Brussels (enr) – Local and regional leaders raised concerns that the next multiannual EU budget risks undermining investment in affordable homes needed to alleviate Europe’s deepening housing crisis.

“Europe’s housing challenge is not simply about building more housing units,” said Kata Tüttő, President of the European Committee of the Regions (CoR), an EU advisory body home to democratically elected regional and local representatives from all 27 Member States.  

At a gathering in Brussels on Thursday, they demanded the EU “move from political ambition to concrete investment and delivery,” arguing that failing to invest now will only put affordable housing further out of reach for millions of Europeans.

As negotiations over the EU’s next long-term financial framework gather pace, cities and regions fear that affordable housing could become a casualty of competing spending priorities as several EU member states seek to cut the European Commission’s proposed €2 trillion budget for ‌2028-2034.

Tüttő called on the European Investment Bank (EIB), the EU’s lending arm, to “mobilise the scale of investment” that cities and regions need to “make communities liveable” by providing essential infrastructure. She cited public transport, as well as energy and water infrastructure, as key examples.

Italian MEP Irene Tinagli, Chair of the European Parliament’s Special Committee on the Housing Crisis (HOUS), said addressing the housing crisis “requires investment, better coordination across all levels of government and a shared commitment from European institutions, Member States, regions and cities”.

The CoR and EIB on Thursday agreed on closer cooperation in key areas including social infrastructure, housing, and energy. The European Investment Bank’s president, Nadia Calviño, said “investing into resilient cities and regions, into cohesion and housing” was a strategic priority.

According to EIB figures, the world’s largest multilateral development bank provided a record €5 billion in financing for housing projects across Europe in 2025. The EIB is targeting an increase to €6 billion this year, Calviño confirmed.

The investments are a contribution to the European Commission’s Affordable Housing Plan, which was launched in December and aims to boost housing supply, mobilise public and private investment, and support Member States and regions in expanding social and affordable housing.

According to the Commission’s estimates, however, the EU needs to build 2 million homes each year to meet current demand, which amounts to an investment of approximately €153 billion per year.

This story was produced by the European Newsroom (enr) in cooperation with the European Committee of the Regions (CoR). The editorial responsibility lies with the enr.

Brussels (enr) – The European Union’s migration commissioner has renewed his call for Germany to gradually end controls at its internal borders, pointing to falling numbers of irregular arrivals and the bloc’s new asylum rules.

It was now time to gradually abolish internal border controls, Magnus Brunner told members of the European Newsroom (enr) network in Brussels.

The Austrian commissioner said the EU’s external borders were better protected and that irregular crossings had fallen sharply. Frontex recorded about one-third fewer irregular crossings at the EU’s external borders in the first half of 2026 than in the same period last year.

The EU’s new Pact on Migration and Asylum also took effect on June 12. Brunner said member states had begun implementing the rules and that the bloc was already seeing progress.

He welcomed steps by individual countries to ease controls. Checks on the border between Germany and Luxembourg on the Trier motorway have been lifted, he said. He also cited the suspension of controls between Austria and Slovenia.

Germany has had checks at its land borders since September 2024. Former Interior Minister Nancy Faeser ordered them, and her successor, Alexander Dobrindt, intensified them in May 2025. Dobrindt has repeatedly extended the measures, which are currently due to remain in place until September.

Brunner also defended the EU’s new Entry/Exit System, known as EES. The digital system records the entry and departure of travellers from outside the EU, Iceland, Liechtenstein, Norway and Switzerland.

He acknowledged that the system had caused problems at some airports, including in Greece and Portugal, but said: “The system itself works very, very well.”

The system has faced criticism over long queues. The Airports Council International Europe has reported waiting times of up to five hours and missed connecting flights.

Brunner said professional truck drivers from the Western Balkans faced a particular problem because they can currently stay in the EU for no more than 90 days in any 180-day period. He proposed that EU member states and Western Balkan countries negotiate long-term visas on a bilateral basis.

Brussels (enr) – European Parliament Foreign Affairs Committee Chairman David McAllister has urged Ukrainian President Volodymyr Zelenskyy to support German Chancellor Friedrich Merz’s proposal for an associate membership for Ukraine as it moves towards joining the European Union.

