brussels has been trying to curb.
“I would not put that as my main argument, but there is a clear linkage,” said Skau. “And if that’s what it takes to get the resources needed to save lives in South Sudan, you know, fair enough,” he added.
Skau is serving as WFP’s interim chief following Cindy McCain’s departure. He is set to hand over to Luke Lindberg at the end of October.
As Europe plans its response to the neurological disease burden, a fundamental measurement gap is being overlooked — and the cost of ignoring it is being felt.
A briefing requested earlier this year by the European Parliament’s Committee on Public Health (SANT) put it plainly: neurological diseases are one of Europe’s most urgent and rapidly expanding health, social and economic challenges. Published in February 2026, it calls for a coordinated European plan linking prevention, early diagnosis, research and innovation.1 But before Europe considers what that plan should look like, a foundational question demands attention: are we measuring the right things?
Multiple sclerosis (MS), a chronic, progressive disease of the central nervous system that disrupts communication between the brain and the body, offers a revealing case study. Consider a woman in her mid-30s, working, raising a family, managing what her neurologist calls “stable” MS. She has not slept properly in years, her memory has been slipping and she is cutting her hours at work. Her last clinical note reads: “No change.” On paper, she is stable, but in reality she is anything but.
Her story is not unusual. According to research commissioned by Sanofi*, the gap between what health systems measure and what people with MS experience may be costing individuals, families and economies more than we realize.3
The stakes for Europe
Over 3 million people globally live with MS and Europe has the highest prevalence, at 133 per 100,000 people.2,3 The condition strikes primarily during prime working years, meaning hundreds of thousands of people are navigating a progressive, unpredictable disease at precisely the point when inadequate support is felt most acutely.3
That support begins with measurement. And right now, the tools used to assess MS in clinical practice do not fully capture what people with the disease experience.3
The consequences extend far beyond the clinic: 82 percent of people with severe MS rely on unpaid family caregiving, yet this burden rarely appears in standard health data or policy design.3 When the full impact of disease is not measured, health systems can underestimate need, delay support, and overlook the wider effects on work, welfare and family life.3
The measurement gap
The Expanded Disability Status Scale (EDSS), the primary tool used to measure MS disability, was developed in 1983 to assess walking ability. We now know that MS affects far more than mobility. Fatigue affects 94 percent of people with MS, while 75 percent report cognitive difficulties, but both are absent in the EDSS assessment.3 In a field where clinical consensus is rare, seven in ten neurologists agree: a more comprehensive approach is needed.3
Growing recognition of smouldering neuroinflammation has made the need for new methods of quantifying MS progression increasingly urgent. This slow, chronic disease activity can persist even when a patient appears clinically stable, with effects that are subtle, cumulative and easy to miss until significant damage has already occurred.4
This is why Sanofi initiated the development of the Smouldering Associated Worsening (SAW) Index+. The SAW Index Study — led by an international steering committee of leading MS clinicians, researchers and patient advocates — is due to complete in 2027. Based on hundreds of hours of in-depth qualitative research with people with MS, the goal of the SAW Index is to provide neurologists with a comprehensive measurement framework that bridges the gap between lived experience and what clinical tools are currently able to detect.
According to the European Multiple Sclerosis Platform, people with MS experience an average of 14 symptoms within the first five years of diagnosis, with fatigue, sensory problems, sleep disturbances, cognitive impairment and balance problems among the most common.5 These are precisely the experiences the SAW Index is designed to surface, replacing static labels like “moderately affected” with measurement metrics grounded in the experience and words of people with MS.
The cost of this gap
These aspects of MS can be challenging to quantify and are associated with substantial societal and economic burdens. Lifetime productivity loss per person with MS ranges from €394,000 in France to €668,000 in Germany.3 The cost profile shifts significantly as the disease progresses: in mild MS, direct healthcare costs dominate; in severe MS, indirect costs become the primary driver.3 Indeed, lost wages, absenteeism, early retirement, disability payments and the growing burden on unpaid carers outweigh medical costs in many countries, placing growing long-term pressure on social insurance and disability systems.3
Early identification of progression could change that trajectory, extending years of employment, preserving household income, and reducing long-term dependence on disability and social benefits.3,6 That is a cost-avoidance opportunity current measurement frameworks are missing.
