Seventeen EU governments have joined forces to defend agricultural and regional funding in the bloc’s next seven-year budget, setting up a confrontation with Germany and five other countries demanding substantial reductions to the European Commission’s proposed €2 trillion spending plan.

Seventeen European Union countries have called for agriculture and cohesion funding to be protected from further cuts as negotiations over the bloc’s 2028–2034 budget enter a decisive phase.

In a letter dated 2 October to Irish Taoiseach Micheál Martin, whose government currently holds the rotating presidency of the Council of the EU, the countries said the overall financing of Cohesion Policy and the Common Agricultural Policy should be maintained in the next Multiannual Financial Framework.

The signatories are Bulgaria, Croatia, Cyprus, Czechia, Estonia, Greece, Hungary, Italy, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovakia, Slovenia and Spain.

The initiative follows months of coordination by the so-called Friends of Cohesion. In an earlier joint position published by the Spanish government, members argued that cohesion, agriculture and fisheries remained central EU policies and called for new EU revenue sources to be “genuine, fair, simple and non-regressive”.

Italian Prime Minister Giorgia Meloni and Romanian President Nicușor Dan have been coordinating the group at leaders’ level. They are expected to convene another informal meeting alongside the European Council on 15–16 October. The two leaders previously brought the group together ahead of the June European Council as governments sought to coordinate their positions on the budget.

The intervention places the group in direct opposition to Germany, Denmark, the Netherlands, Austria, Finland and Sweden.

Those six governments have argued that the Commission’s near-€2 trillion proposal should be reduced by several hundred billion euros. In their joint statement on the 2028–2034 budget, they said national governments were already undertaking fiscal consolidation and that the EU budget could not be exempt from similar pressure. They called for reductions across all spending headings while giving greater weight to security, defence, competitiveness, migration and sovereignty.

EU Today previously reported on the growing pressure from net-contributor countries for deep reductions to the Commission proposal as negotiations moved towards the Irish presidency’s attempt to secure an agreement before the end of the year.

The Commission’s original proposal for the 2028–2034 Multiannual Financial Framework amounts to almost €2 trillion in current prices, equivalent to 1.26 per cent of the EU’s average gross national income over the seven-year period. It substantially restructures the budget, bringing agriculture, cohesion, fisheries, migration and internal security into national and regional partnership plans while allocating more money to competitiveness, research, defence and other emerging priorities.

Agriculture and regional development have consequently become two of the most sensitive parts of the negotiations.

The Council has already backed the principle of the new national and regional plans, but financial allocations remain unresolved. Its negotiating position specifically leaves the money to be settled as part of the overall MFF talks.

EU Today has followed the dispute since the Cyprus presidency produced a negotiating framework in June that proposed reducing the Commission’s plan by about €32.8bn. The disagreement has since widened as governments attempt to reconcile traditional spending on farmers and poorer regions with growing demands for defence, industrial competitiveness and security.

Revenue is another source of disagreement.

The Commission has proposed five new EU own resources, including revenue connected to the Emissions Trading System and Carbon Border Adjustment Mechanism, a contribution based on uncollected electronic waste, a tobacco excise resource and a contribution from large companies operating in the EU. The proposals are intended partly to reduce reliance on national contributions and help finance repayment of pandemic-era borrowing.

EU Today previously examined the dispute over new sources of EU revenue after leaders asked the Irish presidency to develop financing options alongside negotiations over expenditure.

The Friends of Cohesion have also called for a more gradual repayment schedule for NextGenerationEU borrowing and oppose retaining contribution rebates for wealthier member states. Under the Commission proposal, repayments of principal and interest would amount to a fixed €24bn annually between 2028 and 2034, or €168bn across the seven-year budget period.

Ireland now faces the task of narrowing the gap.

The Council’s timetable for the negotiations envisages the Irish presidency advancing the next negotiating framework ahead of the October European Council, with governments seeking a political agreement before the end of 2026. That would leave 2027 for adoption of the legislation required before the new budget takes effect on 1 January 2028.

An agreement among governments will require unanimity. The European Parliament must then give its consent, while the separate decision governing the EU’s own resources also requires unanimous approval by member states and ratification according to their national constitutional procedures.

With 17 governments now explicitly defending agriculture and cohesion spending and six major contributors demanding substantial reductions, the October summit will bring the central budget dispute directly before EU leaders.

Oil prices fell on Friday after European governments backed the release of emergency diesel stocks as part of a wider G7 intervention intended to ease pressure on fuel markets and avert possible US restrictions on diesel exports.

Oil prices fell on Friday after European governments agreed to release emergency diesel reserves, bringing additional supplies onto a market strained by disruption in the Middle East and shortages of refined fuel.

Brent crude futures fell $1.80, or 1.76 per cent, to $100.50 a barrel during trading on 2 October, while US West Texas Intermediate dropped $2.02, or 2.18 per cent, to $90.85, according to market data reported during Friday’s trading.

