BRUSSELS — The European Union should loosen its “rigid” adherence to climate neutrality and allow itself to miss its 2050 net-zero goal by up to 10 percent, Germany’s minister for energy and economy told a major oil and gas conference in the United States. Speaking at the annual CERAWeek conference in Texas late Monday, Katherina Reiche called the EU’s goal to slash its planet-warming pollution to net zero by mid-century into question. Europe, for a long time, “had left a corridor, there wasn’t a net-zero … it was, for Europe, a goal [to reduce emissions] between 85 and 95 percent,” she claimed, likely referring to a non-binding European Commission roadmap from 2011. “There is a flexibility we have to get back, accept not 100 percent solutions but allowing different solutions and technologies and accept that there might be a gap of maybe a 5 or 10 percent by 2050,” she added. “If you have strict and rigid goals, you bind yourself, it ends up that you lose industries that you need … and we can’t afford that we lose our energy-intensive industries in Europe and in Germany.” Reiche’s comments mark a rare departure from the EU consensus. The bloc set itself a net-zero by 2050 goal in 2019, with only Poland not formally committing to the new milestone. Last year, EU governments agreed on an intermediate target to slash the bloc’s emissions by up to 90 percent by 2040. Germany has set itself even stricter goals, aiming to become climate neutral by 2045. Throughout her remarks at CERAWeek, Reiche stressed that economic growth must come before green targets. “At the end of the day, it is good to have a goal of sustainability — but if sustainability crashes your economy, you have to readjust,” she said. “And that’s what we’re doing right now.” In Germany, Reiche has in recent months unveiled plans to build out gas power plants, scrap the previous government’s gas boiler phaseout, remove subsidies for rooftop solar panels, and deprioritize the connection of renewables from the country’s power grid. She also told the Texas audience that Germany should drill for fossil fuels in the North Sea, saying: “We have a gas field in the North Sea, which we don’t want to explore. I think we can’t stick to this attitude. We have to also go into our own reserves.” And she insisted: “I am not speaking against sustainability, and not against a climate target. But if a climate target ignores other things you have to think of, especially affordability and abundance … you have to change course.” Mike Lee contributed to this report from Texas.

BRUSSELS ― Two wars on Europe’s doorstep loomed over a 12-hour summit of EU leaders ― and for very different reasons they found themselves paralyzed rather than able to do much about either. Rarely has the bloc’s inability to take a lead on international affairs been so obvious. Between Germany’s Friedrich Merz, France’s Emmanuel Macron and Italy’s Giorgia Meloni ― heads of three of the world’s top 10 economies ― and the other 24 in attendance, they could only look the other way, squabble with each other, or offer little but words as the bombing, missile-firing and killing continued. “In these very troubled moments in which we are living, more than ever it’s decisive to uphold the international rules-based order,” European Council President  António Costa, who chaired the gathering in Brussels, told reporters. “The alternative is chaos. The alternative is the war in Ukraine. The alternative is the war in the Middle East.” And that speech was about as far as it went. As Tehran pounded its neighbors, disrupting Europe’s energy supplies, Kyiv attacked Russian factories repairing military planes, and Donald Trump in Washington joked about the Pearl Harbor attack alongside the Japanese prime minister, European leaders used their talks to tinker with the bloc’s carbon permit scheme, the Emissions Trading System. It’s not a wholly unrelated matter to the global energy shock, but hardly an issue where the continent could demonstrate its geopolitical might. On Iran, leaders found they had little leverage or will to make any significant intervention. On Ukraine, more than four years after Russia’s full-scale invasion ― a conflict where they do have leverage and they do have will ― they were unable to overcome internal divisions to approve sending €90 billion Kyiv’s way. There was “no willingness to get involved across the table” on the Iran conflict, said a senior European government official, granted anonymity like others quoted in this article to discuss the talks behind closed doors. German Chancellor Merz even complained that focusing on Iran risked shifting attention away from measures to boost Europe’s flagging economy — the summit’s original raison d’être before would affairs got in the way — according to three officials. “The world looked very different at Alden Biesen,” an EU official said, referring to last month’s competitiveness-focused meeting in a Belgian castle that was meant to set the stage for this summit. That was before Iran’s war and Ukraine’s funding dilemma, brought about by Hungarian Prime Minister Viktor Orbán going back on his promise to approve the loan, radically reshaped the agenda. NOT OUR WAR That’s not to say Iran was ignored completely. There was some renewed discussion about sending French warships to protect the Strait of Hormuz, the vital oil transit point that Tehran has effectively shut down by threatening to strike ships, potentially with backing from the U.N. Security Council. “We have begun an exploratory process, and we will see in the coming days if it has a chance of succeeding,” Macron said. But the summit’s final statement stopped short of pledging any new mission, referring only to strengthening existing EU naval operations in the region. Italian Prime Minister Giorgia Meloni at a press conference at the end of the European Council summit on March 19, 2026 in Brussels. | Pier Marco Tacca/Getty Images By the end of the talks, the EU’s leaders reached a sobering conclusion: Europe has little power or inclination to shape