“As we close the tap on Russian energy, we open the doors to a more diverse range of reliable suppliers,” EU energy commissioner Dan Jørgensen wrote in an op-ed for EUobserver this week.
“And these suppliers know that we are reliable buyers.”
One of those ‘reliable’ suppliers is the US, which provided 57 percent of the EU’s liquefied natural gas (LNG) last year and is on course to supply two-thirds this year, according to IEEFA.
Four out of five overseas gas cargoes arriving in the EU will be American by 2028, the think tank estimates. These expensive cargoes have kept coming in. But how reliable is that supply likely to remain?
US officials have already shown their willingness to use their gas dominance for strategic gain. In March, US ambassador to the EU Andrew Puzder threatened that Europe could lose its favourable access to American LNG if it tried to reopen the ‘Turnberry’ bilateral trade deal.
“In switching from Russia to the US, the EU has jumped from the frying pan into the fire,” Pascoe Sabido, a researcher at Corporate Europe Observatory, wrote in a comment under Jørgensen’s op-ed.
And recent developments prove his point.
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A backlash is building against an EU ‘omnibus’ bill that seeks to make it easier to authorise and use pesticides across the bloc.
MEPs are still yet to set a date to vote on the European Commission’s proposal to extend how long pesticide active substances can stay approved in the EU, amid a series of protest letters from scientists, UN health experts, and divisions among member states.
EI parliament’s environment and agriculture committees were originally expected to hold a joint vote on a compromise text on 5 October, but shelved that date without proposing another as this article went to publication.
Sustained criticism has come from the scientific community.
Last month, a group of more than 500 scientists signed an open letter to the commission on 16 September demanding a pause on the file pending “an independent assessment, whether carried out by parliament’s own research service or by an equivalent independent body.”
They warned that the commission’s plan to extend grace periods for products withdrawn on safety grounds, widen derogations for hazardous substances, and restrict the use of the latest independent scientific evidence “seem difficult to reconcile with the precautionary principle and with obligations to respect, protect and fulfil human rights, including the rights of peasants and other people working in rural areas”.
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The Black Sea has become a new frontline between Russia and Ukraine, as the two agricultural powers join battle to halt each other’s exports.
On Tuesday (13 October), the Ukrainian-owned Chelsea 3, sailing under a Maltese flag, was struck by three drones only 30km off Bulgaria.
According to Bulgarian prime minister Rumen Radev, two ships were hit by drones, one of which sank.
The recent incidents underline the vulnerability of commercial shipping in a region where Russia and Ukraine depend on maritime routes for their international trade.
And on the coast, Bulgaria’s position is particularly sensitive, as a Nato member bordering the Black Sea.
EU Commission president Ursula von der Leyen condemned the attacks on social media, calling them an “escalation” of the Russian war in Ukraine.
Nato general secretary Mark Rutte also reiterated the alliance’s commitment to regional security. “Nato would continue working closely with its Black Sea allies and had strengthened its posture along the eastern flank,” he said.
Shipping route under pressure
For Ukraine, access to the Black Sea is essential to exporting grain, sunflower oil, metals and other goods.
Before Russia’s full-scale invasion, Ukrainian Black Sea ports handled exports worth more than $40bn (€35.74bn).
Russian attacks on port infrastructure and shipping have severely undermined this trade, while the threat of further strikes raises the cost and risk of operating in the region.
Severe problems with Ukrainian agricultural exports became apparent as early as August, when the country managed to export only 20 percent of the grain it had shipped during the same period the previous year.
“With grain, it is more difficult,” Ukrainian agriculture minister Taras Vysotsky said.
He added that Ukraine’s domestic market was not suffering for now. Although buckwheat could become scarce, the main challenge for Kyiv now is to be able to export the supplies before they perish.
And alternative routes offer only partial relief.
Ukraine has increasingly relied on Danube ports, including Izmail and Reni, with cargo moving towards Romania’s Constanța port before being transferred to larger vessels for international markets.
But this corridor is under growing pressure from low water levels on the Danube, congested terminals and also drone attacks.
Waiting times for vessels seeking access to the river have exceeded two weeks.
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The EU is shying away from triggering rules that would shield people and companies working at or with the International Criminal Court (ICC) in The Hague from US sanctions, preferring instead months-long diplomatic outreach.
The European Commission on Wednesday (14 October) told reporters in Brussels that it was doing everything to seek “practical solutions”, while hoping that its diplomacy will help the court, which prosecutes people for war crimes, genocide, and other atrocities.
“We haven’t made any decisions yet. But we continue to discuss at every level,” said a commission spokesperson, when pressed on whether a little-known blocking statue, which would presumably damper the impact of the US sanctions, remains an option.