The fall came as the Group of Seven agreed to release 100 million barrels of oil and petroleum products from emergency stocks over four months. The package includes a substantial release of diesel during the first 20 days.

The G7 leaders’ statement on energy security and market stability said the releases would be co-ordinated through the International Energy Agency and would take account of commitments already made earlier this year. G7 governments will also discuss whether additional diesel releases are required.

The agreement marks a rapid development from the negotiations reported earlier on Friday. As EU Today reported before the G7 meeting, Washington had been pressing European governments, particularly France and Germany, to make more of their strategic diesel stocks available.

President Donald Trump had also raised the possibility of restricting US diesel exports as his administration sought to reduce domestic fuel prices. Such a restriction would have had significant consequences for Europe because the United States has become an important supplier of diesel to the European market.

A French proposal discussed by EU governments earlier on Friday envisaged European countries releasing around 50 million barrels of diesel, alongside another 50 million barrels of crude oil from International Energy Agency members.

The eventual G7 agreement also addresses the risk of export restrictions directly. The seven governments committed themselves to avoiding restrictions on energy and energy-product exports between G7 countries and called on other producers to refrain from measures that could worsen market shortages.

For Europe, the intervention comes as diesel supplies remain physically available but prices are being pushed higher by tight conditions on international markets.

The European Commission’s Energy Union Task Force met on Friday to examine diesel supplies and prices. The Commission said EU diesel supplies remained stable for the time being, but acknowledged that prices were high because of tight global markets.

The latest intervention follows a much larger emergency action earlier this year. In March, the International Energy Agency agreed its largest-ever co-ordinated stock release, making 400 million barrels available after the Middle East conflict severely disrupted international oil markets.

Europe’s contribution to that March operation consisted largely of refined petroleum products rather than crude oil, reflecting the particular pressure facing the continent’s fuel markets.

The pressure is part of a wider European energy problem. EU Today reported this week that the Middle East conflict has added more than €100 billion to Europe’s energy import bill, despite the continent receiving no corresponding increase in the physical amount of oil and gas purchased.

European governments have already committed €17.9 billion this year to measures intended to protect households and businesses from the rise in energy costs, according to an EU Today assessment of national support measures.

Diesel represents a particular vulnerability. It remains essential for road freight, agriculture, construction and large parts of European industry, meaning sustained increases in wholesale prices can feed into transport and production costs across the economy.

The present shortage also reflects changes in Europe’s refining sector. Refining capacity has fallen over the past two decades as plants have closed, increasing dependence on imported diesel and other refined petroleum products. That dependence has become more visible since the EU sharply reduced purchases of Russian fuel following Russia’s full-scale invasion of Ukraine.

The G7 nevertheless made clear that the emergency intervention would not be accompanied by a relaxation of measures against Moscow. Leaders said they would maintain sanctions against Russia while working with the IEA and other partners to limit the effect of market disruption on fuel and commodity prices.

The EU has separately continued to tighten measures targeting Russia’s energy revenues and its so-called shadow fleet, including restrictions connected with the maritime transport of Russian oil and petroleum products. The EU’s latest sanctions package targeting Russian energy revenues was adopted in July.

Friday’s fall in oil and diesel futures indicates that traders expect the additional stocks to relieve some of the immediate pressure on supplies. European gasoil futures, the main regional diesel benchmark, also fell sharply during the day as details of the proposed releases emerged.

The G7 has asked the IEA to monitor implementation and report within 20 days, including on whether further action is required and how emergency stocks should eventually be replenished.

For Europe, the immediate objective is to contain diesel prices without compromising security of supply. The broader issue remains unchanged: reduced domestic refining capacity and heavy dependence on imported fuel leave the European economy exposed when international supply routes are disrupted.

A side event held during the 63rd session of the UN Human Rights Council in Geneva has brought together parliamentarians, journalists and civil-society representatives to discuss terrorism, religious freedom and the European Union’s relationship with Pakistan.

The event, “Remembrance and Tribute to the Victims of Terrorism”, took place at the Palais des Nations on 1st October. Speakers included Greek MP Georgios Manous, EU Today Publisher and Editor Gary Cartwright, Stéphane Michot of Ideal International, with a contribution from Prof K. Warikoo.

Two interventions focused particularly on Pakistan and the implications for European policy.

Victims of terrorism at centre of debate

Gary Cartwright began with the victims rather than trade or institutional policy.

“Terrorism is not an abstract concept,” he told the meeting, describing a bomb exploding in a market, a child killed outside a school and families waiting for someone who will never return.

He acknowledged that Pakistan itself has suffered heavily from terrorist violence. The 2026 Global Terrorism Index ranked Pakistan as the country most affected by terrorism in 2025, recording 1,139 deaths and 1,045 incidents.

At the same time, Gary raised the record of militant organisations operating from Pakistani territory. The UN Security Council describes Lashkar-e-Tayyiba as a Pakistan-based organisation involved in terrorist activity and records its involvement in the November 2008 Mumbai attacks, in which approximately 164 people were killed and hundreds injured. The same UN entry also records links to the December 2001 attack on the Indian Parliament.

