European Union negotiators have reached a provisional agreement to revise the rules governing the bloc’s carbon market, increasing the number of emissions allowances that can remain in reserve before being permanently cancelled.

The agreement, reached by the Council and European Parliament on 20th October and announced the following day, raises the invalidation threshold of the EU Emissions Trading System’s market stability reserve from 400 million to 700 million allowances.

The compromise reached by EU negotiators follows months of pressure from energy-intensive industries concerned about carbon prices, electricity costs and competition from manufacturers operating under less restrictive environmental regimes.

The measure requires formal approval before entering into force and forms part of a wider review of the EU’s principal carbon-pricing mechanism.

A larger reserve for future market disruptions

Established in 2019, the market stability reserve was designed to address the accumulation of surplus emissions allowances that had weakened the effectiveness of Europe’s carbon market.

Under the Emissions Trading System, companies in covered sectors must surrender allowances corresponding to their greenhouse gas emissions. The total quantity available is progressively reduced, creating a financial incentive to cut emissions.

The reserve adjusts the supply of allowances entering the market, withdrawing them when there is a substantial surplus and releasing them under specified conditions when supply becomes scarce.

Existing rules also provide for the permanent cancellation of allowances held above a threshold of 400 million.

Under the new agreement, that threshold would increase to 700 million, allowing a larger stock to remain available for potential future release.

The change does not automatically introduce 300 million additional allowances into circulation. Releases would continue to depend on the reserve’s operating rules and market conditions.

According to the Council, more than three billion allowances have been invalidated since the mechanism began operating in 2023.

The Commission initially proposed ending automatic invalidation indefinitely, while the Council’s September negotiating position envisaged a temporary suspension followed by a higher threshold.

The compromise retains invalidation but increases the amount protected from cancellation.

Industry competitiveness enters climate negotiations

The agreement follows growing concern about the cumulative cost of European climate regulation, particularly for steelmaking, chemicals, cement and other energy-intensive sectors. Manufacturers have warned that carbon costs, combined with relatively expensive electricity and industrial gas, complicate investment decisions and weaken their ability to compete internationally.

Brussels must also consider the consequences of production shifting to jurisdictions with lower emissions-related costs, a phenomenon known as carbon leakage. Earlier this year, EU Today examined the Commission’s consideration of changes to industrial protections under the ETS, including the relationship between free allowances and the Carbon Border Adjustment Mechanism.

The latest reserve agreement does not directly change the allocation of free allowances, the emissions cap or the obligations imposed on individual industrial installations. Its principal effect would be to preserve a larger buffer that could become available if future market conditions trigger the release mechanism.

For manufacturers planning investments extending into the 2030s, the availability of allowances and the future trajectory of carbon prices influence production costs and the commercial case for decarbonisation technologies.

Carbon market figures reveal changing conditions

The European Commission reported in May that the total number of allowances in circulation during 2025 stood at approximately 1.023 billion.

Its annual market stability reserve calculation provided for approximately 190.5 million allowances to be withdrawn from auctions between September 2026 and August 2027.

These withdrawals reflect the existing mechanism for reducing market surpluses. The proposed higher invalidation threshold concerns how many allowances can subsequently remain in reserve rather than being cancelled.

The overall emissions cap will continue to decline under the legislation already governing the ETS.

Consequently, preserving a larger reserve does not remove the long-term constraint on emissions or guarantee lower carbon prices for European industry.

The agreement also concerns the established ETS covering power generation, industry and certain other sectors, rather than the separate ETS2 regime for emissions associated with road transport and buildings.

The latter has generated its own political controversy, as EU Today reported following the October European Council summit.

Broader ETS reform remains unresolved

The Council and Parliament have agreed that the question of gradually reducing the invalidation threshold should be considered during the broader ETS review.

That exercise will address the carbon market’s operation over a longer period, when the declining supply of allowances could create tighter conditions.

The present agreement therefore provides an adjustment to the reserve mechanism without reopening the entire emissions trading framework. Following legal and technical finalisation, the provisional deal must be endorsed by both institutions and formally adopted.

The new 700 million threshold would apply after the legislation takes effect, while the larger review of the ETS continues through the EU legislative process.

The European Union has taken a significant step towards revising its digital regulatory framework after member states agreed proposals to amend the General Data Protection Regulation (GDPR), simplify cookie consent requirements and overhaul cybersecurity reporting obligations.

The Council of the European Union adopted its negotiating position on Wednesday, 21st October, clearing the way for negotiations with the European Parliament once MEPs establish their position.

The measures form part of the European Commission’s Digital Omnibus package, introduced in November 2025, and represent one of Brussels’ most substantial attempts to simplify the regulatory obligations imposed on businesses operating across the single market.

Changes to GDPR and personal data rules

The proposed reforms would modify several provisions of the GDPR, which has governed the processing of personal data across the EU since May 2018.

Rather than replacing the legislation, the Council wants to clarify existing obligations, particularly those concerning pseudonymised information, requests for access to personal data and the use of information in scientific research.

The agreed position retains the existing definition of personal data while introducing provisions intended to clarify when pseudonymised information can be linked to an identifiable individual.

Companies would also benefit from simplified procedures for handling manifestly unfounded or excessive data requests and from reduced information requirements in certain low-risk circumstances.

Another proposed change would extend the deadline for notifying authorities of personal data breaches, while establishing more consistent reporting templates across the EU.

For multinational companies, which currently navigate different interpretations of data protection obligations by national authorities, these provisions could reduce compliance costs and administrative duplication.

However, the changes have raised concerns among European privacy regulators.

In a joint opinion published in February, the European Data Protection Board and European Data Protection Supervisor warned that parts of the Commission’s original proposal could create legal uncertainty and undermine existing protections.

They were particularly concerned about proposals affecting the definition of personal data and the Commission’s potential role in determining when pseudonymised information falls outside GDPR requirements.

The Council’s decision to retain the existing definition addresses part of that debate, although the final legislative text remains subject to negotiations.

Fewer cookie banners for internet users

One of the most visible changes would affect the consent notices encountered by Europeans when visiting websites.

Under the Council’s proposal, additional categories of cookies and similar tracking technologies could be used without obtaining explicit consent, provided the relevant legal conditions are satisfied.

The proposed exemptions include technologies necessary to deliver a service, maintain device security or conduct audience measurement.

For website operators, publishers and online businesses, the changes could reduce the number of consent requests displayed to visitors and simplify technical compliance.

The current system has generated extensive legal disputes over whether consent is genuinely voluntary and whether tracking technologies collect information beyond what users have authorised.

EU Today has previously examined the enforcement of these obligations, including a Belgian court ruling concerning the legality of the advertising industry’s consent framework.

The latest proposal would not abolish consent requirements for commercial tracking or behavioural advertising. Technologies falling outside the permitted exemptions would remain subject to the applicable privacy rules.

Cybersecurity reporting and artificial intelligence

The package also addresses the growing number of reporting obligations imposed on European businesses under overlapping cybersecurity legislation.

The Commission originally proposed a single European reporting mechanism for certain data and cybersecurity incidents.

Member states have instead agreed to establish national entry points, supported by an EU-level information system and provisions for coordinating cross-border notifications.

The Council’s position would also clarify the legal grounds for certain uses of personal data in artificial intelligence systems and introduce safeguards for processing sensitive information in specified circumstances.

These provisions follow increasingly complicated disputes over the application of European privacy legislation to AI development and automated decision-making.

As EU Today reported in its coverage of a major GDPR enforcement case involving Uber, automated processing already presents substantial compliance risks for companies operating within the bloc.

Competitiveness drives regulatory reform

The Commission estimates that its wider digital simplification initiative could save European businesses up to €5 billion in administrative costs by 2029.

The initiative reflects pressure from European governments and business organisations to reduce the regulatory fragmentation that makes operating across multiple EU jurisdictions more expensive.

The Digital Omnibus is part of a broader legislative programme influenced by the competitiveness reports produced by former Italian prime ministers Enrico Letta and Mario Draghi.

Under the Council’s negotiating mandate, several existing data-related rules would also be consolidated, while provisions governing the protection of trade secrets would be strengthened.

