The European Council

Ukraine, the United States, China: a key summit on relations between the EU and the rest of the world gets underway

Against this backdrop, negotiations are underway on the 2028–34 budget, a key tool for tackling these challenges. On the eve of the summit, 22 German associations called for a ‘more substantial’ budget

from our correspondent Beda Romano

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La presidente della Commissione europea Ursula von der Leyen e il presidente del Consiglio dell’Unione europea António Costa EPA

4' min read

Translated by AI
Versione italiana

4' min read

Translated by AI
Versione italiana

BRUSSELS – The European Council summit on Thursday 15 and Friday 16 October will focus heavily on the European Union’s relationship with the rest of the world: from relations with the United States and China to the war in Ukraine; not to mention enlargement and the migration crisis. The debate is set to be heated. In the background loom the negotiations on the 2028–2034 budget. To what extent will the current crises influence the talks? Surprisingly, 22 German associations have called for a ‘more substantial’ budget.

International instability is now a reality. It matters little whether US President Donald Trump’s latest remarks are linked to the mid-term elections; his attitude poses a serious threat to transatlantic relations and, above all, to Europe’s position on Ukraine. Not only is the White House calling into question its support for Kyiv in the war against Russia, but, in defiance of the sanctions against Moscow, it has also signed an agreement with the Kremlin on diesel supplies.

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More aid for Kyiv?

Increasingly isolated in the Russian war in Ukraine, and moreover the victim of repeated hybrid attacks, the European Union must step up its aid to Kyiv – for the time being, the 27 Member States have pledged 90 billion euros for 2026–2027. EU estimates suggest a shortfall of a further €75 billion. A national diplomat argues: ‘The matter is urgent, and should be resolved this year because next year the nationalist and anti-Ukrainian front could be stronger’. In 2027, elections will be held in Spain, France and Poland, as well as in Italia.

On the trade front, leaders will discuss relations with China, following the recent initial agreement on quotas for hybrid cars. The latest figures confirm Europe’s huge trade deficit. Compared with last year, the deficit rose in September by 251.8 per cent in France, by 201.7 per cent in Germany, and by 52.3 per cent at European level. In the draft conclusions of the summit, the 27 Member States have mandated Brussels to develop new trade defence instruments ‘as a matter of urgency’.

Attention turns to a recent Franco-German letter in which Paris and Berlin proposed making the current anti-coercion mechanism easier and quicker to implement. Diplomats emphasise that the initiative has been well received amongst Member States. There is more. The European Commission has announced new measures to promote diversification, with a view to reducing dependence on China, and to foster solidarity in the event that a member state is particularly affected by a third country.

The issue is not merely political; it is also financial. Who will fund diversification and solidarity, particularly if reducing dependence on China leads to higher prices? This issue ties in with the 2028–2034 budget. Last Saturday, the Irish Presidency of the European Union presented a new negotiating framework, which reduces the European Commission’s proposal by 8 per cent compared with the 1.76 thousand billion envisaged by Brussels.

The BDI calls for a ‘more substantial’ budget

Of particular interest is the stance taken by 22 German associations, including the BDI. In a letter, they explicitly called for a ‘more substantial’ EU budget. The major challenges of our time – from security to competitiveness, right through to the technologies of the future – “can only be tackled together at European level (…) This is in Germany’s fundamental interest’, explained Anna-Maija Mert, president of the EBD, the association coordinating the position of 22 German lobby groups.

Bernd Hüttemann, Secretary-General of the EBD, added: ‘The politically noteworthy aspect is the composition of this alliance: the BDI, the DGB and the environmental organisations have different priorities, but they are nonetheless calling in unison for a significantly more ambitious EU budget (…) It is precisely the benefits that Germany derives from the single market and European public goods that cannot be measured solely in terms of budgetary returns’. All eyes are now on Berlin.

At a diplomatic-level meeting last Sunday, some member states emphasised that budget cuts are not compatible with the challenges of the present. This week’s summit comes at a time when there appears to be a growing sense that the next EU budget must be the tool with which to tackle a more hostile and unstable world, beyond the debate on a new balance between defence and agriculture, competitiveness and cohesion. The question of funding remains unresolved.

Another national diplomat sums it up as follows: ‘The debate over the budget is not so much between frugal countries and those in favour of cohesion. By now, almost everyone is forced to adopt austerity measures. The question we should be asking ourselves is: what sort of budget do we want? In reality, it is not in Germany’s interests to reduce the European budget. The debate should therefore focus on the revenue side. So far, Berlin has not yet taken any steps in this direction. We shall see what happens at the summit.”

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