Questions over EU education funding

Gary also questioned the safeguards surrounding European education funding in Pakistan.

In December 2024, Dutch MEP Bert-Jan Ruissen asked the European Commission whether EU money intended for education could reach Islamic religious seminaries and what controls were in place over the use of those funds.

In its February 2025 response, the Commission said EU assistance in Sindh and Balochistan was primarily directed through provincial education authorities. It also confirmed that, in selected areas of Balochistan, EU support facilitated formal education for pupils enrolled in religious seminaries through a government-recognised certification programme intended to ease their transition into state education. The Commission said projects were subject to field visits, reporting, monitoring and evaluation.

Gary stressed that he was not arguing that religious education itself constituted extremism. His argument was that European taxpayers should be able to establish where money was going, who administered programmes and what safeguards existed against extremist recruitment.

His intervention then turned to Pakistan’s GSP+ trade status.

Pakistan has benefited from GSP+ since 2014 and is currently the scheme’s largest beneficiary. According to the European Commission’s figures on EU-Pakistan trade, more than 85 per cent of Pakistan’s exports enter the EU duty and quota free. Continued participation requires Pakistan to ratify and effectively implement 27 international conventions covering human and labour rights, environmental protection and good governance.

Gary called for Pakistan’s GSP+ preferences to be suspended pending an assessment of the country’s compliance with its international commitments, counter-terrorism obligations and safeguards surrounding EU-funded programmes.

The issue has been examined previously by EU Today. Its 2025 white paper on Pakistan’s GSP+ compliance argued that the evidential threshold for beginning temporary withdrawal proceedings had been reached, while a Geneva side event in March 2026 considered Pakistan’s human-rights record and the conditionality attached to GSP+ preferences.

Pahalgam attack raised by Greek MP

Greek MP Georgios Manous approached the subject through terrorism, religious freedom and European security.

He referred to the terrorist attack at Pahalgam in Indian-administered Kashmir on 22 April 2025, in which 25 tourists and one local civilian were killed. EU Today previously examined the attack and its victims in its coverage of the Pahalgam massacre.

In December 2025, India’s National Investigation Agency filed a 1,597-page charge sheet naming Lashkar-e-Tayyiba/The Resistance Front and six other accused. The NIA said its investigation alleged that the attack had been planned, facilitated and executed with direction from Pakistan.

Pakistan rejects Indian allegations of responsibility. Islamabad has said India acted without verifiable evidence and maintains that Prime Minister Shehbaz Sharif offered a transparent and independent investigation into the Pahalgam attack.

Manous also addressed Pakistan’s blasphemy legislation and the position of Christians, Hindus and Ahmadis, linking those questions to the broader problem of religious extremism. Concerns over minority rights and blasphemy laws have also featured in EU Today’s continuing coverage of the debate over Pakistan’s GSP+ eligibility.

The Greek MP then turned to Europe, arguing that extremist ideologies and networks should not be viewed solely as a South Asian security problem.

Pakistan, meanwhile, continues to present itself as both a major victim of terrorism and an international counter-terrorism partner. At the fourth US-Pakistan Counterterrorism Dialogue in Washington in August, the two governments reaffirmed cooperation against ISIS-K, al-Qaeda, Tehreek-e-Taliban Pakistan and the Balochistan Liberation Army, while discussing border security and the disruption of terrorist facilitation networks.

The Geneva discussion therefore centred on two linked questions for European policymakers: how Pakistan’s counter-terrorism record should be assessed, and how that assessment should interact with the conditions attached to EU trade preferences and European-funded programmes.

Europe was supposed to be emerging from its inflation nightmare. Instead, the nightmare has apparently decided to return for a second act.

Eurozone inflation surged to 3.8 per cent in September, up sharply from 3.2 per cent in August and considerably above the 3.6 per cent economists had expected. It is now almost twice the European Central Bank’s 2 per cent target.

The immediate culprit is familiar: energy. Fuel and natural gas prices have been climbing sharply, while food costs are also beginning to exert pressure. Energy prices were reportedly 18.8 per cent higher than a year earlier in September, compared with a 14.3 per cent annual increase in August.

There is, however, a particularly awkward detail for the ECB. Inflation is not confined entirely to the petrol pump.

Core inflation — stripping out volatile food and energy prices — edged up from 2.4 to 2.5 per cent. Services inflation also rose to 3.2 per cent. That suggests the energy shock may gradually be finding its way into the wider economy, and that is precisely what central bankers fear.

An energy shock is unpleasant. An energy shock which becomes embedded in wages, services and business costs is considerably more troublesome. Once consumers and companies begin assuming that prices will continue rising, inflation can acquire a momentum of its own.

The ECB therefore finds itself facing the oldest monetary-policy dilemma in the book: raise interest rates and risk damaging economic growth, or hold back and risk allowing inflation to become entrenched.