Progress in motion
There is no single fix, but there is momentum.
MS care has advanced significantly in recent decades: diagnosis is happening earlier, treatment options have expanded and the focus is shifting from relapse control alone to slowing long-term disability progression.7 Furthermore, there is growing recognition of the importance of cognition, mental health, rehabilitation and the day-to-day realities that shape whether people living with MS can remain independent and active.8
The challenge now is to ensure policy keeps pace with that progress, and better measurement is part of the answer. If Europe wants health spending to deliver lasting value, it should see these improvements not as costs to be managed, but as investments in independence, participation, productivity and more sustainable health systems.
Time to act
The European Parliament’s SANT Committee has called for a fully funded European neurological health plan — one with the scale and ambition of Europe’s Beating Cancer Plan, aligning health, research and societal action in a unified framework.1 MS offers a clear and immediate test case for what that ambition looks like in practice.
But ambitious plans require accurate data. If Europe is serious about a coordinated response to neurological disease, getting measurement right is not a secondary concern; it is the foundation on which everything else depends.
The people living with MS across the continent cannot wait for the tools that measure their disease to catch up with the science that understands it. Neither should policymakers.
*Research commissioned by Sanofi. All editorial control retained by Economist Impact. +Sanofi initiated and funds the SAW Index Study.
Scalfari, A, et al. (2024) Smouldering-Associated Worsening in Multiple Sclerosis: An International Consensus Statement on Definition, Biology, Clinical Implications, and Future Directions. Ann Neurol 2024;00:1. DOI: 10.1002/ana.27034.
European Multiple Sclerosis Platform. (n.d.). Impact of multiple sclerosis symptoms (IMSS) [Fact sheet]. Accessed: October 2026
Montague T, Drummond J, Ng K, Parratt J. Advancements in multiple sclerosis. Intern Med J. 2025 Jun;55(6):895-904. DOI: 10.1111/imj.70023.
Giovannoni G, et al. MS care: integrating advanced therapies and holistic management. Front Neurol. 2024 Jan 30;14:1286122. doi: 10.3389/fneur.2023
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The political advertisement is linked to driving action in how neurological disease is measured in the EU (using MS as a case study) and driving action around the briefing requested by the SANT committee aimed at strengthening brain health (Policy Recommendations to Tackle the Rising Burden of Neurological Diseases).
BRUSSELS — Ukrainian President Volodymyr Zelenskyy will make a direct pitch to European leaders for more help on Friday, amid a crisis of faith among allies over Donald Trump’s latest steps favoring Russia.
At the second day of an EU summit in Brussels, Zelenskyy joins European prime ministers and presidents as they discuss Ukraine’s need for more weapons and cash, with concern growing that Kyiv faces a shortfall of billions of euros next year.
The reality of the threat to European security from the four-year-long war penetrated the summit bubble after air drones hit two ships in or near Romanian waters, prompting emergency talks with NATO.
“We all in Europe want this war to end,” Zelenskyy said on social media as he arrived in the Belgian capital on Thursday. “And for that, signals of strength are needed — more real pressure on Russia and more defense support for Ukraine.”
It is especially important, Zelenskyy said, to “act together to protect lives.” But unity among European leaders is in short supply at a meeting already riddled with tensions.
EU governments are pitted against each other in their own fraught negotiations over how much money to commit to the 27-country bloc’s budget. With populists surging, discontent raging and elections scheduled in major power centers across the continent, under-pressure leaders are a long way from approaching a deal.
Ukraine’s President Volodymyr Zelenskyy on the sidelines of the EU summit in Brussels on October 15, 2026. | Nicolas Tucat/Pool/AFP via Getty Images
That’s the combustible mix of financial discussions the U.S. president waded into.
Trump’s decision to open up American markets to previously banned Russian diesel — intended to ease price pressures in the U.S. — risks tilting the balance of an expensive war in Russia’s favor, three European officials warned. Putin’s war chest can now swell from additional fossil fuel exports, while Ukraine struggles for cash.
As they arrived for the first day of the marathon two-day gathering on Thursday, EU national leaders began informally discussing options for how to help redress the balance. That discussion should to be picked up again around the summit table on Friday.