The proposal is an opportunity that Ukraine should seize, the German centre-right lawmaker told members of the European Newsroom (enr) network in early June. Claims that it would amount to “membership light” or second-class membership were incorrect, he said.

Instead, it would allow Ukraine to become more closely integrated into the EU step by step before full membership, making the benefits of the bloc more visible to its people. One possibility would be for Ukraine to participate in the European Parliament as an observer, McAllister said.

Zelenskyy has expressed opposition to the idea, arguing that it would be unfair for Ukraine to be present in the EU but have no say in its decisions. In a letter to EU leaders, he called for the bloc to move faster and not keep Ukraine in a waiting room until full membership.

Merz said earlier that rapid full EU accession for Ukraine, which is fighting Russia’s invasion, is not realistic. For the interim period, he has proposed allowing Ukraine to attend EU summits and ministerial meetings without voting rights.

His ideas also include an associate member of the European Commission without a portfolio or voting rights, associate members of the European Parliament and an associate judge at the European Court of Justice.

Enlargement Agenda

McAllister said EU enlargement was high on the bloc’s agenda and that the Western Balkans were at the heart of Europe. A stable region was an investment in peace and security, he said.

The CDU politician called for each candidate country to be assessed individually and on its merits rather than treating the Western Balkans as a single group. Montenegro was a clear frontrunner, he said, while North Macedonia’s accession path remained blocked by a political dispute with Bulgaria.

Eight other European countries are officially recognised as EU candidate countries alongside Ukraine: Albania, Bosnia and Herzegovina, Georgia, Moldova, Montenegro, North Macedonia, Serbia and Türkiye.

Luxembourg (enr) – The European Investment Bank (EIB) is on course to meet, and potentially exceed, its target of allocating five percent of its financing in the European Union to security and defence projects this year, EIB President Nadia Calviño said.

That would amount to around 4.5 billion euros, according to the EU’s lending arm.

“Tt’s clear that we need more investment in the area of security and defence in Europe,” Calviño told members of the European Newsroom (enr) network in Luxembourg in June. “For the coming years, we are ready to do more to finance Europe’s security and defence capabilities,” the Spanish former economy minister added.

The EIB significantly increased its support for the sector last year in response to Russia’s war against Ukraine and the broader deterioration in the geopolitical situation. Financing for security and defence projects rose to more than 4 billion euros in 2025, four times the previous year’s level and almost five percent of all EIB Group financing in the EU.

“The shift of policy in security and defence has been a turning point for the EIB Group,” Calviño said.

Within only a few years, the bank had expanded its eligibility rules to include purely military projects. It now supports companies and investment funds active across the security and defence sector.

The EIB has gradually eased its financing rules since 2024. It can now provide funding for military equipment, infrastructure, services and technology. Weapons and ammunition remain excluded.

The Luxembourg-based EIB is the EU’s long-term lending institution. Its owners are the bloc’s member states, and its investments are generally intended to support the European Union’s political objectives.

The enr spoke with Calviño on the sidelines of the EIB’s annual Board of Governors meeting, as well as a meeting of EU ministers responsible for economic affairs, finance and the EU budget.

Gdańsk/Brussels (European Newsroom) – Ukrainian cities and regions risk being left out in deciding how billions in reconstruction funds are being used unless they are given a robust role in the planning, governance and implementation of reconstruction support, a joint statement by the European Alliance of Cities and Regions for the Reconstruction of Ukraine warned. 

Meeting on the sidelines of the Ukraine Recovery Conference (URC) 2026 in Gdańsk, Poland, the alliance called for a “localisation marker” in donor planning tools and ring-fenced funding with direct local access. 

Antje Grotheer, President of the State Parliament in Bremen, Germany, and chair of the European Committee of the Regions’ (CoR) Working Group on Ukraine, argued that local and regional authorities should have a greater voice in donor discussions and reconstruction planning. She stressed that Ukraine’s decentralisation reforms have been key to maintaining resilience during the war.   

“We feel there is an increasing need for stronger coordination of support that targets municipalities and regions,” Grotheer said.  

Oleksii Riabykin, Deputy Minister for Rebuilding and Minister for Development of Communities and Territories of Ukraine, said his country is already moving from emergency reconstruction to building resilient communities. Experience gained by Ukrainian cities, towns and villages during the war can help strengthen resilience across in Europe, he said. 