It has already raised rates twice this summer. Its deposit rate currently stands at 2.5 per cent, and investors are contemplating as many as three further increases over the coming year. Yet markets are not expecting an October increase, with the next move not fully priced in until January.

That caution is understandable. Interest rates are a remarkably blunt instrument for dealing with an energy shortage. Raising the cost of borrowing cannot produce another cubic metre of natural gas or another barrel of oil. It can, however, make mortgages more expensive, discourage investment and squeeze companies already facing higher energy bills.

Europe has another problem: its public finances. Governments are under increasing pressure to cushion households and businesses from soaring energy costs. France has already seen street protests over fuel prices, while government support measures risk becoming another burden on national budgets already under considerable strain.

This creates an unpleasant feedback loop. Governments subsidise energy to protect consumers; deficits increase; bond markets demand higher yields; borrowing becomes more expensive; and households and businesses face another round of financial pressure.

France is an obvious danger point. The spread between French and German borrowing costs has risen to multi-decade highs, reflecting growing investor concern about French debt sustainability.

The ECB is consequently being asked to perform an increasingly improbable balancing act: suppress inflation without strangling growth, protect financial stability without appearing complacent, and somehow compensate for an energy shock over which it has virtually no control.

There is one reason for optimism. The underlying inflation numbers have not exploded. ECB policymaker Olli Rehn has pointed out that rising long-term interest rates themselves could restrain the transmission of higher energy prices into wages and other prices.

But that is hardly a comforting economic strategy. Europe is effectively relying on expensive money to prevent expensive energy from becoming even more expensive.

The danger is that policymakers discover they are always one crisis behind.

The eurozone’s inflation rate has already risen from 2.0 per cent at the beginning of 2026 to 3.8 per cent in September. Eurostat’s latest figures show just how rapidly the situation has changed.

If energy prices remain elevated into 2027, the ECB may have little choice but to tighten further.

Europe was promised an inflation victory. Instead, it has been handed yet another bill.

France and Germany are moving towards a possible compromise over the future of Europe’s automotive industry, linking negotiations over EU vehicle-emission rules with a separate dispute over how strongly European-made products should be favoured in subsidies and public procurement.

The negotiations bring together two issues that have divided Paris and Berlin: Germany’s demand for greater flexibility in rules governing combustion-engine vehicles and France’s campaign for stronger “Made in Europe” requirements in EU industrial policy.

Officials involved in the discussions believe a broader Franco-German agreement may now be possible, although differences remain over how European content should be defined and whether products made in countries with EU free-trade agreements should receive similar treatment.

The automotive dispute follows the Commission’s decision in December 2025 to propose significant changes to rules that had originally required a 100 per cent reduction in tailpipe CO₂ emissions from new cars from 2035.

Under the revised automotive package, manufacturers would instead face a 90 per cent tailpipe-emissions reduction requirement from 2035.

The remaining 10 per cent could be compensated through mechanisms linked to low-carbon steel produced in the EU and the use of e-fuels and biofuels.

EU Today reported before the Commission presented the package that pressure from Germany, Italy and European manufacturers was forcing Brussels to reconsider the original 2035 framework.

The subsequent proposal confirmed the shift.

In March, EU Today also examined the Commission’s decision to link low-carbon European steel directly to vehicle-emissions compliance, creating a connection between automotive climate rules and support for Europe’s heavy industry.

Germany has continued to argue for a technology-neutral approach.

Berlin wants legislation to leave scope for combustion engines operating on renewable or low-carbon fuels rather than treating battery-electric vehicles as the only route towards lower emissions.

That position is particularly important for Germany because of the scale of its automotive sector and the large industrial supply chain built around combustion-engine technology.

France’s priority is different.

Paris wants EU industrial policy to ensure that public subsidies and procurement increasingly support products manufactured inside Europe.

The argument centres on the Commission’s Industrial Accelerator Act, proposed in March as part of a wider strategy to strengthen European manufacturing.

The legislation introduces “Made in EU” and low-carbon requirements for public procurement and public support schemes covering strategic sectors including automotive manufacturing, steel, cement and aluminium.

The dispute is over what “European” should mean.

France favours a relatively strict definition focused principally on production inside the EU’s 27 member states.

Germany has advocated what Economy Minister Katherina Reiche has described as a “Made with Europe” approach, under which some products from close trading partners could qualify if those countries provide equivalent market access to European companies.

That could potentially include states such as Norway and Switzerland and partners including Canada.

Spain has been among countries seeking a middle position between the French and German approaches.

The issue matters because modern automotive supply chains do not stop at the EU’s external border.

Battery materials, semiconductors, electric motors and other components can pass through several countries before final assembly, while Britain and Turkey remain deeply integrated into European vehicle production.

The EU-UK relationship is particularly sensitive because stricter rules of origin for electric vehicles are due to apply from 2027.

EU Today previously reported that European and British manufacturers were seeking another delay to those rules because the regional battery supply chain had not developed as quickly as originally expected.