Russian assets
One idea rapidly rising back up the agenda is the fraught question of whether, or how, to make use of some hundreds of billions of euros of frozen Russian financial assets held in European banks.
The bulk of these rest with the Euroclear depository in Brussels. A previous attempt to grab the funds and send them directly to Kyiv was blocked by the Belgian government ― and other countries less prominently ― over concerns it would be exposed to legal action.
But Sweden, Finland and Germany want to take another look at the assets. The European Commission is to come up with a new detailed assessment of Ukraine’s funding needs and an options paper on how to help, including the use of assets, according to officials from these countries.
As the summit began, German Chancellor Friedrich Merz said he had been urging his counterparts to “do everything we can to help Ukraine get through the winter and continue to support it next year as well.”
“We will also have to increase funding once again in order to provide Ukraine with truly long-term assistance,” he said. “I remain firmly convinced that we are not only defending Ukraine’s territorial integrity, but also the political order of Europe, which is truly under pressure from Russia in every respect.”
A German official earlier suggested that of the available options to help Ukraine, including a loan and direct grants from national governments, using the assets was the most viable way forward and should be “discussed.”
A U.S. proposal to unfreeze some of the Russian assets and transfer them to a U.S.-controlled entity so Washington could use them as leverage in peace talks with Moscow also attracted strong criticism.
Merz told reporters that the assets had been frozen in Europe and “should remain frozen in Europe … That is our business, and we will decide on it.”
‘Try again’
Finland’s Prime Minister Petteri Orpo told POLITICO as the summit began: “The best solution would be that we will have a solution on how to use frozen assets … We have to try again.”
Finnish Prime Minister Petteri Orpo speaks to journalists at the European Arctic Summit in Rovaniemi, Finland, on Sept. 14, 2026. | Jouni Porsanger/AFP via Getty Images
Sweden is also backing the move to re-examine options on using the assets to help Ukraine’s future funding needs. “Doing nothing is not an option,” Swedish EU Affairs Minister Jessica Rosencrantz told POLITICO. “The Commission is looking into different financial options, and we need to get them on the table quite soon,” she said.
Leaders at this week’s summit should “be really honest that Ukraine needs increased financing” and that the EU “must really step up,” she added.
Zelenskyy met Belgian Prime Minister Bart De Wever, the main opponent to a deal on assets, for talks on Thursday and thanked him for his country’s support so far.
Speaking to reporters after the first day of the summit, De Wever said the assets should be looked at as part of a future peace agreement. “Are there people on this planet who maybe dream of doing it differently this time and operationalizing those assets earlier for certain purposes? The answer to that question is: Yes there are,” he said. “Are they in this building? They are. Are there outside this building? Yes there are. Do I want to talk about it? No, I don’t.”
For Finland’s Orpo, Trump’s “terrible deal” with Putin on diesel, and the apparent U.S.-imposed limits on Starlink technology to help Ukraine counter Russian attacks, are hard to understand.
“My message to [Trump] is that we are allies,” Orpo said in an interview. “We are in NATO. And what is the biggest threat against NATO? It’s Russia — and that is why there is no logic. I don’t have answers. I have many questions.” He said Trump may be focusing on winning votes ahead of next month’s midterm elections in the U.S. but he should remember that his real allies lie in Europe and he should not “trust” Putin.
Election anxiety
Finland holds its election next year at the same time as what could be a seismic contest in France. Far-right leader Marine Le Pen is leading the polls for the French presidency and wants to cut aid to Ukraine and slash the EU’s budget.
French President Emmanuel Macron, who is constitutionally barred from standing next year, warned EU leaders that they must get a deal on the bloc’s next budget by December, otherwise it will be too late.
But the 27 leaders remain split and show no signs of bridging the gap between “frugal” countries like Germany, Sweden and the Netherlands, who want to limit the settlement, and others such as Italy and Romania, who are on the side of bigger pots of cash for regional development and farming.
European Council President António Costa also sees the urgency. He believes a deal before the end of the year is not only necessary but achievable, according to two EU officials.
Costa, who is taking over the negotiations from Ireland in its role at the helm of the rotating presidency of the Council of the EU, believes failing to secure a deal by December would push the entire budget negotiating process beyond the electoral cycle. That would potentially delay a deal until October next year — perilously close to the new EU budget taking effect in January 2028.
