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EU
Lithuania’s capital Vilnius was temporarily shut down due to a potential drone incursion on Wednesday, reflecting heightened tensions along NATO’s eastern flank amid ongoing conflicts. The incident prompted airport closures and evacuations of key government figures, as well as strong condemnations from European leaders regarding Russia’s actions.
The European Commission has retained its carbon border tax in a new plan for fertilisers, aimed at supporting farmers despite rising costs linked to carbon pricing. Commissioner Christophe Hansen stated the importance of maintaining competitiveness against cheaper imports while acknowledging the financial pressure on agriculture and food prices.
Former German Chancellor Angela Merkel received the European Order of Merit on Tuesday. In her acceptance speech, she emphasised that Europe can no longer assume peace and security, highlighting concerns over Russia’s invasion of Ukraine and shifting US security policies that indicate a loss of established certainties.
Belgium is negotiating with French energy group Engie to take control of its nuclear power plants, aiming to secure energy supplies. Prime Minister Bart de Wever confirmed plans to halt decommissioning operations while advocating for increased use of nuclear energy amid rising energy prices linked to global conflicts.
European defence spending surged by 14% in 2025, totalling €739 billion, with Germany becoming the largest investor after increasing its budget by 24% to €97 billion. This rise comes amid US pressure for NATO members to meet 5% GDP targets by 2035, marking the highest growth since the 1950s.
Hungarian Prime Minister-elect Péter Magyar indicated that EU funds could soon be released to Hungary following productive talks with European Commission President Ursula von der Leyen. Their discussions addressed unlocking billions in frozen funding, necessary for economic support, amid a looming August deadline.
As EU countries debate the European Commission’s proposal, China is urging national governments to abandon the planned law. Beijing has warned that failure to comply will lead to countermeasures, highlighting escalating tensions between the EU and China over regulatory standards.
EU FOCUS THIS MORNING
Europe addresses ongoing energy and security challenges
as imminent discussions on sanctions and reforms continue.
The European Parliament has adopted its stance on the EU long-term budget, advocating for a 10% increase and the implementation of EU-level taxes. Members of the European Parliament are prepared for rigorous negotiations as discussions regarding the budget for the 2028-2034 cycle progress.
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