At the same time, the EU is attempting to reduce dependence on Chinese electric vehicles, batteries and critical inputs.

The Commission has committed €1.8 billion to a Battery Booster strategy intended to strengthen the European battery value chain.

European electric-vehicle demand is continuing to grow. A 16-market European survey examined by EU Today showed battery-electric cars taking more than a quarter of new registrations in July, although large differences remain between national markets.

Manufacturers must therefore make investment decisions while several important elements of the regulatory framework remain under negotiation.

Factory conversion, battery plants and new vehicle platforms require investments planned years in advance. The conditions applying after 2030 will directly affect where those investments are made.

A Franco-German understanding would not determine the final EU rules. The European Parliament, Commission and other member states remain part of both legislative negotiations.

It could, however, bridge two of the most important disputes: Germany’s demand for greater technological flexibility in the 2035 vehicle regime and France’s demand that public money be used more directly to support European production.

The negotiations now underway suggest Paris and Berlin are increasingly treating those questions as parts of the same industrial bargain.

A group of 119 members of the European Parliament is pressing the European Commission and national governments to ensure that a new EU ban on artificial-intelligence  ‘Nudifier’systems used to generate non-consensual sexual images can be enforced as soon as it takes effect.

The prohibition on so-called AI “nudifier” systems becomes applicable on 2 December 2026 following changes to the EU Artificial Intelligence Act approved earlier this year.

The legislation prohibits AI systems designed to create child sexual abuse material or realistic images, video or audio depicting an identifiable person’s intimate parts or sexually explicit activity without that person’s consent.

Providers cannot place systems intended for such use on the EU market. Systems capable of producing the material must have adequate safeguards intended to prevent it, while deployers are prohibited from deliberately using AI systems for that purpose.

The final agreement on the AI Act amendments gave companies until 2 December to bring their systems into compliance.

The latest intervention is intended to ensure that regulators are ready to enforce the prohibition rather than simply having the legislation on the statute book.

The letter supported by 119 MEPs was initiated by Green MEP Lena Schilling and Greens/EFA co-president Terry Reintke.

Its signatories include members from several political groups.

They want the Commission and member states to ensure that national authorities are designated to enforce the ban and that people targeted by non-consensual AI-generated sexual imagery know which authority to contact.

The letter also calls for stronger enforcement of the Digital Services Act against online platforms and search engines carrying or facilitating access to such material.

The initiative follows research cited by the organisers which identified 147 European politicians appearing on websites containing sexualised AI deepfakes.

Of those identified, 138 were women.

Schilling was among those affected and has used her own case to argue that the December prohibition needs an operational enforcement system from its first day.

The prohibition emerged during the EU’s broader revision of its AI legislation.

In March, the European Parliament adopted its negotiating position by 569 votes to 45, with 23 abstentions.

Parliament and Council subsequently reached agreement on the revised text, and the measure completed its formal legislative process in June.

EU Today reported at the time that the Council’s final approval combined delays to some high-risk AI requirements with new restrictions on non-consensual sexual imagery.

The issue is distinct from the wider transparency requirements applying to AI-generated content.

Under Article 50 of the AI Act, transparency obligations have applied since 2 August.

Providers of generative systems must in relevant cases make AI-generated or manipulated material machine-readable and detectable, while deployers face disclosure obligations covering deepfakes and some AI-generated material dealing with matters of public interest.

EU Today examined those changes when chatbot and deepfake disclosure rules entered into application in August.

There is, however, a transitional period for some AI systems that were already on the market before 2 August. Their machine-readable marking obligations take effect on 2 December.

That means the same date will bring both the new nudifier prohibition and the end of the transitional period for certain AI-content marking requirements.

Enforcement is divided between national regulators and EU institutions.

National market-surveillance authorities carry much of the responsibility for enforcing the AI Act. The Commission’s AI Office has direct enforcement responsibilities in more limited areas, including certain systems built on general-purpose AI models and systems integrated into very large online platforms or search engines.

The Commission’s guidance on Article 50 is intended to provide regulators and companies with a common interpretation of those transparency requirements.

The nudifier prohibition raises an additional problem because distribution of non-consensual intimate images also intersects with the Digital Services Act, national criminal and civil laws and EU legislation addressing violence against women.

The 119 MEPs are therefore seeking action beyond the AI Act itself.

Their letter asks for stricter use of the Digital Services Act against platforms and search engines, faster implementation of the EU directive combating violence against women and clearly identifiable national authorities able to respond to complaints.

The legal gap surrounding nudifier systems had previously been acknowledged by the Commission.

Its review of prohibited AI practices concluded that the original AI Act’s provisions on manipulation and exploitation of vulnerabilities did not adequately cover systems producing child sexual abuse material and non-consensual sexually explicit images.

That finding contributed to the explicit prohibition subsequently added during the Digital Omnibus negotiations.