In an effort to make progress on the budget talks, EU leaders will return to Brussels for an extra summit next month.
Camille Gijs, Hanne Cokelaere and Gregorio Sorgi contributed reporting.
TIRANA — The College of Europe’s Tirana office was among the latest casualties of escalating student protests gripping the Albanian capital.
The office for the school, which serves as a training ground for future EU civil servants, was broken into, looted and set on fire on Wednesday evening.
“Until yesterday, this was the office of the College of Europe,” Albanian Prime Minister Edi Rama said in an Instagram video delivered from the burned-out shell of the office. Rama’s own workplace is a stone’s throw from the Pyramid complex housing the College of Europe.
Rama said he did not believe the damage was down to the students. “Students are the future, they are the ones who look ahead, who want to go further and faster,” he said.
Instead, he accused his political opponents of being behind the destruction, claiming that they were attempting to undermine Albania’s progress. The opposition parties deny any wrongdoing.
The College of Europe in Tirana refused to comment.
Protests in Albania have been ongoing since late May against the proposed development of a luxury resort linked to U.S. President Donald Trump’s son-in-law, Jared Kushner, and alleged government corruption. But the situation escalated on Tuesday and Wednesday as students from around the country clashed with police, set fire to government buildings and businesses linked to powerful businessmen, and damaged traffic lights, bus stops, and the city’s roads.
Alice Taylor/POLITICO
The Delegation of the European Union to Albania released a statement Thursday morning, condemning the destruction of private and public property and asking protesters to exercise restraint. “Violence has no place in democracies,” they wrote.`
Large swathes of the city were damaged during over 14 hours of protests Wednesday. The Ministry of Justice, Ministry of Education and Ministry of Finance, as well as a number of government institutions, banks, and private businesses, were broken into and set on fire. In centrally located Skanderbeg Square, protesters torched a large under-construction tower block, with flames reaching several floors.
With the destruction came many reports of police brutality, including against regular citizens and journalists. Several media workers were prevented from filming or had their equipment confiscated. On Tuesday, a young man required emergency surgery for a severely broken leg following an altercation with police.
At least 89 people required hospital treatment, including about 51 police officers, while many more protesters have reported minor injuries.
On Thursday, protests began again at 8 a.m., as students across Tirana boycotted lessons and marched toward the Ministry of Education. Police immediately dispersed demonstrators with tear gas and water cannons, while the unrest continued to spread to other parts of the capital, particularly near government institutions and the headquarters of Rama’s Socialist Party.
A parliamentary session for Thursday was canceled after students said they would not allow any deputies to access the assembly.
Protests also spread to other parts of Albania. Masked protesters clashed with police in multiple cities, with damage, fires, and violence reported across the country.
Many businesses throughout the capital were shuttered for the day, with owners putting up signs saying “we are with you, please don’t burn our businesses.”
The students and the so-called “Flamingo Revolution” protestors are demanding the resignation of Rama and the entire government, and a new start for Albania — including economic, educational, government, electoral and legal reform.
Rama told Reuters on Thursday that he has no intention of resigning.
BRUSSELS — The EU and China are in a good place to talk after last week’s trade deal on hybrid cars, but challenges remain, panelists at POLITICO’s European Resilience Summit on Wednesday agreed.
“From the Chinese business perspective this is very welcome,” said Linlin Liang of the China Chamber of Commerce to the EU, calling the understanding reached in Beijing “quite balanced from our perspective.”
An agreement to halve China’s exports hybrid vehicles to Europe was the main deliverable brought home by Trade Commissioner Maroš Šefčovič.
The two sides said in a joint statement that they would keep talking about issues such as market access for medical devices and the Foreign Subsidies Regulation, an EU measure that scrutinizes foreign subsidies that distort competition in public procurement and corporate acquisitions.
Šefčovič will hold further talks with Chinese Commerce Minister Wang Wentao in January, and they will meet again in March, as he pushes to rein in a €1 billion-a-day bilateral trade deficit.
Liang said Beijing stands ready to act if further talks go off track.
“I would like to remind all what MOFCOM mentioned: that they reserve the right to retaliate in case that things … don’t go around as agreed,” she told the panel on Europe in global trade, referring to the Chinese Ministry of Commerce.
