Six frugal countries this week circulated a letter threatening to block a deal on the next EU budget unless “hundreds of billions” of euros in spending was cut.
The Dutch and Germans, ever the most zealous keepers of the frugal flame, want to redirect what remains away from regional and farming funds, towards innovation and defence.
For those following EU fiscal debates, this song will sound familiar. So-called ‘net payer’ countries have never liked sending money to the economic periphery.
In 2013, after a year of bickering, Britain, Germany, and the Netherlands killed a European Commission plan for a five percent increase and pushed through the EU’s first-ever budget cut, with farm and cohesion funds taking the biggest hit.
But new research suggests that the frugals may be shooting themselves in the foot.
Last week, Olga Ivanova, a senior researcher at the Netherlands Environmental Assessment Agency (PBL), published a study in Dutch economics journal ESB calculating what EU money actually does for the Netherlands’ 12 provinces.
And, for most of them, she found that the growth effect of EU investment outweighed their share of what the Netherlands paid into the budget.
Using PBL’s own economic model, she traced 10 EU funding streams between 2013 and 2024, from Horizon science research grants to farm subsidies and regional development money.
Across the Netherlands as a whole, provinces get back about 99 cents in extra growth for every euro paid out to the EU budget.
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Former French MEP Rachida Dati is facing intense scrutiny following allegations she took lobbying money from French energy giant GDF Suez/Engie during her time at the European Parliament, on top of a separate investigation into her ties with French car maker Nissan-Renault.
The 60-year-old, who was born to Arab parents and started out as a maid, is also a former French culture and justice minister, and now mayor of the affluent 7th arrondissement in Paris.
But she also risks wearing a police ankle-bracelet and faces four years in prison in ongoing trials into her ties with the French companies, which first hit the headlines in 2025.
And back in 2014, when she sat in the European Parliament on the benches of the centre-right European People’s Party (EPP) group, she threatened to sue EUobserver because we asked her about GDF Suez, which later changed its name to Engie, while deriding the corruption allegations against her as racist slurs.
EUobserver has published below some of the related email correspondence for the sake of transparency:
Dati email from 15 Apr 2014
“Rachida Dati will not hesitate to sue any media which will report such a defamatory statement,” her office also said in an email in 2015, after a German Green MEP, who was spearheading an ethics committee, said she was likely pocketing GDF Suez money.
Dati email from 15 June 2015
The allegedly “defamatory statement” had been made by Gerald Häfner, a former German MEP, who had chaired the parliament’s advisory committee on its Code of Conduct.
Häfner’s supposedly offensive words were:
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The European Parliament’s culture committee on Tuesday (29 September) agreed to boost the flagship Erasmus+ student exchange programme by €7bn in 2028-2034 linked to rule-of-law conditions, even as so-called frugal countries seek to cut overall funding.
MEPs backed in April to increase the European Commission’s original proposal from €40bn to €47bn as part of a interim report on the EU’s long-term budget (MFF).
On Tuesday, they also said funds should be linked to respect for the rule of law and transparency standards – a clear reference to the situation facing Hungarian universities in the past, which were unable to participate in Erasmus+ during the illiberal rule of former prime minister Viktor Orbán.
Candidate countries, such as Ukraine and Moldova, may be able to participate in the next Erasmus+ in the coming cycle, provided they met “certain conditions,” Polish centre-right and lead MEP on the file, Bogdan Zdrojewski, said during a press conference in Brussels.
The UK and Switzerland are also set to rejoin the programme already in 2027.
And Canada might be able to participate too, Zdrojewski said, should it gain an associate EU membership – an unclear status presented by EU commission president Ursula von der Leyen during her State of the Union speech on 11 September and welcomed by Canada’s prime minister Mark Carney.
Around 17m participants have taken part in Erasmus+ since it was launched 39 years ago, in what is widely considered one of the most popular EU integration projects.
An estimated one million babies have also been born from couples who have met during their exchange.