The European Parliament must now determine its negotiating position before formal discussions between the institutions can begin. Until the legislation is agreed and adopted, existing GDPR, cookie consent and cybersecurity requirements remain in force.

The European Union has moved to reduce the administrative burden imposed on smaller businesses by its packaging legislation, agreeing a negotiating position that would relax requirements for companies selling limited quantities of packaged goods in other member states.

The Council adopted its position on 21st October, proposing an exemption from the obligation to appoint an authorised representative in another EU country when the amount of packaging placed on that country’s market remains below one tonne per calendar year.

The measure addresses complaints from small and medium-sized enterprises that the Packaging and Packaging Waste Regulation, which became applicable on 12th August 2026, creates unnecessary expenses for companies engaged in relatively modest volumes of cross-border commerce.

The proposal forms part of the EU’s eighth legislative simplification package and will now be negotiated with the European Parliament.

Cross-border compliance costs under scrutiny

Under the Packaging and Packaging Waste Regulation, businesses placing packaging or packaged products on the European market are subject to obligations concerning waste management and extended producer responsibility.

The extended producer responsibility system requires producers to contribute to the management of waste generated by products and packaging placed on the market.

For businesses operating across borders, the framework also includes requirements concerning authorised representatives in member states where producers are not established.

These representatives perform specified compliance functions and provide a point of contact for national authorities.

The system can create substantial administrative obligations for businesses trading in several countries, particularly when the quantity of packaging supplied to individual markets is limited.

A small Belgian retailer, for example, may sell products to customers in Germany, France and the Netherlands without maintaining physical operations in those countries.

The requirement to arrange representation separately across different markets can add compliance costs regardless of whether the volume of trade justifies them.

Under the Council’s proposal, eligible EU-based producers placing less than one tonne of packaging annually on another member state’s market could be exempted from appointing a representative there.

The threshold would be assessed by reference to the quantity placed on the market of the member state concerned.

However, the proposed exemption would not abolish the wider principle of extended producer responsibility or automatically release businesses from their other environmental obligations.

Packaging reform follows early implementation problems

The regulatory changes come only two months after the EU’s revised packaging framework began applying across the single market.

The legislation, Regulation (EU) 2025/40, is intended to reduce packaging waste, improve recyclability and establish more consistent requirements for products and packaging materials.

It covers an extensive range of commercial activities, including manufacturing, retail, food distribution, transport packaging and online sales.

As EU Today reported when the regulation began applying in August, the legislation introduces new requirements affecting packaging design, materials and waste prevention.

However, the practical implications for smaller firms have generated pressure for modifications.

In September, EU Today examined the emerging campaign for simplification, as business organisations questioned whether the compliance system adequately reflected the circumstances of smaller producers.

The Council’s latest agreement represents a further legislative step, replacing general calls for administrative relief with a specific negotiating position.

The Commission also issued detailed implementation guidance in June 2026 after receiving numerous questions from member states and businesses about how the regulation should be interpreted.

Safeguards and temporary exemption

The proposed exemption would not apply without conditions.

The Council’s negotiating mandate includes a safeguard allowing the relevant authorities to respond when a producer fails to comply with extended producer responsibility obligations.

It also provides for the European Commission to review the duration of the temporary suspension by 31st December 2030, ahead of its scheduled expiry in 2032.

The timetable reflects the possibility that broader reform of producer responsibility arrangements could replace the temporary measure.

The Commission is preparing a Circular Economy Act intended to address additional problems affecting Europe’s recycling and secondary raw materials markets.

That initiative could provide a more comprehensive framework for the administration of producer responsibility systems across member states.

For now, the Council has opted for a narrower intervention designed to reduce the immediate burden on smaller companies without reopening the entire packaging regulation.

Single market objectives and environmental obligations

The proposal also reflects a broader problem with European regulatory integration.

Although companies can sell goods throughout the single market, compliance requirements often remain administered through national systems, requiring businesses to deal with separate authorities and procedures.

For multinational corporations, such costs can be distributed across substantial commercial operations. For smaller exporters and online retailers, similar administrative requirements can consume a much greater proportion of turnover.

The Council argues that removing unnecessary representation requirements would support cross-border trade while preserving the objectives of European environmental legislation.

The Irish presidency will now seek agreement with the European Parliament on the proposed amendment.

Until that legislation is adopted and becomes applicable, businesses must continue to comply with the existing rules, including relevant national producer responsibility requirements.

The European Union has reached a provisional agreement on reforms to its securitisation framework, potentially allowing banks to release more capital for lending to businesses, households and infrastructure projects.

The agreement, announced on Wednesday, 21st October, follows negotiations between the Council and European Parliament over changes to prudential requirements and the regulation governing securitised financial products.

The reform package agreed by EU negotiators would reduce capital requirements for lower-risk transactions, introduce a new category of resilient securitisations and simplify administrative procedures for financial institutions and investors.

It forms part of the EU’s Savings and Investments Union initiative, which aims to channel more private capital into the European economy.

Banks offered greater flexibility

Securitisation allows banks and other lenders to combine financial assets, including mortgages, consumer credit and corporate loans, into securities that can be purchased by investors.

By transferring some of the financial risks associated with these assets, banks can reduce the amount of regulatory capital they are required to maintain against particular exposures.

This can increase their capacity to extend new loans, although it does not guarantee that additional lending will follow.

The provisional agreement would recalibrate capital requirements according to the risk of individual transactions.

Lower-risk securitisations would receive more favourable treatment, while higher capital requirements would continue to apply to riskier structures.

A new category of resilient securitisations would be introduced alongside the existing framework for simple, transparent and standardised transactions, commonly known as STS securitisations.

The agreement would also strengthen supervision of independent organisations responsible for verifying compliance with the STS criteria.

The Council said that third-party verifiers would become subject to EU-level supervision, with the aim of improving consistency across national markets.

European financial markets remain fragmented

The reforms address a long-standing concern that European banks face higher administrative and capital costs for securitisation than competitors operating under other regulatory systems.

Following the financial crisis of 2008, European authorities introduced tighter rules governing structured financial products, including restrictions intended to improve transparency and ensure that lenders retained appropriate exposure to credit risks.

The resulting framework, which began applying in 2019, strengthened investor protection but also increased compliance costs.

The European Commission proposed the latest review in June 2025, arguing that the existing arrangements had constrained the development of securitisation as a financing tool.

According to the Association for Financial Markets in Europe, approximately €252.3 billion in securitised products was issued across Europe in 2025, with €156.3 billion placed with investors.

Those figures cover the wider European market, including activity outside the EU.

Brussels regards the development of deeper financial markets as necessary to finance infrastructure, technological investment and industrial development.

As EU Today previously reported, the EU’s largest economies have also been examining proposals to strengthen supervision and reduce fragmentation across European capital markets.

Will banks lend more to businesses?

The potential benefits of securitisation are not automatic.

Research published by economists on the European Central Bank’s website in September 2026 found that banks using synthetic securitisation increased corporate lending only modestly, while also distributing more capital to shareholders.

Synthetic securitisation allows banks to transfer credit risk to investors without necessarily removing the underlying loans from their balance sheets.

The researchers found that a one per cent increase in synthetic securitisation issuance was associated with an increase of approximately 0.02 per cent in corporate loan growth.

Their findings also indicated that banks participating in the synthetic securitisation market made greater use of capital released through these transactions to increase dividend payments.

The study suggests that easing capital requirements alone may not generate the substantial expansion in business lending envisaged by European policymakers.

Credit demand, economic conditions and banks’ commercial decisions will also influence whether the reforms produce measurable increases in investment financing.

Broader investment rules to change

The provisional agreement includes additional measures intended to encourage participation by institutional investors.

Investment limits for certain regulated funds, known as UCITS, would be increased, while targeted changes would allow insurers and reinsurers greater participation in specified synthetic securitisation transactions.

The package also seeks to facilitate securitisation arrangements used to finance infrastructure projects before they become operational.

Together, these provisions could widen the investor base and make financing structures available to a broader range of businesses and projects.

However, transferring credit exposure between banks and investors does not eliminate the underlying risk.

If borrowers default or the financial institutions providing protection encounter difficulties, losses may still emerge within the wider financial system.

European regulators will therefore have to assess whether the new classification and supervisory arrangements adequately reflect the risks of different securitisation products.