Kathleen Van Brempt, a Belgian MEP for the Socialists & Democrats, said the most important outcome of last week’s Beijing talks was that there was “some sort of trade deal or result.”
Yet Beijing’s aggressive subsidy policies remain a hurdle, the senior trade lawmaker said, referring to a widely cited OECD study which found that Beijing’s subsidies to industry are up to eight times higher than in other countries: “It’s not normal,” she said.
Liang said that China’s export success should not be attributed solely to subsidies, and was the result of “decades of investment in innovation.”
She also said there was “a super appetite” among Chinese businesses to invest in Europe, but that they needed to assess the profitability of the EU market just like European companies.
The discussion also revealed differences between policymakers and businesses over the EU’s proposed Industrial Accelerator Act, a flagship measure aimed at steering public procurement spending toward European companies in sectors ranging from renewable energy to steel and the automotive industry.
Van Brempt, the S&D group’s lead lawmaker on the file in the trade committee, said the parliament’s three co-leads are aligned on the bill. While the center-right European People’s Party was “very divided” over the measure, she said lawmakers should be able to come to a common position.
The bill’s “Made in Europe” provision is a cause for concern for industry, meanwhile, as it risks isolating the EU from global supply chains.
“I would be careful always saying, okay, localize, put fences up,” said Holger Weintritt of German pharmaceutical company Bayer. “Let’s make sure that we still remain globally connected and look for reliable partnerships instead of isolating ourselves .”
The Commission is grappling with two goals that may be counterproductive: cutting migration and slashing development aid.
The EU executive’s argument is that a slash in development funding will likely result in people showing up at European borders in search of a better life. And that’s a problem for the bloc, since it’s looking to decrease migration numbers. On the show, hosts Zoya Sheftalovich and Ian Wishart explain how the dilemma will be unpacked at the upcoming European Council this week.
Next, a shooting near the European Parliament in Brussels has EU officials — and everyone else, for that matter — on edge.
Finally, the U.K. under Andy Burnham is at a big inflection point when it comes to redefining its relationship to the EU. But the bloc doesn’t even seem to care.
Questions? Comments? Let us know on our WhatsApp here or at +32 491 05 06 29.
European organizations have to reckon with how to keep up with the modern world without sacrificing sovereignty. Geopolitical instability, tightening regulatory expectations and the rapid adoption of artificial intelligence (AI) mean that, for many organizations, sovereignty now sits alongside resilience and business continuity in board-level risk discussions. The question they can no longer defer is how to harness the opportunities of the modern cloud without surrendering control over their own data. Answering it requires honesty about what sovereignty means, and about where it can actually be found.
A definition Europe can trust
The European Commission’s forthcoming Cloud and AI Development Act (CADA) is the right vehicle for that honesty: giving Europe a shared, enforceable definition of what “sovereign” actually means. Without such a definition, the market is filled with commercial offerings that claim the sovereignty label without delivering the substance, a practice described as “sovereignty washing.” This gap has led some organizations to treat open source as the answer. But open source software is a licensing model, not an operating model, and it doesn’t settle questions about infrastructure or jurisdiction or even reliability and access. It’s not a route out of dependency, it’s a different dependency on project sponsors and code maintainers. A definition gives policymakers a way to properly assess claims of sovereignty against a consistent standard rather than taking marketing at face value.
Europe should not wait for CADA to take effect before acting, though. European cloud service providers (CSPs) have been partnering with established technology providers to deliver real sovereign capability, without rebuilding the entire technology stack from scratch.
The best time to plant the sovereign tree was 10 years ago
If Europe wants to grow its industrial base, it has to support the ecosystem as it is now, not as it may in 10 years’ time. CADA’s own roadmap assumes roughly five to seven years to triple the EU’s data-center capacity. Providers who have already built capacity by blending EU capabilities with proven non-EU technologies would have to spend the intervening years relinquishing their growth. It is scale, not a shortage of skills or innovation, that is the biggest practical obstacle facing a stronger European cloud market. This is precisely why partnership with proven technology sources deserves a central place in the sovereignty debate rather than being treated as a second-best option.