And an EU summit in Brussels on Thursday is expected to ask the US to reverse the decision, according to draft conclusions seen by EUobserver.
The EU’s little-known “blocking statute” would prevent EU companies and banks from complying with the sanctions. It was first used against US sanctions on Cuba, Iran and Libya.
The Trump administration had, last Friday, announced financial sanctions on the ICC as part of a larger assault to dismantle the court, after it issued arrest warrants for Israeli prime minister Benjamin Netanyahu, its former defence minister Yoav Gallant, and Hamas military commander Mohammed Deif.
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The Russians are making a mockery of Trump’s energy ceasefire.
What the restrictions on Starlink mean and how they are being felt.
The Russians are pushing towards Dobropillia.
The 3rd Army Corps reported on the next phase of Operation Vivaldi, but we learned nothing new.
Maps of the day — Lyman, Dobropillia
Videos of the day — a drone hit a flying Mi-28 helicopter; how a heavy machine gun is used in drone warfare; civilians fleeing the fighting were struck by artillery and mortar fire
Trump’s America is becoming a rogue state. Ukraine, as well as Europe as a whole, must now accept that the United States is openly supporting Russia’s aggression against Ukraine. Under the pretext of efforts to end the war, the US government — and, as of Tuesday, a major technology company as well — are openly backing the fight against Ukraine and, therefore, against European security.
The United States has recently taken several decisions in quick succession that could help Russia win the war, at a time when it was failing to do so on the battlefield.
US president Donald Trump eased sanctions on trade in Russian oil, enabling Russian president Vladimir Putin to better finance his aggression against Ukraine, and effectively called for the overthrow of Ukraine’s legitimate president.
A growing number of voices claim that the US has stopped providing intelligence on Russian air raids (this has not been confirmed, and some authorities deny it).
And the United States has now also deprived the Ukrainian army of the ability to carry out effective medium-range strikes.
It did so by dramatically restricting the Starlink service over Ukraine’s occupied territories. In practice, this will have serious consequences for the Ukrainian army’s ability to use drones for its previously highly effective attacks on Russian logistics.
What the restrictions on Starlink mean and how they are being felt. Since this morning, the Ukrainian army has reported restrictions on the operation of receivers for SpaceX’s satellite system.
Thanks to Starlink boss Elon Musk’s equipment, they destroy hundreds of Russian army trucks and other military equipment every month at distances of 30 to more than 100 km.
However, on the night of 14 October, Ukrainians lost access to the military part of the system known as Starshield, meaning that the devices did not function at speeds above 160km/h. This means drones cannot carry out combat missions because their operators cannot guide them to their targets.
The situation deteriorated further during the day. Serhii Sternenko reported that the army later reported losing control at speeds above 70 km/h. This means grounding Ukraine’s drone fleet for medium-range attacks.
It is highly likely that this is not a technical problem but a response to a request from the Trump administration, since otherwise the Ukrainian army would have received an explanation — which, according to Ukrainian sources, did not happen.
According to our observations, communications may have been interrupted for 10 to 20 seconds during drone flights,even at speeds of 110 to 120 kilometres per hour,” Oboronka news outlet quoted a military source.
A technical problem is unlikely, as the Ukrainian military would have received an explanation in that case, which,according to Ukrainian sources, did not happen. The question now is how long the outage will last. It is also unclear to what extent the decision was made by Musk and to what extent by Trump.
“Our defence forces received no warning of such a restriction, which led to the cancellation of several missions. It is clear that this is no coincidence and is connected to the current political situation,” wrote Serhii “Flash” Beskrestnov, for example.
He described as an even more serious problem than the restriction of medium-range attacks the fact that Starlink is now crucial to intercepting Russian air raids on Ukrainian cities.
“Through their actions, our partners are depriving us of one of the few means of protecting the country against jet-powered Shahed drones,” said Beskrestnov, a leading drone expert.
Among European politicians, Poland’s foreign minister responded by asking Musk whether he was once again engaging in politics, and reminding him that his European customers were watching him closely.
Naturally, the Russians are delighted.
However, the change will not affect Ukrainian long-range air strikes. The drones carrying them out are not guided using Starlink, so the restrictions will not affect their operations.
Hey, @elonmusk, big man, are you playing politics with your products again? As your European customers, we are watching you. https://t.co/T385xpUEUu
The Russians are making a mockery of Trump’s energy ceasefire. The US president characteristically announced with great fanfare that he had brokered an energy ceasefire between Ukraine and Russia.
Although the Russian army did not observe it for a single day, the Ukrainians stayed away from Russian refineries for 48 hours. That is no longer the case after today, but before then the Russians carried out a massive air raid, including on the capital.