The political agreement now requires legal finalisation and formal approval by the Council and European Parliament.

The new arrangements would then form part of the EU’s wider programme to strengthen financial markets and reduce barriers to investment across the single market.

The European Commission has urged Malta to strengthen judicial independence, tackle corruption and improve protection for journalists, as a European Parliament debate exposes continuing disagreements over the country’s rule-of-law record.

The European Commission has called on Malta to accelerate judicial reforms and strengthen safeguards for journalists, nine years after the assassination of investigative reporter Daphne Caruana Galizia, as the European Parliament revisited concerns over corruption and institutional accountability on Wednesday, 21 October.

European Commissioner for Democracy, Justice, the Rule of Law and Consumer Protection Michael McGrath told MEPs in Strasbourg that Malta had made progress in certain areas but had yet to implement several outstanding recommendations concerning judicial independence, high-level corruption and media freedom.

The debate followed the controversial acquittal of businessman Yorgen Fenech, who had been accused of involvement in Caruana Galizia’s murder. Maltese prosecutors appealed the verdict in September, leaving the criminal proceedings subject to further judicial consideration.

Commission identifies continuing weaknesses

The European Commission’s 2026 Rule of Law Report, published in July, assessed Malta’s progress in reforming its justice system, anti-corruption institutions and protections for the media.

The report acknowledged certain improvements, including additional resources allocated to judicial and prosecutorial authorities.

However, it found that progress remained limited on several recommendations.

These include reducing delays in judicial proceedings, improving the investigation and prosecution of high-level corruption and ensuring greater judicial involvement in the appointment of the Chief Justice.

The Commission has also expressed concern about the effectiveness of existing anti-corruption arrangements.

Although investigations and prosecutions have increased in some areas, Brussels continues to seek a stronger record of final judgments in major corruption cases.

Court delays and pressure on judicial resources remain significant difficulties.

McGrath told Parliament that the Maltese authorities must continue implementing reforms to address these shortcomings.

Fenech acquittal intensifies accountability debate

Caruana Galizia was killed by a car bomb near her home in Bidnija on 16 October 2017.

The 53-year-old journalist had investigated corruption, money laundering and political connections involving prominent figures in Malta’s business and political establishment.

Her assassination prompted international condemnation, widespread demonstrations and investigations into the circumstances surrounding the killing.

Several men have subsequently been convicted for participating in the murder or supplying the explosives.

However, the criminal proceedings concerning the alleged commissioning of the assassination have remained contentious.

On 2 September 2026, a nine-member jury acquitted businessman Yorgen Fenech of complicity in the murder and criminal association. The verdict was reached by eight votes to one.

Fenech had denied ordering or financing the killing.

The acquittal prompted criticism from Caruana Galizia’s family and organisations campaigning for press freedom.

On 22 September, Malta’s Attorney General formally appealed the verdict, challenging legal decisions made during the trial.

The appeal does not overturn Fenech’s acquittal or establish criminal responsibility.

The Court of Criminal Appeal must determine whether the legal grounds presented justify further proceedings, potentially including a retrial.

The criminal case remains separate from the broader political debate over Malta’s institutional reforms.

Maltese MEPs clash in Strasbourg

Wednesday’s parliamentary debate exposed sharp disagreements between representatives of Malta’s opposition Nationalist Party and governing Labour Party.

Nationalist MEPs Peter Agius and David Casa criticised the authorities’ record on corruption and institutional accountability.

Agius argued that repeated European Commission assessments had failed to produce sufficient improvements and questioned whether Malta’s institutions were effectively addressing allegations of wrongdoing.

Casa referred to the findings of the independent public inquiry into Caruana Galizia’s assassination, which concluded in 2021 that the state had contributed to circumstances in which a climate of impunity enabled the killing.

He argued that significant recommendations arising from that inquiry remained outstanding.

Labour MEP Alex Agius Saliba rejected the criticism, maintaining that Malta had implemented reforms and that its judicial institutions should be allowed to perform their functions independently.

He pointed to the prosecution’s appeal against Fenech’s acquittal as evidence that the judicial process was continuing.

Labour MEP Thomas Bajada concentrated on the protection of journalists and the need to counter misinformation while preserving independent reporting.

The disagreements subsequently prompted a response from Maltese Prime Minister Robert Abela, who accused opposition MEPs of damaging Malta’s reputation through their interventions.

Protection of journalists remains unfinished

Media freedom featured prominently in the Commission’s concerns.

Malta has introduced legislation addressing certain abusive legal proceedings against journalists, including transposing EU protections against strategic lawsuits intended to discourage public participation.

However, the existing measures principally concern civil proceedings with cross-border implications.

The Commission has urged Malta to extend comparable protections to domestic cases.

Other concerns include journalists’ access to official information, protection from intimidation and the need for more comprehensive legislative safeguards.

McGrath indicated that the Maltese government intended to present additional media legislation in the coming weeks.

The Commission has called for consultations with journalists, media organisations and civil society before the measures are adopted.

European institutions are also examining Malta’s implementation of wider EU requirements under the European Media Freedom Act.

Further pressure for reform

The European Parliament’s proceedings form part of the continued scrutiny of Malta’s institutional record following Caruana Galizia’s assassination.

The Commission’s annual rule-of-law assessments provide a mechanism for identifying outstanding problems and monitoring governments’ responses.

However, the implementation of many recommendations remains the responsibility of national authorities.

For Malta, the immediate issues concern the government’s promised media legislation, outstanding judicial reforms and the progression of the appeal in the Fenech case.

The Commission has made clear that further improvements are required, while the Maltese government maintains that substantial institutional changes have already been introduced.

The next assessment will depend on legislative measures actually adopted, their implementation and progress through the relevant judicial proceedings.

Party given additional penalty by Electoral Commission for not paying original fine on time

Reform UK has been fined more than £2,000 for failing to declare it was the publisher of campaign material seen by voters – including an additional penalty for failing to pay on time.

Nigel Farage’s party was sanctioned by the Electoral Commission after four items of elections material were missing an “imprint” – a declaration of the publisher so voters know who has paid for the promotional message.

Brussels (Brussels Morning Newspaper) October 21, 2026 – The European Commission has opened formal proceedings to assess whether Booking.com may have breached the Digital Services Act (DSA) by failing to diligently assess and effectively mitigate risks related to … Read more

European Commission calls accommodation website’s approach to fraudulent listings and phishing scams as ‘absolutely substandard’

EU regulators have opened an investigation into Booking.com, alleging that the accommodation website has not done enough to protect consumers from fake listings and scams.

The European Commission, which regulates the world’s biggest tech companies operating in the EU, said Booking.com may have breached the EU’s Digital Services Act (DSA) with its “absolutely substandard” approach to tackling fraudulent listings and phishing scams, where criminals impersonate a third party to trick people to hand over money.

European Commission calls accommodation website’s approach to fraudulent listings and phishing scams as ‘absolutely substandard’

EU regulators have opened an investigation into Booking.com, alleging that the accommodation website has not done enough to protect consumers from fake listings and scams.

The European Commission, which regulates the world’s biggest tech companies operating in the EU, said Booking.com may have breached the EU’s Digital Services Act (DSA) with its “absolutely substandard” approach to tackling fraudulent listings and phishing scams, where criminals impersonate a third party to trick people to hand over money.

Budapest has unexpectedly obstructed the next stage of EU accession negotiations with Ukraine and Moldova, just a week after approving earlier negotiating chapters and days after Prime Minister Péter Magyar pledged to restore relations with Kyiv.

Hungary has blocked a procedural decision needed to advance Ukraine and Moldova’s European Union accession negotiations, raising fresh questions about Budapest’s position under Prime Minister Péter Magyar, whose government had recently agreed to remove longstanding objections to Kyiv’s membership ambitions.

The intervention took place in Brussels on Tuesday, 20 October, during a meeting of the Council of the EU’s Working Party on Enlargement and Countries Negotiating Accession to the EU (COELA). Representatives of the 27 member states were examining the screening results for the final two negotiating clusters, covering environmental policy, transport, agriculture and regional development.

According to diplomats familiar with the discussions, the Hungarian delegation refused to approve the proposed procedural step. When representatives of other member states requested an explanation, Budapest reportedly maintained that its position remained unchanged, without providing further arguments.

