BRUSSELS — French president Emmanuel Macron warned fellow EU leaders they need to get a deal on the bloc’s seven-year budget by the end of the year because it’ll be too politically difficult after that, four European diplomats said.

His words rachet up the pressure on the EU to overcome their significant differences over the coming weeks.

During a closed-door discussion on Thursday evening, Macron said he wouldn’t have a political mandate to sign a deal close to the French presidential elections in April 2027, the diplomats, all briefed on the conversation, said.

Macron “said that, starting from January, there will be no political room” for concluding an agreement, one of the diplomats said.

The EU’s 27 governments are divided over the total size of the 2028-2034 budget. Leaders gathering in Brussels are discussing the Irish plan, which envisions cuts of €159 billion in current prices to the Commission’s nearly €2 trillion proposal. 

European Council President António Costa is pushing leaders to finalize negotiations during a summit in December — before elections in France, Italy and Poland in 2027 threaten to derail the talks — but some governments and EU officials have said such a timeframe is very unrealistic.

One EU diplomat dismissed Macron’s intervention as a threat to support Costa on the December deadline. “EU would be ungovernable if we were to take into account all the local elections,” they added.

French far-right leader Marine Le Pen, who is leading the polls to replace Macron, pledged to halve France’s contributions to the EU budget if she comes to power.

During a press conference in Brussels on Wednesday, Le Pen accused the EU of speeding up talks to prevent France’s next leader to have a say.

Several leaders are unwilling to commit to the end-of-year deadline, fearing that time pressure will undermine their leverage in the negotiations.

“We will not sign an agreement that is not beneficial to us just to meet a deadline,” Italian Prime Minister Giorgia Meloni told the country’s parliament on Wednesday. “We will sign an agreement only when it is right for Italy.”

Une rude bataille s’engage pour faire adopter le prochain budget de l’Union européenne. Non seulement les 27 pays sont divisés sur son montant et sur ses priorités mais plusieurs élections nationales compliquent l’équation politique. En amont du sommet du Conseil européen de jeudi et vendredi, Marine Le Pen s’est d’ailleurs rendue à Bruxelles pour mettre en garde contre la conclusion d’un accord avant le scrutin français. Que se joue-t-il réellement avec ces discussions ? La demande du RN de repousser l’adoption du budget est-elle justifiée ? Marine Le Pen propose-t-elle une sortie déguisée de l’UE en voulant couper dans la contribution française ? Anthony Lattier en discute avec Marion Solletty et Giorgio Leali, journalistes à POLITICO.

EU leaders meet today for their first chance to beef about the budget face to face.

On the show, Zoya Sheftalovich and Sarah Wheaton dive deeper into why leaders look increasingly unlikely to reach an agreement on the EU’s next money pot by December. Plus, Zoya obtained a document revealing deepening relations between Russia and Slovakia. Will that be a cause for concern around the Council table?

Next up, Zoya spoke with Defense Commissioner Andrius Kubilius on stage yesterday. His main message? Europe should boost its defense capabilities and stop relying so heavily on U.S. military support.

And finally, ECB President Christine Lagarde plugged her upcoming memoir at a press conference … is she allowed to do that? 

If you have a question or comment, don’t hesitate! message us on our WhatsApp here or at +32 491 05 06 29.

Articles mentioned in this episode:

• “How to watch the EU leaders’ summit like a pro.”
• “Slovakia deepening ties with Russia, document shows.”
• “Lagarde’s book plug raises questions about ECB ethics standards.”
• “Weakened Macron and Merz sink hopes of a quick EU budget deal.”

Die Berliner Landespolitik manövriert sich erst in eine Sackgasse und will nun doch daraus rausfinden. Wegen des Streits um antisemitische Strömungen in der Linkspartei stehen die Sondierungsgespräche mit SPD und Grünen auf der Kippe, werden aber heute fortgesetzt. Wie sich das rot-grün-rote Bündnis gegen den Widerstand von SPD und Grünen im Bund retten will, zeigt Maximilian Stascheit auf.

Auch die Bundes-SPD kämpft mit schlechten Umfragewerten und internem Frust vor dem anstehenden Parteitag im Dezember. Im 200-Sekunden-Interview erklärt der nordrhein-westfälische SPD-Fraktionschef Jochen Ott, warum seine Partei eine neue Vision braucht und wie der Weg aus der Krise aussehen soll.

Beim EU-Gipfel in Brüssel steht Europa derweil vor einem massiven Realitätscheck in der Ukraine-Politik. Die US-Unterstützung bröckelt spürbar. POLITICO-Experte Hans von der Burchard ordnet ein, welche Forderungen Wolodymyr Selenskyj morgen mitbringt und warum der Streit um den EU-Haushalt weitere Hilfen zu blockieren droht.

Das Berlin Playbook als Podcast gibt es jeden Morgen ab 5 Uhr. Rixa Fürsen, Maximilian Stascheit und das POLITICO-Team liefern Politik zum Hören – kompakt, international, hintergründig.

Für alle Hauptstadt-Profis: Der Berlin Playbook-Newsletter bietet jeden Morgen die wichtigsten Themen und Einordnungen. Jetzt kostenlos abonnieren.

POLITICO Deutschland – ein Angebot der Axel Springer Deutschland GmbH
Axel-Springer-Straße 65, 10888 Berlin
Tel: +49 (30) 2591 0
information@axelspringer.de
Sitz: Amtsgericht Berlin-Charlottenburg, HRB 196159 B
USt-IdNr: DE 214 852 390
Geschäftsführer: Christoph Eck-Schmidt, Carolin Hulshoff Pol, Mathias Sanchez Luna

**(Anzeige) Eine Nachricht von YouTube: Die Auffindbarkeit von Qualitätsjournalismus ist entscheidend für eine lebendige Medienlandschaft. 79 % der Medienunternehmen, die YouTube nutzen, an, dass digitale Videoplattformen ein wichtiger Vertriebskanal sind, so Oxford Economics. Und 81 % der Medienunternehmen mit YouTube-Kanal erreichen darüber weltweit neue Zielgruppen. Hier klicken und mehr erfahren.**

BRUSSELS — The EU border agency Frontex is suspending a support program for deported migrants after its budget for the year ran out earlier than anticipated, emails seen by POLITICO show. 