Partnership shortens that timeline considerably, letting European CSPs deliver sovereign, scaled services now instead of waiting for domestic capacity to catch up organically. In Italy, IPZS, owned by the Italian Ministry of Economy and Finance, is using this model to build a modern Digital Application Platform for the Italian EUDI wallet, a foundational EU digital identity initiative. It provides a live example of that model working in Europe today, at the scale and speed the policy window demands.
It is through scale that the local industrial base can deliver sovereign capabilities, compete, capture market share, and invest in developing and integrating home-grown technologies. Hoping for the alternative to happen, that is for a European technological stack to fully emerge and be adopted, is the equivalent of putting the cart before the horse.
The rules need to allow for a model that’s already working
Providers, such as evoila, are now operating well beyond Europe’s borders, alongside Uniserver. This shows the model working at a broader scale, combining local operational and jurisdictional control with proven technology. Sovereignty spans jurisdictional, technological, operational and supply-chain dimensions, and a partnership model can address all four while drawing on technology already proven at scale, rather than asking every layer to be rebuilt from first principles by a single European provider.
Alongside its cloud platform, developed in-house and operated from data centers in Europe under EU jurisdiction, IONOS also offers customers a dedicated VMware-based private cloud. It is also operated within the EU and designed to provide European data sovereignty and operational control.
Broadcom’s role in that model is deliberately narrow. It supplies the VMware cloud software layer to the CSP, while the CSP itself runs the infrastructure and holds the customer relationship, so that no European customer data passes through Broadcom or is subject to its access. Trust, in this model, follows the architecture rather than the brand. If CADA’s tiers implicitly assume that sovereignty can only be delivered by a fully European-built stack, CADA would shut out precisely the route that is already allowing Europe to scale fastest: partnership between local operators and proven technology providers.
The path forward
Europe does not have to choose between moving quickly and building sovereignty. The two are compatible, provided the legislation is calibrated to recognize it. As the European Parliament and European Council work on CADA, the priority should be for it to recognize and reward the partnership models already delivering sovereign capability across Europe today.
The above column is sponsor-generated content.
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BRUSSELS — Germany and its allies rebuffed Ireland’s plan to downsize the bloc’s next seven-year budget, arguing that the proposed cuts are not enough.
On Saturday, the Irish presidency of the Council of the EU, which is steering the talks, proposed cutting around 8% from the bloc’s total budget from 2028 to 2034 in a bid to assuage a German-led camp demanding reductions of several hundred billions euros.
But Dublin’s hopes of facilitating a deal were immediately dashed by German Chancellor Friedrich Merz, one the key players in the negotiations as his country contributes to approximately one-quarter of the bloc’s common budget.
“We are still a long way from an agreement. The amount of the new proposal is not a basis for an agreement. The EU budget must be affordable for those who bear the brunt of the financing,” Merz wrote in a statement on Saturday.
Germany leads a group of six “frugal” countries — Sweden, Denmark, the Netherlands, Finland and Austria — which contribute 40% of the Union’s common budget.
Most frugal countries criticized Ireland’s proposed €159 billion in cuts in current prices from the Commission’s nearly €2 trillion proposal, saying they were insufficient.
Sweden’s Europe minister Jessica Rosencrantz described the negotiating document, or negobox, on X as a “wildly unaffordable increase,” as the overall amount would still be higher than the current budget.
Austrian Europe Minister Claudia Bauer echoed that criticism, saying that the new budget remained “miles away from an Austrian yes.”
Tensions will come to a head during a summit of EU leaders next Thursday and Friday, where they will discuss the negobox.
EU governments are racing to reach a budget deal among themselves by the end of the year — before elections in France, Italy and Poland in 2027 threaten to derail negotiations.
But Dutch Finance Minister Eelco Heinen warned on Saturday that “at this rate, there will be no deal by the end of the year.”
Ireland’s Minister of State for European Affairs Thomas Byrne, who leads the negotiations, dismissed criticism and described the proposal as a balanced compromise.
“The negotiating box acts to bridge the many differences between the Member states,” Byrne told reporters on Saturday.
Divided Union
The EU is split between frugal countries pushing for cuts across the board and a rival camp of southern and eastern states, the Friends of Cohesion, opposing reductions to farmers’ subsidies and regional payouts known as cohesion policy.