An Unexpected Reversal After October Agreement

The obstruction comes only seven days after the EU formally opened two additional negotiating clusters with Ukraine and Moldova.

On 13 October, the Council approved the opening of Cluster 2, covering the internal market, and Cluster 3, dealing with competitiveness and inclusive growth. The decision followed an agreement between Kyiv and Budapest on educational rights for Ukraine’s ethnic Hungarian minority.

Ukraine’s parliament adopted legislative amendments on 12 October extending minority-language education rights, and President Volodymyr Zelenskyy signed the legislation the same day.

The agreement had appeared to remove the principal bilateral obstacle to further negotiations. Ukrainian Foreign Minister Andrii Sybiha and his Hungarian counterpart, Anita Orbán, welcomed the development following discussions in Luxembourg.

The diplomatic rapprochement continued on 16 October, when Zelenskyy and Magyar held their first official bilateral meeting in Brussels. Both governments expressed an intention to improve relations after years of disputes under former Hungarian Prime Minister Viktor Orbán.

Magyar also invited Zelenskyy to Budapest for commemorations marking the 70th anniversary of Hungary’s 1956 anti-Soviet uprising.

The subsequent Hungarian objection has therefore interrupted a process that Ukrainian and European officials had expected to advance before the end of the year.

Agriculture and Energy Remain the Final Obstacles

Ukraine and Moldova have now formally opened four of the six negotiating clusters required under the EU’s enlargement methodology.

The remaining two are Cluster 4, Green Agenda and Sustainable Connectivity, and Cluster 5, Resources, Agriculture and Cohesion. They cover several of the most economically sensitive areas of prospective Ukrainian membership.

Cluster 4 includes environmental regulation, energy policy and transport infrastructure, while Cluster 5 encompasses agriculture, food safety, fisheries and regional development funding.

Ukraine’s agricultural sector presents particular challenges for the EU’s Common Agricultural Policy. The country’s extensive farmland and substantial grain production could affect agricultural subsidy allocations, market competition and the distribution of EU budgetary resources.

Poland and other agricultural member states have previously expressed concerns about the implications of Ukrainian agricultural integration. Such questions will require negotiation regardless of Hungary’s immediate position.

However, the 20 October meeting was not intended to settle these substantive issues. Its purpose was to advance the procedural preparations for formally opening negotiations on the remaining clusters.

Domestic Politics and the Question of EU Funding

The explanation for Budapest’s latest move may lie in Hungary’s domestic political calculations rather than a new dispute over minority rights.

Diplomatic sources have suggested that Magyar’s government is attempting to avoid accusations from Viktor Orbán’s opposition that it is making excessive concessions to Ukraine.

Although Magyar defeated Orbán in April’s parliamentary elections and has adopted a more cooperative approach towards Brussels, he has consistently opposed accelerated Ukrainian membership.

In an interview conducted on 20 October, Magyar reiterated his opposition to fast-tracking accession, arguing that membership must remain conditional on compliance with EU requirements. He also questioned whether a country at war could join the Union.

Another potential complication concerns Hungary’s financial relationship with Brussels.

The European Commission agreed in May to unlock €16.4 billion in previously frozen funds following reforms introduced by Magyar’s administration. Some disbursements remain subject to conditions, while separate disputes over EU financial penalties continue.

However, there is currently no publicly established evidence that Hungary’s objection on 20 October was intended to secure additional financial concessions. Any connection between the two negotiations remains speculative.

Moldova Caught in Budapest’s Dispute with Kyiv

Hungary’s position also affects Moldova, despite the absence of an equivalent bilateral dispute between Budapest and Chișinău.

The EU has kept the accession negotiations of Ukraine and Moldova politically aligned, seeking to advance both countries through the six negotiating clusters together.

Consequently, an objection directed principally at Ukraine can delay Moldova’s progress even when its own technical preparations satisfy the relevant requirements.

Separating the two accession tracks would allow Moldova to advance independently, but such a move would require political agreement among member states and could raise further questions about the EU’s enlargement strategy.

Ireland Seeks Agreement Before December

Ireland, which holds the rotating presidency of the Council of the EU until 31 December, has made progress on Ukrainian and Moldovan accession a priority.

The disputed procedural decision is expected to return to subsequent meetings of the enlargement working party, with senior EU and national officials still anticipating that the final two clusters could formally open in December.

The latest obstruction does not reverse the four clusters already opened, nor does it terminate accession negotiations. It does, however, demonstrate that the change of government in Budapest has not eliminated Hungary’s capacity or willingness to obstruct individual stages of enlargement.

For Kyiv and Chișinău, the immediate question is whether the 20 October decision represents a short-lived domestic political manoeuvre or the beginning of another prolonged dispute over the conditions of EU membership.

The European Union has adopted a new Arctic strategy placing security at the centre of its northern policy, reflecting growing concern over Russian military activity, vulnerable submarine infrastructure and competition for control of emerging maritime routes.

Presented on Tuesday, 20 October, by the European Commission and EU foreign policy chief Kaja Kallas, the strategy proposes a maritime security hub, expanded satellite surveillance, greater icebreaker capacity and improved military mobility across northern Europe.

The document marks a departure from the EU’s 2021 Arctic policy, which placed greater emphasis on climate change, environmental protection and scientific cooperation. The revised framework treats the region as an increasingly important component of European security and economic policy.

Russia’s military presence reshapes European priorities

Russia’s expanding military infrastructure in the High North is a principal concern behind the policy revision.

Moscow has reopened Soviet-era military installations, strengthened its northern forces and maintained substantial nuclear capabilities on the Kola Peninsula. The region contains strategically important naval bases used by Russia’s Northern Fleet, including facilities supporting its submarine-based nuclear deterrent.

Russian operations in the Arctic also have implications for maritime access between the Atlantic and the Barents Sea, an area increasingly important to NATO’s northern defence arrangements.

The EU intends to work more closely with NATO and its northern partners, including Norway, Iceland, Britain, Canada and the United States, while developing capabilities that complement existing military structures.

Kallas said the Arctic’s security environment had deteriorated significantly since 2021, with geopolitical competition increasingly affecting a region previously associated principally with environmental and economic cooperation.

The EU’s revised priorities reflect concerns extending beyond conventional military deployments, particularly the exposure of undersea communications networks and energy infrastructure to sabotage and disruption.

New maritime security hub and submarine cable protection

A central proposal involves establishing an EU Maritime Security Hub to improve information-sharing between member states and partner countries operating in Arctic waters.

The system would strengthen monitoring of maritime movements and support the identification of suspicious activity near critical infrastructure.

Brussels also proposes an Arctic Cable Hub, initially concentrating on the protection, monitoring and repair of submarine communications cables across the North Atlantic and Arctic.

Such infrastructure carries international data traffic and supports communications between Europe, Greenland and North America. Damage to cables could interrupt telecommunications, financial services and government networks.

The Commission’s new Arctic policy framework also supports the proposed Pan-Arctic Cable connecting Greenland directly with Europe, together with secure satellite communications through the EU’s IRIS² programme.

Further measures envisage expanded use of Copernicus satellite surveillance, improved maritime intelligence and closer monitoring of vessels associated with Russia’s shadow fleet.

These measures form part of a broader attempt to improve European surveillance capabilities without relying exclusively on military assets provided by individual NATO members.

Icebreakers, transport corridors and military mobility

The strategy also addresses Europe’s limited capacity to operate in extreme northern conditions.

The Commission wants to support additional icebreaker capabilities, which are essential for maintaining access to Arctic waters, conducting emergency operations and supporting scientific and logistical activity.

Russian icebreaker capabilities remain considerably more extensive than those available to most European countries, providing Moscow with operational advantages along the Northern Sea Route.

European investment would also support ports, railways, energy terminals and digital infrastructure capable of serving both civilian and security requirements.

The emphasis on dual-use infrastructure reflects the growing importance of military mobility across northern Europe, particularly following Finland’s and Sweden’s accession to NATO.

Improved transport links could facilitate the movement of equipment and personnel while also supporting economic development in sparsely populated northern regions.

However, the Commission has not provided a comprehensive financial allocation for the proposed security measures, leaving important questions about funding, procurement and implementation.