They used as many as 39 ballistic missiles and more than 100 drones. Since Trump had earlier deprived Ukraine of effective air defence in the form of missiles for Patriot systems, it has nothing with which to defend itself against such attacks. As a result, the Russians struck three Kyiv thermal power plants on Wednesday.
Overnight, the Russians used 39 ballistic missiles and more than 120 attack drones and loitering munitions against our energy and critical infrastructure in Kyiv, the Kyiv region, and Kharkiv. A targeted Russian ballistic missile strike specifically against energy infrastructure…
— Volodymyr Zelenskyy / Володимир Зеленський (@ZelenskyyUa) October 14, 2026
The Kremlin does not even conceal that a Trump ceasefire means nothing to it.
“Tonight, the Armed Forces of the Russian Federation carried out a massive strike using precision-guided weapons and long-range strike drones against communications and energy infrastructure facilities in Kyiv, Kyiv region and Kharkiv region,” said a statement by the Russian defence ministry.
It also included a list of the power plants hit. The Russians boasted that they had struck six of them. For each one, they used the formula that it was “supplying electricity to military logistics facilities, weapons depots and military equipment”.
Mike Pence, who served as Trump’s vice-president during his first term, wrote that Putin did not want peace but Ukraine, and that Trump should impose harsh sanctions rather than strike a deal with Putin. None of this, however, will happen.
Putin doesn’t want peace. Putin wants Ukraine. Enough is enough.
President Trump should rescind the diesel deal with Russia and return to the strong policies of our four years in the White House; use the Lindsey Graham Sanctioning Russia Act to impose harsh sanctions on any… pic.twitter.com/uw11mEkh0x
The Russians are pushing towards Dobropillia. All analysts agree on this. Their advance is slow, but persistent. It is enabled by the mass deployment of Russian soldiers.
The Kremlin has currently concentrated its largest number of forces in this sector. It therefore appears that the capture of Dobropillia is the Russian command’s main objective in these weeks.
“The Russians here have a seemingly endless pool of manpower and a clear numerical advantage, allowing them to significantly increase the flow of infiltrators and thus the likelihood that some will penetrate Ukrainian defences,” wrote the OSINT account Playfra, whose map can be found below. However, the price of the unceasing waves of infantry is, according to it, “colossal losses” on the Russian side.
Dobropillia sector.
In the same way, this sector is also worsening.
The Russians have a seemingly infinite manpower pool here and a clear numerical advantage, which allows them to significantly increase the flow of infiltrators and, as such, the chance of some passing through… https://t.co/BoiqRuCRs5pic.twitter.com/pKBIhHZW3d
French analyst Clément Molin published a time-lapse map of the past four months based on DeepStateUA data. Its latest version is not the most accurate and does not correspond to other sources, but it illustrates the slow pace of the Russian advance.
During the last 4 months, Russia 🇷🇺 made a slow but steady progress in the direction of Dobropilla
Russian forces continue to advance and capture villages and small towns south of Dobropilla. Shevchenko and Bilytske fell, Russian forces are now attacking Dobropilla from the… pic.twitter.com/mTDRo4DcPf
The Polish analytical account Thorkill examined the situation north-east of Dobropillia in greater detail. It sees a significant Russian advance there.
It bases this assessment on Sentinel satellite data which, it said, showed no signs of Russian bombardment in the areas of Zolotyi Kolodiaz, Novotroitske and Andriivka — an indication, in its view, that they are under Russian army control.
Sytuacja w rejonie: Zołote Kołodiazi – Nowotroickie – Andrivka (Dobropole).
Mniej więcej miesiąc temu we wpisie o bardzo dużej liczbie FAB-ów z modułami UMPK zrzucanych przez rus w rejonie Andrivki, sygnalizowałem że sytuacja 1 Korpusu "Azowa" GN na płn od Dobropola jest dużo… pic.twitter.com/KihWWAuI7u
Playfra sees the situation far less negatively. It did confirm Russian infiltration in Andriivka, which lies as much as 20 km behind the notional front line, but said that around eight Russian groups of two to four soldiers were moving throughout the area and did not pose a threat.
For easier orientation: Zolotyi Kolodiaz is at the tip of the green salient on Playfra’s map. On Thorkill’s map above, it is located in the lower centre, within the red area.
The two depictions of the situation therefore differ radically. However, there is agreement that the Russians are currently exerting the greatest pressure near Dobropillia and are advancing slowly.
Dobropillia direction.
The situation is quite peculiar tactically:
South, after the clearing conducted since August, some Russian groups still remain in the dotted square, mixed with some new infiltrators, but they aren't significant.