EU law implementation

The joint statement released Wednesday stressed that over 70 percent of EU law is implemented at local level, but most reconstruction funding for Ukraine is still channeled through national governments, leaving municipalities to compete over the leftovers. At the URC 2026 in Gdańsk, the CoR and its alliance partners demanded a structural fix.  

The alliance also encouraged Ukrainian regions to exploit existing EU programmes and platforms. It underscored the contribution of neighbouring EU countries to both Ukraine’s military efforts and its reconstruction, arguing that they should receive targeted support.  

EU member states that share a border with Ukraine are Poland, Slovakia, Hungary and Romania. 

The alliance brings together EU and Ukrainian local and regional authorities and was co-founded by the CoR, an EU advisory body, in June 2022 following Russia’s full-scale invasion of Ukraine.  Its goal is to coordinate an effective reconstruction of Ukraine that involves local and regional authorities rather than centralising the implementation of funds to the state. 

The URC was also established after Russia’s full-scale invasion, building on the foundations of the annual Ukraine Reform Conference established in 2017 by supporters of Ukraine, including the European Union.  

The URC 2026 takes place on June 25 and 26 and focuses on the sectors most impacted by Russia’s attacks, such as energy, critical infrastructure, and logistics. The lead-up to the conference was overshadowed by escalating dispute between Warsaw and Kyiv. Ukrainian President Volodymyr Zelensky had named an army unit after Ukrainian underground fighters from World War II who are also blamed for massacres of tens of thousands of Poles and Jews in what is now western Ukraine.  In response, Poland’s right-wing conservative President Karol Nawrocki stripped Zelensky of a high Polish order of merit. 

This story was produced by the European Newsroom (enr) in cooperation with the European Committee of the Regions (CoR). The editorial responsibility lies with the enr. 

The European Union is bringing out the big guns in the face of widespread outrage over the use of Artificial Intelligence (AI) violating people’s privacy and dignity.  

Brussels is considering the possibility of classifying the creation of sexual deepfakes as a prohibited practice under the Artificial Intelligence Act following the scandal involving sexualised images created by Grok AI, the chatbot integrated into Elon Musk’s X platform. 

Grok outrage

Musk’s company xAI – after prolonged international criticism – has introduced new restrictions in mid-January on sexually suggestive AI-generated images in Grok. The move follows criticism that Grok allowed users to digitally replace women’s clothing with bikinis and, in some cases, create sexualised depictions of minors. 

The first images of people being stripped naked without consent (“nudification”) began circulating in the days following the release of the feature, but their spread increased particularly around New Year’s Eve. According to CNN, between January 5 and 6 alone, Grok was used to generate at least 6,700 sexual images. These often involved women or minors. 

“Grok is now offering a ‘spicy mode’ showing explicit sexual content with some output generated with childlike images. This is not spicy. This is illegal. This is appalling,” EU digital affairs spokesman Thomas Regnier told reporters back then.

The European Commission, which acts as the bloc’s digital watchdog, said it would take note of new measures taken by X and would review them. Officials warned that if the steps prove insufficient, the EU will consider using the full scope of its Digital Services Act (DSA).

European Commission Vice-President Henna Virkkunen has stated that the Commission is considering explicitly banning these types of AI-generated sexual images under the AI Act, classifying them as unacceptable risks. 

The prohibition of harmful practices in the field of AI could be relevant to addressing the issue of non-consensual sexual deepfakes and child pornography, said Virkkunen, who is also the responsible commissioner for Tech Sovereignty, Security and Democracy, at this week’s plenary session of the European Parliament in Strasbourg. She also said the DSA mitigated the risk of online sexual material being disseminated without consent. 

She also recalled that the Commission had sent a request for information to X regarding Grok as part of its investigation into the platform under the DSA. 

The platform was asked to preserve all internal documents and data relating to it until the end of the year. “We are now examining the extent to which X may in any case be in breach of the DSA and will not hesitate to take further action if the evidence suggests it,” she said.

The Commission had previously stepped up pressure on X, which was fined 120 million Euro in early December over transparency violations. The EU has insisted it will enforce its rules despite causing backlash from the US administration.