The committee boost comes amid long-term EU budget talks for the next seven years, in which frugal states such as Germany and the Netherlands want to pay in less than in the past, but Zdrojewski was “feeling optimistic” about getting through the proposed Erasmus budget increase.
He said he counted on EU capitals to defend the programme in future negotiations.
MEPs want to make Erasmus+ more inclusive, highlighting special programmes for adult learners and students in informal education programmes.
They also aimed to set a 20 percent quota for participants with underpriviliged access to career and educational opportunities.
To make Erasmus+ easier to manage, they proposed dividing the funding between different areas: education and training (74 percent), youth and volunteering (15 percent), and sport (four percent).
The committee report will now be voted on by the EU Parliament plenary, although it is still unclear when, when it becomes part of MEPs’ formal basis for negotiations with EU capitals.
This article was updated on 30 September 2026 to make clear that the €47.39bn figure was first set out in Parliament’s interim report on the MFF, adopted in April. Tuesday’s committee vote incorporates that figure into the Erasmus+ regulation, alongside new rule-of-law and transparency conditions.
The European Commission says it will not compromise on protecting the EU’s external borders, but will also respect human rights, while declining to specify if a new emergency rule could suspend people’s basic right to asylum.
The vague statements by Magnus Brunner, the EU home affairs commissioner, in Brussels on Tuesday (29 September), followed an equally vague proposal announced by commission president Ursula von der Leyen in her State of the Union speech on 11 September, who pledged to create a “European emergency response framework”.
When asked if her new framework would include the possibility to suspend asylum at the EU’s external border in cases that mirrored this summer’s Ceuta crisis, when tens of thousands of people entered the Spanish enclave in north Africa, Brunner said: “I can’t go into details, because it’s a discussion which is going on at the moment”.
His non-committal take on the hot button issue also came after a resolution adopted by the centre-right European People’s Party (EPP) in Brussels on Tuesday, which is demanding that member countries, in some cases, be given the option to temporarily suspend asylum applications.
Specifically, it calls on the EU “to adopt legislative measures authorising refusal of entry or returns without individual asylum procedures for illegal migrants used in a hybrid attack”.
Meanwhile, Brunner and von der Leyen come from the same conservative party in the EPP, posing questions to what extent political pressure has influenced the latest commission initiative.
Greece’s prime minister Kyriakos Mitsotakis (also EPP) in early August had already gone public with demands for new EU rules allowing for asylum to be suspended for newly arrived people.
The Polish government (EPP) also weighed in, claiming credit for getting von der Leyen to cite the idea in her big speech.
Warsaw had earlier this month extended its asylum ban on people entering from Belarus, in what rights groups say involves pushbacks that cause loss of life.
But for Brunner, the issue had already been broached in a commission asylum strategy report that was published back in January.
That report references “weaponisation of migration” by hostile countries, such as Belarus and Russia, and links it back to another commission document from December 2024 that argues there are certain exceptional situations in which the ban on pushbacks cannot apply.
Kyiv is currently in a worse situation than Kharkiv when it comes to air-raid alerts.
The Russians struck the National Academy of Sciences, forcing scientists to flee through windows. Why did they target it?
What upgrades they are testing on their Geran-5 drones.
According to Rybar, Russia’s goal in attacking Kyiv is also to persuade Europe to stop helping Ukraine.
Maps of the day: The situation near Lyman and the gap between the Russian ministry and reality.
Videos of the day: an attack on the border crossing with Poland; footage from the cockpit of an Su-25; a robot avoids a drone; Russians flee among a crowd of civilians.
Kyiv has experienced its worst attacks since the start of the war in recent weeks. According to an analysis by French OSINT analyst Clément Molin, the capital was hit by 155 Russian missiles and drones in September, compared with 113 in August and 21 in March.
Denník N reporter Mirek Tóda, who visited Ukraine last week, said that Kyiv was currently worse off than Kharkiv in terms of air attacks, even though Kharkiv lies just 30 km from the front line.
Even smaller, FPV (first-person view) drones have recently begun flying on Kharkiv’s outskirts, hunting cars, but the number of air-raid alerts and air strikes there has still been far lower than in Kyiv in recent weeks.