events. “Middle East impacts us a lot — but are we a player in the game?” an EU official who was party to the leaders’ discussions asked. “They’re trying to find a place in this debate and we have a lot of statements and positions [but] is there a role for Europeans for solving this process?” Evidently not, according to Kaja Kallas, the EU’s foreign policy chief, who warned leaders that “starting war is like a love affair — it’s easy to get in and difficult to get out,” according to two diplomats briefed on her remarks. Translation: This is not Europe’s war — and it’s not going to be. The EU was left with doing “what we always do,” an EU official said, writing “nice statements.” BURNING GAS FIELDS Europe already angered U.S. President Trump earlier this week when its top envoys rejected his call to secure the Strait of Hormuz. The summit’s final conclusions leaned heavily on familiar calls for “de-escalation” and “restraint,” without proposing concrete action, sticking to that earlier position. That’s despite Qatar warning Thursday it would not be able to fulfill its liquefied natural gas contracts with Belgium and Italy after Iran directed its wrath — and its ballistic missiles — over U.S.-Israeli strikes at the Gulf country, knocking out almost a fifth of its LNG export capacity. Yet rather than grapple head-on with the rapidly expanding energy shock, Europe’s leaders spent hours debating the bloc’s climate policy, including its ETS, which a group of countries are eager to reform. “To say ETS is the biggest issue when big gas fields are burning is a bit weird,” an EU official said. European Commission President Ursula von der Leyen said the consequences of the war extended far beyond the Middle East, adding its most “immediate impact” was on energy supply and prices. She announced a slate of emergency measures to lower costs, from lowering taxes to boosting investment in ETS. ‘JUST CRAZY’ If anything, the summit exposed where the wars in Iran and Ukraine overlap. In what could be his final EU gathering after 16 years if he loses next month’s election, Hungary’s Orbán slammed Europe’s approach to the unfolding energy crisis. “The behavior and the strategy that the Europeans have here is just crazy,” he said — adding the EU needed to buy Russian oil to “survive.” Orbán has blocked a €90 billion EU loan to Kyiv because of a dispute about a damaged pipeline carrying Russian oil through Ukraine to Hungary and other central European countries. For that reason, the bloc was similarly unable to offer much more than assurances on the Ukraine war either. Orbán maintained his opposition on Thursday and even won the sympathy of Meloni, who told leaders she understood his position. As frustration inside the room boiled over, many leaders sharply criticized the Hungarian premier, according to Swedish Prime Minister Ulf Kristersson. “I have never heard such hard-hitting criticism of anyone, ever,” he told reporters during a break in the talks. Merz concurred that leaders were “deeply upset” at Orbán. “I am firmly convinced that this will leave a lasting mark,” he said. But the pressure from his peers failed to sway Orbán and questions of the EU loan will roll on to another summit next month ― by which time Hungary could have a new leader, or at least an old one not desperate for votes. On Iran and on Ukraine, the EU didn’t get anywhere. Earlier predictions by diplomats that leaders might continue discussions through the night or even reconvene for a second day as the urgency of a world in turmoil forced them to face up to the challenges before them failed to materialize. Things were done and dusted before midnight. After 12 hours of few decisions, leaders were left with little new to tell people back home. “There are many things worrying about this war” in the Middle East, while Orban’s veto of the loan to Kyiv “is still there and we are extremely unhappy about this, and so of course is Ukraine,” Sweden’s Kristersson told reporters upon leaving the summit. And that was that. Zoya Sheftalovich, Nette Nöstlinger, Nicholas Vinocur, Gerardo Fortuna, Gabriel Gavin, Hans von der Burchard, Sonja Rijnen, Zia Weise, Seb Starcevic, Giorgio Leali, Hanne Cokelaere, Ferdinand Knapp, Milena Wälde, Aude van den Hove, Gregorio Sorgi, Koen Verhelst, Victor Jack, Ben Munster, Jacopo Barigazzi and Bartosz Brzezińksi contributed reporting.

BRUSSELS — EU leaders were supposed to spend Thursday mapping out how to boost Europe’s economy. Instead, they were left scrambling to deal with two wars, a deepening transatlantic rift and a standoff over Ukraine. Twelve hours of talks, a few showdowns and many, many coffees later, here’s POLITICO’s rapid round-up of what we learned at the European Council. 1) Viktor Orbán’s not a man for moving … The most pressing question ahead of this summit was whether Hungary’s prime minister could be convinced to drop his veto to the EU’s €90 billion loan for Ukraine. He wasn’t. The European Commission had attempted to appease Orbán in the days running up to the summit by sending a mission of experts to Ukraine to inspect the damaged Druzhba pipeline, which supplies Russian oil to Hungary and Slovakia. Orbán has argued that Ukraine is deliberately not addressing the issue, and tied that to his blocking of the cash. Asked whether he saw any chance for progress on the loan going into the summit, Orbán’s response was simple: “No.” Twelve hours later, that answer was much the same. 2) … But he does like to stretch his legs. In one of the most striking images to have come out of Thursday’s summit, the Hungarian prime minister stands on the sidelines of the outer circle of the room while the rest of the leaders are in their usual spots listening to a virtual address from Ukrainian leader Volodymyr Zelenskyy. Ukraine’s President Volodymyr Zelenskyy (on screen) speaks to EU leaders via video at the European Council summit in Brussels, March 19, 2026. | Pool photo by Geert Vanden Wijngaert/OL / AFP via Getty Images The relationship between the two has descended into outright acrimony after the Hungarian leader refused to back the EU loan and the Ukrainian leader made veiled threats — which even drew the (rare) rebuke of the Commission. Faced with Zelenskyy’s address, the Hungarian decided to vote with his feet. 3) The new kid on the block is happy to be a part of this European family, dysfunctional as it may be. This was the first leaders’ summit for Rob Jetten, the Netherland’s newly-installed prime minister. Ahead of the meeting, he said he was “very much looking forward to being part of this family.” His verdict after the talks? That leaders differ greatly in their speaking style, with some quite efficient while others take longer to get to the point — but he welcomed the jokes of Belgian’s Bart De Wever, “especially when the meeting has been going on for hours.” 