The Ukraine war’s spillover into the Black Sea is creating a growing European security and commercial risk: Drones are hitting ships and killing sailors, grain routes are under strain, and insurers and investors are weighing the cost of operating through Ukraine’s ports.

Five commercial vessels have been hit in Bulgarian and Romanian waters over the past week alone, leaving at least four people dead, several sailors missing and others injured. In response, Black Sea countries Bulgaria, Romania and Turkey have raised the issue at NATO, asking for more focus toward the region and joint support, according to two alliance diplomats.

“The attack within Bulgaria’s exclusive economic zone is absolutely unacceptable. It constitutes a serious breach of maritime and international law and will further jeopardise safe navigation in the Black Sea,” Bulgarian Prime Minister Rumen Radev said on X after the attacks last week.

Russia has been attacking Ukrainian ports and cities in the area since the start of its full-scale invasion. But the recent strikes have brought the spillover into NATO territory. If they continue, EU leaders will face pressure to protect Black Sea shipping and keep Ukrainian trade moving.

Those questions will be top of mind at Thursday’s European Council summit. According to draft conclusions obtained by POLITICO, leaders are expected to discuss the “immediate restoration of safe passage for grain cargo ships.”

A wider problem

Russia is not the only country using naval drones in the Black Sea. Ukraine has also used them against Russian-linked shipping. In June, a Ukrainian sea drone exploded in Romania’s Constanța port after Kyiv said it had veered off course because of Russian electronic interference.

“The Black Sea situation is quite dangerous because attacks are coming from both [sides],” said an EU shipping representative, who was granted anonymity to speak freely. “You have to worry about both.”

Attribution can also be difficult. Bulgarian Prime Minister Rumen Radev said Wednesday that investigators still have not proven that Russia is behind the strikes — although some have attributed his reticence to his broadly softer approach toward the Kremlin.

Drone operations by both Russia and Ukraine are likely to continue as long as each has the money and production capacity to sustain them, said Cristian Vlas, assistant research manager for Eastern Europe at the think tank ACLED.

Oleksii Goncharenko, a Ukrainian lawmaker and founder of the Black Sea Security Forum, told POLITICO that a “serious diplomatic initiative” was needed, bringing together Ukraine, Russia and a third-party guarantor, such as Turkey, “to restore freedom of navigation in the Black Sea.”

Grain routes under pressure

The security risk is disrupting routes that carry Ukraine’s harvest to market, with consequences for EU transport links. Black Sea ports are Ukraine’s main export gateway, handling around 95 percent of the country’s grain exports, as well as significant volumes of iron ore. Shipping traffic has fallen as the security risk has grown.

Some cargo is being rerouted to the River Danube, but capacity there has been stretched in recent months as drought pushes water levels to record lows. Operators are trying to add rail capacity, but that risks moving the bottleneck westward to Romania.

Moving more Ukrainian grain overland also risks reviving tensions with farmers in neighboring EU countries, Vlas said. Romanian farmers have worried that Ukrainian produce meant only to transit could stay on the domestic market, he added, while transport operators are already juggling competing demands for capacity.

Ukraine’s Agriculture Minister Taras Vysotskyi has warned that millions of tons of unsold grain is piling up, and that farmers who can’t sell won’t be able to afford to resow all their land.

Bulgaria is working with Romania and Turkey on a joint initiative to protect freedom of navigation in the Black Sea, which Radev plans to bring to EU leaders on Thursday.

Following the Black Sea countries’ request at NATO, military officials are likely to look into possible options such as shifting counter-drone systems to the region, the two alliance diplomats said. Radev said Sofia will convene his counterparts in Ankara and Bucharest to examine further proposals, while a senior Bulgarian official called for new joint anti-drone systems with Romania, partly financed by the EU.

Investment at risk

The attacks also threaten what had started to look like a renewed bet on Ukraine’s ports. MSC, the world’s largest container line, was among the biggest and newest investors, reportedly acquiring a majority stake in a container terminal at a port near Odesa in May.

Ukraine has also been offering investors a long-term concession at the Chornomorsk terminal near Odesa. This terminal is one of Ukraine’s largest planned port public-private partnerships and part of what is expected to be a multibillion-euro reconstruction effort involving European companies.

But people who work in Ukraine’s ports say the case for rebuilding is collapsing.

“No one is ready to invest and rebuild, since you know that tomorrow there will be another missile, another pack of drones,” Oleg Grygoriuk, chairman of Ukraine’s Marine Transport Workers’ Trade Union, said.