Molin added that the Russians had struck the heart of the capital 10 times a day in recent days.
The Russian independent group Conflict Intelligence Team wrote that Kyiv and its surroundings would probably account for the highest number of civilians killed and injured anywhere in Ukraine in September — more than in the Donetsk, Kherson, or Kharkiv regions.
An at a time when attacks causing casualties occur every day, it is becoming harder for foreign journalists to engage readers with reports about an attack on the Ukrainian capital.
But on Monday, however, the Russians managed to do so.
During the working day, they struck the historic building of Ukraine’s National Academy of Sciences. It caught fire, and footage of scientists and other employees attempting to climb out through smoke-filled windows circulated around the world.
A Russian strike against the building of the National Academy of Sciences of Ukraine. A rescue operation is underway: crews are putting out the fire and searching for people who may have been trapped inside. All services are deployed. Today in Kyiv, a pharmaceutical company and… pic.twitter.com/ccfIHnGFNg
— Volodymyr Zelenskyy / Володимир Зеленський (@ZelenskyyUa) September 28, 2026
The images of people standing on a ledge may have recalled those seen after the 11 September attacks, although the terrorists then struck skyscrapers more than 100 storeys high in New York.
Horrific scenes out of Kyiv this morning as Russia used a jet-powered drone to blow up Ukraine’s National Academy of Sciences. People are escaping through windows as the building burns. Just like they target kindergartens and schools, now they are bombing science. pic.twitter.com/yvwzLz9DXe
🚨 BREAKING: Terrifying footage captured people climbing out of windows after a Russian attack struck the National Academy of Sciences in central Kyiv in broad daylight.
The attack killed one person and injured at least three others, triggering a massive blaze. pic.twitter.com/wiWTU51QaL
The historic building had only three floors. Thanks in part to this and the firefighters’ rapid response, only one person was killed and six were injured.
It is quite likely that the attack on the Academy of Sciences was not accidental and that the Russians were targeting an important individual.
Ukrainian analyst Viktor Kovalenko believed that the Russians had wanted to kill 86-year-old Volodymyr Horbulin. He is one of the architects of Ukraine’s missile and space programme.
He headed Ukraine’s space agency in the 1990s and, for five years under President Leonid Kuchma, served as secretary of the National Security Council. Despite his age, he remains active: he is vice-president of the National Academy of Sciences and focuses on security issues.
And the elderly scientist was in the building at the time of the attack. The drone hit a room one floor above his office. He sustained only minor injuries, but his assistant was killed.
A few hours later, the Russians struck the building of the Dobrobut medical centre, which caught fire. Several people were reported injured there.
Russia bombed the Dobrobut Medical Center in Ukraine's capital, Kyiv, this afternoon, setting the facility ablaze. pic.twitter.com/gs0d1X3eB5
These attacks took place in the wider city centre and were felt by the EU ambassador to Kyiv, Slovakia’s Katarína Mathernová.
“Just moments ago, an explosion jolted me out of my chair in my Kyiv office. It was the loudest blast I have experienced here in three years. A jet-powered drone struck a building around 200 metres from the EU delegation. It happened in broad daylight. The target was a hospital,” Mathernová wrote.
While the Russians once attacked Kyiv mainly at night, attacks are now also taking place during the day. Although they target military and industrial sites as well, they frequently hit civilian facilities where many people are present during daytime.
“Today in Kyiv, a person can be killed in a supermarket, at a university, at a petrol station, on the street or at work. The campaign of indiscriminate attacks targeting the centre of the capital is unprecedentedly violent. The Russians are targeting data centres and regularly miss their targets,” French analyst Clément Molin wrote.
“What Russia is doing is pure terrorism. And we should treat neither its state leadership nor its military forces any differently. Why should we continue pretending that it is possible to negotiate with such terrorists on equal terms?” German analyst and former journalist Julian Röpcke wrote.