“The DSA is very clear in Europe. All platforms have to get their own house in order, because what they’re generating here is unacceptable, and compliance with EU law is not an option. It’s an obligation,” Regnier said at the height of the scandal in early January. 

Last week, a group of about 50 MEPs had called on the Commission to ban artificial intelligence apps used to create nude images from the EU market. 

Can’t live without X

Despite criticism of X, nearly all senior EU officials continue to post there rather than on European alternatives, according to research by dpa.

European Commission President Ursula von der Leyen and other top officials still do not have official accounts on Mastodon, a Germany-based alternative. Virkkunen  opened an official Mastodon account in January. High-ranking EU politicians are also active on Bluesky, another US-based platform currently gaining traction.

The Commission justifies continued use of X due to its reach: Mastodon has roughly 750,000 monthly users, compared with 100 million on X, according to the companies.

The long legal path towards better safety online

The path towards protection of minors in the EU is long-winded as concerns of privacy, business and protection clash. Several regulations intersect:

• Chat Control

The Commission in 2022 proposed a regulation to require platforms to detect and report images and videos of abuse (child sexual abuse material or CSAM), as well as attempts by predators to contact minors.

Supported by several child protection groups, the plan nicknamed “Chat Control” sparked fierce privacy debates inside the 27-country bloc and led to accusations of mass surveillance. 

The final legislation is expected to be negotiated in early 2026, aiming to bridge the gap between Parliament’s privacy-focused approach and the EU Council’s desire for broad voluntary scanning powers. 

While extending temporary voluntary scanning measures until April 2026 to avoid a legal vacuum, MEPs have expressed urgency for a permanent solution.

• DSA

The European Union uses the Digital Services Act to sanction online platforms by imposing massive fines, requiring immediate operational changes, and – as a last resort – temporarily suspending their services. It can apply fines if platforms violate DSA obligations, fail to comply with interim measures or breach commitments.

It is an EU regulation for a safer online world, requiring platforms to tackle illegal content, protect users, and increase transparency.

• AI Act

The AI Act was adopted in 2024 and is the world’s first and only comprehensive legal framework in the artificial intelligence context. It establishes a risk-based system to regulate AI technologies within the EU, aiming to ensure they are safe, trustworthy, and respect fundamental rights while fostering innovation. 

It bans certain unacceptable AI practices, such as social scoring, and sets rules for areas of high risk for AI use – like in critical infrastructure or employment. It also sets out restrictions on manipulative AI uses such as deepfakes targeting children, among others. 

• Social media bans

France, which is considering banning social media for children under 15, has been testing an age verification app developed by the European Commission since this summer. This tool is one of several methods used to verify the age of internet users, which is a headache for tech giants and authorities alike.

Individual efforts

The Spanish Minister of Youth and Children, Sira Rego, in early January asked the attorney general’s office to investigate whether Grok may be committing crimes related to the dissemination of child sexual abuse material.

Currently, Spain is developing its own law for the protection of minors in digital environments. The law strengthens the framework for protecting personal integrity and privacy against new forms of violation linked to the use of technologies such as artificial intelligence, reaffirming that the best interests of the child must always prevail over any digital business model.

Bulgaria has stepped up efforts to combat online child sexual abuse through international law enforcement cooperation, national prevention campaigns and policy discussions aligned with EU legislation. In 2025, Bulgarian authorities took part in a major international operation that shut down Kidflix, one of the world’s largest platforms for child sexual exploitation, used between 2022 and 2025 by nearly 2 million users.

Romania has legislative mechanisms in place to combat child sexual abuse material through its criminal code, and the authorities are seeking to expand and modernise these rules. 

Since 2025 an important bill on the protection of children online (called the Online Age of Majority Law) has been under parliamentary debate, and Romania is also gradually participating in and implementing EU rules on the prevention and combating of online sexual abuse. The Online Age of Majority Law introduces mandatory age verification and parental consent for minors (under 16) to access online services such as social media, gaming and streaming platforms.

EU candidate country Bosnia and Herzegovina still has no specific law regulating this area. In BiH, criminal liability for the production, distribution and possession of such material is based on criminal laws that cover the sexual exploitation of children, but do not contain explicit provisions on AI-generated or simulated content. 