The 3rd Army Corps reported on the next phase of Operation Vivaldi, but we learned nothing new. Andrii Biletskyi, the commander of what is perhaps the strongest component of Ukraine’s army, published a new video confirming the liberation of another 101 square kms north of Lyman. Since the start of Operation Vivaldi, this brings the total to 277 square km.
Четвертий сезон операції «Вівальді»: Білецький оголосив про взяття ще 101 км²
Третій армійський корпус та придані підрозділи звільнили ще три населені пункти — Зелену Долину, Липове й Колодязі, — повідомив у своєму зверненні бригадний генерал Андрій Білецький. Протягом… pic.twitter.com/0Msxrau6yw
The Ukrainian project DeepStateUA, which is close to the army and respects the operational silence it has declared, also published its map of the area.
The latest version includes the liberation of the villages of Kolodiazi, Zelena Dolyna and Lypove. However, this is not new information but merely reflects changes that have been discussed since August.
Russian sources, especially Rybar, have also repeatedly reported that fighting is actually taking place further east. According to them, Ukrainian soldiers have already reached several locations, including the village of Terny on the Zherebets River. This area is marked red on DeepStateUA’s map, indicating that it is under Russian control.
Poland’s Thorkill has more recent data. Over the weekend, it published a map consistent with Rybar’s claims that Ukrainians had reached the Zherebets near Terny and further north.
Sytuacja w rejonie Nowego (Łyman), część IV.
Po blisko miesięcznej przerwie wczoraj w Donbasie była w końcu bezchmurna pogoda i można było przyjrzeć się na Sentinelu co się mniej więcej dzieje na tych najciekawszych odcinkach frontu. Jeżeli chodzi o rejon na płn od Łymanu -… pic.twitter.com/2yods3H3Yk
A Ukrainian drone pursued and caught up with a Russian Mi-28 attack helicopter in Kharkiv region. The Russians were on a combat mission; the footage clearly shows a missile being launched. The outcome of the attack is not yet known.
Ukraine's 115th Mechanized Brigade "Aliens" struck a Russian Mi-28 with drone, downing it pic.twitter.com/wefYKaMDk4
The following photographs are related to the previous video. The image on the left appeared on the Russian internet at the beginning of the month, described as the result of an FPV drone strike. It is currently unknown whether this is the same incident or another, as yet unidentified one.
In early October, Russian sources published photos showing damage to the right side of a Mi-28 attack helicopter, specifically the pneumatic emergency escape ladder just below the pilot’s cockpit, claiming it had been hit by an FPV drone.
A 12.7mm US heavy machine gun being fired. The close-up footage shows what the trigger looks like, but above all reveals the tactics for using the weapon. The machine gunner fires a short burst at Russian positions, then reports over the radio that the task has been completed.
A confirming “plus, plus” is heard twice from the other end — “plus” is used in radio communication to confirm receipt of a message — after which the soldier covers the machine-gun position with a camouflage net and goes into hiding to avoid being detected by Russian drones.
Ukrainian soldier supresses Russian assault with a Browning M2 from WW2.
Only the Ukrainian version of events is known about the footage below. It shows civilians from the Kupiansk area attempting to move to safety. However, they are struck by fire while on the move — the number of casualties is unknown and they cannot be seen in the footage.
According to the Khartiia unit, which published the video, the Russian army subjected the group to artillery and mortar fire. The claim cannot be verified. In any case, it illustrates that it is a mistake to remain in areas affected by fighting.
Цивільні – живий щит росіян, а потім – їхня мішень для інформаційної провокації.
У Купʼянську вранці 13 жовтня росіяни прикривалися мирними жителями, виводячи їх до труби газогону, й самі ж накрили групу мінометним та артилерійським вогнем. Серед людей були жінки та дитина. pic.twitter.com/lB6AGd7fFk
By Tuesday (13 October), Russia had verifiably lost 24,192 pieces of heavy equipment (24,170 on Monday, 5 October). Of these, 19,155 (19,133) were destroyed by Ukrainians, 1,002 (1,003) were damaged, 1,194 (1,194) were abandoned by their crews, and 2,841 (2,840) were captured by the Ukrainian army. This includes 4,453 (4,452) tanks, of which 3,358 (3,357) were destroyed in combat.
Ukraine lost 12,259 (12,238) pieces of equipment, of which 9,652 (9,633) were destroyed, 713 (711) damaged, 695 (695) abandoned and 1,199 (1,199) captured. This includes 1,471 (1,466) tanks, of which 1,131 (1,126) were destroyed in combat.
Note: Neither side regularly reports on its own dead or destroyed equipment. Ukraine publishes daily figures for Russian casualties and destroyed equipment, which cannot be independently verified. This overview uses data from the Oryx project, which has compiled a list of equipment losses documented exclusively by photographs since the start of the war.