“Nothing expresses the ‘fight against Nato expansion’ quite as clearly as bombing the historic building of Ukraine’s National Academy of Sciences in central Kyiv, forcing ordinary scientists to jump from windows to escape death in the flames,” Ukrainian journalist Illia Ponomarenko added.
The Russians are attacking the capital virtually constantly. It is not merely one or two attacks a day. As Ukrainian analyst Bohdan Myroshnykov wrote on Sunday, Kyiv had been without an air-raid alert for only 5 hours and 55 minutes in the previous 24 hours.
“The current alert has lasted 8 hours and 20 minutes. The enemy deliberately launches drones in order to prolong the alert. Once they arrive in Kyiv, they begin circling over the city and its suburbs to keep people on edge for even longer,” he wrote.
According to him, the main weapons currently used by the Russians to attack Kyiv are Geran-5 jet drones. These are essentially smaller — though still six-metre-long — cruise missiles. By contrast, Geran-4 jet drones have the classic delta-wing shape of older Shahed drones.
Myroshnykov wrote that Ukrainians had more or less learned how to shoot down Geran-4 drones, but were having difficulties with the fifth series. While they intercept Geran-4s with an effectiveness of 70 to 80 percent, the rate for Geran-5s is only 50 to 65 percent. “The fourth series is intercepted en masse while approaching the Kyiv agglomeration, whereas the fifth is only intercepted within it,” the analyst wrote.
Last week, we wrote that Ukrainians had released the first videos showing them shooting down jet-powered Geran drones, including Geran-5s, using jet-powered interceptor drones capable of matching their speed. A video has now emerged of another new drone that apparently can already do this.
The problem, however, is that none of these drones is yet being mass-produced. Ukrainians therefore do not have enough of them to counter the growing number of jet-powered Gerans that the Russians are launching at Kyiv and other Ukrainian cities — as well as other targets.
“There are prototypes that have delivered varying results, but considerable effort is needed to bring a prototype into large-scale serial production. Sometimes this is impossible because access to certain components is limited,” former adviser to Ukraine’s defence ministry Serhii Sternenko wrote.
“It took us 3.5 years to find a more or less reliable anti-drone defence against conventional Shaheds. We began this path five months ago in the case of jet-powered drones. It may take us eight to 10 months to find a reliable anti-drone defence,” Myroshnykov wrote.
Ukraine’s defence minister, Yevhen Khmara, called on European partners at a meeting of his EU counterparts to help finance these interceptor drones, which have proved to be the best defence against conventional Gerans.
The Russians are also becoming increasingly creative in their efforts to strike targets in Ukraine. Serhii Beskrestnov, another former adviser to the defence minister, shared a video showing the Russians striking Incom’s office building in Kyiv. What is notable is that they filmed the strike themselves using a drone with a high-quality camera.
“The enemy attacked Incom’s office with a Geran-5 missile, while at the same time a jet-powered Shahed flew over Kyiv, circling above the attack site at an altitude of almost three km. It served as a radio-signal relay for the Geran-5 missile while also recording — and immediately transmitting — video of the attack on Incom. This Shahed then flew out of Kyiv and destroyed a McDonald’s warehouse,” Beskrestnov wrote.
He added that he was convinced the two operators had been sitting next to one another.
The Defence Express website also published an article about the Russians fitting their newest Geran-5-K5 jet drones with the Susanin navigation system, first reported by a Russian Telegram account. The system works by comparing current camera images with pre-recorded imagery.
“This enables the Geran-5 K5 to determine its coordinates even when satellite navigation is unavailable,” Defence Express wrote.
However, it works better during the day than at night, as it needs current images of objects on the ground.
It is often said that the Russians attack Ukrainian cities because they are unable to advance at the front. The aim may be to lower Ukrainians’ morale, degrade their economy and force them to surrender and accept Russian terms.
Although the attacks on Kyiv have been the worst since March 2022, they do not yet appear to have shifted Ukrainian public opinion. According to one recent poll, people were most concerned about government corruption (50 percent), with Russian air attacks only in second place (40 percent). Naturally, the poll was conducted not only in Kyiv but also in places where attacks are less frequent.