The legislation is now settled. The immediate issue before the 2 December deadline is whether regulators across the 27 member states have the mechanisms in place to identify prohibited systems, investigate providers and respond when people report AI-generated intimate material produced without their consent.

European governments and the United States are negotiating over emergency diesel reserves as a global shortage of refined fuel places increasing pressure on transport, agriculture and industry.

The Trump administration has urged France and Germany to release diesel from their strategic stocks, while raising the possibility of restricting American diesel exports if European governments fail to put additional supplies on the market.

Washington has asked Europe to release about 120 million barrels over six months, according to people familiar with the talks.

The demand puts European governments in a difficult position. Releasing reserves could help reduce prices in the short term, but it would also reduce the emergency buffer available if disruption to Russian or Middle Eastern supplies becomes more severe.

The European Commission, France, Italy, Ireland and Britain held discussions on 1 October over possible diesel stock releases. Germany has been involved separately in discussions with Washington.

France and Germany hold a substantial share of Europe’s emergency diesel reserves.

Under the EU’s Oil Stocks Directive, member states must maintain emergency crude oil or petroleum-product stocks equivalent to at least 90 days of net imports or 61 days of domestic consumption, whichever is higher.

The requirement exists to provide a buffer against major supply interruptions rather than normal market fluctuations.

Europe’s dependence on imported oil remains substantial. Oil accounted for around 38 per cent of the EU energy mix in 2024, while approximately 95 per cent of crude oil consumed in the bloc was imported.

The latest dispute follows months of mounting pressure in the diesel market.

EU Today reported in September that President Donald Trump had urged Ukraine to reduce attacks on Russian refining infrastructure as global diesel supplies tightened.

Moscow has since extended restrictions on diesel exports. At the same time, disruption to Middle Eastern refining and shipping has constrained another major source of supply, while China moved on 1 October to suspend most fuel-product exports outside Hong Kong and Macau.

The result has been a particularly sharp problem for Europe because its refining capacity has declined over the past two decades and it has become increasingly dependent on imported middle distillates.

European dependence on outside energy supplies was already becoming more expensive before the latest diesel shortage. Recent Eurostat figures showed that the value of EU petroleum-oil imports increased by 55.8 per cent in the second quarter of 2026, even though the physical volume imported rose by only 1.2 per cent.

The United States has become an increasingly important diesel supplier since Europe sharply reduced imports of Russian refined products following Moscow’s full-scale invasion of Ukraine.

That means a US export restriction would have an immediate impact on the European market.

EU Trade Commissioner Maroš Šefčovič said after discussions with US Trade Representative Jamieson Greer that Brussels wanted a coordinated transatlantic approach to lowering diesel prices.

He said restrictions on US diesel exports would damage Europe’s economic performance and that both sides had agreed to remain in close contact.

Šefčovič also noted that the EU had exceeded its commitment to purchase US energy under the trade agreement reached at Turnberry in 2025.

US Energy Secretary Chris Wright, meanwhile, said he was “highly confident” European governments would release additional stocks.

Wright argued that coordinated action was particularly important as the northern hemisphere moved into the harvest season and towards winter, when demand for diesel and heating fuels normally increases.

Emergency releases have already been used on an exceptional scale this year.

In March, the 32 members of the International Energy Agency agreed to make 400 million barrels of oil from emergency reserves available to the market after disruption caused by the Middle East conflict.

It was the largest coordinated stock release in the organisation’s history.

A further European release would therefore come only months after governments had already drawn on strategic reserves to stabilise markets.

The pressure is increasing as oil prices again move higher. Brent crude settled above $102 a barrel on 1 October amid concerns over Chinese fuel exports and further US military deployments to the Middle East.

EU energy officials are now considering whether the immediate risk of high diesel prices outweighs the value of keeping fuel in reserve against a potentially more serious supply disruption later in the year.

European Union governments have committed €17.9 billion this year to measures intended to protect households and businesses from rising energy prices as disruption in the Middle East and global fuel markets continues to feed through into European inflation.

Twenty-five of the EU’s 27 member states have adopted some form of energy support during 2026, according to the latest assessment of the measures.

More than two-thirds of the spending consists of measures that directly suppress energy prices rather than targeted income support.

The figure has increased since the Commission’s spring economic forecast.

Measures adopted or sufficiently detailed by 4th May were then estimated to cost €14.5 billion, equivalent to around 0.07 per cent of EU GDP. The Commission calculated that extending those measures until the end of 2026 could increase their cost to €38.6 billion.

National measures include reductions in fuel taxes and excise duties, energy vouchers, direct financial assistance and support for companies facing higher production and transport costs.

The Commission has repeatedly urged governments to concentrate assistance on vulnerable households and particularly exposed industries rather than subsidising energy use across the entire economy.

Its spring assessment found that roughly three quarters of the support then in force was not targeted specifically at vulnerable consumers or energy-intensive companies.

Broad price measures can reduce household bills immediately, but they also carry a larger fiscal cost and reduce the incentive to cut consumption when supplies are constrained.

