BRUSSELS — Faced with a €30 billion-a-year repayment bill from Covid-era borrowing, the European Commission briefly considered the unthinkable — tapping into the EU’s most sacred cow, farm subsidies. For a few tense months, Brussels flirted with folding the Common Agricultural Policy and cohesion funds into broader national envelopes, a so-called national partnership plan modeled on the pandemic-era Recovery and Resilience Facility. Under the proposal, national governments would have more control over how EU money was spent, allowing for faster shifts toward priorities like defense, competitiveness and climate. Officials pitched the system as flexible and streamlined. Critics saw it as a power grab — and a stealth attempt to hollow out the CAP. As budget talks ramped up, so did the resistance. Farm lobbyists mobilized. Agriculture ministers revolted. The Commission’s own agriculture chief, Christophe Hansen, began pushing back internally. Germany’s governing Christian Democrats wrote to Commission President Ursula von der Leyen, who hails from the party,  urging their “Dear Ursula” not to fold the farm budget into broader spending plans.  “Cuts to the Common Agricultural Policy would send out completely the wrong signal,” Johannes Steiniger, one of the authors of the letter, told POLITICO. “The CAP must continue to have an independent and reliable budget.” The goal had been to fundamentally reshape how the farm budget worked. But in the end, the next CAP will look much like the current one, with its basic structure left intact. By June, the Commission had quietly shelved the restructuring plan. Jan Olbrycht, a special adviser to Budget Commissioner Piotr Serafin, said the CAP would remain as a separate pillar in the EU’s 2028-2034 budget. Rural development funding would stay within the CAP’s two-pillar structure. Earlier ideas to shift that money to the cohesion rubric were, Olbrycht said, “over, finished.” That marked a major retreat before the official unveiling of the Commission’s budget proposal on July 16. And it has underscored the raw political power the farm lobby can still exert in Brussels, even as the number of farmers declines and the EU faces growing calls to redirect money toward strategic challenges. STRUCTURE SAVED, BUT CUTS STILL STING For Europe’s farmers, the victory is bittersweet. With pressure mounting to repay the Covid debt and finance new priorities, Brussels is trying to stretch a budget that is unlikely to grow. The Commission is still expected to propose significant cuts to overall CAP funding. Early estimates suggest a reduction of between 15 percent and 25 percent compared to current levels. While the structure of the CAP may be safe, the size of the pot is not. At nearly €400 billion, the CAP currently accounts for almost a third of the EU’s entire seven-year budget. Created in 1962, it is the bloc’s oldest common policy — and is fiercely defended by the vested interests that have benefited from it for so long. European Commissioner for Agriculture and Food Christophe Hansen. | Olivier Hoslet/EFE via EPA In practice, however, farmers will still lose money. Top-ups to direct payments, the backbone of the CAP, are likely to shrink. That could be enough to rekindle the protests that swept across Europe last year, especially if farmers feel they’ve been strung along with structural protections but no financial ones. “If the Commission is serious about its vision for agriculture and wants to strengthen European agriculture and make it fit for the future, rumors of a drastic budget cut cannot be a serious option,” Bernhard Krüsken, general secretary of the German Farmers’ Association, told POLITICO.  “Anything other than an increased and earmarked agricultural budget will not do justice to the challenges of the time.” The failed attempt to restructure the CAP also reveals how hard it is to shift money in Brussels. Even as EU officials argue for a more strategic budget, the traditional alliance of farm groups, conservative MEPs, and agriculture ministries continues to defend the CAP with almost religious fervor. The political compromise leaves both sides unsatisfied. For farm groups, structural survival without financial security is little comfort. For budget hawks and modernizers, keeping the CAP intact looks like a missed opportunity. But it also illustrates a deeper truth about Brussels: Power in EU budget politics isn’t just about the numbers. It’s about the coalitions that can be mobilized, and the red lines drawn early and loudly. And this time, the farmers shouted loudest. Bartosz Brzeziński reported from Brussels. Oliver Noyan reported from Berlin. Gregorio Sorgi contributed reporting.