Recent polling by the Kyiv International Institute of Sociology (KIIS) indicates that the most worrying issue for Ukrainians right now is government corruption (at 50%), followed by Russian missile and drone attacks (40%) and unprofessionalism and incompetence of the authorities… pic.twitter.com/OvEbFz5jNQ
The attacks are often compared to the “war of the cities”, during which both countries attacked each other’s cities in the 1980s Iran-Iraq war. According to the Russian propaganda channel Rybar, they are also intended to undermine support from Europe.
This may be a somewhat far-fetched theory, but it is worth mentioning because it may indicate that people in the Kremlin think along these lines as well.
Rybar asks what the attacks mean for Ukraine’s “sponsors”. In its view, it is time for them to write off Ukraine, because there is no point pouring money into such a country. A “Marshall Plan”, it says, would be “pointless”.
“The more effective the strikes by the Russian armed forces in the framework of the ‘war of the cities’, the more likely the scenario in which the EU, even in the event of a ‘freezing’ of the situation, will ‘write off’ so-called Ukraine because further support for it is unsustainable. And without sponsors, the Kyiv regime cannot survive,” Rybar wrote.
This might perhaps apply if it were a war on the other side of the world, in which the EU was supporting one side. But the war over Ukraine is a conflict on the EU’s border, and there is a high likelihood that, if Ukraine does not stop the Russians, scientists will be fleeing from burning windows in Tallinn, Vilnius or Warsaw.
Maps of the day
On Monday, we wrote about how Ukrainians were gradually releasing parts of Operation Vivaldi, which is liberating territory north of Lyman. Russia’s defence ministry, as well as the Russian state agency Ria Novosti, continue to maintain their claims that the front line lies much further west.
This map compares official Russian claims with reality. At the point of greatest divergence, the maps differ by 40 km. For comparison, that is roughly the distance between Trnava and Bratislava. Overall, the Russians claim to control 1,360 square km more in this area than they actually do.
The yellow line on this map shows what the current official Russian maps portray the situation in the Lyman direction as (or what they would now consider the Izyum direction).
At it's furthest point, their claimed frontline is 40 km (!) west of my frontline. This was achieved… pic.twitter.com/Nd2SP3HJur
Russian Z-bloggers and propagandists are, however, closer to reality. The Two Majors channel wrote that the situation was “continuing to deteriorate”.
“The enemy is conducting counterattacks and trying to push Russian troops back beyond the Zherebets. (…) The Russian foothold west of the river has shrunk,” it said.
According to the channel, Ukrainians had entered the village of Zarichne from several directions, while fighting was also under way for Yampil.
According to Two Majors, this sector remains one of the most problematic parts of the front from the Russian perspective. The Russians’ aim is to stabilise it and retain at least some units on this bank of the river.
The Rybar channel wrote that Ukrainians had intensified fire on the few places where the river can be crossed, as well as attacks on logistics far behind the front line.
“Despite the stabilisation measures that have been launched, the situation remains extremely difficult and tense. The enemy’s gradual release of footage is a tool of information pressure, but it conceals a very real deterioration of the situation in the Lyman sector,” Rybar wrote.
Videos of the day
In addition to Kyiv, the Russians are attacking other parts of Ukraine. They again struck the Yahodyn border crossing on the Polish-Ukrainian border. A Geran-5 drone landed in a car park, around one km from Polish territory.
Recently, after a similar attack in which they hit a train, they also struck a petrol station 800 metres from the crossing. These are the attacks closest to Polish territory since the start of the war, not counting drones and a Kh-101 missile that have already entered Poland.
An enemy UAV struck near the "Yagodin" checkpoint on the border with Poland, according to social media posts pic.twitter.com/COrcYKrUoJ
Footage from the cockpit of a Ukrainian Su-25 military aircraft during a mission in the east. The pilot flew low over the ground, then climbed higher, released a French AASM guided bomb and turned away.