The present shock began with disruption to oil and gas supplies caused by the Middle East conflict.

The Commission responded with its AccelerateEU package of emergency and structural measures, allowing governments to use measures including income support, energy vouchers and lower electricity taxes for vulnerable households.

Brussels says Europe does not currently face an immediate security-of-supply problem for the winter of 2026–27 because supplies have been diversified and strategic reserves remain available.

Price exposure is a different matter. Europe still depends heavily on imported fossil fuels, leaving domestic businesses and consumers exposed when world-market prices rise.

Recent trade figures underline the scale of that vulnerability. EU Today reported last month that Europe’s petroleum import bill increased by 55.8 per cent in the second quarter compared with the same period of 2025, despite only a 1.2 per cent increase in the volume imported.

Natural gas presents another risk. European storage sites entered the autumn at unusually low levels, with EU Today reporting that EU gas stocks were around 67 per cent full in mid-September, leaving the bloc more exposed if winter demand rises sharply.

Pressure has now spread into refined fuel markets as well. Russian diesel exports are restricted, Middle Eastern supply remains vulnerable and China has suspended most fuel-product exports outside Hong Kong and Macau. Washington is simultaneously pressing European governments to release diesel from their strategic reserves.

The energy shock is also affecting the wider economic outlook.

The Commission’s spring forecast had already anticipated weaker growth and higher inflation. It projected EU employment growth of only 0.3 per cent in 2026 and expected the aggregate government deficit to rise from 3.1 per cent of GDP in 2025 to 3.6 per cent by 2027.

More recent Commission estimates indicate that eurozone growth in 2026 could be somewhat stronger than the earlier forecast, while expectations for 2027 have deteriorated.

Inflation is expected to remain around 3 per cent this year and to remain above earlier projections next year. That increases the fiscal problem facing governments.

Large energy subsidies can reduce the immediate impact on households but add to public borrowing and may complicate monetary policy if they support overall demand.

The European Fiscal Board has urged member states to ensure that energy measures are temporary, have clear expiry dates and are directed at vulnerable households and businesses.

The Commission is also drawing lessons from the measures adopted after Russia’s full-scale invasion of Ukraine in 2022. Energy support introduced during 2022 and 2023 alone had a net cost equivalent to about 2.1 per cent of EU GDP, according to Commission calculations.

Brussels wants to avoid a second prolonged cycle of broad subsidies while accelerating investment intended to reduce Europe’s structural reliance on imported fossil fuels. That includes grid investment, electrification, renewables and measures to reduce taxes on electricity relative to gas.

For national governments, however, the immediate pressure is coming from bills paid today rather than energy infrastructure planned for the next decade. With €17.9 billion already committed during 2026, further disruption in international oil, diesel or gas markets could determine whether what was designed as temporary support has to be extended into next year.

The European Union has formally adopted new rules allowing member states to establish migrant return hubs outside the bloc, completing a legislative process that significantly expands the tools available to governments seeking to remove people with no legal right to remain.

The Council gave its final approval to the Return Regulation on 1 October. The measure introduces a common European framework for returns, including a European Return Order, stronger obligations on people ordered to leave and special provisions for individuals regarded as security risks.

It also creates an explicit legal basis for member states to send people subject to return decisions to facilities established in non-EU countries.

Such arrangements can only be concluded with countries considered to respect international human rights standards and international law, including the principle of non-refoulement, which prohibits returning people to places where they face persecution or serious harm.

Unaccompanied minors are excluded from transfers to return hubs.

The regulation will enter into force the day after its publication in the EU’s Official Journal. Provisions dealing with return hubs will apply immediately, while measures requiring administrative preparations will take effect one year later.

The decision moves the return-hub policy beyond the negotiating stage. In September, EU Today reported that Denmark, Germany, the Netherlands, Austria and Greece had begun actively seeking third countries willing to host return centres.

By the end of September, the same group was preparing a pilot system intended to begin transferring rejected asylum seekers outside the EU during 2027.

The European Commission has argued that the existing returns system has been one of the weakest parts of EU migration policy. When agreement on the legislation was reached in June, it said the effective return rate had risen to 28 per cent in 2025 but remained too low.

The Council now puts the problem more starkly: around two in every three people ordered to leave the EU do not actually leave.

A central element of the new framework is the European Return Order.

A member state issuing a return decision will enter essential information on a standard European form. That will give other member states the information required to recognise the decision if the person subsequently moves elsewhere within the Union.

Automatic recognition will not initially be compulsory. Governments will be able to recognise another country’s return decision voluntarily, with the arrangement due to be reviewed three years after the regulation enters into force.

The Commission may then propose making mutual recognition mandatory.

People ordered to leave will also face an EU-wide obligation to cooperate with national authorities. Failure to do so can lead to reduced benefits or allowances, withdrawal of incentives for voluntary departure, financial penalties and, where national legislation permits, criminal sanctions.