The border agency paused new applications for reintegration support under its program on Oct. 2 after estimating that costs had “reached a level that does no longer ensure full financial coverage,” according to an email sent by Executive Director Hans Leijtens to staff on that date.

The program, which has operated since 2022, offers financial assistance, healthcare, vocational training and counseling to people who are returned to their home countries after being refused the right to stay in the EU. Reintegration support forms part of the EU’s plan to boost returns of unsuccessful asylum-seekers.

The suspension comes as the EU seeks to step up deportations from the bloc — a leading pillar of EU migration policy, and the object of new legislation adopted earlier this month — and weeks before the European Commission is expected to propose expanding the mandate of the border agency, including its role in returns and reintegration.

Frontex cannot resume the program without additional cash. The agency asked the Commission for more funds, but is waiting for clarity on the EU budget for 2027, and the next seven-year budget starting in 2028, the emails said.

“There is no point in talking about a more ambitious European return policy without also talking about the resources needed to deliver it,” Frontex spokesperson Chris Borowski told POLITICO. “Ambition and funding have to go hand in hand.”

Borowski confirmed that the agency had suspended new cases, but stressed that individuals already been accepted into the program wouldn’t be affected and that Frontex would also continue to offer EU countries “other forms of assistance” on returns, such as operational and technical support.

“Returns do not end when a plane lands. Helping people rebuild their lives after returning to their home countries is an important part of making migration management work. It takes planning, people and money,” he said.

With 2,368 new cases per month on average, the agency took on significantly more migrants seeking reintegration support than it expected. Cases in September were 63% higher than Frontex’s target, according to Leijtens’ email to staff. In the first half of this year, the agency took on around 75% more cases than it did in the same period last year.

In previous years, Frontex was able to assign additional funds from other parts of its budget, the email says — signaling the agency has had to search to find the cash to keep the program running in the past.

“Frontex does not have the necessary appropriations to cover the needs further as MFF allocations did not consider that Frontex would be expected to take over EURP funding at the scale we have seen today,” Leijtens wrote, referring to Multiannual Financial Framework, the EU’s seven-year budget.

The agency has raised the issue with the Commission but “no further commitments could be made onwards,” according to the email.

The program’s suspension raises questions about the future of the bloc’s migration approach. Reintegration is “the key ingredient” to making the EU’s returns strategy work, Lukas Gehrke, the director of the U.N.’s migration organization’s global office in Brussels, told POLITICO.

Forced returns are expensive and come with a higher risk of human rights infringements, whereas reintegration support boosts voluntary returns, reduces people’s propensity to attempt to reach the EU again, and tends to ease cooperation with the country to which they return, he argued.

“That means every euro spent on return with reintegration is a euro spent in a more sustainable way,” Gehrke said.

‘Do not argue or defend the EU policy’

In emailed guidance on how to communicate the suspension to migrants who applied for support, seen by POLITICO, staff were told to “acknowledge the institutional problem” with reintegration program funding “so the returnee does not feel personally targeted or punished.”

Counselors should be transparent, validate migrants’ disappointment, wait for their emotions to pass and shift the conversation to what they could still do upon their return, the guidance read, advising: “Do not argue or defend the EU policy.”

Potential returnees “may feel deceived, leading to anger, despondency, or complete withdrawal from the return process,” it also warned.

Expanding the agency’s Frontex mandate featured in the Commission’s five-point plan to address sudden mass movements of people, in the aftermath of migration crisis in the Spanish exclave of Ceuta. Besides stepping up the agency’s role in returns and reintegration, the plan also noted an intention to charge Frontex with monitoring the bloc’s external borders and add capacity to quickly deploy forces in the event of an emergency.

“The Commission will propose that Frontex becomes a genuinely European capability with the scale, tools and agility to support Member States wherever and whenever needed,” Commission President Ursula von der Leyen wrote in a letter to EU leaders ahead of a summit on Thursday and Friday, where migration is likely to be a flashpoint.

The plans have already raised concerns that the border agency’s mandate is being expanded more quickly than its resources.

Strengthening the border agency’s emergency response capacities, for example, comes with a tradeoff as staff that can be deployed on a moment’s notice cannot be deployed elsewhere, Leijtens, Frontex’s executive director, said at an event earlier this month.  “If they’re in Narva in Estonia, you can’t use them in Italy right now.”

Zoya Sheftalovich contributed to this report.

BRUSSELS ― Political pressure is leaving Emmanuel Macron and Friedrich Merz poorly placed to break the deadlock over the EU’s next seven-year budget.

As EU leaders gather for a two-day summit in Brussels from Thursday, the heads of the bloc’s two largest countries hold the keys to breaking the impasse between capitals that has persisted for months, as a Germany-led group advocating a smaller budget clashes with those like France which are resisting reductions.

“Delays and persisting divisions in the Council [representing EU governments] are worrying,” said Siegfried Mureșan, co-leading the European Parliament’s work on the MFF, the multiannual financial framework. “The EU budget can only be built through compromise … The faster we adopt the budget, the faster we can implement it and become more competitive, safer, help farmers and researchers and protect our borders and cyberspace.”

Sealing agreement on the EU’s long-term central budget, worth approximately €2 trillion, is the biggest challenge over the next few months facing leaders, all of whom must sign up to the final numbers. While it isn’t just up to Macron and Merz, getting the chiefs of the bloc’s two most powerful countries to overcome their differences would be a massive step in making all the pieces of the jigsaw slot into place.

But with Macron soon to leave office and Merz under severe pressure domestically, officials and diplomats in Brussels, Paris, and Berlin are playing down hopes of a Franco-German breakthrough this week.

“If the French and German leaders come hand in hand, I think that could change the game,” an EU diplomat, granted anonymity to speak frankly, said. “You need [Italian Prime Minister Giorgia] Meloni and [Polish Prime Minister Donald] Tusk, but it starts with Merz and Macron.”