Rare cockpit view from a Ukrainian Air Force Su-25 Frogfoot on a strike mission over the eastern front, screaming low over the ground before pitching up, clawing for altitude, and launching a French AASM guided bomb at a Russian target. pic.twitter.com/DmX2Pvfftw
Ukrainian robot operators are also assisted by aerial reconnaissance drones during missions. This apparently helped the operator in the video skilfully evade a Russian drone at the last moment.
Ukraine’s Khartia Brigade released a video which it said showed Russian soldiers in civilian clothes, mixed in with actual civilians, trying to escape through a pipeline.
🚨 BREAKING: Drone footage from Ukraine’s Khartia Brigade reveals likely Russian soldiers disguised in civilian clothing, attempting to escape alongside elderly hostages and children.
By Tuesday (22 September), Russia had verifiably lost 24,138 pieces of heavy equipment, compared with 24,098 on Monday (14 September). Of these, Ukrainians destroyed 19,105 (19,065) pieces, 1,000 (1,000) were damaged, crews abandoned 1,194 (1,194), and the Ukrainian army captured 2,839 (2,839). These included 4,448 (4,447) tanks, of which 3,353 (3,352) were destroyed in combat.
Ukraine had lost 12,175 (12,143) pieces of equipment, of which 9,579 (9,551) were destroyed, 702 (698) damaged, 695 (695) abandoned and 1,199 (1,199) captured. These included 1,464 (1,462) tanks, of which 1,125 (1,120) were destroyed in combat.
Note: Neither side regularly reports its own casualties or destroyed equipment. Ukraine publishes daily figures for Russian casualties and destroyed equipment, which cannot be independently verified. In this overview, we use data from theOryx project, which has compiled a list of equipment losses documented exclusively by photographs since the start of the war.
As the EU seeks budget cuts to break a stalemate in member states’ talks, women’s rights groups are on the chopping bloc, prompting advocates’ concern that the cause is fading from the common agenda.
Research published on Monday (28 September) by rights initiative MOTERIS showed a consistent loss of funding for feminist organisations across EU countries.
Some groups are also facing political conditions on the money they receive, for instance in Poland and Croatia, alongside groups reporting increasing dependance on unpaid work.
And the trajectory points toward decreased funding in the 2028-2034 EU multi-annual framework (MFF), which is currently being haggled in Brussels, making matters worse.
Feminist groups pointed toward AgoraEU as evidence of the trend – the proposed new single-funding stream is to merge grants for culture, media, equality and civil society under in the same MFF bracket, in what would make equally worthy causes and their defenders compete against one another for diluted resources.
And the ongoing cuts at national level meant that “EU funds are a crucial lifeline for many women’s rights groups where state funding is insufficient,” MOTERIS said.
Small, grassroots rights groups, many of whom MOTERIS represents, find it even harder to access grants due to heavy administrative requirements.
Meanwhile, the Czech Republic and Lithuania served as examples of EU countries whose philanthropy was dependent on external top-ups, making them “more vulnerable to geopolitical shifts, such as the withdrawal of US funding.”
MOTERIS staged a protest to push for MFF support for women’s rights groups outside the European Parliament in Brussels on Tuesday (29 September), ahead of an MEPs’ debate on the topic.
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Ukraine’s reconstruction is being planned from a map of destruction. Financing its private assets instead follows a map of earnings.
Since the full-scale invasion, the European Bank for Reconstruction and Development (EBRD) has lent $131m [€115.3m] to Nova Post, Ukraine’s largest parcel and courier network — an established business with visible demand, revenue, and an owner able to put up around a quarter of the cost itself.
Shipments grew 16 percent in 2024 as traffic reoriented towards western and central Ukraine and across Ukraine’s borders with the EU. Part of the financing paid for more than 600 safety capsules and shelters at its premises. A wartime resilience need met an earnings stream, and a lender followed.
Three sets of records show where else those conditions hold.