Separate rules apply to individuals considered security risks.

Governments may impose indefinite entry bans where justified and proportionate and may detain such individuals for periods exceeding 24 months.

The Return Regulation complements the wider EU Pact on Migration and Asylum, which entered application on 12 June. That system introduced new arrangements covering border screening, asylum procedures, biometric registration and responsibility-sharing between member states.

Return hubs have nevertheless become one of the most politically significant elements of the wider migration policy.

The European Parliament approved the new returns framework in June, after Council and parliamentary negotiators had reached a provisional agreement earlier that month.

Attention subsequently moved to implementation — particularly the question of finding governments outside the EU willing to host people removed from member states.

The regulation cannot compel a third country to accept a return centre. An agreement or arrangement must first be negotiated with the country concerned, covering legal safeguards and the operation of the facility.

That requirement leaves the most difficult diplomatic question unresolved.

The five governments already working together on return hubs have discussed possible partner countries, while Greece has separately moved to create national legislation supporting transfers to centres outside the EU.

The Council’s decision gives those initiatives a common European legal framework. Whether return hubs become a significant part of EU migration policy will now depend on agreements with countries prepared to host them.

Ukraine will seek to have Russian businessmen Alisher Usmanov and Mikhail Fridman restored to European sanctions lists after the EU removed both men as part of an agreement that secured a three-year renewal of its wider individual sanctions regime against Russia.

Ukraine is preparing a new sanctions initiative targeting more than 20 Russian businessmen and intends to press for Alisher Usmanov and Mikhail Fridman to be placed back under restrictions, Foreign Minister Andrii Sybiha said on Thursday.

Sybiha, speaking to journalists in Kyiv on 1 October, said the Ukrainian government regarded the European Union’s decision to remove the two men from its sanctions list as unacceptable and had tried to prevent it through both public and diplomatic channels.

“Our response will be asymmetric. You removed two oligarchs, and we will add another twenty,” Sybiha said.

He said Kyiv had prepared a list containing more than 20 Russian businessmen for possible sanctions and was also working to restore restrictions against Usmanov and Fridman.

The minister did not specify which EU legal mechanism Kyiv expects to use. Ukraine cannot itself add individuals to the bloc’s restrictive-measures list, meaning any renewed designation would require action by EU member states.

The EU formally removed Usmanov and Fridman from its sanctions list on 22 September. Council Implementing Regulation (EU) 2026/2160 deleted the entries for Usmanov, Fridman and Russian businessman Andrey Falaleev, as well as Redbird Corporate Services Ltd.

At the same time, EU governments extended the remaining individual sanctions for another 36 months, until 22 September 2029. The regime covers more than 3,000 individuals and entities and provides for asset freezes, travel restrictions and a prohibition on EU citizens and companies making funds or economic resources available to those listed.

The agreement marked a significant change to the previous system under which individual sanctions were renewed every six months.

The fate of Usmanov and Fridman had become one of the principal points of dispute during negotiations. EU Today reported before the decision that Latvia opposed a compromise involving their removal while supporting a longer renewal period for the wider sanctions regime.

The eventual agreement nevertheless resulted in both men being removed. EU Today reported on 22 September that the Council had approved the three-year extension alongside their delisting.

Kyiv is now seeking to compensate for that decision through national sanctions regimes while pursuing their possible return to the EU list.

Sybiha said President Volodymyr Zelenskyy had approved the Ukrainian approach and that Kyiv was working with partner governments to ensure that restrictions against Usmanov and Fridman remained in force outside the EU framework.

According to the foreign minister, Canada has indicated that it intends to retain its restrictions. Sybiha also pointed to Britain, Japan and Australia as jurisdictions where sanctions remain in place and said Ukraine would seek similar measures elsewhere.

Britain continues to maintain a separate national Russia sanctions regime. The UK government’s current Russia sanctions framework records designations, amendments and removals independently of decisions made by the European Union.

Several EU member states have meanwhile taken or begun preparing national measures following the September decision.

Estonia moved immediately after the EU agreement. Foreign Minister Margus Tsahkna signed national sanctions against Usmanov and Fridman on 23 September, saying Tallinn had opposed their removal from the EU list.

Lithuania has also begun using national legislation. Foreign Minister Kęstutis Budrys asked for both businessmen to be placed on Lithuania’s national entry-ban list for five years. The Lithuanian Foreign Ministry said it was also preparing legal measures that would allow the freezing of their funds and economic resources.

The dispute has exposed one of the structural features of EU sanctions policy: decisions on restrictive measures require agreement among member states, allowing individual listings to become part of wider negotiations over the continuation of an entire sanctions regime.

Moving from six-month to three-year renewals reduces the frequency with which the broader Russia sanctions list has to return to the negotiating table.

It does not, however, prevent individual names from being added again during that period. Kyiv’s new initiative is therefore likely to focus both on persuading individual governments to introduce national restrictions and on building sufficient support inside the EU for Usmanov and Fridman to be designated again.