Brussels retreats from Arctic drilling ban proposal

The revised strategy also introduces a significant change in the EU’s position on Arctic fossil fuel development.

In 2021, Brussels proposed pursuing an international legal commitment to prohibit further oil, gas and coal extraction in the Arctic.

The new strategy maintains the EU’s opposition to environmentally damaging fossil fuel development but no longer includes the explicit ambition to secure a multilateral legal prohibition.

The adjustment follows sustained disagreement with energy-producing countries and recognition that an international agreement would be difficult to achieve under current geopolitical conditions.

Norway has argued that continued exploration in parts of the Barents Sea remains important for European energy security, particularly as production from mature Norwegian fields is expected to decline.

EU Today previously reported on Brussels’ opposition to Norwegian Arctic drilling plans and the disagreements between environmental objectives and Europe’s long-term energy requirements.

The latest strategy does not represent an endorsement of new Arctic drilling. It does, however, acknowledge the limitations of the EU’s previous diplomatic approach.

Greenland and the northern economy

Greenland occupies a prominent position in the revised strategy because of its location, mineral resources and importance to transatlantic communications.

The Commission wants to expand cooperation on digital connectivity, critical raw materials, research and infrastructure investment, while recognising the responsibilities of Greenland’s own institutions and the Kingdom of Denmark.

Brussels also intends to strengthen scientific cooperation and support Arctic communities adapting to rapid environmental change.

The Arctic is warming nearly four times faster than the global average, creating new commercial opportunities while imposing substantial costs on local populations and infrastructure.

The EU’s proposals therefore combine security measures with investment in transport networks, research facilities and economic diversification.

For Brussels, implementation will require agreement between member states with different geographical interests, defence capabilities and budgetary priorities. Cooperation with NATO will also require careful coordination to avoid duplicating existing military arrangements.

The Commission has established a significantly broader Arctic agenda than the one adopted five years ago. Its practical impact will depend on whether member states finance the surveillance systems, vessels and infrastructure that the new strategy envisages.

Czech Prime Minister Andrej Babiš has rejected calls to reconsider his government’s direction after a crushing Senate election defeat, as the opposition strengthens its position and fresh disputes over Russia, European funding and domestic reforms add to his difficulties.

Czech Prime Minister Andrej Babiš has ruled out changing his government’s policies despite a humiliating defeat in the Senate elections, in which his ANO movement failed to win a single seat. The result has strengthened the parliamentary opposition and intensified questions over the political direction of his coalition, less than a year after it took office.

Speaking after a cabinet meeting on Monday, 19 October, Babiš insisted that the election results would have no effect on the functioning of his government or its alliance with the far-right Freedom and Direct Democracy (SPD) party and the Motorists movement. His administration would continue implementing its programme, including controversial changes to public broadcasting and proposed legislation regulating the financing of non-governmental organisations.

The prime minister’s refusal to reconsider his government’s agenda has drawn criticism from Senate president Miloš Vystrčil, who accused Babiš of transferring responsibility for the defeat to regional party organisations rather than accepting personal accountability.

A defeat with consequences beyond the Senate

The elections, held on 9–10 and 16–17 October, concerned 27 of the Senate’s 81 seats. ANO entered 13 candidates in the second-round contests, but every one of them lost. The party’s representation consequently fell to 14 senators.

Babiš called the outcome “catastrophic”, acknowledging a result that was particularly damaging given ANO’s success in the 2024 Senate elections and its subsequent victory in the October 2025 parliamentary contest.

The opposition Mayors and Independents movement (STAN) emerged as the strongest performer, with ten successful candidates or endorsed contenders. The centre-right Civic Democratic Party (ODS) secured seven seats, maintaining its position at the head of the Senate’s largest parliamentary group alongside TOP 09.

In an interview published on 20 October, Vystrčil said the results demonstrated that Babiš’s personal electoral appeal did not translate into successful Senate campaigns. He also criticised the prime minister’s response to the defeat, describing his attempts to blame regional organisations as an evasion of leadership responsibility.

The vote followed municipal elections in which ANO lost ground in several important urban centres, while SPD also suffered substantial losses.

Opposition leadership becomes the next political contest

STAN leader Vít Rakušan has interpreted the result as evidence that his movement can become ANO’s principal national challenger.

The party’s Senate performance followed a strong showing in municipal elections, including victory in Prague, where its leading candidate Petr Hlaváček is seeking to form the next city administration.

The movement’s growing appeal is supported by recent opinion polling. A Median electoral model published on 17 October, based on September interviews, placed ANO at 29.5 per cent, STAN at 17 per cent and ODS at 12.5 per cent.

Yet STAN’s ambitions face competition from within the opposition. ODS retains substantial institutional influence through the Senate, while the Christian Democrats’ new leader, Jan Grolich, is increasingly discussed as another possible contender for national opposition leadership.

The opposition’s unity is also less straightforward at municipal level. In Ostrava, ANO has negotiated a local governing agreement with Starostové pro Ostravu and the Ostravak movement, illustrating the flexibility of local political alliances.

Russia policy brings fresh controversy

The electoral setback coincides with renewed controversy over the Czech government’s approach to Russia.

On 19 October, Foreign Minister Petr Macinka, leader of the Motorists, defended his decision not to support a Finnish initiative calling for tighter European Union restrictions on entry visas for Russian citizens.

The proposal, promoted by Finnish Foreign Minister Elina Valtonen, sought stronger EU-wide restrictions on non-essential travel by Russian nationals, including tourists, against a background of growing concerns over Russian sabotage and hybrid operations.

According to details of the diplomatic disagreement, senior Czech foreign ministry officials had recommended supporting the initiative.

Macinka argued that Prague already maintained extensive national restrictions and had previously endorsed a comparable Estonian proposal. He questioned the effectiveness of the Finnish initiative, which attracted limited support from other EU governments.

The disagreement comes as Czech security policy remains under scrutiny. On Tuesday, 20 October, the National Security Council discussed the country’s security outlook, military development plans and changes to NATO’s air and missile defence implementation arrangements.

The issue exposes a continuing area of contention between Babiš’s coalition and opposition parties favouring closer coordination with Ukraine’s European supporters.

Brussels presents another challenge

Meanwhile, Babiš faces unresolved questions concerning his former business conglomerate Agrofert and access to European Union funding.

The European Commission has maintained restrictions on certain EU reimbursements after concluding that the trust arrangement involving Babiš’s business interests does not sufficiently address the potential conflict of interest.

The measures affect particular cohesion-fund expenditure and rural development reimbursements, rather than all EU agricultural payments. Babiš has maintained that the arrangements governing his business interests comply with the law.

The dispute carries particular significance as Prague participates in negotiations over the EU’s next long-term budget, covering 2028–2034.

At the European Council summit on 15–16 October, Babiš argued for protecting national allocations of EU funds, revisiting aspects of the emissions trading system and addressing high industrial energy costs. These negotiations will continue while the Commission’s concerns about his business arrangements remain unresolved.

Government retains power despite opposition gains

The Senate defeat does not threaten Babiš’s parliamentary majority. The lower chamber can override most Senate objections to ordinary legislation, and the governing parties continue to command sufficient support to pursue their programme.

The September Median model projected that ANO, SPD and the Motorists would retain 107 seats in the 200-member Chamber of Deputies, only slightly below their current combined strength.

Nevertheless, the elections have given the opposition a stronger platform for challenging the government over public broadcasting, European relations, defence policy and constitutional legislation, where the Senate possesses more substantial powers.

The immediate political contest is therefore not over the survival of Babiš’s government, but over whether STAN can convert its regional and Senate successes into a credible national alternative before the next parliamentary elections. For Babiš, whose party remains the largest in the country, the more pressing difficulty is its inability to defeat opposition candidates when elections are decided beyond ANO’s established electoral base.

The European Commission is checking whether laws Ukraine’s parliament passed last week earn it a €3.7 billion ($4.3 billion) EU payment, spokesperson Balázs Ujvári told reporters in Brussels on 19 October. He also said Ukraine’s 2027 funding gap stands at about €70 billion, and that the EU “cannot do this all alone.” How Ukraine pays for Russia’s war next year now depends on reforms in Kyiv and on money from Europe and beyond.