BRUSSELS ― Carlos Cuerpo wants eurozone members to wake up and lead Europe to financial union. The 44-year-old Spanish economy minister — who on Friday entered the race to head up the powerful group of eurozone countries known as the Eurogroup — is calling for a major shake-up of a body he says has become all talk and no action. “Going forward, the Eurogroup should be more about decisions,” Cuerpo, a socialist, said in an interview with POLITICO, where he outlined his proposal for sweeping changes to the body. Cuerpo argued that groups of countries ― as opposed to all the EU’s 27 states ― should lead the way to integrate Europe’s financial markets, a long-held ambition in Brussels that has repeatedly struggled to get off the ground. “If you cannot go in terms of reducing fragmentation from 27 to one, you might have to go in different steps and reduce the fragmentation by putting groups of countries together.” This is a major rupture from the incumbent Eurogroup President Paschal Donohoe, whom critics accuse of prioritizing broad consensus over actual decisions in his two terms in office. To everyone’s surprise, in October, Cuerpo launched a “coalition of the willing” ― known as the European Competitiveness Lab ― to finally make progress on a decades-old project to create U.S.-style financial markets in Europe. The EU’s biggest countries ― Germany, France, Italy, Poland, Luxembourg, the Netherlands and Spain ― have signed up to the initiative, boosting Cuerpo’s leadership credentials. He said he will empower this scheme if he’s elected as Eurogroup president. “I expect that all 27 member states would be members of the competitiveness lab at some point.” The Spaniard, however, faces an uphill battle to defeat Donohoe in next Monday’s secret vote by the eurozone’s 20 finance ministers. While many officials praised Cuerpo’s soft skills and “encyclopedic knowledge” of the European economy, others feel alienated by his more radical ideas, such as doubling the size of the EU budget or issuing common debt for defense. Donohoe is the odds-on favorite to secure a third term as he hails from the powerful center-right European People’s Party and appeals to small countries who will tip the balance of the election. Lithuanian socialist Finance Minister Rimantas Šadžius, is unlikely to make it past the first round of voting, according to several officials. | Oliver Hoslet/EPA The third candidate, Lithuanian socialist Finance Minister Rimantas Šadžius, is unlikely to make it past the first round of voting, according to several officials with knowledge of the voting procedures. A simple majority — 11 votes — is necessary to be elected as president. THE EUROGROUP’S MIDLIFE CRISIS The Eurogroup is a club of 20 eurozone ministers who meet every month to coordinate economic policy. During its heyday, it steered the eurozone through the rumble-tumble of the sovereign debt crisis, but lost influence as the euro area stabilized and a more inclusive EU-wide group of 27 finance ministers gained power. The Eurogroup has become a “bland working group” or a “think tank,” according to two EU diplomats, who, like others in the story, were granted anonymity to speak freely. A group of countries — including Spain — have questioned the usefulness of holding monthly meetings in Brussels in an informal report that was seen as mildly critical toward Donohoe’s presidency. Faced with this criticism, Cuerpo said he wants to breathe new life into stalled Eurogroup projects such as creating an EU-wide financial and banking union and strengthening the role of the euro. “We need to be very efficient in coming up with deliverables, otherwise we might be late to the party,” compared to other foreign countries. “Eurogroup needs to have a voice for these new times that actually requires us to face new challenges and call for a revamped Eurogroup.” THE ITALIAN VETO One of the thorniest issues is Italy’s veto over a plan to use money from the European Stability Mechanism — a bailout fund for countries introduced during the eurozone crisis — to rescue failing banks. Populist parties in Italy oppose ratifying the reform over the ESM’s lingering association with strict bailout conditions during the eurozone meltdown. Rome, however, is open to using these funds to provide cheap loans for defense — something that Cuerpo has endorsed in the past. In a sign of détente, Cuerpo said that “we have to help Italy help us on this [ratifying the ESM],” although he shied away from questions on using these funds for defense. “[We need] to provide the right narrative, which is sometimes also an important element around how the ESM can help us going forward in these new challenges as well.” This story has been updated to reflect Carlos Cuerpo’s formal job title as minister of economy, trade and business.