While Merz and Macron may talk bilaterally during the summit, according to an Elysée official, there were no firm plans for a more formal sit-down, two EU diplomats said, adding they were expecting them to use the two-day meeting to hash out positions.

Domestic political weakness makes both leaders less likely to yield ground, three EU diplomats said.

Backfiring

For the French president, who leaves office next year, the fear is that making big concessions — like accepting cuts demanded by Berlin — could be weaponized by presidential candidates vying to replace him.

“Macron should not appear too conciliatory” in budget talks, said an ally of the French president. “It would backfire in the presidential campaign.”

Indeed, Macron may be wary of striking a deal that could lead to attacks from far-right leader Marine Le Pen or far-left rival Jean-Luc Mélenchon, both of whom argue that France receives too little value for its contributions to the EU pot.

During a press conference in Brussels on Wednesday evening, Le Pen accused negotiators of speeding up talks as “an attempt to stifle future democratic choices before they even take place” — effectively warning Macron against locking in an agreement before France’s April presidential election and votes in other major EU countries, such as Spain, which goes to the polls next month, and Italy, which is due to hold a poll next year.

“All this is not serious,” Le Pen told reporters on the 26th floor of The Hotel in Brussels.

It’s complicated

Merz faces similar political pressures.

Following humiliating state election defeats to the far-right Alternative for Germany party, the Chancellor is wary of concessions that could be framed as sending more taxpayer money to Brussels. Berlin prefers no deal at all to one that increases the overall budget, Merz said.

But Paris and Berlin’s positions may not be as far apart as public statements suggest.

“It’s complicated because France and Germany both need to step outside of their comfort zone,” said the Macron ally. “But it will end with a deal between France and Germany,”

France’s Europe minister Benjamin Haddad told reporters on Tuesday that discussions should focus on raising money via taxes, or “own resources” as they’re known in the EU —such as online gambling levies—rather than “massive cuts.”

However, Paris also wants to “stabilize national contributions” ― in other words, keep its own payments level.

Berlin was “open to examine new own resources, but we are more skeptical than the French that it will generate enough money,” a German official said.

France is betting that when push comes to shove, Merz will give in to pressure from other countries — and German captains of industry — to abandon his demands for far-reaching cuts.

“I see that there is also a real debate in Germany as well on the fact of having a position that would only be focused on cuts to the detriment of future policies,” an Elysée official said Wednesday. This week, Germany’s industrial lobby BDI and top industry groups urged their government to defend a more ambitious EU budget.

Macron and Merz showed unity earlier this month by jointly urging the European Commission to toughen its stance on China. But they still struggle to agree on another major deal—first reported by POLITICO in July—where Berlin accepts stronger “Made in Europe” rules in exchange for France backing relaxed car emission targets and the 2035 combustion engine ban.

EU Industry chief Stéphane Séjourné told POLITICO on Tuesday he supported the deal to finalize both files. Macron recently called the agreement “imminent,” suggesting progress depended on German coalition talks. But their failure to present an agreement at this week’s Paris car show confirms Paris and Berlin still disagree on terms, with the Elysée confirming negotiations remain ongoing.

BRUSSELS — Far-right leader Marine Le Pen pledged to turn the European Commission into a “secretariat” in the service of its member countries as part of her plan to slash the size and power of the European Union should she win France’s presidential election next year. 

“Over the past 10 years, France has seen the implementation of a European vision that is the exact opposite of the one I will champion,” Le Pen told reporters at a press conference in Brussels after a meeting with fellow European far-right leaders. “They wanted a powerful Europe. We got a powerless Europe. They wanted European sovereignty. All we’ve gotten is the dilution of national sovereignty.” 

Asked by POLITICO what downsizing the EU would look like in practice, the front-runner in the race to replace term-limited President Emmanuel Macron next year said the EU should pare back its operations in areas it has expanded in recent years such as foreign policy, security and public health.

Le Pen also promised to “stop” the bloc’s Green Deal, which she claimed was harming economic growth, and eliminate institutions like the European Committee of the Regions and the European Economic and Social Committee. 

“I’m not fooled by what the European Commission wants to do. The European Commission wants to turn itself into a state; we do not. And so we will stand in its way,” Le Pen said. 

Though Le Pen has abandoned her calls for France to leave the European Union, she remains deeply skeptical of the bloc and its ambition. 

She and her National Rally party last week said they would unilaterally slash France’s annual contribution to the EU budget by €11.1 billion as early as next year if Le Pen wins the presidency. 

Le Pen frames the move as necessary to help fix France’s disastrous public finances — she is proposing €140 billion in savings by 2032 — but her critics say such a move would set up a dramatic showdown with Brussels that could end with France leaving the bloc. 

Le Pen is in Brussels the day before EU leaders meet for key discussions over the bloc’s next seven-year budget, which Council President António Costa had hoped to get finalized before elections in France, Italy and Poland in 2027 that could derail the talks. 

But EU countries have weakened their commitment to wrap up negotiations by year-end amid a major split between frugal countries such as Germany, which want to further shrink the budget, and countries like France that support more EU spending.  

Le Pen once again reiterated her accusations that Brussels’ attempt to speed up budget talks — which would prevent France’s next government from having a say in the matter — is “a democratic scandal.” 

This developing story has been updated.

EU leaders returned Friday for their second day of marathon talks, with a discussion on migration set to descend into a showdown over whether to push for tougher controls.

Before those talks, Denmark called for new, tougher language linking migration to crime.

Earlier, Ukrainian President Volodymyr Zelenskyy made a direct pitch for more help amid a crisis of faith among allies over Donald Trump’s latest steps favoring Russia.

Leaders are expected to turn to the question of how to protect the bloc from Russian hybrid attacks, maritime security and the Middle East.

On Thursday, a three-hour argument over taxing car emissions derailed Antonio Costa’s carefully laid plans to tackle the biggest challenges facing the bloc: fixing its economy and sorting out its spending priorities, drawing ire from some diplomats.