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 .”

MONACO — Ukraine is taking its war effort from the muddy Donbas trenches and halls of European power to an iconic London football stadium this week.

Originally driven from its home in 2014 by marauding Russian-backed forces, Shakhtar Donetsk — Ukraine’s top team — will take up a residency at Stamford Bridge, home of Chelsea FC, in Europe’s premier football competition Wednesday night.

As air raid sirens sounded relentlessly back home, the club’s Chief Executive Sergei Palkin and Sporting Director Darijo Srna met POLITICO in the marbled lobby of a Monaco hotel to discuss Shakhtar Donetsk’s UEFA Champions League prospects — and why they’re playing for something much bigger than on-field success. 

“At this point we are not representing just Shakhtar Donetsk. We are representing the whole country,” said Palkin, ahead of four matches in London this fall and winter. “For us, it’s also to support Ukrainian people who left their homes and moved to London, to England. And therefore, these games completely change context. It’s very important every time to send messages to support Ukraine.”

Shakhtar’s survival among Europe’s elite is emblematic of Ukraine’s own endurance against Moscow’s bombardment. Forced out of Donetsk in 2014, the club has spent more than a decade moving between temporary host cities while keeping its Champions League ambitions alive throughout the war, despite the difficulty of attracting top European signings while based in a war zone. 

Since Russia’s full-scale invasion began in 2022, Shakhtar Donetsk has played “home” matches in Poland and Germany. Club bosses are thrilled to be based in England for this season’s games against Greece’s AEK Athens, Portugal’s Sporting CP, Turkey’s Fenerbahçe and Spain’s Real Madrid. “[London] is the capital of the football world,” Palkin said.

“We don’t have pressure. We want to play football. We are 24/7 under stress in Ukraine. And we want to just go out and play for our fans, for Ukraine,” added Srna, a former star defender for Shakhtar Donetsk and the Croatian national team. 

Invest in Ukraine

Large white letters adorn Shakhtar Donetsk’s orange and black jersey bearing the name of SCM, the country’s biggest private financial and industrial investment company, owned by Ukraine’s richest man and the club owner, Rinat Akhmetov.

Russian President Vladimir Putin’s unabating assault has cost tens of thousands of lives in Ukraine, and also caused hundreds of billions of dollars worth of damage to infrastructure across the country. Ukrainian President Volodymyr Zelenskyy has crisscrossed the globe in recent months trying to maintain Western support for Kyiv, as it runs short on cash and critical air defenses. 

Closely connected to Shakhtar Donetsk, officials at SCM are appealing to Western investors that they are the key to Ukraine’s reconstruction — and that it can start already. Natalya Yemchenko, chief corporate affairs officer at SCM, said that any investment would pay an immediate dividend for Europe.

“It’s a good time to invest in Ukraine, not from the point of view of big and easy money. It’s a great time to invest from the view of strategic security issues, energy security issues [and] food security issues. It’s a very good time to create strength in Ukraine to protect Europe and to make Europe more ready for the next years,” Yemchenko told POLITICO at a separate event in Monaco.

While some of the military and reconstruction financing that has poured into Ukraine during the war has ended up in the crosshairs of anti-graft investigations — including one prominent case that ensnared a former minister in Zelenskyy’s government, and the president’s top aide Andriy Yermak — Yemchenko emphasized SCM’s commitment to anti-corruption. 

“We have zero tolerance [for] corruption inside of our business. And I would say from our experience, when you see some big cases, it means that the anti-corruption system works. It would be much worse if during the war we would not see any cases of fighting this corruption,” she said.

Russia’s hybrid campaign against Europe has sharpened SCM’s case for investment in Ukraine. The company argues that Ukraine is already Europe’s first line of defense — and that keeping its economy strong helps make the rest of the continent safer.

For Yemchenko, the investment case is inseparable from the war. Ukraine cannot keep defending Europe if its economy fails. She said Russia’s recent attacks on businesses are meant to leave people feeling desolate.

“They would like to demotivate Ukrainian business. Shopping malls, logistics centers: They are the main target for the last two months. And I do believe that they would like to make life in Ukraine almost impossible,” she said. 

“We saw it in Mariupol, what they started to do from the very beginning. They start to create a humanitarian catastrophe. Their first target was telecoms. Then it was heating. Then water. They destroy everything connected to basic needs. Why? Because they think that people will leave cities, including Kyiv,” she added.

“And again, this war is a Ukrainian war, but to a big extent, it’s a European war, unfortunately.”