BRUSSELS ― Italian Commissioner Raffaele Fitto is leading a rearguard fight inside the EU executive to secure a powerful role for Europe’s regions in the bloc’s new multi-year budget. Fitto, who is currently in charge of €400 billion in regional funding, is at odds with his boss, European Commission President Ursula von der Leyen, over a plan to dramatically increase the power of national governments in managing the cash pot to the detriment of local bodies. That would be a major setback for the regions, and for Fitto, who have handled the so-called cohesion policy ever since it was introduced in the 1970s to narrow the gap between poorer and richer areas in Europe.   Von der Leyen is investing major political capital in radically reforming the EU’s budget, currently worth €1.2 trillion, for the 2028-2034 cycle. The plan to steer billions in EU funding away from agriculture and regional spending and toward defense and innovation, however, is sending shockwaves through Brussels and across national capitals. Months of simmering tensions inside the Berlaymont are now at a boiling point ahead of the Commission’s presentation of its budget proposal on July 16. Von der Leyen supports overhauling a set of criteria ― known as the Berlin formula ― that allocates a major share of the cohesion cash to underdeveloped regions across the bloc, two EU officials and two EU diplomats told POLITICO. “The first question is: Will [the Berlin formula] be kept or not?” Jan Olbrycht, a former MEP now serving as an advisor to budget commissioner Piotr Serafin, said during a public event last week. “My answer for today is ‘I don’t know’, and I’m not sure it will be kept like this.” Changing the rules could result in the Commission handing the money directly to national governments, which would have more leeway over how to allocate the funding to regions. Critics view this as problematic, as it could reinforce existing disparities within individual countries and sideline regions from the process. “It’s basically a renationalization of the programs,” said one of the EU officials who, like others quoted in the story, was granted anonymity to speak freely. Italy’s Fitto ― who is famed for his quiet and reserved public demeanor ― is leading the pushback against these sweeping changes that could diminish his power in the Commission in the years to come. His view is broadly shared by Serafin, MEPs from von der Leyen’s own European People’s Party (EPP), 149 regions and 14 national governments, who wrote a critical letter to the Commission president.   Raffaele Fitto, who is currently in charge of €400 billion in regional funding, is at odds with his boss, European Commission President Ursula von der Leyen. | Marie Odgaard/EPA “Sixteenth July will be just the beginning of the fight,” Olbrycht said, predicting tough negotiations with national capitals and the Parliament further down the line. BUDGET FAULT LINES Proponents of the cohesion funding reform ― most importantly, the Commission’s powerful budget department, if not the commissioner himself ― argue that it will allow greater simplification and more strategic investments in defense and industrial build-up. The changes are part of a broader plan to lump agricultural and regional funds ― which jointly make up around two-thirds of the EU’s €1.2 trillion purse ― into a single cash pot for each country, where payments are linked to the fulfilment of economic reforms. Critics argue that the new system will effectively bypass regions and create a democratic deficit, with local bodies bearing the brunt of governments’ failing to carry out major economic reforms. Skeptics also fear that autocratic leaders, such as Hungary’s Viktor Orbán, will cut EU funding to regions governed by political rivals. To prevent this risk, Fitto and Serafin support linking regional payments to local reforms. They’re also looking for safety nets to secure funding for farmers and regions, even if the reforms are not met. Disagreement between the Commission’s budget and regions departments over cohesion policy is so strong that less than two weeks out from the budget’s publication date they haven’t finalized a draft text. Unlike many other areas of the budget, internal consultations over this issue haven’t started yet, the two officials told POLITICO. “There are different visions inside the Commission,” Olbrycht said.

Listen on * Spotify * Apple Music * Amazon Music Europe baked, the Atomium shut early — and Brussels finally unveiled its long-delayed climate target. Host Sarah Wheaton speaks with POLITICO Climate Reporter Louise Guillot, Chief Foreign Affairs Correspondent Nick Vinocur and EU Politics Reporter Max Griera about the EU’s new 2040 goal: What a 90 percent emissions cut really means, why critics say it’s already being softened, and how Denmark’s presidency of the Council of the EU plans to juggle climate, migration and more amid stormy politics. We also pull back the curtain on Ursula von der Leyen’s powerful gatekeeper, Bjoern Seibert — and on Viktor Orbán’s crackdown on Budapest Pride. Later, POLITICO’s Cities Correspondent Aitor Hernández-Morales joins to explore how Europe’s cities are navigating the heat — both political and literal — and why so many mayors are now turning to Brussels for help with urgent issues like housing.

The European Parliament is getting hot and sweaty, and it’s not because of the upcoming EU budget negotiations. The air-conditioning system in Zone C of the Paul-Henri Spaak building in Brussels, home to staff from the Greens, the liberals of Renew Europe, and the right-wing European Conservatives and Reformists, has malfunctioned. The affected parties appear to be taking it in good humor, at least. “It hasn’t been this overheated since [European Commission President Ursula] von der Leyen cut the green claims stuff!” quipped a Renew spokesperson, referring to last week’s political turmoil over the Commission’s mixed messaging on whether it would kill an anti-greenwashing bill.  “I hear it’s better on the 5th floor, where they don’t believe in climate change,” the spokesperson added, referring to the offices of the ECR, a group that wants to water down the EU’s climate policies. Not to be outdone, an ECR spokesperson said: “I know they want to make us sweat over our political positions, but isn’t this ridiculous?” The Spaak building is set for a €440 million renovation starting in 2027, which will take about five years. It is meant to bring the infrastructure up to modern safety and green standards after the partial collapse of the plenary chamber ceiling, according to the Parliament’s administration. On Tuesday night the system experienced “a major malfunction” due to “exceptionally high temperatures,” an internal communication from the Parliament’s infrastructure department reads. “Our teams were unable to restore the system during the night and repair works are continuing this morning as a matter of absolute priority,” the note adds. 