5) Though not everyone was so charitable. Broadly speaking, Orbán digging in his heels did not go down well. Sweden’s prime minister told reporters after the summit that leaders’ criticism of the Hungarian in the room was “very, very harsh,” and like nothing he’d ever heard at an EU summit. Jetten said the vibe in the room with EU leaders was “icy” at points, with “awkward silences.”  6) The EU’s not giving up on the loan. Despite murmurs ahead of the talks of a plan B in the works, multiple EU leaders as well as Costa and Commission chief Ursula von der Leyen were adamant that the loan was the only way to go — and that it will happen, eventually. “We will deliver one way or the other … Today, we have strengthened our resolve,” von der Leyen. Costa added: “Nobody can blackmail the European Council, no one can blackmail the European Union.” Top EU diplomat Kaja Kallas arrives at the European Council summit on March 19, 2026. | Pier Marco Tacca/Getty Images 7) Kaja Kallas wants to avoid a messy entanglement. In her address to the bloc’s leaders, Kallas, the EU’s top diplomat, stressed the importance of not getting caught up in the conflict in the Middle East. “Starting war is like a love affair — it’s easy to get in and difficult to get out,” she said, according to two diplomats briefed by leaders on the closed-door talks. At the same time, Kallas reiterated the importance of the EU’s defending its interests in the region but said there was little appetite for expanding the remit of its Aspides naval mission, currently operating in the Red Sea. 8) But it was all roses with the U.N. U.N. Secretary-General António Guterres joined the Council for lunch, thanking them for their “strong support for multilateralism and international law.” In an an exclusive interview with POLITICO on the sidelines of the summit, Guterres applauded the restraint shown by the Europeans, despite Donald Trump’s anger at their refusal to actively support the war or help reopen the Strait of Hormuz, a critical maritime artery that Iran has largely sealed off, driving up global energy prices. 9) Kinda. One senior EU official told POLITICO that the lunch meeting was “unnecessary.” “With all appreciation for multilateralism and its importance … considering the role the U.N. is not playing in international crises right now, it is unnecessary,” said the official, granted anonymity to speak freely. 10) Celery is a very versatile vegetable. Also on the table while they picked over the future of the multilateral world order was a pâté en croûte with spring vegetables and fillet of veal with celery three ways. Three ways! And for dessert? A mandarin tartlet with cinnamon. 11) Cyprus and Greece want the EU to get serious about mutual defense. Cypriot President Nikos Christodoulides and Greek Prime Minister Kyriakos Mitsotakis asked the EU to think about a roadmap for acting on the bloc’s mutual defense clause, according to two EU diplomats and one senior European government official. The clause, Article 42.7, is the EU’s equivalent of NATO’s Article 5. Its existence and potential use has recently come into focus since British bases in Cyprus were attacked by drones. 12) And the Commission hopes it’s already got serious enough about migration. Von der Leyen said that while the EU has not yet experienced an increase in migrants as a result of the conflict in Iran, the bloc should be prepared. “There is absolutely no appetite … to repeat the situation of 2015 in the event of large migration flows resulting from the conflict in the Middle East,” said one national official. The Commission chief emphasized that the mistakes of the 2015 refugee crisis won’t happen again. 13) Von der Leyen likes to cross her Ts.   Speaking of emphasis — “temporary, tailored and targeted” was how von der Leyen described the EU’s short-term actions to minimize the impact on Europe of the recent energy price spikes after the U.S.-Israeli strikes on Iran. The moves will impact four components that affect energy prices: energy costs, grid charges, taxes and levies and carbon pricing, she said. 14) The ETS is here to stay — with some modifications. While EU leaders agreed to make some adjustments to the Emissions Trading System — the bloc’s carbon market — most forcefully backed the continuation of the system itself. “This ETS is a great success. It has been in place for 20 years and is a market-based and technology-neutral system. So we are not calling the ETS into question,” German Chancellor Friedrich Merz told reporters after the talks had concluded. While the Commission will propose some adjustments to the ETS by July, these are merely adjustments, not fundamental changes, the German leader said. In the run-up to the summit, some EU countries, including Italy, floated the idea of weakening the ETS to help weather soaring energy prices. 15) No matter what, EU leaders want to get home — ASAP. While Costa has so far ensured every European Council under his watch lasts only one day instead of the once-customary two, this time around, that goal was looking optimistic. However, at the end of the day, leaders’ dogged determination to get out of there prevailed (even if that meant kicking a discussion on the long-term budget to April). À bientôt!