The EU has put into place a set of complementary tools and measures to protect its citizens – young and old – from harmful practices online, but weak points include challenges in enforcement, algorithmic amplification of harm, inconsistent national implementation, and debates over balancing security with privacy.

This article is an ENR Key Story. The content is based on information published by ENR participating agencies.

Growing popularity of electric vehicles (EVs) from China is causing headaches for European carmakers – and for Brussels, with national governments clamouring for protection for their national champions. 

The European Commission, which is in charge of trade policies for the bloc, has to square the circle between avoiding a trade war and injecting some life into the idling economy. 

In one recent step the EU is attempting to introduce minimum prices for Chinese made EVs to offset subsidies instead of slapping on more tariffs. 

The EU in 2024 had introduced tariffs of up to 35.3 percent on EVs imported from China after an anti-subsidy probe concluded that the country’s support undercut European automakers. Manufacturers in China benefit from unfair subsidies that give them a significant advantage in the European market. Since then, the two sides have been engaged in talks to find other solutions. 

How cheap is too cheap?

Under new guidelines published by the Commission last week, companies can commit to setting minimum prices for vehicles exported to the European Union in order to avoid the price surcharges. In addition, in the case of a corresponding offer, commitments to invest in the EU or to limit exports would be positively taken into account.

Such offers would be assessed objectively and fairly by the Commission, according to the new guidelines. A prerequisite for acceptance is that the measures eliminate the damaging effects of subsidies and have an effect equivalent to the tariffs.

The published document was “intended to provide guidance to Chinese exporters who may be considering submitting price undertaking offers for exports of battery electric vehicles to the EU, which are currently subject to countervailing duties,” Commission spokesman Olof Gill said. 

He said that at present, the Commission has received one price undertaking offer, without specifying which company or for which model. He added that the Commission is ready to consider other proposals, provided that they “adequately address the unfair competitive advantage” and demonstrate that they are “feasible in practice”.

Leading German automotive expert Ferdinand Dudenhöffer, head of the private institute Center Automotive Research (CAR), was sceptical of the effects of the minimum prices could have on competition. 

According to EU calculations, manufacturers in China benefit from unfair subsidies that give them a price advantage of around 20 percent on the European market. For this reason, tariffs ranging from 7.8 to 35.3 percent were imposed from 2024, depending on the manufacturer. German and US companies that manufacture in China are also affected. In retaliation, China imposed special tariffs on EU goods such as spirits, pork, and dairy products.

According to CAR, Chinese manufacturers sell their models in the EU at an average markup of 118 percent on top of the domestic price. “Given the current price level in Europe, there should still be significant scope for Chinese manufacturers to reduce prices,” said Dudenhöffer. 

Pressure from all sides

According to the latest report by the EU research agency Eurofound, the automotive industry in the EU directly employs around 6 million workers and another 6 million in related sectors. 

Since 2019, the pace of job losses in the sector has clearly accelerated. In 2024 alone and at the beginning of 2025, layoffs announced by European companies affected around 100,000 jobs.

The largest employment losses have been recorded in countries with a strong presence of Europe’s biggest car manufacturers. In France, a structural decline is feared, while since 2019 job cuts have also affected Germany, Italy, and, to a lesser extent, Spain. Central and Eastern European countries – Czechia, Hungary, Poland, Romania, and Slovakia – are facing the relocation of production outside the EU to countries with lower labor costs.

This is happening because sales of cars originating from China, including electric vehicles (EVs), are increasing in the EU. In practice, some of these cars on EU markets are not only models of Chinese brands but also vehicles produced in China for Western brands.

German auto angst

Germany, for many years a global carmaking powerhouse, is facing a dilemma. Demand for EVs is rising, but it is not just the battery powered Volkswagens or BMWs customers are flocking to – and the long-term outlook is dire. 

Electric vehicle sales rebounded strongly in Germany in 2025, according to official data from early January this year, with Chinese manufacturers making inroads from a low base in the EU’s largest economy despite tariffs.

EV sales rose 43.2 percent last year to 545,142 in total, the KBA federal transport authority said, representing 19.1 percent of all new cars sold.

Chinese EV giant BYD – which last year overtook Elon Musk’s Tesla to become the worlds largest electric carmaker – saw its German sales rise over 700 percent to more than 23,000 cars, giving it 0.8 percent of the overall auto market.