The European Union has continued its scientific cooperation with Israeli firms and institutions implicated in genocide and apartheid throughout Israel’s three-year old assault on Gaza. Such complicity must stop.
Israel has been associated with the €95.5bn Horizon Europe research and innovation programme (2021-2027), and, according to the European Commission’s detailed Horizon dashboard, the EU’s net contribution to Israel amounts to €1.02bn.
While much of the funding supports legitimate research, the programme also channels substantial resources to Israeli universities and companies, some closely connected to Israel’s military and security apparatus.
Pointing to just such EU-Israel collaboration, Francesca Albanese’s UN report “From economy of occupation to economy of genocide” published last year, estimated EU research funding to Israeli entities at over €2.12bn since 2014.
Horizon Europe funds collaborative projects and European Research Council grants.
But it is the European Innovation Council (EIC) and schemes which include the EIC Accelerator, the EIC STEP Scale-up and the Scaleup Europe Fund which are especially relevant to the question of EU complicity in Israel’s ongoing assault on Gaza.
Horizon Europe is formally limited to civilian research, but Israeli companies with links to Israel’s military and security establishment have received funding through these schemes.
In March 2026, for example, members of the European Parliament tabled a written parliamentary question asking the European Commission specifically about such companies including Sightec, an Israeli drone-navigation firm that received almost €2.5m through the EIC Accelerator and whose chief executive has described its technology as “combat-proven and deployed on over 3,000 drones in critical missions”.
The issue is not confined to overtly military applications. EU-funded civilian technologies can also serve Israel’s settler-colonial project.
Should European public money finance, for example, orange-harvesting robots that help Israel manage what it euphemistically calls a “labour shortage” in settlements built on occupied Palestinian land?
The EIC also goes beyond grants. Through the EIC fund, the EU can take equity in companies it supports; the new Scaleup Europe Fund is explicitly designed to make direct equity investments in strategic technology firms, and is open to companies based in countries associated with Pillar III of Horizon Europe, including Israel.
The EU can therefore not only subsidise Israeli technology firms but also acquire a financial stake in them and potentially profit from their future growth.
And it could get worse.
The EIC’s 2026 work programme expands the type of projects that can be funded by including ‘dual use’ applications that are both civilian and military.
This opens the door for the EU to fund nuclear-related Israeli projects although Israel is not a member of the European Atomic Energy community (Euratom).
But none of this is inevitable.
Next EU budget and credibility at stake
Israel’s association with the current Horizon Europe programme runs only until 2027 and the shape and scale of the EU’s next Horizon programme will be decided during ongoing negotiations on the bloc’s seven-year Multiannual Financial Framework (MFF).
There are also clear signs that Israel is likely to participate in the next Horizon programme (2028-2034).
Only a few weeks ago, Ekaterina Zaharieva, European commissioner for startups, research and innovation, met with the head of the Israel Space Agency, Shimrit Mama.
European Commission president Ursula von der Leyen and her team must ask themselves if the EU should be building an innovation architecture in which Israeli firms and state institutions, which are already deeply integrated into Israel’s military-industrial ecosystem, could receive European support for technologies explicitly framed as dual-use or defence-related.
Are they comfortable with funding companies that help develop the type of violent technologies described in the award-winning documentary NAZA, which exposes the systems and AI technology used during the military campaign in Gaza?
Audience members hold signs supporting Yuval Abraham and Rachel Szor’s documentary Naza after it wins the European Film Audience Award at the 74th San Sebastian Film Festival in Spain, 26 September 2026 (Source: EPA/JUAN HERRERO)
Last year, under public pressure, von der Leyen proposed a partial suspension of Israel’s participation in Horizon Europe by specifically excluding Israeli entities from new EIC Accelerator grants and investment support.
The proposal was modest: it would have affected future funding only, not existing agreements, and covered roughly 20 percent of EU financial flows to Israel under the programme.
It required a qualified majority in the Council but did not secure the necessary votes. It is, however, technically “still on the table”, according to commissioner Zaharieva.
Nobel Peace Prize winner Navi Pillay concluded in 2025 that Israel’s actions have “consistently pointed toward a singular, harrowing objective – the destruction of Palestinian life in Gaza”.
The EU has done little so far to stop the genocide in Gaza and ethnic cleansing in the occupied West Bank, and arguably – through trade and weapons’ exports – is actually contributing to it.
Now the EU faces a clear choice. It can continue to fund, co-invest in and deepen research ties with an Israeli innovation sector increasingly oriented towards dual-use and defence technologies.