BRUSSELS — The European Commission will make a proposal to boost the bloc’s carbon market reserve within “days” and develop a €30 billion decarbonization fund, in response to pressure from EU leaders to limit the CO2 price’s impact on electricity bills. Commission President Ursula von der Leyen said the EU executive would work on a mix of immediate relief and structural changes to bring down high energy prices, with measures to tackle all components of the power bill, from taxes and levies to carbon costs. Two measures to tweak the Emissions Trading System (ETS), which requires factories and power plants to purchase a permit for every ton of CO2 they emit, “will come in the next days,” von der Leyen said at a press conference following Thursday’s EU leaders’ summit. They include an update to the so-called benchmarks that determine how many free-of-charge permits a certain industrial sector receives and a proposal to “increase the firepower” of the Market Stability Reserve governing the ETS permit supply. In what she described as the “medium term,” von der Leyen pointed to the review of the ETS scheduled for this summer, as well as a new “ETS investment booster” providing financial support to industry. This booster, first reported by POLITICO on Thursday, will “have a budget of round about €30 billion, financed by 400 million ETS allowances,” she said. “The aim is to finance projects for decarbonization” under a first-come, first-served scheme with a focus on lower-income EU countries. In their summit conclusions, leaders asked the Commission to conduct the ETS review “by July 2026 at the latest, to reduce the volatility of the carbon price and mitigate its impact on electricity prices … while preserving the essential role of the ETS.” Compared to previous drafts, the final conclusions also “invited” the Commission “to work closely with Member States to design national temporary and targeted measures” to rein in high energy prices. This addition was seen as catering to countries such as Italy and Poland, which had cited their national circumstances — in particular, high reliance on fossil fuels in their power mix — as reasons for more substantial changes to the ETS, two diplomats said. Asked specifically about a controversial Italian decree subsidizing power companies to make up for their ETS costs, von der Leyen said: “Because of different energy mix in different member states you cannot have one-size-fits-all” and vowed to “work closely with the Italian government on the Italian decree.” In general, she said, Thursday’s summit was “positive for the ETS.” The bloc’s bedrock climate measure escaped demands for fundamental changes from leaders and was widely praised as a key lever for accelerating the bloc’s transition to cheaper clean energy.

BRUSSELS — An EU summit once billed as a chance to boost the bloc’s economy is now a full-blown stress test. Leaders gathering Thursday face a combustible agenda: Ukraine’s financial survival, Middle East escalation, transatlantic tensions, and deep internal rifts over energy and climate policy. Thursday’s meeting has been dramatically reshaped in recent days by the U.S.-Israeli war in Iran and a standoff with Hungary over a €90 billion lifeline for Kyiv — turning what had been meant to be a forward-looking discussion into a scramble to manage multiple crises at once. Leaders will still try to push ahead on plans to strengthen Europe’s competitiveness, from deepening the single market to easing the burden on businesses. But those longer-term ambitions risk being overshadowed by more immediate geopolitical fires, alongside intense discussions on continent’s energy, defense and migration policies, according to a draft version of the post-summit joint statement obtained by POLITICO.   Expect a packed — and likely fractious — day in Brussels. Here’s POLITICO’s cheat sheet of the five biggest clashes to look out for at the European Council. THE €90B QUESTION: HUNGARY VS. EVERYONE  A €90 billion lifeline for Ukraine — which will determine Kyiv’s ability to continue defending itself against Russian aggression — hangs on whether Hungary lifts its veto. EU leaders agreed in December to provide the funding. But Hungarian Prime Minister Viktor Orbán later reneged and blocked the deal over a dispute with Ukraine about a damaged pipeline carrying Russian oil to Central Europe. Budapest has accused Kyiv of trying to engineer an energy crisis in Hungary by cutting off Russian oil supplies and says it won’t approve the cash disbursement until flows resume. The European Commission said Tuesday it had offered to help repair the pipeline and that Ukraine had accepted, raising hopes of a breakthrough. The move could prompt Hungary to lift its veto, one diplomat familiar with Budapest’s thinking said, speaking on condition of anonymity like others in this article to discuss sensitive negotiations. But Orbán struck a defiant tone in a video posted after the Commission’s announcement, saying: “If there is no oil, there is no money.” That leaves him isolated from almost all other leaders, aside from Slovakia’s Robert Fico. “The behavior from Hungary is a new low,” Sweden’s Europe Minister Jessica Rosencrantz told POLITICO ahead of the meeting. Another diplomat said that “if we fail on the loan, [Ukrainian leader Volodymyr] Zelenskyy will rightly be furious.” The latest draft conclusions still point to disbursement by early April — a timeline leaders will be endeavoring to rescue in their negotiations. HORMUZ DILEMMA: IRAN’S THREATS VS. A RELUCTANT EUROPE Tehran’s attacks on ships in the Strait of Hormuz — a vital oil transit point — have jacked up the global price of oil and forced Europe to weigh whether to get involved. One idea was to expand the mandate of the EU’s Middle East naval mission, Aspides, to allow European warships to patrol the waterway. That was quickly ruled out by the bloc’s foreign ministers on Monday. “Nobody wants to go actively in this war,” the EU’s top diplomat, Kaja Kallas, said after the foreign envoys met. Instead, leaders will call for the reinforcement of existing naval missions, Aspides and Atalanta, with “more assets” (read: ships) — while stopping short of extending their reach to Hormuz, according to the draft summit conclusions. The text stresses that operations must remain “in line with their respective mandates.” A diplomat from the Gulf region said they were watching closely but did not expect any major shift from EU leaders, such as expanding the Aspides mandate or launching joint operations with third countries. TRANSATLANTIC TREMORS: TRUMP VS. EUROPEAN CAPITALS  Europe’s refusal to step in around the Strait of Hormuz has angered U.S. President Donald Trump, who said it would be “very bad for the future of NATO” if EU countries failed to act. That frustration is only growing. Republican Senator Lindsey Graham said he had spoken to Trump about Europe’s unwillingness to provide assets to keep the strait open and had “never heard him so angry in my life.” The flare-up comes with EU-U.S. ties already under strain. Spain has openly defied Trump over the Iran conflict, refusing to allow the U.S. to use its bases and drawing threats of trade retaliation from Washington. French President Emmanuel Macron has stepped in to back Madrid and signal European solidarity, while other leaders have taken a more cautious or mixed line on how far to push back. Trump may not be on the formal agenda, but his pressure will loom over the summit — and sharpen already fraught debates over defense, trade and Europe’s reliance on the U.S. ETS BRAWL: ITALY, POLAND AND OTHERS VS. THE COMMISSION  A major brawl is brewing over the EU’s Emissions Trading System between a cadre of member countries and the EU’s executive.  