BRUSSELS — With the Socialists and liberals threatening to block European Commission President Ursula von der Leyen’s agenda, an obvious question looms: Can’t she simply govern with the European Parliament’s right-wing majority? Last week, the centrist coalition she has been relying on to pass legislation appeared close to breaking point due to frustration over the efforts of von der Leyen’s center-right European People’s Party to water down the EU’s green plans. That has set the forces further to the right in the Parliament crowing over what they portray as their success in bringing the EPP on board with their agenda, enabling them to push through ideologically divisive measures on topics such climate and migration. “The most natural outcome would be to have a right-wing majority” when agreeing the new regulation on deportations, said Dutch MEP Marieke Ehlers, a leading member of the Patriots for Europe group working on that law. “If the EPP were to work with the left on this file, they would end up with a proposal that is weaker than what their own commissioner has proposed, so I don’t really see how they would sell that to their voters,” she added. But while von der Leyen might find some marriages of convenience on environmental themes and immigration with the far right, she would find it almost impossible to build a workable legislative agenda with such fractured and disparate right-wing parties. Some, for example, are pro-Russian, others anti-Russian. “They find it very hard to agree. That, in turn, means they are an unreliable partner for the EPP as a permanent coalition,” said Richard Corbett, a former British MEP and adviser to the European Council president.  GERMAN SENSITIVITIES Von der Leyen also has particular sensitivities as a German centrist politician, highly conscious of coming from a country shaped by its Nazi past, about coordinating legislation with extremist nationalist parties. If she were to rely on the right, she would often find herself allying with politicians who are pro-Kremlin, anti-Ukraine, anti-LGBTQ+, anti-abortion and Euroskeptic — all anathema to her essential beliefs. While there is probably more room to cooperate with the European Conservatives and Reformists, dominated by Italian Prime Minister Giorgia Meloni, it would be far harder to see von der Leyen making regular common cause with the Patriots, whose big names include Hungary’s Viktor Orbán and France’s Marine Le Pen. And any frequent coordination with the far-right Alternative for Germany (AfD) in the Europe of Sovereign Nations grouping would prove especially tricky — although the EPP has already flirted with that option. If von der Leyen were to rely on the right, she would often be allying herself with numerous politicians who are pro-Kremlin, anti-Ukraine, anti-LGBTQ+, anti-abortion and Euroskeptic. | Annette Riedl/Picture Alliance via Getty Images Working with the far right is specially delicate for von der Leyen, with German Chancellor Friedrich Merz battling the AfD back in Berlin. Of the German Christian Democrat trio dominating Brussels, only Manfred Weber, leader of the EPP, has relied on far-right votes in the Parliament. “Weber is the only one. So von der Leyen is careful, Merz is very careful for national reasons, and Weber, he’s the only one that really doesn’t have any shame of cooperating with the far right,” said Sophia Russack, a researcher at the Centre for European Policy Studies. Von der Leyen “clearly does not like to cater to the far right, she has demonstrated that in her first term. The majority that she built most of her legislation on was the center left and right, the centrist majority,” she added. WRECKERS NOT BUILDERS While the EPP can rely on a Parliamentary majority of various hues of right-wingers to help shoot down files they don’t like — such as parts of the Green Deal — the symbiosis will be far more difficult when it comes to assembling more complex legislation like the budget. An example of the perils of flirting with the far right came with the 2025 EU budget guidelines. The EPP had initially coordinated with its regular allies the Socialists, liberals and Greens, but then shifted to working with the far right including the AfD to introduce harder language on border barriers and detention centers. After the EPP lurched right, the Socialists, liberals and Greens decided to vote against the text as a whole, alongside the Patriots, who despite their success in getting the migration amendments passed regarded the resolution itself as “unacceptable.” As Rasmus Andresen, an MEP from the Greens, put it at the time: “If you like relying on the far right, then maybe you will get an amendment passed, but you will not get the budget passed.” Even on green policy — where the right-wing bloc broadly agrees some trimming is needed — the far right’s demand that laws be scrapped in their entirety would be too much for the EPP. Accepting it would risk internal fractures, given that some of its members support a strong Green Deal. Relying on a right-wing majority would also raise eyebrows among some of the EPP’s own heavyweights, such as Polish Prime Minister Donald Tusk, who is locked in a bitter political feud with his country’s nationalist conservative opposition, the Law and Justice party. The Poles have already called out EPP leader Weber’s rapprochement with hard-right forces in the past. At the same time, the EPP’s Hungarian party Tisza is leading the opposition to Orbán.   The Socialists, still the second-largest overall grouping in the Parliament, are being clear that an understanding was struck among the centrists on the Commission’s program, and that von der Leyen will need to stick to it. “There is a cooperation between different forces that has supported a Commission with a program. I want to remind you, President von der Leyen made a speech promising certain things, and this speech was the result of many negotiations and meetings with the president of the Socialist group,” Laura Ballarín, a Socialist MEP and former chief of staff of the Socialist group, told POLITICO. “If these promises are not kept, we can obviously reevaluate our role.”