As leaders piled into their motorcades around midnight after 14 hours of talks, they seemed as far away as ever on negotiations over the bloc’s next long-term budget — with the next serious round of talks slipping to November.  

The European Commission’s bid to make the EU’s billions more responsive to the unknown crises of the future might also make them more prone to misuse, the EU’s top spending watchdog warned.

European Court of Auditors President Tony Murphy said key pillars of the Commission’s plan to overhaul the EU’s long-term budget would muddy the view for those in charge of making sure public money is spent as intended.

“It’s more difficult for us to follow the money,” Murphy said. “You’re saying to the member state, here’s a whole lot of money, and you make sure everything is okay. It’s sort of a self-policing.”

The warning comes as EU leaders continue fighting over the price tag for the EU’s post-2027 budget in Brussels this week — and as the auditors document an increase in misspending of taxpayer funds.

Yet separate from the budget’s bottom line is the debate over how that money gets divided. As a spending cycle marked by the pandemic, wars and climate-fueled disruption comes to a close, the Commission wants to make the next seven-year budget more agile by assigning about half of it — almost a trillion euros over seven years — to a single pot of money that countries can spend on objectives ranging from migration to agriculture and regional development.

Those agriculture and regional development funds — often delivered in the form of subsidies to farms and local projects — have long been vulnerable to fraud and misuse.

According to Murphy, giving capitals more leeway to shift spending would make spending even harder to track.

“There will be some flexibility, but at what cost?” he said in an interview. More of the oversight will depend on the checks each country has already put in place.

As it stands, misspending of the EU budget was on the rise last year, with errors affecting transactions for an estimated €5 billion according to the ECA’s latest report.

In the next EU budget, it might not be possible to even estimate such a number, Murphy warned, as each country’s auditors have different roles and ways of doing things. His head of cabinet, Wolfgang Stolz, added during the interview: “Year after year we have found that the work of these auditing authorities is not fully reliable.”

In a statement, the Commission defended its proposal, underlining that “key principles” of the current control system will remain in place. National authorities are “well-functioning,” the statement contended, but added that the Commission would maintain the right to ask capitals to “amend the plan or introduce correction mechanisms if needed.”

‘Mixed bag’

One of the Commission’s proposed innovations is putting the Common Agricultural Policy — historically a standalone budget line — into a behemoth umbrella fund known as the National and Regional Partnership Plans.

Murphy stressed that he’s not advocating for any model over the other. But as EU money increasingly merges with national budgets, it will be harder for Brussels to monitor where its money actually goes. The CAP is simpler to audit when “it’s not mixed up in this mixed bag,” Murphy said.

Headlines about farm subsidies paying for fake pastures in Greece and cash meant to support rural tourism in Slovakia instead going to luxury villas for the rich offer lurid illustrations of the challenge of policing these funds under the current system.

And the model for the new spending system — the EU’s post-Covid recovery fund — doesn’t bode well, Murphy said. While it became easier for countries to direct the funds where they were needed, the spending also became more opaque. The new national plans were designed using the same blueprint.

Under the current budget system, the ECA can physically visit a farm that receives EU funds. However, under the Covid recovery fund, the EU publishes only the top 100 beneficiaries each year.

“It’s not very transparent. I mean, where is the EU money actually ending up? That’s what matters,” Murphy said. “You have a fund where there are different policy areas with completely different objectives and timeframes, different delivery mechanisms and less predictability.”

PARIS — Conservative presidential candidate Bruno Retailleau said France should seek a rebate on its contribution to the EU budget ahead of a key European summit in Brussels this week.

France pays more in to the EU budget than it gets out, but it is struggling to reduce a severe budget deficit.

“It’s crazy,” Retailleau, the leader of the conservative party Les Républicains, said at POLITICO’s Competitiveness Summit in Paris. “Why should we contribute more when we know how dire our public finances are?”

European leaders are meeting in Brussels on Thursday and Friday to discuss the bloc’s long-term budget, the Multiannual Financial Framework, which is pitting the so-called frugal countries against those who want a bigger EU budget. France sits in neither camp.

Retailleau singled out structural funds — money that is invested in poorer European regions — as an area where savings could be made.

“We’ve given billions to countries so they would catch up with us. Well they have, and in a couple of years they’ll probably have a higher standard of living. Sorry, but stop,” he said.

However, Retailleau, who is trailing center-right presidential candidate Edouard Philippe and far-right front-runner Marine Le Pen in the polls, did not put a figure on the rebate he would demand if he came to power. Le Pen, who is the front-runner ahead of next year’s presidential election, and her party have proposed slashing France’s yearly contribution by €11.1 billion as early as next year.

Retailleau said he would seek “a negotiation,” rather than unilaterally impose a lower contribution, as Le Pen says she would do.

“I’m not going to behave like Marine Le Pen, I’m pro-European,” said Retailleau.

Retailleau argued that France’s defense and nuclear deterrence investments should also be included in the country’s contribution calculation, because the concept of forward deterrence benefits France’s European neighbors.

PARIS — French center-right presidential candidate Edouard Philippe accused his far-right rival Marine Le Pen of trying to force a Frexit in disguise with her euroskeptic campaign promises.

“There is something in Marine Le Pen’s proposals that has the potential to blow Europe up, or let’s say to crack it open,” Philippe said at POLITICO’s Paris Competitiveness Summit on Tuesday.

The former prime minister — who is currently the best-placed centrist candidate to challenge the front-running Le Pen, according to recent polls — said Le Pen’s plan to unilaterally demand a drastic cut to France’s contribution to the EU budget was akin to “saying you want out of Europe” without openly advocating for leaving the bloc. Le Pen had previously called for a referendum in France on leaving the EU but dropped the proposal after her crushing defeat to Emmanuel Macron in the 2017 presidential election. Her party, the National Rally, now says it wants to change the EU from within.

Philippe, a fiscal conservative who has been pitching himself as the voice of reason in a campaign dominated by populist rivals, also slammed budget plans Le Pen unveiled last week as “grotesque,” accusing her of pitching “fantasy” savings.