Ten EU member countries sent a letter to the Commission ahead of Thursday’s summit asking to speed up a planned review of the ETS, a cornerstone of the bloc’s climate policy that forces big polluters to cough up.  Poland, Czechia, Slovakia, Romania, Greece, Hungary, Italy, Bulgaria, Austria and Croatia are urging the EU executive to reexamine the scheme by the end of May at the latest, arguing it harms their industries and is contributing to rising energy prices.  But not everyone agrees, with two EU officials from ETS-supporting countries saying the cap-and-trade system must remain in place. The first official argued it is not contributing to the energy crisis and is actually helping Europe’s economy, with its revenues needed for the green transition.   On the topic of energy, the Commission’s proposed gas price cap is also likely to be raised, though not all countries are likely to get on board with that either, according to a senior German government official. According to the draft conclusions, EU leaders will instruct the Commission to “present without delay a toolbox of targeted temporary measures” to bring down energy prices.  COMPETITIVENESS, ANYONE? EU VS. ITSELF Despite the crises crowding the agenda, leaders will still try to push forward plans to revive Europe’s economy, building on talks at a February summit at Alden Biesen in Belgium. Most of the proposals fall under the “One Europe, One Market” push to deepen the single market — easing the movement of goods, services, capital and people across the bloc. The draft conclusions say leaders will back new corporate rules, dubbed “EU Inc.,” to help startups scale across borders, as well as a “simple, unified and voluntary e-declaration system” to make it easier to work across countries. The aim is to move from talk to delivery, with concrete steps and deadlines, another EU diplomat said. But while there is broad agreement on the need for reform, divisions persist over whether EU energy and climate policies — particularly the Emissions Trading System — are holding back growth. That split, with Central, Eastern and Southern European countries pushing for changes and others, including the Nordics, resisting, will likely be the main battleground on competitiveness. Nick Vinocur contributed reporting.

BUDAPEST — If Brussels claws back €10 billion of EU funds controversially disbursed to Hungary, it will also have to recover as much as €137 billion from Poland too, Budapest’s EU affairs minister told POLITICO. The European Commission made a highly contentious decision in December 2023 to free up €10 billion of EU funds to Hungary that had been frozen because of weaknesses on rule of law deficiencies and backsliding on judicial independence. Members of the European Parliament condemned what looked like a political decision, offering a sweetener to Prime Minister Viktor Orbán just before a key summit where the EU needed his support for Ukraine aid. On Feb. 12, Court of Justice of the European Union Advocate General Tamara Ćapeta recommended annulling the decision, meaning Hungary may have to return the funds if the court follows in its final ruling in the coming months. Orbán has slammed the idea of a repayment as “absurd.” János Bóka, Hungary’s EU affairs minister, told POLITICO that clawing back the €10 billion from the euroskeptic government in Budapest would mean that Brussels should also be recovering cash from Poland, led by pro-EU Prime Minister Donald Tusk. “We believe that the Commission’s decision was lawful … the opinion, I think, it’s legally excessive,” Bóka said. He warned that “if the Advocate General’s opinion is followed then the Commission would be legally required to freeze all the EU money going to Poland as well, which I think in any case the Commission is not willing to do.” The legal opinion on Hungary states the the Commission was wrong in unfreezing the funds “before the required legislative reforms had entered into force or were being applied,” Ćapeta said in February. Bóka said that would seem to describe the situation in Poland too. In February 2024, the EU executive released €137 billion in frozen funds to Tusk’s government in exchange for promised judicial reforms. But these have since been blocked by President Karol Nawrocki as tensions between the two worsen — spelling trouble for Poland’s continued access to EU cash. “It’s very easy to get the EU funds if they want to give it to you, as we could see in the case of Poland, where they could get the funds with a page-and-a-half action plan, which is still not implemented because of legislative difficulty,” Bóka said. Fundamentally, that is why Bóka said he believed “the court will not issue any judgment that would put Poland in a difficult position.” Bóka risks leaving office with Orbán after the April 12 election, with opposition leader Péter Magyar leading in the polls on a platform of unlocking EU funds, tackling corruption, and improving healthcare and education. The Commission is, separately, withholding another €18 billion of Hungarian funds — €7.6 billion in cohesion funds and €10.4 billion from the coronavirus recovery package. “I think Péter Magyar is right when he says that the Commission wants to give this money to them … in exchange, like they did in the case of Poland, they want alignment in key policy areas,” he said, “like support for Ukraine, green-lighting progress in Ukraine’s accession process, decoupling from Russian oil and gas, and implementing the Migration Pact.” “Just like in the case of Poland, they might allow rhetorical deviation from the line, but in key areas, they want alignment and compliance.” Poland’s Tusk has been vocal against EU laws, such as the migration pact and carbon emission reduction laws. Bóka also accused the Commission of deciding “not to engage in meaningful discussions [on EU funds] as the elections drew closer.” He added that if Orbán’s Fidesz were to win the election, “neither us nor the Commission will have any other choice than to sit down and discuss how we can make progress in this process.” Legal experts are cautious about assessing the potential impact of such a ruling, noting that the funds for Poland and Hungary were frozen under different legal frameworks. However, there is broad agreement that the case is likely to set some form of precedent over how the Commission handles disbursements of EU funds to its members. If the legal opinion is followed, “there could be a strong case against disbursing funds against Poland,” said Jacob Öberg, EU law professor at University of Southern Denmark. He said, however, that it is not certain the court will follow Ćapeta’s opinion because the cases assess different national contexts. Paul Dermine, EU law professor at the Université Libre de Bruxelles agreed the court ruling could “at least in theory, have repercussions on what happened in the Polish case,” but said that he thought judges would follow the legal opinion “as the wrongdoings of the Commission in the Hungarian case are quite blatant.”