These areas account for almost half of the total budget and are politically sensitive because of pressure from farmers’ lobbies and regions.
In a concession to the 17 Friends of Cohesion, Ireland left the agriculture and regional budgets untouched and focused cuts on other priorities such as competitiveness, defense and development aid.
“There was a strong support for heading one [agriculture and cohesion] from almost all of the member states, including some of the countries who would be considered to be net contributors” to the budget, Byrne told reporters.
Reactions to the negobox from the Friends of Cohesion were more conciliatory than those of their frugal peers.
“It’s an excellent starting point to have recovered the money for the CAP [Common Agricultural Policy], but we’re still not satisfied,” said Italy’s Agriculture Minister Francesco Lollobrigida.
Poland’s Europe minister Ignacy Niemczycki welcomed the fact that his country “continues to receive the largest allocation,” but noted that the “change in the overall size of the budget does not match the EU’s ambitions.”
The frugals were also are disappointed that the cuts disproportionately target innovative policies such as defense and competitiveness, which they favor.
“They’re cutting the future to protect the past,” said one EU diplomat from the frugal camp.
BRUSSELS — The bloc’s next seven-year budget suffered a €159 billion cut from the Commission’s original proposal, according to a new plan unveiled Saturday.
The Irish presidency of the Council of the EU, which is steering the talks, proposed cutting around 8% to the bloc’s total budget from 2028 to 2034 to appease a German-led camp demanding major cuts.
The Irish negotiating document, or negobox, envisages cuts of €122 billion in current prices from the previous negobox presented by the Cyprus presidency in June. It sets the scene for fraught discussions among the EU’s 27 leaders during a summit next week.
The bloc is split between frugal countries demanding cuts of several hundred billions to the nearly €2 trillion proposal on the table and a rival camp of southern and eastern states, known as the Friends of Cohesion, opposing reductions.
In a concession to the Friends of Cohesion, Ireland shielded farmers’ subsidies and regional payouts, that account for half of the total budget and are politically sensitive, from any cuts.
Instead, the bulk of the reductions came from foreign aid which was cut by €38 billion; competitiveness which was axed by €75 billion and the EU’s administrative costs which were reduced by €10 billion.
Dublin also scrapped a rainy day fund, known as the “EU Facility cushion,” that allowed the European Commission to deploy cash to tackle unforeseen emergencies throughout the seven-year budget cycle.
Ireland’s Minister of State for European Affairs Thomas Byrne, who leads the negotiations, defended the proposal as a balanced compromise between 27 countries.
“We protected … the traditional policies of the Union, which are very important for the European Union and the single market. But we also very much look to the future,” Byrne told reporters.
However, Ireland’s proposal is unlikely to satisfy the frugals, who have warned against disproportionate cuts to new EU-wide priorities such as competitiveness, defense and development funding.
“The Irish proposal is a disappointment and not even close to a landing zone. The steep increase in MFF spending compared to today is unaffordable and financially not viable at all. By favouring policy priorities of the 20th century the proposal fails to prepare the EU for the 21st century,” an EU diplomat said.
They added: “This negobox is no basis for an agreement among member states. We urgently need more financial realism and less financial La La Land.”
Germany and its allies criticized the previous Cyprus Council presidency for cutting only €32 billion in the last negobox in June.
The new negobox will also be a hard sell to the European Parliament.
“The Irish Presidency has delivered little progress, no meaningful new solutions and a weaker budget,” the European People Party’s budget negotiator Siegfried Mureșan wrote in a statement shortly after the proposal was published.
He added: “Parliament is not bluffing: the budget proposed by the Irish Presidency will not receive our consent.”
The EU’s 27 ambassadors will react to the negobox during a meeting on Sunday, where they will also prepare the leaders’ discussion on Thursday.
Governments are racing to agree on a budget deal among themselves by the end of the year, before elections in France, Poland and Italy threaten to disrupt the negotiations.
Tax tweaks
The Irish presidency made no major changes to a package of five new EU-wide taxes, or own resources, that were proposed by the Commission last year to generate a total of €66 billion for the budget.
This comes as a disappointment for countries such as France, which had been pressuring Dublin to add the European Parliament’s proposed levies on digital giants, online gambling and crypto firms to the negobox to increase the potential revenue.
