Soaring energy prices, mounting trade tensions with China and a high-stakes battle over the European Union’s next long-term budget take centre stage today as EU leaders gather in Brussels for a two-day summit, amid growing uncertainty over the bloc’s relationship with the United States and its support for Ukraine.
The European Council summit brings together the leaders of the EU’s 27 member states to set the bloc’s political direction and negotiate solutions to shared challenges. Chaired by European Council President António Costa, the meeting also involves European Commission President Ursula von der Leyen.
Energy prices: Relief versus fiscal discipline
The summit opens with energy costs, which have surged amid hostilities in the Middle East, leading to oil reaching over $100 a barrel.
Italy and Greece are pressing Brussels to relax EU fiscal rules, allowing governments to introduce temporary and targeted measures to bring prices down. However, more fiscally conservative member states warn that loosening budgetary constraints could deepen already high deficits and increase financial market volatility.
China trade: A growing economic fault line
Leaders will also address the EU’s widening trade deficit with China, just days after EU trade chief Maroš Šefčovič reached a preliminary agreement with Beijing to curb imports of Chinese hybrid vehicles into Europe while facilitating access to rare earths.
Despite the progress, concerns remain over the imbalance in the trading relationship.
France and Germany have found common ground in proposing a so-called “kill switch” that would cut off China’s access to the EU market if the trade deficit became unsustainable.
Leaders must now consider whether further action is necessary without jeopardising the recent agreement.
The budget battle
The most contentious discussions are expected later today, when leaders turn to the EU’s next seven-year budget, which will determine how the bloc finances its priorities from January 2028.
Negotiations remain deadlocked between the so-called “frugal” countries, which favour spending restraint, and governments pushing for a larger budget to meet Europe’s growing economic and strategic needs.
Costa wants an agreement by the end of this year to allow the complex legislative process to be completed before the new budget period begins. However, a compromise proposal brokered by Ireland has dissatisfied both camps, raising doubts about whether a unanimous deal can be reached in December.
Ukraine tensions expose Europe’s dependence on Washington
EU foreign policy chief Kaja Kallas described in this morning’s interview with Europe Today that a US-Russia diesel deal as a “gift to Putin”, arguing that oil revenues remain a major source of financing for Russia’s war. She also defended Ukraine’s right to strike Russian oil refineries, saying such attacks constitute self-defence under international law.
Ukrainian President Volodymyr Zelenskyy, who is due to join EU leaders on Friday, has meanwhile expressed a growing sense of abandonment by Washington. In an interview with British broadcaster Piers Morgan, he said he felt “betrayed” by US President Donald Trump, adding that Ukraine was losing American support through no fault of its own.
Questions over US support have also intensified following disruptions to Ukraine’s Starlink satellite connectivity. Zelenskyy warned that the interruptions could cost lives after unstable connections and speed restrictions disrupted military operations, including drone interceptions against Russian aerial attacks.
Le Pen challenges EU spending and Ukraine aid
The summit also comes amid growing domestic resistance to European integration and continued financial support for Kyiv.
French far-right presidential hopeful Marine Le Pen attacked the European Commission during a Brussels visit on Wednesday, calling for its powers to be reduced and France’s net contribution to the EU budget capped at €5 billion annually.
She also argued that France could no longer afford to finance Ukraine, citing the country’s deteriorating financial position.
French borrowing costs are at their highest in nearly 25 years, while 10-year government bond yields have risen by 100 basis points since the start of the year. Her National Rally party is polling strongly ahead of next April’s presidential election.
Elsewhere, MEPs are urging the EU to protect the International Criminal Court from US sanctions by activating the bloc’s Blocking Statute, which can prevent European companies from complying with certain foreign measures.
What happens next?
Today, leaders are expected to discuss energy, China, enlargement and the budget with Costa and von der Leyen scheduled to hold a press conference after the discussions. Friday’s agenda will bring Ukraine more directly into focus when Zelenskyy joins the summit.
An immediate breakthrough on every issue is unlikely. Instead, the meeting is expected to test whether Europe’s leaders can narrow their differences on spending, trade and energy while maintaining a common approach to Russia and Ukraine.
The stakes extend well beyond Brussels. As households face higher costs, European businesses confront intensifying competition and relations with Washington become less predictable, the summit will offer a crucial indication of whether the EU can translate shared concerns into coordinated action.
(Sources: Europe Today, European Parliament, Reuters)
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