BRUSSELS — The European Commission will look into loosening state aid rules and capping the price of gas to help member countries deal with the energy crisis triggered by the Iran war, according to a letter sent by Commission President Ursula von der Leyen. The letter, dated March 16 and obtained by POLITICO, singles out a number of main ways countries could combat higher energy costs, which have risen sharply as a result of the U.S.-Iraeli war with Iran. The letter comes ahead of a meeting of European leaders in Brussels on Thursday. Since the war broke out last month, effectively shutting off the Strait of Hormuz through which a fifth of the world’s oil supply transits, EU countries have been debating a broad range of responses to a looming energy crunch. Proposed measures have ranged from the modest and technical, such as relaxing rules to allow governments to compensate households and businesses for rising energy costs; to the radical and controversial, such as scrapping the EU’s most important climate laws. One option proposed in Monday’s letter is to relax state aid rules to permit national capitals to redistribute profits generated by gas-fired plants to support consumers and businesses facing rising bills, the letter says. Another potential change would allow countries to cap the price of gas.  Von der Leyen said both of these policies had been used after Russia’s invasion of Ukraine in 2022 and stressed that the Commission would determine on a case-by-case basis whether they would be deployed again. “The design of these emergency mechanisms should in any case avoid internal market distortions, preserve long-term investment signals for clean energy and preclude excessive additional demand for gas,” she said.  The Commission will also “further strengthen” a mechanism that allows countries to compensate 80 percent of the carbon price paid under the Emissions Trading System, the EU’s flagship carbon pricing mechanism, von der Leyen added.   The letter also stresses that measures ought to be “targeted and temporary” — an apparent rebuke to countries that have sought to dismantle key climate policies that they blame for higher prices.  The Commission president added that the Commission would also look into simplifying rules for companies to buy electricity through power purchase agreements. It will also propose a new law to “ensure that grid users receive the right incentives to make optimal use of existing grid infrastructure, as this will avoid unnecessary and costly grid expansions,” she said. 

EU leaders were all set to finally hammer out how they will revive the bloc’s ailing economy and chart a path to independence from powers like China and the United States. But Donald Trump had other plans. Just as the U.S. president’s threats to seize Greenland had dominated a previous gathering of leaders in January (and his tariffs had overshadowed a meeting before that), the U.S.-Israeli war on Iran has hijacked the agenda of Thursday’s European Council, forcing leaders to focus on a short-term energy crisis — while sapping attention from the original aim of talking about long-term competitiveness. “It is crucial that we reduce the price impact” from the war, European Commission President Ursula von der Leyen said in the run-up to the summit. “We must deliver relief now … [We need] a comprehensive look at how to reduce people’s energy bills.” With oil prices hovering around $100 per barrel, EU leaders will spend much of their time at Thursday’s meeting weighing how to offset the impact of surging energy prices on European households and businesses, according to several diplomats ahead of the gathering, who were granted anonymity to discuss private summit preparations like others in this article. While high energy prices have been a consistent theme in discussions among leaders for months, including at their gathering at Alden Biesen castle in Belgium last month, the volatility fueled by Iranian drone and missile attacks across the Middle East has turned an irritant into an emergency for leaders, who fear that surging inflation could fuel an upsurge in support for populist, anti-EU politicians. “The focus will be very strongly on energy prices — we are expecting proposals from the European Commission,” said a senior EU diplomat. “The situation with energy prices was there before at Alden Biesen but now it is indeed acute.” Then there’s the war itself, where Europe remains divided on how to respond to Trump. One camp led by Spanish Prime Minister Pedro Sánchez is pushing for the bloc to use Council conclusions (the often dry-seeming language agreed by all 27 leaders at the end of the summit) to call for international law to be upheld, in what would amount to an indirect rebuke to Trump and Israeli Prime Minister Benjamin Netanyahu. But another group of nations, including heavyweight Germany, is wary of taking any steps that could irritate the U.S. president and imperil an EU-U.S. trade deal currently being examined by European lawmakers. The risks of irking Trump are simply too great, said a second EU diplomat from a large country. “We don’t want trade escalation. We want the U.S. involved in Ukraine. We want them involved in NATO. Is it worth risking these objectives in order to be vocal about Iran? So far, not really.” “Is it worth saying: you stupid fuckers, why did you do it? No, because we will pay a higher price for that,” added the diplomat. The result is unlikely be a total missed opportunity. Leaders are still set to agree on ambitious deadlines for slashing EU red tape, as well as laying the groundwork for a more integrated European financial market. But their agenda is — once again — being dictated primarily by a leader who resides in Washington, not Europe. ORBÁN, AGAIN Oil prices surging past $100 per barrel last week have thrust Europe back into the dark days of 2022 when Russia’s full-scale invasion of Ukraine caused a massive spike in energy prices across the bloc. Those price spikes, though offset thanks to a huge injection of EU cash, nonetheless helped far-right and far-left political movements, with Hungarian Prime Minister Viktor Orbán basing his current reelection campaign on the idea that the Ukraine war has been too costly. Now Orbán is set to seek center stage again: His threat to veto a planned €90 billion EU loan for Ukraine looms