Le Pen’s fiscal plans have faced serious scrutiny since being presented, with many observers saying they either lack key details or overestimate savings on major proposals like immigration. Progressive think tank Terra Nova wrote in a note out Tuesday that Le Pen’s budget presentation was “riddled with errors and contradictions” as well as “botched estimates.”

“She isn’t even able to estimate the cost of the pension reform she is proposing,” Philippe said.

Le Pen said in August that her plan to bring France’s legal retirement age back down to 62 for most workers would cost €9 billion a year, and last week she said she would lay out at a later stage how she intends to fund her flagship pledge. However, the Institut Montaigne, a fiscally conservative think tank, estimated the proposal would cost €34.7 billion a year.

Philippe is hoping to convince voters that his fiscally conservative agenda is the right path in a country burdened by a ballooning public debt and a budget deficit still above 5% of gross domestic product, in breach of EU rules.

Philippe said France needed to get its finances back on track to regain credibility on the European stage after a “loss of influence” over the past few years.

Though he currently leads a crowded field of centrist candidates, Philippe’s campaign has struggled in recent weeks to gain momentum — and far-left candidate Jean-Luc Mélenchon is now challenging the former PM for second place in the polls. France’s presidential election goes to a runoff if no candidate receives more than 50% of the vote, and Le Pen’s strong poll numbers all but guarantee her a spot in the second round.

Tough on China

The former prime minister pitched a pragmatic European agenda with less regulatory burden, more focus on investment and a tougher approach to China.

Philippe had some harsh criticism for an already embattled flagship measure of the EU’s green deal, saying the 2035 combustion engine ban has been “disastrous.”

There was “a great naiveté toward China,” which ultimately benefited from Europe’s push on electric vehicles, Philippe said.

“We need to much better protect our market,” he added. “If one wants access to the European market, one has to manufacture in Europe. If a carmaker doesn’t manufacture here, then we have to slap high tariffs.”

The EU is in the process of drawing up new “Made in Europe” rules that would favor European producers over those outside the bloc, in response to trade practices by competitors like China and the United States.

Shortly before Philippe took the stage, European Commissioner for Industry Stéphane Séjourné said at the POLITICO event that a Franco-German deal trading stronger protections on the definition of Made in Europe in exchange for a loosening of combustion engine rules should be finalized “in the next few hours or in the next few days.”

On artificial intelligence, Philippe aligned himself with Macron, advocating for European sovereignty in the field and the need to regulate what he described as “an instrument of power.”

“What I see is an AI world making money for the U.S. with European savings and European data, and that bugs me,” he said.

Germany has rejected Ireland’s proposal for the EU’s next seven-year budget, despite €159 billion in cuts. And it’s not alone: Governments are divided over where the cuts should fall, while the European Parliament is threatening to block the deal.

Zoya Sheftalovich and Nick Vinocur unpack the backlash and what it means for this week’s EU leaders’ summit.

Plus, Zoya interviews Migration Commissioner Magnus Brunner about Europe’s efforts to curb irregular migration and plans to tighten restrictions on Russian visitors and former soldiers.

And why the influencers expected at this week’s EU summit won’t be showing up after all.

Questions? Comments? Let us know on our WhatsApp here or at +32 491 05 06 29.

BRUSSELS — Europe will lose out because of €159 billion in cuts to the bloc’s next long-term budget, the European Commission has warned days before EU leaders gather in Brussels for talks on the bloc’s future spending plans.

In an unusual attack, the Commission told governments that scrapping billions from several rainy-day funds will leave Europe less equipped to deal with crises during the next seven-year budget cycle, said four EU diplomats briefed on the talks, granted anonymity to speak freely about confidential discussions.

The Commission’s top budget official, Stéphanie Riso, delivered the warning to the EU’s 27 ambassadors during a closed-door meeting on Sunday, a day after 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.

The Commission is “very concerned about cuts to flexibility,” said one of the EU diplomats.

As a result of the changes, “we will have no ways left to help farmers and regions when crises hit, because of climate change or geopolitical tensions,” they added.

EU ambassadors gathered to discuss the Irish plan, which envisages cuts of €159 billion in current prices from the Commission’s nearly €2 trillion proposal. Of that amount, €38 billion was cut from foreign aid, €75 billion was axed from competitiveness, and at least €22 billion was slashed from rainy-day funds.

But even those reductions were criticized as insufficient by a German-led group of states pushing for cuts of several hundred billion. During the closed-door meeting, a rival bloc of 17 countries, known as the Friends of Cohesion, welcomed the fact that the Irish presidency had spared agriculture and regional payments from cuts.  

EU governments are racing to finalize a deal on the budget among themselves by the end of the year — before elections in France, Italy and Poland that threaten to disrupt the negotiations.

A leaders’ summit on Thursday and Friday will give early signals as to whether the end-of-year deadline is achievable — or whether leaders should start preparing contingency plans.

One EU diplomat said the pressure is now on those leaders: “What could make a difference is if Friedrich Merz and Emmanuel Macron show up, hand-in-hand, and say we live in a new world.”

Cuts to the future

The Commission warned that cuts such as those put forward by Ireland will shrink the next budget — excluding repayments to post-Covid debt — below the current one.

The cuts overwhelmingly affect EU-wide priorities such as competitiveness, defense and foreign aid while leaving traditional policies untouched such as agriculture and regional payouts, which make up almost half the budget.

The changes undermine the Commission’s proposal, which envisaged more flexibility and steered hundreds of billions of euros toward new priorities.

In a further setback for the Commission, Ireland also downsized — or even scrapped — several financial cushions to shelter EU countries from unforeseen events such as natural disasters or public health emergencies.

The EU executive argues these changes will make spending in the next budget more rigid than in the current one — and potentially warrant a midterm review of the budget further down the line.

However, Ireland’s Europe Minister Thomas Byrne disputed this claim in a press conference on Saturday, saying the budget proposal “offers increased flexibility … in response to the clear call from member states for a simplified and more flexible, modern [budget].”