Or it can stand with the winner of the 2026 Nobel Peace Prize, draw a line and decide that there will be no Israeli participation in the next Horizon programme, no EU equity in Israeli firms, and no public money for technologies that may be used to sustain genocide, occupation, surveillance and war.
The credibility of the EU and the values it proclaims depends on the choice it makes.
The Irish text, known in Brussels as the negobox, keeps all three of the commission’s borrowing programmes that sit outside the budget’s normal limits: Catalyst Europe, a €150bn lending facility; a crisis mechanism of up to €395bn for major unforeseen shocks; and support for Ukraine of up to €100bn.
Add loans for defence and lending to other non-EU countries and, by our estimates, joint borrowing could still equal around 44 per cent of the new budget, about €800bn at current prices, up from 41 per cent under the Commission’s proposal. The budget shrinks, but the borrowing hardly changes.
Ireland’s proposed budget is too small for Europe’s mounting common challenges, and its borrowing approach is too ad hoc and risky.
Excluding the distorting effects of NextGenerationEU (NGEU), the Covid recovery fund, the Commission’s budget proposal is already far smaller than the headline figures suggest, and Ireland’s proposal would make it smaller still.
That matters because, as the Draghi report argued, Europe’s shared challenges such as Ukraine, rearmament and competitiveness require European public goods because no single member state captures their full benefits.
A budget worth just over one percent of the EU’s gross national income (GNI) is a poor match for that responsibility.
By comparison, total government expenditure across EU countries comes to close to half of their combined GNI. Keeping most fiscal capacity at national level, while expecting such a modest EU budget to finance increasingly vital continental priorities, is a bad use of public resources.
A stronger common budget needs more of its own revenue, at least what the Commission proposes in its Own Resources Decision, which Parliament broadly supports and which would raise nearly €60bn extra a year.
The Irish plan’s acceptance of five new resources is encouraging. But it has to survive the negotiations, and the details of the final reform will decide whether it means anything.
The Council’s approach to common borrowing remains haphazard, lacking a permanent framework and relying on crisis-driven compromises. Governments may not like it, but a more European approach is coming, and the €800bn is likely to grow.
And a successor to SAFE, the EU’s defence loan scheme, is widely expected, since €150bn has proved far from enough for Europe’s rearmament.
France has just shown what it costs to borrow alone. Its yields recently hit a 24-year high, and the state now pays more to borrow than some major French companies. Sharing the effort through the common budget, including prudent joint borrowing, would help spread that risk.
Yet Europe has no clear, sustainable plan for borrowing. To date, EU governments have reluctantly signed up to each new borrowing instrument and called it an exception.
European borrowing capacity has been assembled one crisis at a time, starting with the euro area crisis and accelerating since the pandemic.
NGEU was accepted by fiscally cautious states as a one-off decision to deal with the Covid-19 emergency. Then the war in Ukraine and the need to fund rearmament produced new exceptions.
This year, EU governments used enhanced cooperation, a procedure that lets a subset of member states go ahead without the rest, to approve the €90bn Ukraine Support Loan, the EU’s largest foreign loan ever.
For defence, they reached for Article 122, the treaties’ emergency clause, to set up SAFE. Parliament, which felt sidelined, decided to sue the Council before the European Court of Justice.
There is a catch though.
These exceptional programmes are guaranteed by the so-called budget headroom, the margin between the EU’s revenue ceiling and the spending limits in the seven-year budget, rather than by money set aside in advance.
In barely five years, headroom-backed exposure has climbed to €681bn (see Figure 1), 82 percent of all EU debt.
The European Court of Auditors has warned that if a Ukraine loan guaranteed this way goes bad, future EU budgets, and the national contributions that fund them, would have to cover the loss.
Frugals vs Friends of Cohesion
EU capitals remain divided over the new budget and over joint borrowing. Net contributors, sometimes referred to as the Frugal Six, want deep cuts in the commission’s proposal, argue that new common borrowing is not the solution and have misgivings about the creation of new own resources.
By contrast, a group of sixteen southern and eastern countries, that call themselves the “Friends of Cohesion”, are much more open to joint borrowing and back an approach closer to the Commission and Parliament on the budget and own resources.
Ireland’s plan largely reflects the influence of the frugal countries, yet one diplomat has already dismissed it as “not even close to a landing zone.”
Europe needs an ambitious budget, backed by at least the Commission’s proposed new own resources, so it relies less on national contributions based on GNI. Joint borrowing should become a permanent, predictable part of it, with safeguards.
First, it should fund loans, not grants, as the Commission suggests. Second, riskier exposures, especially to non-EU countries, should be at least partly backed by money set aside in advance, as the Court of Auditors recommends.