Russia keeps striking Ukraine’s power grid and cities, and Kyiv already faces a hole in next year’s war budget before any new military spending. Foreign money keeps salaries, pensions, and repairs flowing while Ukraine spends its own revenue on defense. So each delayed payment is felt at home while Russia hits the energy system again.

Brussels reads Kyiv’s new laws before paying

The payment is the second tranche of the EU’s macro-financial assistance to Ukraine, and each one depends on reforms, Ujvári said at the Commission’s midday briefing.

“We saw that last week some important laws were adopted in the Rada, and we are in the process of analyzing these laws and we will formulate our assessment thereafter,” he said.

On its third attempt, parliament passed a law on 15 October ending the VAT exemption for foreign parcels worth up to €150 from 1 July 2027, and making online marketplaces collect the tax. The Commission had warned the law was one of 12 conditions for the tranche. Fewer than 1% of the 75 million parcels Ukrainians receive each year were taxed, and lawmakers had rejected the measure twice despite IMF pressure.

About €30 billion is in the pipeline for Ukraine this year, mostly under the EU’s €90 billion support loan, if reforms continue, Ujvári said.

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EU announced funding shortfall for Ukraine in 2027

A €70 billion gap for 2027

Current pledges leave a gap of about €70 billion for 2027, Ujvári said, even counting the €45 billion ($52 billion) the EU has set aside for next year and some partners’ commitments.

“We cannot do this all alone. Therefore, our partners in general must step up,” he said. “They have to come forward with pledges, and they have to deliver on those commitments.”

On 16 October, Ukrainian President Volodymyr Zelenskyy asked EU leaders for at least €70 billion more for 2027. They tasked the Commission with a proposal but set no deadline. Asked whether it would revisit using frozen Russian assets, Ujvári said it was “a little bit early” to discuss options in that detail. New EU borrowing has also grown costlier: 10-year rates rose from 3.2% to just above 4% in six months, he said.

The €90 billion loan was designed on the assumption that the war would end in 2026. Slovak Prime Minister Robert Fico said Slovakia and Hungary would opt out of new aid but would not block others.

The European Commission has selected 77 industrial and technology projects across 23 European Economic Area countries to receive €3.4 billion in funding, as Brussels attempts to strengthen the continent’s manufacturing capacity and reduce dependence on imported energy and critical materials.

The funding, announced on Monday, 19 October, will come from the EU Innovation Fund, which uses revenues generated by the Emissions Trading System to support investment in technologies intended to reduce greenhouse gas emissions.

The selected projects include manufacturing facilities, renewable energy installations, advanced energy storage, critical raw materials processing and industrial carbon management. For the first time, the programme also includes a small modular nuclear reactor project and a direct air carbon capture and storage initiative.

The announcement comes amid growing concern over Europe’s industrial competitiveness, particularly as manufacturers face high energy costs, increasing competition from China and difficulties securing investment for major industrial projects.

Funding for industrial production

According to the Commission’s announcement, the 77 selected projects span energy-intensive industries, clean technology manufacturing, alternative fuels, transport and several other sectors.

Six projects concern critical raw materials, an area in which the EU has been seeking to reduce its exposure to foreign suppliers.

These investments are intended to strengthen European supply chains for technologies including batteries, renewable energy equipment and permanent magnets, which are essential components in electric motors and other industrial applications.

The funding follows renewed political pressure to expand the processing and production of strategically important materials inside Europe.

As EU Today recently reported, the European Parliament has been pressing for stronger measures to reduce dependence on China for critical raw materials used by European manufacturers.

China occupies a dominant position in several international processing and refining markets, leaving European companies exposed to supply interruptions and trade restrictions.

The Commission is seeking to support alternative production capacity through financial assistance, industrial regulation and measures designed to attract private capital.

However, the selection of projects for EU funding does not automatically mean that the proposed facilities will be built. Their implementation will still depend on financing agreements, regulatory approvals and commercial decisions.

Nuclear technology enters funding programme

The inclusion of a small modular nuclear reactor project represents a new development in the Innovation Fund’s portfolio.

Small modular reactors are designed to produce electricity or industrial heat using nuclear technology on a smaller scale than conventional nuclear power stations.

Supporters argue that modular construction could reduce certain project risks and provide stable electricity supplies for energy-intensive industries.

However, the technology faces substantial challenges involving construction costs, regulatory approval, supply chains and the transition from demonstration projects to commercial production.

The Commission published a European strategy for small modular reactors in March, outlining plans to accelerate their development and support the first operational facilities in the early 2030s.

The latest funding decision gives the technology access to a financial instrument principally associated with industrial decarbonisation and clean energy investment.

Another newly represented technology is direct air carbon capture and storage, which involves extracting carbon dioxide from the atmosphere and storing it.

Both technologies remain at comparatively early stages of commercial deployment in Europe, making their eventual costs and performance important considerations.

Emissions trading revenue finances investment

The Innovation Fund is financed through revenues from the EU Emissions Trading System, under which companies operating in covered sectors must obtain allowances for their greenhouse gas emissions.

Part of the revenue generated from auctioning allowances is reinvested into projects designed to introduce lower-emission technologies into industrial production.

The Commission estimates that the 77 newly selected projects could avoid approximately 290 million tonnes of greenhouse gas emissions during their first ten years of operation.

That figure is a projection based on the projects’ anticipated performance, rather than an achieved reduction. Actual results will depend on construction, commissioning and subsequent commercial operation.

The funding announcement also follows the publication of the EU’s broader industrial policy initiatives, which seek to increase domestic production of clean technologies and improve investment conditions for European manufacturers.

The Commission announced a separate allocation of more than €390 million to 135 environmental and climate projects under the LIFE programme on the same day. That funding is distinct from the €3.4 billion Innovation Fund selection.

Funding agreements still to be concluded

The companies and organisations behind the selected Innovation Fund projects must now complete the procedures necessary to obtain their grants.

During the Commission’s 19 October press briefing, officials indicated that project-specific grant amounts would become available when the agreements are signed, currently envisaged for the first quarter of 2027.

The final allocations and implementation conditions therefore remain subject to the grant preparation process.

For industrial companies, the principal test will be whether the European funding attracts sufficient additional investment to bring the selected technologies into commercial operation.

The results will also provide an indication of how effectively Brussels can translate its industrial policy objectives into additional European manufacturing capacity, particularly in sectors where supply chains remain concentrated outside the Union.

Image Credit: © European Union, 2024 / CC BY 4.0

The European Parliament has demanded €225 billion for the European Union’s foreign policy and development programmes between 2028 and 2034, challenging proposals by member states to reduce spending under the bloc’s next long-term budget.

The Parliament’s Foreign Affairs and Development committees approved their negotiating position on the Global Europe Instrument on Monday, 19 October, by 63 votes to 27, with five abstentions. The proposed allocation represents an increase of €25 billion over the European Commission’s original €200 billion proposal.

The decision comes as negotiations over the wider 2028–2034 EU budget have become increasingly contentious, with Germany and several other net contributors opposing higher expenditure while Brussels faces mounting demands for defence, industrial investment, enlargement and support for Ukraine.

Parliament rejects proposed reductions

Under the position adopted by the parliamentary committees, at least €25 billion would be reserved for humanitarian assistance. MEPs also want dedicated funding for reconstruction in Gaza and financial support for countries seeking EU membership.

The committees are proposing that 20 per cent of official development assistance should be directed towards human development, alongside stronger provisions covering democracy, human rights and the rule of law.

Global Europe is intended to consolidate several existing financing instruments into a single framework governing much of the Union’s external expenditure. The programme would finance activities ranging from development cooperation and humanitarian assistance to economic partnerships and support for countries preparing to join the EU.

The Commission introduced the original €200 billion proposal in July 2025. However, subsequent negotiations among member states have raised the prospect of substantial reductions.

Germany, the Netherlands and several Nordic countries have argued that the next budget must reflect the financial constraints facing national governments. Their objections have complicated efforts to accommodate additional spending on European security and economic competitiveness.

The European Parliament has taken a different position, maintaining that reducing external expenditure would restrict the Union’s ability to operate internationally when European security and economic interests increasingly depend on developments beyond its borders.