Another source of tension in the next budget came from Ireland’s watering down the link between EU payouts and economic reforms.

The Commission has repeatedly defended using regular budget payments as a carrot to nudge governments to undertake reforms that will make them more competitive.

However, Ireland’s ambassador to the EU, Aingeal O’Donoghue, said during the meeting that the new text will not link EU cash disbursements and “fiscal reforms,” according to one of the diplomats.

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.

LUXEMBOURG — EU finance ministers struck a compromise to beef up the bloc’s markets watchdog Friday, but the deal exposed divisions over national control and exemptions that critics say favor the biggest member countries.

Most finance ministers backed the Council’s position on MISP, a package of bills to integrate and police financial markets. At its heart is a plan to give the EU’s securities regulator powers to oversee major financial players — a flagship bid to make Europe a stronger investment hub, where European companies can seek investors without traveling to Wall Street.

But capitals stopped short of handing the future watchdog too much autonomy, triggering a hard rebuke from the European Commission.

“We deeply regret that the compromise now on the table falls significantly short of the level of ambition needed,” Finance Commissioner Maria Luís Albuquerque told ministers during Friday’s public Ecofin debate in Luxembourg. “We need [the European Securities and Markets Authority] to become an effective supervisor. The current compromise text would not allow for that.”

France spearheaded a last-minute push over dinner Thursday to strengthen the watchdog’s executive powers. Paris took issue with a rule that would allow nine national supervisors to force the watchdog’s executive board to submit draft decisions for further scrutiny before they’re adopted. The Irish EU presidency tweaked the rule overnight to limit national supervisors’ ability to delay decisions and preserve the watchdog’s power to act in emergencies, according to a compromise document obtained by POLITICO.

That was enough for France and most other countries. But not for the Commission, nor European Central Bank President Christine Lagarde, who was equally critical of the Council compromise. Beyond the governance concerns, Albuquerque took aim at supervisory carve-outs that the Irish introduced to accommodate Germany’s push to exclude its stock exchange, Deutsche Börse, from EU oversight.

The carve-out club

The carve-out shields stock exchanges from direct EU supervision unless they meet certain thresholds for trading activity and cross-border reach. Spain’s stock exchange, Bolsas y Mercados Españoles, would also benefit from the carve-outs, triggering criticism from smaller EU countries that accused the waiver of granting the bloc’s largest nations preferential treatment.

Belgium was particularly critical because its Brussels-based securities depository Euroclear is expected to come under direct EU oversight and face supervisory fees, while some major stock exchanges could remain under national oversight. Belgian Prime Minister Bart De Wever will take the issue to EU leaders at the end of next week.

“We cannot support the carve-outs. The package includes as many ins as there are outs,” Belgian Finance Minister Jan Jambon said during Friday’s public debate. “I think Germany has won in certain cases.”

As a peace offering, Berlin backed a review clause that would allow the Commission to revisit the carve-outs two years after the supervisory rules start applying. Any changes would require new legislation, however.

“The carve-out is temporary,” Dutch Finance Minister Eelco Heinen, who backed the deal, told journalists Thursday. “If that exchange were to grow, it would also fall under [EU supervision]. This is also intended to ensure that Dutch companies or pan-European companies such as Euronext are not put at a disadvantage.”

Friday’s deal puts pressure on MEPs to agree Parliament’s position so negotiations on a final text can begin. The Commission hopes future legislative negotiations will provide a second chance to improve the text, which also threatens to increase pressure on the EU budget.

Under the compromise, the EU budget would shoulder 60% of the cost of ESMA’s activities not covered by industry fees, with national supervisors paying the remaining 40%.

“The Commission cannot accept a significant increase in the EU budget contribution in light of the difficult discussion at [the Multiannual Financial Framework],” Albuquerque said amid a bitter budget battle that threatens to shave hundreds of billions of euros off the proposed €2 trillion cash pot. “I sincerely hope that the European Parliament will be more ambitious.”

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. 

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.”

Trade Commissioner Maroš Šefčovič is kicking off his visit to China today — and the stakes are high.

On today’s show, Zoya Sheftalovich and Sarah Wheaton discuss the most important topic on the agenda: Europe’s trade deficit with China. France and Germany are finally on the same page and want Brussels to get tougher on unfair trade. So can we expect results from the meeting?

Next, EU development ministers are meeting in Dublin to discuss the future of Europe’s development policy. But the timing is unfortunate, as governments prepare another round of cuts to the next long-term budget.

Finally, a mysterious death at a Russian anti-plague lab has an unexpected connection to Zoya’s own family.

Questions? Comments? Let us know on our WhatsApp here or at +32 491 05 06 29.

Articles mentioned in this episode:

• EU toughens China stance ahead of Šefčovič’s Beijing visit.
• EU-China trade talks zero in on cars.
• WHO seeks clarity on second pneumonia case in Russia amid plague fears.

PARIS — Far-right presidential candidate Marine Le Pen offered her usual recipe for pulling the French economy from the brink of a debt crisis when she presented her plan Tuesday: curbing immigration, cutting contributions to the European Union and slashing red tape.

“If the French do not choose a political about-face, France will head toward default,” Le Pen said at a lengthy press conference at her National Rally party’s headquarters.

Le Pen spent much of her opening speech attacking what she called President Emmanuel Macron’s “disastrous track record” on the economy. For her, the event was an opportunity to cast herself as a responsible steward of the economy as France’s public finances fall deeper into the red, and erase a tumultuous week that saw her protégé, Party President Jordan Bardella, accused of authoring antisemitic views in his youth.

But critics were quick to argue her plan lacked crucial detail on one of her most costly campaign pledges: the promise to bring back France’s legal retirement age to 62, which is currently set to increase to 64. 

Bardella, who stood by her at the press conference, struggled to draw a line under the antisemitism allegations that have been leveled at him. Le Pen left him to face the rolling barrage of questions about his alleged antisemitic Facebook messages and his ability to continue the campaign. 