“International vehicle manufacturers with affordable battery electric vehicles and plug-in hybrids have contributed disproportionately to growth in these segments,” said Imelda Labbé, head of the VDIK foreign carmakers’ lobby in Germany.

The rise in EV sales last year comes after a fall of almost 30 percent in 2024 following the withdrawal of government subsidies, and Germany’s electric car market is still smaller than optimists had hoped for. After the decline in the market in 2024, the government said in December it would introduce subsidies again.

Some motorists will be able to benefit from 5,000 Euro for the purchase of new EVs or hybrids so long as their components are largely made in Germany. But industry figures say that better charging infrastructure and cheaper power would be needed to really boost EVs and warned that the planned subsidy would have limited impact.

On the other hand, German carmakers have been reporting strong declines in vehicle sales in China. Volkswagen said in January its sales dropped by 8 percent in 2025 year-on-year, as it was facing intense competition on the Chinese market from local producers. Mercedes-Benz reported a 19 percent decline in sales for the year, while BMW sold 12,5 percent fewer cars in China. 

German manufacturers like Mercedes or VW sell about 30 percent of their cars on the Chinese market. 

The tug-of-war affects not just major players, but the automotive sector across the continent. 

Bulgaria for example is not a major car producer, but it is increasingly important as a supplier of automotive components to European manufacturers. The sector has grown into one of the country’s strongest industrial branches, generating close to 11 billion Euro in annual turnover, according to business media and industry analyses. 

This means that it is indirectly exposed to the EU-China trade dispute over electric vehicles: weaker competitiveness of European carmakers could reduce orders for Bulgarian suppliers, while a recovery in EV sales in core markets such as Germany would have the opposite effect. 

At the same time, Chinese manufacturers are not only exporting cars to Europe but are also expanding production and partnerships within the EU, with Bulgaria being increasingly part of China’s automotive strategy in Southeast Europe according to analysts. 

For Bulgaria, this creates a mixed impact: EU trade measures may protect European carmakers, but Chinese localization in Europe could also open new opportunities for Bulgarian suppliers.

Dudenhöffer expects the sector to shrink in the next years in Germany and Europe, as manufacturers shift their production to the US or Asia, he said in his market forecast for 2026.

“Growth is taking place in Asia, and Asian car manufacturers (Japan, Korea, China) are increasingly dominating the car business.”

Ferdinand Dudenhöffer, German Automotive Expert

Fading from Green to Petrol 

And then there are of course the EU’s green policies: The EU in December rolled back a 2035 ban on new petrol and diesel cars seen as a milestone in the fight against climate change, as the bloc pivots to bolstering its crisis-hit auto sector. 

Under proposals slammed by green groups as an act of “self-sabotage”, carmakers will have to cut exhaust emissions from new vehicles by 90 percent from 2021 levels – down from an envisaged 100 percent.

This means that in practice automakers will still be able to sell a limited number of polluting vehicles – from plug-in hybrids to diesel cars –  beyond 2035, provided the resulting emissions are “compensated” in various ways.

The EU’s Industry Commissioner, Stéphane Séjourné, insisted the bloc’s green ambitions stood intact as he put forward a plan billed as a “lifeline” for Europe’s auto industry.

The combustion-engine ban was hailed as a major win in the climate fight and a key tool to drive investments in electrification when adopted in 2023.

The compromise plan was slammed by both environmentalists and industry groups.

While the EU had recognised that remaining open to different technologies was important, its proposal was “fraught with so many obstacles it threatens to remain ineffective in practice”, the president of the German Association of the Automotive Industry (VDA), Hildegard Müller, said. “In times of increasing international competition, in times when European economic power is crucial, this overall package from Brussels is disastrous.” 

The future of German car manufacturers – and by extension automakers in other EU member states – is closely linked to the Chinese market. 

According to Dudenhöffer, they must develop and build electric cars “in China for China”. In this context, he criticised the softening of the combustion engine phase-out. He said it was not possible to disconnect from developments, but that it is necessary to face competition in the tough Chinese market. “If you’re not in China, you’re not in the car business.”

This article is an ENR Key Story. The content is based on information published by ENR participating agencies.