Ukraine and enlargement funding

The parliamentary proposal would preserve support for Ukraine while seeking to prevent assistance connected with Russia’s invasion from reducing resources available to other partner countries.

Ukraine’s reconstruction, institutional reforms and integration with European markets will require substantial financing over the coming years. However, the precise allocation will depend on negotiations over the wider budget and the financing arrangements eventually approved.

For candidate countries, MEPs want clearer incentives linking EU assistance to progress on political and economic reforms. The proposed framework would also provide Brussels with greater powers to suspend funding where democratic standards, human rights or judicial independence deteriorate.

A separate provision would permit the Commission to suspend payments where partner countries seriously fail to meet obligations concerning the readmission of their nationals.

That measure reflects the growing connection between the EU’s development policy and its migration objectives. Brussels has increasingly sought cooperation on returns and border management as part of agreements with countries receiving European assistance.

The committees have also called for stronger parliamentary supervision of Global Europe, including more detailed reporting by the Commission and regular discussions with the commissioners responsible for implementation.

Difficult negotiations ahead

The financial disagreement extends well beyond external policy. The overall seven-year budget remains contested, particularly over agricultural subsidies, regional development funds, defence investment and repayment of borrowing undertaken during the coronavirus pandemic.

As EU Today previously reported, a group of 17 member states has opposed reductions in agricultural and cohesion spending, adding further pressure to negotiations.

The Parliament’s proposed €225 billion allocation has not been agreed by governments and does not constitute an approved spending commitment.

The committees also approved a mandate for negotiations with the Council, although their position still requires endorsement by the full Parliament, provisionally expected in November.

Meanwhile, member states must settle their own negotiating position, including the financial ceilings governing the programme.

The eventual settlement will determine how much Brussels can spend on development cooperation, humanitarian operations and international partnerships after 2027, and how those commitments can be reconciled with the EU’s expanding domestic financial obligations.

European Union ministers have adopted a new recommendation calling for stronger measures to prevent homelessness and housing exclusion, as governments face increasing pressure over housing shortages and the cost of accommodation.

The recommendation was approved at a meeting of employment and social affairs ministers in Luxembourg on Monday, 19 October, and forms part of the European Commission’s wider efforts to address Europe’s housing crisis.

It proposes measures ranging from early intervention for households facing eviction to increased investment in affordable housing, improved access to social services and more coordinated support for people without permanent accommodation.

However, the recommendation is not legally binding. Member States will retain responsibility for deciding which measures to introduce, how they should be financed and the extent to which existing national housing policies should be changed.

More than one million people affected

According to the Council’s announcement, more than one million people are estimated to experience homelessness across the European Union.

The problem extends beyond people sleeping on streets or using emergency shelters.

The term housing exclusion also encompasses households living in inadequate accommodation, people facing imminent eviction and those unable to secure stable housing because of financial or personal circumstances.

The Council identifies poverty, unemployment, domestic violence, disability, poor health and insufficient affordable housing among the factors contributing to the problem.

Housing costs have also risen considerably faster than incomes in several European countries.

Between 2013 and 2024, nominal house prices increased by more than 60 per cent across the EU. In some Member States, average increases exceeded 220 per cent during the same period.

These developments have placed additional pressure on households with lower incomes, particularly in cities where rental accommodation is increasingly expensive and social housing is limited.

The shortage affects not only unemployed people but also individuals in paid employment whose earnings are insufficient to cover market rents.

Prevention before eviction

A central element of the new recommendation is the introduction or strengthening of national strategies intended to prevent homelessness before people lose their accommodation.

The Council encourages Member States to establish early-warning mechanisms capable of identifying households experiencing serious financial or housing difficulties.

Proposed interventions include debt counselling, emergency rental assistance, mediation between landlords and tenants, and appropriate safeguards against forced eviction.

The emphasis on prevention reflects the potentially substantial social and financial consequences of losing stable accommodation.

Once a person becomes homeless, obtaining employment, maintaining healthcare arrangements and securing permanent accommodation can become considerably more difficult.

The Council also calls for particular attention to children, young people leaving care and people facing domestic abuse.

Member States are encouraged to ensure that children have access to adequate housing and that young people leaving institutional or foster care are not placed at risk of homelessness because appropriate support arrangements are unavailable.

Greater emphasis on permanent housing

The recommendation promotes a housing-led approach, under which securing suitable and stable accommodation becomes a central element of the response to homelessness.

This differs from policies relying primarily on emergency shelters or temporary accommodation, although such facilities remain necessary for people facing immediate housing difficulties.

Housing-led programmes can include permanent accommodation accompanied by individual support services, depending on the person’s circumstances.

The Council also proposes simplifying access to social and healthcare services through integrated arrangements that allow people to obtain assistance without repeatedly approaching different public authorities.

One suggested model involves providing access to relevant services through a single contact point, with support from social workers, healthcare professionals and other organisations.

However, access to permanent housing ultimately depends on the availability of suitable properties.

The recommendation therefore calls for increased public and private investment in affordable and social housing, renovation of existing accommodation and support for non-profit housing models.

Questions over implementation and funding

The non-binding character of the recommendation remains one of its principal limitations.

European institutions can coordinate policies, provide guidance and support investment, but national governments and local authorities retain substantial responsibility for housing provision and social welfare arrangements.

The recommendation does not automatically establish a new EU housing entitlement or provide dedicated funding to every Member State.

Its effectiveness will depend on whether governments introduce measures capable of increasing housing supply and reducing the number of people entering homelessness.

The European Federation of National Organisations Working with the Homeless, known as FEANTSA, previously welcomed the Commission’s proposal while identifying shortcomings.

In its assessment of the original proposal, the organisation argued that EU policy should place greater emphasis on permanently ending homelessness rather than primarily managing housing exclusion.

It also questioned the adequacy of funding arrangements and the proposed five-year interval for national progress reporting.

Five-year assessment planned

Under the adopted recommendation, Member States are encouraged to provide the European Commission with information on the effectiveness of their national strategies every five years.

The Commission is expected to evaluate national progress and report to the Council five years after the recommendation’s adoption.

The policy follows the European Affordable Housing Plan, presented in December 2025, and the EU’s Anti-Poverty Strategy, introduced in May 2026.

Together, these initiatives seek to expand the Union’s role in coordinating housing policy without transferring national housing responsibilities to Brussels.

The first indication of whether the recommendation will produce measurable results will come from national decisions on social housing investment, eviction prevention and access to permanent accommodation. Without changes to those practical arrangements, the Council’s commitments will remain principally a framework for voluntary cooperation.

Belgium’s three regions have reached an agreement with the European Commission to strengthen measures against water pollution, improve wastewater treatment and increase protection against floods and droughts.

The joint statement, signed in Leuven on Monday, 19th October, sets out commitments for Flanders, Wallonia and the Brussels-Capital Region, including action on industrial pollution, pesticides and persistent chemicals such as per- and polyfluoroalkyl substances, commonly known as PFAS.

The agreement was signed by European Commissioner for Environment, Water Resilience and a Competitive Circular Economy Jessika Roswall, Flemish Environment Minister Jo Brouns, Walloon Environment Minister Yves Coppieters and Brussels State Secretary Ans Persoons.

According to the European Commission’s announcement, the agreement follows a detailed examination of Belgium’s implementation of European water legislation and identifies measures requiring greater attention from regional authorities.

European Commission seeks faster implementation

Belgium is the second EU Member State to complete a structured dialogue under a Commission initiative launched in November 2025.

The process is intended to improve implementation of existing environmental requirements rather than establish an entirely new legislative framework.

European water legislation already obliges Member States to assess the condition of their rivers and groundwater, control pollution and prepare management plans intended to improve water quality.

However, achieving the objectives of the EU’s Water Framework Directive remains difficult in several countries, particularly where pollution, agricultural activity and urban development place competing demands on water resources.

Belgium presents additional administrative complications because responsibility for environmental policy and water management is divided principally between three regional governments.

Watercourses also cross regional and international boundaries, requiring cooperation with neighbouring countries.

The Commission’s review examined Belgium’s third generation of river basin management plans and its second generation of flood risk management plans.