On stage, the duo presented their counter-proposal for next year’s budget, about to be negotiated in Parliament, as well as Le Pen’s proposed five-year, cost-cutting package. The far-right leader hinted she was ready to be more lenient towards the government this time around and not topple it during upcoming budget negotiations.

“As imperfect as it is, the pressure [from financial markets] is such that we can’t afford to have blanket red lines … knowing that this budget will only apply until the election and that we can amend it afterwards,” she said in answer to a question.

She also promised €140 billion in net savings over the course of a five-year term, if she is elected president. “If investors only lend at exorbitant rates, our state and our social system will collapse,” she said.

Le Pen’s proposal to cut €19.5 billion from France’s EU contributions by 2031 is bound to set up a showdown with Brussels. The party’s counter-budget proposal for 2027 includes an €11.1 billion cut in France’s gross contribution to the bloc as early as next year.

Jean-Philippe Tanguy, a National Rally lawmaker widely seen as a contender for economy minister should Le Pen win next year’s presidential election, said that Le Pen and her party would ramp up pressure for a fundamental rethink of EU priorities, rather than just renegotiating the country’s annual contribution.

“We are not only asking for a rebate; we are asking for the cancellation of entire programs,” Tanguy said, citing EU foreign policy initiatives but also EU funds deployed within pre-accession programs.

During past presidential campaigns, Le Pen and the National Rally have been criticized for floating unrealistic and unfunded proposals that lack important details. They’ve also been accused of inflating savings in some proposals — meaning the numbers unveiled Tuesday will likely be heavily scrutinized.

Center-right presidential hopeful Edouard Philippe lampooned her plan Tuesday as being “spectacularly flippant”.

“To make savings, you make up billions. But reality will always catch up with you. What you offer does not add up,” he wrote. 

Devil is in the details

Le Pen said slashing immigration would save €15 billion in the first year of her presidency, and €14 billion in the second. 

She also said reorganizing France’s social security system would bring in a staggering €36.7 billion over five years, which also needs to absorb the cost of her flagship pension promise.

In August, Le Pen doubled down on her past pledge to lower the age of retirement back to 62, which she says will come at a cost of €9 billion per year. But that number is largely seen as an underestimation, with fiscally conservative think tank Institut Montaigne putting it at €34.7 billion.

Le Pen said other, yet undefined changes to the pension system would save €15–20 billion, promising to lay out its plans in detail at a later stage.

Hadrian Camatte, a specialist with the French investment bank Natixis, said Le Pen was being “overly-optimistic” and that the National Rally’s plan to cut billions on state spending was “massive, huge.”

“It will be very complicated if even [the party] are very aggressive regarding state agencies or state bodies,” he said. 

She said she would put a so-called fiscal “golden rule” to a referendum, which would bind lawmakers and the government in setting the budget, similar to the way the German debt brake works.

Le Pen’s version would instead require successive governments to reduce France’s public debt as a share of gross domestic product each year until it reaches 60% — nearly half its current level. In practical terms, France could still run budget deficits, provided they are small enough for the debt burden to keep falling relative to the size of the economy.

Le Pen also said that she planned to introduce a funded component into the pension system, under which a worker’s contributions are invested for their future retirement rather than paying for current retirees — a proposal that had been pushed by the National Rally’s more pro-business wing.

A pair under pressure

Sold as a winning ticket, the Bardella-Le Pen duo came under intense scrutiny during their second public appearance Tuesday when the antisemitism allegations were leveled against the party president. 

Le Pen, the front-runner in the race to replace Macron next year, did not rush to Bardella’s defense during the press conference, declining to respond to the allegations. Instead she launched into a defense of another National Rally official Jean-François Jalkh, who has faced accusations of Holocaust denial. 

Bardella meanwhile went on the offensive: “I imagine you would have loved to see me bow down, but that’s because you don’t know me,” he said. 

He accused Mediapart, which published the report, of trying to dig up dirt on him by asking his former classmates to send screenshots of private conversations when he was as young as 12.

“I won’t accuse you of perversity, others will judge, but it doesn’t look like your little operation is having an impact in the country,” he said.

Bardella also said his party was looking into taking legal action against Mediapart. 

European Commission President Ursula von der Leyen cautioned against cuts to the EU’s next seven-year budget in a rebuke to Germany’s calls to dramatically slash spending.

During a speech in the European Parliament in Strasbourg on Tuesday, von der Leyen said that reducing the size of the EU’s common cash pot would undermine critical EU-wide priorities such as competitiveness and energy autonomy.

“I would like to caution against large cuts. It would risk cutting deep into critical priorities that we all together have agreed on,” von der Leyen told MEPs.

The warning comes days before the Irish presidency of the Council of the EU, which is steering the budget talks, is expected to put forward a budget negotiating document with new figures.

Von der Leyen had previously hailed the Commission’s budget proposal for 2028-2034 as “the most ambitious ever proposed.” But Tuesday, as negotiations among governments enter crunch time, she struck a more cautious note.

In a message to Berlin, von der Leyen recalled that the Commission’s budget proposal represents 1.26% of the European Union’s gross national income — a relatively small increase from the current seven-year cash pot.

She also underscored the need to approve “a significant package of new own resources,” which are EU-wide taxes to finance the budget and reduce national contributions to Brussels.

The bloc’s governments are racing to reach an agreement by the end of the year, before elections in France, Italy and Poland in 2027 threaten to disrupt the negotiations.

Despite the looming deadline, EU leaders are still far apart over the size of the new budget.

Germany and its allies in Northern Europe have pressured Dublin to make cuts worth hundreds of billions of euros across the board.

But 17 EU countries from Southern and Eastern Europe — led by Italy and Romania — are pushing in the opposite direction. They asked to preserve farmers’ subsidies and regional payouts, known as cohesion policy, in a joint letter last week.

During a separate speech to the European Parliament on Tuesday, Portuguese Prime Minister Luís Montenegro said that “there is no European competitiveness without cohesion, and no European cohesion without competitiveness.”

In a rebuke to the frugals, Montenegro said that Portugal’s contribution to the EU budget as a share of its gross domestic product is higher than that of Germany and other wealthier countries.