Where it makes sense, the headroom guarantee could be topped up with national guarantees in proportion to each country’s size, as under SURE, and like-minded partners outside the EU could sometimes take part.
Stronger capital at institutions such as the EIB, or at any future defence-financing vehicle, would also let Europe borrow more together without putting its creditworthiness at risk.
Governments should also consider deferring repayment of the NGEU bonds, as the Draghi report suggested, especially if the own-resources reform falls short. It would protect priority spending when it is needed most.
Sustained joint borrowing brings a bonus: more common safe assets in euros, which strengthens the euro’s international role. The demand is already there.
Wobbles in US bond markets, which partly reflect doubts about America’s fiscal health, its reliability as a partner and the dollar’s safe-haven status, give the euro an opening.
But it can only take it if EU governments put their own fiscal houses in order.
Ongoing tensions in the French bond market provide a clear warning. Putting France’s finances on a sustainable path would do more than reassure markets about the euro. It would restore French debt as a safe euro asset.
EU leaders meet on Thursday and Friday in Brussels. Whatever they discuss (and later decide) on the budget, Europe should keep borrowing together, and in large amounts.
The task now is to give that borrowing a coherent plan: a permanent framework, money set aside in advance and safeguards that cautious capitals can accept.
Belgium’s foreign minister has called on the EU to deepen its economic, trade, and defence ties with Turkey, amid concerns from Ankara that it risks being shut out of the bloc’s new rules on industrial supply chains and multi-billion euro defence procurement scheme.
Speaking at a Turkey-EU business forum in Brussels on Tuesday (13 October), Belgian foreign minister Maxime Pévot said that European manufacturers were increasingly looking for reliable partners closer to home as they seek to reduce their reliance on Chinese inputs.
“We should make values of its proximity, particularly in sectors where Europe needs to reduce strategic dependencies,” he added.
“Our economic relationship should no longer be limited to buying and selling goods. We should also be developing, producing, and investing together,” he said.
For his part, following talks with Ankara’s trade minister, Ömer Bolat, EU trade commissioner Maroš Šefčovič told reporters that the two sides had agreed on reforms to Turkey’s import control system to make the system easier for EU exporters to use and a mutual recognition pact on trusted traders.
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Find the full transcript below:
Two ships have been hit by drones in Bulgarian waters in the Black Sea on Monday. Several other ships have been targeted in recent weeks, at a time when Russia is intensifying its attacks on Ukraine.
So, at what point does a hybrid attack become an attack on Nato? On Monday, two ships were hit by drones in the Bulgarian economic zone in the Black Sea.
One of them sank, with 11 crew members missing. The second vessel, which belonged to Ukraine, was damaged but did not sink, and all 15 people on board were rescued.
A week earlier, two other cargo ships had been attacked by drones in the same area, killing 10 people. And on 5 October, a Turkish cargo ship carrying grain was sunk by drones shortly after leaving Ukraine.
There is currently no evidence proving that Russia was behind these attacks, and Moscow has not claimed responsibility.
But that did not stop Bulgarian Prime Minister Roumen Radev from summoning Russia’s ambassador. Radev said that, while there was no conclusive evidence, the outcome of these attacks clearly benefited Russia more than anyone else.
Russia’s ambassador to Bulgaria, Eleonora Mitrofanova, said she had received no information from the Russian defence ministry about the attacks. She also suggested that they could have been provocations carried out by a third party.
And that uncertainty is important, because it makes it much harder for Nato countries to decide when an incident should be treated as an attack.
So how do Europeans cope with these attacks? We’ve already seen several Russian drones end up inside EU territory in recent months. And in some cases, they have been clearly identified.
Take the Russian drone that crashed on a residential building in the Romanian city of Galați in May and injured two people. Or the two drones found at Leipzig airport in Germany this summer, charged with explosives. They were all identified as Russian.
So far, however, the response has consisted mainly of diplomatic measures and political statements. Neither Bulgaria nor Germany has requested formal consultations under Article 4 of the Nato treaty.
Article 4 allows a Nato member to ask for consultations when it believes its territorial integrity, political independence or security is threatened.
Bulgarian Prime Minister Radev has spoken with Nato Secretary General Mark Rutte about the incidents, which are serious enough to be discussed at Nato level. But Bulgaria has not gone as far as triggering Article 4.
One reason is precisely the ambiguity surrounding all these drone attacks: who is controlling them, whether they were deliberately sent into EU territory, and whether they were jammed or diverted.
But if an attack were clearly attributed to Russia, how would Nato respond? That’s one of the questions currently being discussed within the alliance.
On Monday, Nato’s top military commander, US General Alexus Grynkewich, said he did not believe a conflict between Russia and Nato was imminent or inevitable.