Technical discussions identified areas where implementation could be accelerated, particularly regarding pollution controls, water efficiency and coordination between public authorities.

Flanders to address industrial pollution

Under the agreement, Flanders will prioritise investment in water resilience and stronger action against industrial pollution.

The region intends to use its IMPULSE programme to support improvements in water management and pollution reduction.

Industrial discharges are among the issues specifically identified for closer scrutiny.

The joint statement calls for more systematic reviews of permits governing water abstraction and industrial wastewater discharges, particularly where existing activities place pressure on rivers and groundwater.

The agreement also highlights the need to tackle persistent chemical pollution.

PFAS have become a significant environmental concern because many of these substances degrade extremely slowly and can accumulate in water, soil and living organisms.

Certain PFAS compounds have been associated with adverse health effects, although the risks depend on the individual chemical, exposure level and duration.

The Commission’s commitments include stronger action on PFAS and pesticides, alongside improvements in monitoring and pollution prevention.

Agricultural pollution is another area requiring attention.

Fertilisers and pesticides can enter rivers and groundwater through runoff or infiltration, creating difficulties for water treatment and contributing to the deterioration of aquatic ecosystems.

The three regions have agreed to strengthen cooperation with farmers, retailers and researchers to support more sustainable agricultural practices, including expanding markets for organic products.

€300 million for river restoration in Wallonia

Wallonia has committed to continuing investment in river restoration and improved water resilience, with particular attention to the Vesdre basin.

The region intends to use a €300 million loan secured from the European Investment Bank in 2025 to support restoration work.

The Vesdre basin experienced severe flooding in July 2021, when widespread destruction across eastern Belgium exposed weaknesses in flood protection and the management of vulnerable river valleys.

Restoration measures can include improving river channels, reconnecting floodplains and using natural systems to retain water during periods of heavy rainfall.

The regional authorities also intend to support industrial companies investing in water-efficient production technologies and environmental innovation.

These measures are intended to reduce pressure on water resources while helping businesses adapt to changing environmental requirements.

Wallonia has additionally committed to supporting cleaner agricultural practices, consistent with the wider national objective of reducing pollution from fertilisers and pesticides.

Brussels focuses on wastewater treatment

The Brussels-Capital Region will concentrate on improving water governance and wastewater treatment.

Urban wastewater infrastructure is particularly important in densely populated areas, where drainage networks and treatment facilities must accommodate domestic sewage, commercial activity and rainfall.

Heavy precipitation can place additional pressure on combined sewer systems, potentially increasing the risk of untreated or insufficiently treated wastewater entering natural watercourses.

Improving treatment capacity and water management requires investment in infrastructure, monitoring and coordination between the authorities responsible for sanitation and environmental protection.

The Brussels commitments therefore form part of the wider European effort to modernise urban wastewater systems and improve the ecological condition of rivers passing through major cities.

Cross-border water management

The agreement also identifies the need for closer cooperation in the Scheldt and Meuse river basins.

Both river systems cross national boundaries, making their management dependent on coordination between Belgium and neighbouring countries.

Regional governments have committed to supporting the restoration of floodplains and the removal of barriers affecting shared watercourses where appropriate.

The measures are intended to improve the condition of aquatic ecosystems while strengthening natural protection against floods and droughts.

The Commission will support Belgium through initiatives under the European Water Resilience Strategy, including research, digital technologies, technical expertise and assistance in mobilising public and private investment.

However, the joint statement signed in Leuven does not itself establish a new binding regulatory regime or guarantee that all the investments identified will be financed.

Its importance will depend on whether the three regional governments translate their commitments into funded projects, revised permits and measurable improvements in water quality.

For the European Commission, Belgium’s agreement is also part of a wider programme of structured discussions with Member States on compliance with EU water legislation. Further national dialogues are expected as Brussels seeks to improve implementation across the Union.

Registrations of fully electric cars across 17 European markets increased by 70.3 per cent in September, according to industry figures published on Monday, 19 October, as France and Germany seek to ease the European Union’s emissions requirements for new vehicles.

The data show that 300,202 battery-electric cars were registered during the month, accounting for 32.6 per cent of new passenger-car registrations in the markets surveyed.

The figures emerge three days after Paris and Berlin announced a joint position on the future of Europe’s automotive industry, proposing greater flexibility in the EU’s 2035 emissions regime while introducing measures intended to favour vehicles manufactured in Europe.

Electric vehicles gain market share

The latest figures, compiled by E-Mobility Europe, New Automotive and Fier Automotive, indicate that electric vehicle demand accelerated sharply during September.

According to the industry data published on 19 October, approximately 1.98 million battery-electric cars have been registered across the 17 markets during the first nine months of 2026, an increase of 38.1 per cent compared with the equivalent period last year.

Higher oil prices, government incentives and the introduction of more affordable electric models have all contributed to demand.

The figures represent a substantial change in the composition of European new-car sales, although they cover selected markets rather than constituting a complete statistical account of the EU’s 27 Member States.

France recorded 65,243 battery-electric registrations in September, representing 41.7 per cent of its new-car market. Germany registered 88,724 electric vehicles, giving the technology a market share of 34.6 per cent.

Both countries have substantial automotive manufacturing industries and are directly involved in negotiations over Europe’s future emissions legislation.

Significant differences between European markets

Despite the overall increase, electric vehicle adoption remains uneven across the continent.

Norway retained its position as Europe’s most electrified new-car market, with battery-electric vehicles accounting for 98.8 per cent of registrations in September.

Denmark followed with 88.8 per cent, while Finland recorded 62.7 per cent and Sweden 49 per cent.

Electric models also accounted for approximately half of new-car registrations in Belgium, the Netherlands, Ireland and Portugal.

At the other end of the market, battery-electric vehicles represented only 11.2 per cent of registrations in the Czech Republic, 7.6 per cent in Italy and 6.2 per cent in Poland.

These differences illustrate the difficulty of establishing a uniform European transition timetable.

Household incomes, purchase incentives, vehicle prices and charging infrastructure differ substantially between countries. The availability of affordable electric cars is particularly important in markets where buyers are more sensitive to the initial purchase price.

The varying national figures also complicate the EU’s industrial calculations, since manufacturers must operate across markets progressing at different rates.

France and Germany reach automotive compromise

On 16 October, French President Emmanuel Macron and German Chancellor Friedrich Merz agreed on a joint approach to changes in European automotive regulations.

Under the proposed compromise, car manufacturers would be required to reduce carbon dioxide emissions from new vehicles by 90 per cent by 2035 compared with the 2021 reference level.

The agreement would also remove a proposed requirement to compensate for the remaining emissions through measures such as the use of low-carbon steel.

The change would create additional opportunities for manufacturers to continue selling vehicles powered by combustion engines beyond 2035, subject to the final legislative framework.

In their joint declaration on the automotive industry’s future, the French and German governments argued that emissions reduction must be combined with industrial competitiveness, investment and European manufacturing capacity.

The agreement also envisages preferential treatment for vehicles produced in Europe under certain public procurement and subsidy arrangements.

Britain could potentially benefit from provisions allowing selected European partners to qualify under the proposed industrial framework.

The Franco-German understanding is not, however, a final EU legislative decision. Changes to the regulatory regime require agreement through the relevant European legislative procedures.

Automotive competitiveness enters the debate

The principal argument advanced by supporters of greater regulatory flexibility is that European manufacturers need additional time to adapt production, protect employment and compete with international rivals.

German manufacturers retain extensive investment in combustion-engine and hybrid technology, while French producers have placed considerable emphasis on electric vehicles and maintaining European supply chains.

The negotiations therefore concern more than emissions limits. They also involve battery production, access to raw materials, manufacturing costs and the ability of European companies to compete with producers in China and other markets.

Supporters of the existing transition timetable argue that weakening long-term requirements could discourage investment in electric manufacturing capacity just as consumer demand is increasing.

Manufacturers seeking greater flexibility maintain that regulatory targets must account for uneven market conditions and the cost of developing new technologies.

September’s sales figures provide evidence that electric vehicle adoption is accelerating, but they do not establish whether the same rate of growth will continue without existing incentives.

The debate now centres on whether regulatory relaxation will preserve Europe’s automotive industry during the transition or slow investment in the technology that is already capturing an increasing share of the market.