The first is what the international financial institutions have financed. Over four years the EBRD, European Investment Bank (EIB), International Finance Corporation (IFC) and World Bank announced some $19bn (€17bn) of project-level finance for Ukraine, more than two-thirds of it to public authorities and state-owned companies.
Guarantees to banks, some $1.8bn of them, are meant to reach smaller and mid-sized firms. Yet bank lending accounts for under four percent of Ukrainian capital investment. Mid-sized companies appear to be underserved.
The second is what foreign investors have done. They put around $2.9bn of new equity into Ukraine from 2022 to 2025, most of it into services rather than industry or energy.
Across 134 EBRD financed projects, announced third-party equity appears in three, all of them technology companies incorporated outside Ukraine. A growing number of international venture funds are entering Ukrainian defence technology, whose assets can travel with global demand. A food processor in Vinnytsia, for instance, has neither that pull nor that mobility.
The third is what companies in Ukraine do with their own money, and it dwarfs the other two. Capital investment runs at around $18bn a year, and companies’ own funds finance 71 percent of it.
In construction, the pattern is starker still: unfinished apartment blocks in Kyiv are going up without bank debt, paid for by the people buying the flats.
That money is heavily concentrated. Kyiv and its surrounding region take 54 percent of it; the eight western regions 16 percent. The eight frontline and border regions, which hold 78 percent of the damage and 62 percent of the projected cost of rebuilding, take seven percent.
Three kinds of financing, one pattern. Lenders and investors follow earnings, not destruction.
The limits of private money
Much of reconstruction will therefore remain publicly financed. International funding flows to public entities which meet urgent needs and will likely not go bankrupt. For the most part, this is right. A large share of the damage sits in assets that never earned or whose earnings the war has interrupted, and repairing schools, de-mining fields, or restoring homes whose owners cannot pay will remain public spending.
But the balance matters beyond making public funds reach further. State-led reconstruction creates revenue-generating assets in public hands. EU accession will subject them to competition and state-aid rules they do not currently face, and some will have to be restructured or sold.
Expanding the overlap between the two maps means mitigating the externalities of war more effectively. Energy infrastructure was hit 4,500 times in 2025, drones striking transformers and substations and interrupting the cash flows of otherwise functioning power plants.
When the Kakhovka dam was destroyed in 2023, up to 1 million people lost access to drinking water, and water supplies across four regions, including Kryvyi Rih’s, have had to be replaced or rebuilt — and the municipal utilities involved are counterparties private investors are reluctant to contract with.
The Kakhovka dam’s spillways in use in 2013. It was destroyed in 2023 (Source: Wikimedia)
Despite around $200bn of international public non-military support to Ukraine since 2022, the instruments addressing those externalities are patchy at best. A solar developer financing a projec against a Ukrainian public buyer needs a payment obligation it can rely on, and insurance that covers both capital and cash flow.
Closing those gaps is a political decision, not a technical one. European decision-makers need to mandate the EBRD and the EIB to stand behind public buyers of services, widen the guarantees and risk cover available to private investors, and take more risk on their own balance sheets. Of the €9.6bn EU Ukraine Investment Framework, only €220m is equity, anchoring a fund meant to reach €1bn over time. That pool of public risk capital should be larger.
Export credit agencies are a separate lever, and it is national governments that set how far they can reach. Denmark’s agency has backed more than €450m of financing for Ukrainian wind farms built with Vestas turbines, but uptake of a broader European export credit scheme administered by the EIB has been slow.
None of this fully aligns the destruction and earnings maps. It widens the ground on which they meet — the part of the rebuilding that can keep earning when the public money stops.
EUobserver is proud to have an editorial partnership with Europod to co-publish the podcast series “Briefed” hosted by Léa Marchal. The podcast is available on all major platforms.
Find the full transcript below:
The EU is negotiating its next long-term budget, worth 2 trillion euros. But reaching an agreement among the 27 member states is proving difficult. The deadline is approaching, and the stakes are high.
Will the EU member states be able to agree on the budget? And what are the different options?
The bloc’s next long-term budget covers the period from 2028 to 2032.