Some of the Commission’s ideas — including a corporate tax, known as CORE, and a levy on polluting firms (ETS) — have been challenged by EU governments for more than a year of negotiations and are seen as unlikely to come to fruition.
Despite pressure to drop the most criticized options, Ireland has kept the five taxes on the table and merely suggested technical changes to overcome opposition.
It suggested phasing in ETS contributions for poorer countries that are overwhelmingly hit by the tax, and increasing EU budget contributions from a levy on carbon imports that is accepted by most governments.
Tensions on own resources will come to a head during Thursday’s leaders’ discussions. The president of the European Council, António Costa, said he intends to “fix” a package of potential taxes that are acceptable to governments during that meeting.
BRUSSELS ― EU governments expect the proposed size of the bloc’s next seven-year budget to be slashed by €100 billion to €200 billion from the previous plan announced in June, 12 EU diplomats told POLITICO.
Ireland, which holds the presidency of the Council of the EU and is steering the talks, will unveil the proposal on Saturday, setting the scene for fraught discussions among EU leaders at their summit next week.
The bloc is split between so-called frugal countries — Germany, Austria, the Netherlands and others — that want to slash several hundred billion euros from the nearly €2 trillion proposal on the table, and a rival coalition of southern and eastern countries, the Friends of Cohesion, that opposes the cuts.
Dublin is expected to cut the budget by between €100 billion and €200 billion as a goodwill gesture to the German camp, the diplomats said. However, the Irish plan to shield agriculture and regional spending from major cuts as a concession to the Friends of Cohesion.
At next week’s summit, EU leaders will react to the latest numbers, known as the “negobox” because it gives governments something to negotiate on, and signal early whether an agreement is possible by the end of the year.
Governments are rushing to secure a deal among themselves before national elections in France, Poland and Italy in 2027 threaten to derail the negotiations.
As a neutral broker in the discussions, Ireland hasn’t publicly disclosed its intentions on the negotiating document.
Dublin’s European Affairs Minister of State Thomas Byrne told the European Parliament earlier this week that EU member countries have made “substantial progress” toward an agreement. But he warned: “we cannot satisfy everybody.”
Germany and its allies criticized the previous Cyprus Council presidency for cutting only €32 billion in the last negobox in June.
Ireland’s looming cuts
The frugals’ calls for budget savings have ignited fears among the Friends of Cohesion.
The 17 countries — including heavyweights Italy, Spain and Poland — issued a joint statement last week opposing cuts to agriculture and cohesion.
In a concession to this camp, Ireland is expected to propose budget savings in other policy areas. Governments are bracing for major reductions to the Global Europe fund, the EU’s €200 billion pot of development aid and external relations cash, and the €410 billion European Competitiveness Fund to boost the bloc’s industrial capacity.
In 2025, the European Commission proposed five new levies that are expected to generate €66 billion per year. | Michele Spatari/NurPhoto via Getty Images
Cuts to administrative costs, with €118 billion earmarked for the EU’s institutions and staff, are also popular among EU governments, though they will yield fewer savings.
However, frugals have warned against shielding agriculture and cohesion from a smaller budget. They argue instead that more money should be steered away from traditional priorities towards new challenges such as defense and competitiveness.
“We are very concerned that Ireland would decide to smash funding for research and external action, which is a major issue for development, our economic interests and migration,” said one EU diplomat, granted anonymity like others in this article to speak frankly about their expectations for the sensitive negotiations.
Tax game
Another sensitive issue is EU-wide taxes — known as “own resources” — to finance the budget and reduce national contributions.
In 2025, the European Commission proposed five new levies that are expected to generate €66 billion per year. During negotiations, governments opposed levies that would overwhelmingly affect their economies.
Several European governments lobbied Ireland to remove a corporate tax, known as CORE, that is unpopular across the bloc. But Dublin is expected to refrain from doing so, and keep the Commission’s five levies in the negobox.
To make CORE more palatable, Dublin might exempt small and medium enterprises from the scope of the levy. It could also make tweaks to a tobacco levy that is opposed by many.
Instead, the European Parliament’s proposed taxes on digital levies, online gambling and crypto firms are expected to be left out entirely from the negobox.
An EU diplomat criticized these incremental changes as “disappointing and minimal.”
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