“Giving 10 out of 100 is much more than giving 50 out of 1,000,” he told MEPs.

But Germany insists that its budget contributions are too high. In a thinly veiled threat on Monday, German Chancellor Friedrich Merz said that “having no new financial framework is by far the most financially advantageous solution for Germany.”

However, he added that such a scenario would restrict the EU’s ability to act and renewed calls to end the negotiations by the end of the year.

Several European officials believe that Dublin will propose budget cuts exceeding €100 billion. The proposal is expected to be put forward Saturday and be discussed by EU ambassadors Sunday.

This article has been updated.

BRUSSELS — A defeat for Pedro Sánchez in Spain’s snap election risks destabilizing the EU by putting the Socialists and Democrats on the back foot in Brussels and pushing them into a more confrontational stance.

Sánchez, the only Socialist-aligned leader currently running a large EU country, has provided a center-left counterweight to decisions in a Council largely dominated by the center right. Spain’s lawmakers form the S&D’s largest national delegation in the European Parliament, and when Sánchez strikes a Council deal, Spanish MEPs can usually carry his position through the group, even over internal opposition.

A change of government in Madrid would disrupt that arrangement, senior S&D lawmakers told POLITICO. Polls suggest that the country will vote in an administration led by the center-right People’s Party, which would likely partner with the far-right Vox party.

“There might be a temptation to look more critically at Council positions if there is no [longer] a Socialist prime minister of a large country,” said René Repasi, head of Germany’s SPD delegation in Parliament.

A second senior S&D lawmaker said Sánchez helped “balance” decisions at the leaders’ table and that his absence would unsettle the informal alliance of the S&D, liberals and the center-right European People’s Party that Commission President Ursula von der Leyen relies on to pass legislation.

“If what comes out of the leaders’ table, and the guidelines it gives the Commission, becomes more conservative, it will be less appealing for progressives to feel part of that governing majority,” said the lawmaker, who was granted anonymity to speak about sensitive group matters.

The S&D has lost ground elsewhere in Brussels. Since the 2024 European election shifted Parliament to the right, the EPP has passed some legislation with far-right groups. The Socialists have less representation in national governments and fewer commissioners of their own, fueling repeated tensions and attempts to repair the alliance. With Sánchez gone, the last center-left leaders would be Denmark’s Mette Frederiksen and Malta’s Robert Abela — with Magdalena Andersson working to form a government in Sweden.

Spain’s election will sound the starting gun a year of consequential votes across major EU countries, including Italy, Poland and France, where the far-right National Rally is leading the polls ahead of the 2027 presidential election. Far-right forces in Brussels are pressing the EPP to drop its ban on cooperating with them and break with its traditional ties to the S&D. 

Fewer incentives for compromise

The S&D, Parliament’s second-largest group, has repeatedly threatened over the past two years to withdraw support for von der Leyen, with some lawmakers urging a more forceful stance on EU policy.

Spain’s Iratxe García, who leads the group, has so far kept Spanish lawmakers in line. She faces a leadership vote on Oct. 21, though she is broadly expected to keep her post.

Should Sánchez lose his election, all the S&D’s largest national delegations — from Italy, Romania and France — would be in opposition at home. The only S&D parties still in government would be junior partners in Germany and Austria, alongside Denmark’s Social Democrats, whose hardline stance on migration limits their influence in the group.

Without a heavyweight prime minister from a large EU country to keep the S&D in line, von der Leyen would face greater pressure to make more concessions to lawmakers already frustrated by the center-right’s votes with the far right.

“If von der Leyen still delivers on S&D priorities, she will have the support of the group, and if that is not the case, then she will lose the support of the group,” Repasi said. A formal alliance between Spain’s EPP and far-right Vox, he added, “will drive us even more apart.”

The S&D would also have fewer “incentives” to compromise without Sánchez’s presence, the second senior lawmaker said, because the group would have less responsibility for maintaining stability in EU institutions.

“The institutional responsibility to guarantee support for the Commission and stability in the EU institutions will no longer be there,” the lawmaker said. A tougher line would be easier for the center-left “if the EPP continues striking deals with the far right, and the European Commission fails to offer a politically attractive agenda that progressives can sell to their voters.”

One diplomat called the Socialists’ threat to withdraw support for von der Leyen “not credible,” saying it would isolate the group further: “They just feel a need to send a signal to the EPP.” Weakening or firing von der Leyen also runs against the S&D’s interests, the diplomat added, because the EU has moved further to the right since she first took office and “the next person coming in would be much less inclined to work with them.”

Turbulence ahead

Brussels is set to become a battleground between Spain’s two main parties, with the Spanish lawmakers leading the Socialists in Parliament, while their rivals in the EPP form that group’s second-largest national delegation.

The election is also weighing on talks over the EU’s next seven-year budget, known as the Multiannual Financial Framework, which Brussels aims to conclude by the end of the year.

“It’s not going to do any good for the MFF,” a Commission official said, warning that Spain risks dragging its feet during already strained negotiations. The EPP and its allies will try to put debates on Parliament’s agenda to cause discomfort for Sánchez, the official said, likely making the talks more “turbulent.”

Spain’s underlying budget position will not change under a new government, a second diplomat said, but “the election will be distracting” and “won’t incentivize finding compromise.”

The EPP’s Siegfried Mureșan, Parliament’s lead budget negotiator, warned EU countries not to use the election to delay talks ahead of a leaders’ summit in mid-October. “The European Council shall not use the political situation in Spain as an excuse for further delays.”

EPP leader Manfred Weber declined to comment on what a Sánchez defeat could mean for the Socialists’ influence in Brussels, but voiced support for Spain’s opposition leader, Alberto Núñez Feijóo.

“Spain’s future is now in the hands of the Spanish people,” he said. “At a time when vision and reform are needed more than ever, the EPP is proud to stand firmly behind Alberto Núñez Feijóo. He has our full support.”

Zoya Sheftalovich and Tim Ross contributed reporting.