But he also presented what Nato calls a “theory of victory”: a plan designed to ensure that the alliance could rapidly neutralise an enemy attacking one of its members.
The strategy rests on several pillars. One is establishing clear red lines that an adversary should not cross. Another is investing in new military technologies, with drones playing a central role. And the third is maintaining the ability and readiness to fight at short notice.
The idea is not only to be able to respond if a direct attack happens, but also to deter Russia from continuing what Nato describes as hybrid activities against its members.
Last month, a coalition of economists, politicians and AI experts released a report entitled Transformative AI Strategy for Europe. It provides yet more disturbing analysis of Europe’s deep dependency on overseas providers of essential AI. The concept of ‘Transformational AI’ is clearly gaining currency among policy elites as are the dangers it represents.
Co-signatory of the report, ex vice president of the European Commission, Margaret Vestager rightly comments: “We cannot allow Europe to become a playground for foreign powers. Our citizens are already bearing the economic and social consequences of decisions taken elsewhere. AI will accelerate this development, transforming our personal lives and relations, learning and jobs at an unprecedented pace.”
Unrelated to the report, European Central Bank chair Christine Lagarde has also said: “A withdrawal of access [to AI models], or a change in its terms, would … reach every sector at once … That is leverage of a kind no trade partner has ever held over Europe, and it could be used in any negotiation, on tariffs or on digital taxes, for example.”
This is going to be expensive
Yet the solutions proposed by this assembly of experts would exacerbate, not mitigate, the control over European economy and society currently wielded by a handful of ultra-dominant, mainly US-headquartered, corporations.
Two approaches are outlined by the signatories of the report. One is to invest and build European frontier models to compete and participate as equals in the transformation AI economy. This, however, is almost immediately written off as too costly and too high risk to undertake.
The second, strongly recommended route, suggests trading power and land for access to frontier models – Europe will fast-track Big Tech build out on European soil in exchange for “guaranteed” preferential access to their frontier models.
This is little more than capitulation to the dominance of that handful of mega corporations under the control of foreign regimes. It is ironically resonant, in times when we speak of frontier models, of Native Americans trading land for a few trinkets – and we know how well that worked out.
Naïve expectation
It is naïve in the extreme to expect to negotiate lasting privileged access to frontier models in return for power and land in Europe. For one thing – Big Tech already has this access. Europe has a weak hand if trying to extract conditions in return for inward investment to build capacity that it needs.
In addition, current behaviours suggest that corporations and nation states already appreciate and are leveraging the economic and political power that possession of leading frontier models confers. Export restrictions on latest models are already in place, as are mark-ups of 20-50 percent to run models within defined jurisdictional boundaries, like EU clouds.
This clearly illustrates that OpenAI, and surely others, are keeping the best models to use internally. It is therefore inconceivable that Europe, or anyone, will really be able to negotiate access to the true frontier – we would be paying more for a worse model. This is not how you get ahead.
Surrender is not an option
Europe needs sovereign capacity and models to benefit from, rather than become subject to, transformational AI. Europe does not have to accept the Big Tech narrative on what or where the frontier is. Deciding for ourselves how AI can and should be deployed to have the most beneficial impact and best support European values is within our control and is our responsibility.
Regulation gets a bad rap, but one reason we have regulation is to enforce the values we share as Europeans. We care about product safety, fairness, and personal freedom. We do not accept intellectual property theft at massive scale in the name of technological innovation.
We may never catch-up to the US or Chinese frontier Large Language Models, but perhaps we should not blindly accept this as the right race to run. Asking ourselves how can AI positively transform what we already value in Europe must be the first question: what do we really want AI for? Then, perhaps Europe can work on its own large but focused AI models to leapfrog and create AI transformation that matters to us and conforms to our ideals and values.
First, stop digging!
Action is clearly needed, and urgently. But the first step cannot be to negotiate away our assets be they land, power, data or values as part of a surrender to the status quo ante bellum.
The saying goes that when you find yourself in a hole (as Europe most surely is) stop digging. That means, as of now, stop giving new workloads to overseas AI and cloud giants by default.
We already have European alternatives for the majority of cloud services, and for AI, there are both European and open weight models that run with European providers – why are we not using them? Where there are gaps, we can develop bespoke European solutions with European providers. This creates reliable demand for homegrown AI models and compute capacity. It allows sovereign models to train and improve on sovereign data. Crucially, it deprives oversees models from using our data, resources and energy to further cement their control and dominance.
Buy or build European
Nudging public procurement towards European players grows the market and creates reliable demand against which venture capital and corporate funds can invest.
Only by flipping the paradigm – so that the default action is to consider how can we use or create a European solution first – can we fully prepare for the AI transformation and maintain our sovereign control.
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