as the major unsolved question of the summit, infuriating leaders. Frustration at Budapest is at a fever pitch, according to the senior diplomat, with governments taking on a “much more direct, even confrontational” tone with Budapest behind closed doors, the person said. Orbán’s violating his promise to back the loan had made it possible for other countries to drag him before the European Court of Justice for violating the EU principle of “sincere cooperation,” the two diplomats said. However, they acknowledged that any legal proceedings would take months or years to conclude — far too long for Ukraine, which needs the EU loan within months. The alternative is to reach a deal on Thursday. The same two diplomats voiced optimism it could be done and said Orbán himself had shown openness to a deal, which could also include unblocking a 20th package of sanctions against Russia that is currently being held up by Budapest and Bratislava. Leaders are also due to lock horns over the longer-term direction of Europe’s energy policies. A group of Nordic countries, plus Spain, wrote to the Commission before the summit to defend the bloc’s Emissions Trading System (ETS), arguing that greater use of renewable energy will make the EU more autonomous. But they’re up against Italy’s Giorgia Meloni and Poland’s Donald Tusk, who are pushing for tweaks to the ETS to offset potential price spikes linked to the fact that Poland and Italy remain big consumers of fossil fuel. “I don’t know if we go as far as removing ETS completely,” said the second EU diplomat, when asked about their country’s demands for next week’s leaders’ summit.  But the diplomat added: “If you have a [price] spike caused by an external shock, there has to be a mechanism where ETS doesn’t add to this shock.” IRAN AND UKRAINE Another major concern is how the Iran war affects Ukraine, given that spiking oil prices have refilled Russian President Vladimir Putin’s coffers just as his army is losing control of the Dnipropetrovsk region in eastern Ukraine. Leaders are also concerned that demand for U.S. weapons for the Iran war will deprive Kyiv of much-needed arms, which in many cases are being purchased with EU money. Diplomats say this could be a chance for Europe’s defense industry to step in while providing Ukraine with much-needed revenues given its production capacity. Indeed, Ukraine has announced it is sending anti-drone operators and counter-drone technology to assist the Gulf states. The push to take advantage is reflected in a draft of the conclusions, dated March 9 and seen by POLITICO, where leaders call “for a step change” in strengthening the EU’s defense industry. A previous version did not include such strong wording. But it remains unclear whether Europe’s defense industry can keep up with demand.  After the war in Ukraine, this is a new challenge for the industry — military conflicts are proliferating so fast that the sector can’t keep up with production demand, said the CEO of Italian defense giant Leonardo, Roberto Cingolani. “There’s a big effort ongoing” to help countries in the Persian Gulf that are under attack from Iran, Cingolani told a company presentation in Rome last week.  But “to be honest,” he added, “the number of wars … is growing even faster than our Capacity Boost program,” he added, referring to a Leonardo initiative to increase production capacity in response to rising demand. Jacopo Barigazzi contributed reporting.

LONDON — Brussels is insisting that British Prime Minister Keir Starmer agree to a cut in tuition fees for EU students as the price of his Brexit reset, according to two officials familiar with the state of negotiations. EU officials say they are frustrated that the U.K. is yet to engage on the topic in talks — which are meant to finish by the summer. “It needs to be worked out before talks can be concluded,” one EU official told POLITICO. “There is some frustration on our side that we haven’t reached a point in negotiations where this issue has been openly discussed.” The EU official added that a cut in fees for European students was “a very key point for our member states” and “a clear interest for us.” Before Brexit, EU students paid “home” U.K. tuition fees of about £9,500 a year in England — but are now subject to eye-watering “international” rates that can lock out all but the wealthiest students. Overseas rates can range from roughly double the U.K. rate for some courses to huge sums for the most prestigious degrees, such as the £62,820 a year international fee to study computer science at Oxford University. Under pressure from its member countries, the EU wants fees cut for Europeans studying in the U.K. as part of talks to set up a “youth experience” scheme. But Starmer and his negotiators are under pressure from British universities not to accede to the demand. Universities say they will face a cash crisis if lucrative foreign fee income is cut and not replaced, with one recently published analysis by the Russell Group suggesting the sector would be left £580 million out of pocket. A U.K. official said the home fees demand wasn’t mentioned in the “common understanding” drawn up as a blueprint for talks last year — and that negotiations are about implementing that document. The agreement does not explicitly mention tuition fees and only says the youth scheme should “facilitate the participation of young people from the European Union and the United Kingdom” in areas including study. But the EU official quoted above said that, while it was debatable whether the change was alluded to in last year’s communique, it was nevertheless the EU’s position. They stressed that other issues under discussion, like the planned agri-food agreement or linking emissions trading systems, were largely U.K. “asks” — and that the EU also had its own interest to pursue. “It’s important to look at the position from the other side,” they added. A U.K. government spokesperson said: “We will not give a running commentary on ongoing talks.” They added: “We are working together with the EU to create a balanced youth experience scheme which will create new opportunities for young people to live, work, study and travel. “Any final scheme must be time-limited, capped and will be based on our existing youth mobility schemes, which do not include access to home tuition fee status.”