The aim is to reach an agreement by the end of this year. Then, in 2027, the European Parliament will have to give its consent, and the political agreement will need to be translated into legislation, with funding allocated to the different programmes.
But with just three months left before the end of the year, reaching a deal on time is proving difficult. A meeting of EU ministers dedicated to the budget last week led nowhere. Countries stuck to their positions.
On one side are the so-called frugals: Germany, Austria, Denmark, Finland, the Netherlands and Sweden. But they prefer to call themselves “modernisers”. They want to limit spending and are reluctant to increase their contributions to the EU budget.
On the other side are countries worried about receiving less European funding in the years to come.
The European Commission argues that the next budget needs to be bigger than the previous one to address new challenges, including European competitiveness and defence.
And it’s not just the Commission’s view. The European Parliament and many observers share it.
But the countries calling for spending cuts say the EU cannot simply add new priorities to existing ones. They argue that choices have to be made.
So the Commission has proposed another option: increasing the EU’s own resources.
These are revenues that go directly into the European budget, rather than relying entirely on contributions from member states. The idea is to raise additional money without asking national governments to pay more.
But this proposal is also facing opposition from countries calling for spending restraint. They argue that the bloc should not simply look for more money to fund all its priorities.
So how can the 27 countries break the deadlock?
When ministers cannot reach an agreement, the issue is taken up by EU leaders themselves. And that is exactly what is expected to happen in the coming months.
The president of the European Council is planning several meetings of EU leaders before the end of the year, in an attempt to bring countries closer together.
He is even said to be considering a summit lasting three to four days at the end of November, to give leaders enough time to reach an agreement and avoid a difficult December.
But what happens if the 27 countries still fail to agree before the end of the year? There is some room for manoeuvre in 2027. According to media reports, several dates have already been set aside early next year for last-minute negotiations, should an agreement not be reached in time.
But this leaves very little room for delay.
The European Parliament will still need several months to give its consent, and the EU will then have to finalise the legislation and prepare the different programmes.
That brings us very close to 2028, when the new budget is supposed to take effect.
And if everything is not ready by then, the EU does have a mechanism to keep things running.
It can continue covering certain ongoing expenses and payments that have already been committed, even without a new long-term budget in place.
Unlike in the United States, where a budget deadlock can lead to a government shutdown and some public employees being temporarily sent home without pay, the EU has a system designed to avoid such a complete halt.
But this would only be a temporary solution.
It would not provide the certainty needed to launch new programmes or guarantee that all European funding will be available as planned.
The most important finding is that part of this network was said to have operated from Slovakia.
We do not yet know all the details of the ongoing investigation, and I trust that Slovak security authorities will thoroughly examine the circumstances of the case and determine the true scope of the entire operation.
However, according to the German security services’ findings so far, the Slovak connection is not marginal.
Slovakia may have served as one of the hubs of a wider network linked to Russia’s military intelligence agency, the GRU.
According to German security sources, two Bulgarian nationals detained after the arson attack in Munich on 3 September were part of a GRU-linked group operating from Slovakia. Incendiary devices were thrown near Rohde & Schwarz and Helsing, companies linked to the defence industry and support for Ukraine.
The same wider network was said to have been preparing an arson attack on Skyeton’s plant near Prešov, which produces reconnaissance drones for Ukraine. Slovak authorities thwarted the plan and detained Latvian and Ukrainian nationals. Another suspect was detained in Germany.
The nationality of those carrying out the attacks is not decisive.
The current model of Russian operations uses nationals of different countries, often recruited through intermediaries. A professional GRU officer can therefore remain several layers removed from the attack itself. Recruitment may take place via Telegram, payments through cryptocurrencies, and those carrying out the attacks may not even know precisely who the real instigator is.
German investigators argued there was also a link to an attempted attack using an explosive drone at Leipzig-Halle Airport on 4 August.
The target was reportedly a Ukrainian cargo aircraft used to transport material. The German government subsequently publicly attributed responsibility for the incident to Russia.
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