The National Fund for Environmental Protection and Water Management (NFEPWM) will be the first institution to implement the ELENA (European Local Energy Assistance) instrument at the national level in Poland. As the leader of green investment financing in Poland, it is launching a new advisory services segment for companies and local governments preparing sustainable investments. On March 3, 2026, in Luxembourg, Ioannis Tsakiris, a vice president at the European Investment Bank, and Dorota Zawadzka-Stepniak, the board president of the NFEPWM, officially acknowledged an agreement for the ELENA National Pilot Program. The project preparation budget is €4.5 million, with €4.05 million provided as grant support from the ELENA facility — a joint EIB and European Commission facility under InvestEU. Pre-investment support will target local government authorities and heating companies. Increased investments in heating and energy efficiency will lead to energy savings and reduced carbon dioxide emissions. These efforts are part of Poland’s energy transition, with the NFEPWM playing a significant role. In 2026, the fund will allocate 85 percent of its planned green investment budget of €8.8 billion to the energy transition. After a consultation, the European Commission formally approved the ELENA grant, and it was decided to leverage the NFEPWM’s experience to implement an ELENA pilot mechanism nationally. The fund will combine its experience with the EIB’s established practices under the ELENA instrument. After the pilot phase, the NFEPWM plans to continue and expand the program to include beneficiaries from other sectors. > In 2026, the fund will allocate 85 percent of its planned green investment > budget of €8.8 billion to the energy transition. “The competence center, established as part of the ELENA project, addresses market needs in investment consulting to support Poland’s energy transition. The ELENA program will provide the NFEPWM with a unique range of services in Europe, combining advisory and financial support for future beneficiaries. This initiative aligns with the fund’s strategy for 2025–2028, which focuses on developing advisory services and creating a competence center within the fund, as well as utilizing modern financial instruments,” explains Zawadzka-Stepniak. ELENA in Poland: pilot project assumptions Between 2026 and 2029, Polish investors planning thermal modernization of public buildings and upgrades in the heating sector will have access to advisory services. Local government authorities and heating companies will receive comprehensive expert support in preparing their investments. The involvement of relevant experts will facilitate the development of high-quality project documentation, leading to effective funding applications in calls for proposals conducted by the NFEPWM. The pilot program will support entities that choose not to modernize public buildings or heating plants due to a lack of know-how. It will target new investors who can evaluate the profitability of potential investments, helping to expand the NFEPWM program’s beneficiaries. Some Polish local authorities and heating companies, constrained by limited finances, avoid the risk of inefficient spending on investment analysis, missing the chance to secure support from European funds or the Modernisation Fund. Under the ELENA project, the NFEPWM will reach out to these investors, providing technical assistance and identifying financing opportunities for future projects. This approach addresses the need for local governments to enhance energy efficiency and the requirements for heating companies to adopt more environmentally friendly heat generation methods. The future beneficiary will gain a partner in the NFEPWM, an expert in preparing technical documentation for co-financing applications and green project funding. Assistance will focus on supporting preparatory processes, including energy audits, feasibility studies, technical documentation, public procurement services and ex-ante analyses. The transformation of district heating is a priority for change in the Polish economy, making it crucial to enhance the efficiency of district heating systems and increase the use of renewable energy from various sources. More than 15 million Poles are daily users of district heating produced by small municipal heating plants typical of the Central European region. Although the networks are extensive, improving their efficiency is often necessary. The challenges include reducing heat production from coal combustion and minimizing unnecessary heat consumption. Companies are increasingly investing in modern technologies that decrease the release of dust and harmful compounds into the atmosphere. The last 20 years have brought significant changes to the Polish heating sector — carbon dioxide emissions have fallen by nearly 20 percent, the production of harmful dust has been reduced by over 90 percent, sulfur dioxide emissions have decreased by almost 90 percent and nitrogen oxides by over 60 percent. > For nearly 37 years, the NFEPWM has led green transformation financing in > Poland, improving the natural environment and quality of life. It has > co-financed environmental protection and water management investments totaling > nearly 160 billion złoty. Modernizing the heating sector and improving the energy efficiency of public buildings will reduce greenhouse gas emissions locally and nationally. The ELENA project in Poland will co-finance at least 65 entities in the heating sector. Energy efficiency projects will lower energy consumption, increase renewable energy use and enhance facility comfort. Long-term investments will reduce local government operating costs, improving air quality and residents’ quality of life. The national pilot aims to support analyses and documentation for at least 80 thermal modernization investments in public buildings. The ELENA instrument is implemented by the European Investment Bank under an agreement with the European Commission. Established in 2009 as part of the Intelligent Energy Europe II program, ELENA provides pre-investment support for sustainable energy, transport and housing. It is an EIB Advisory grant facility, under InvestEU, which supports the preparation of sustainable investments. As of the end of 2025, the ELENA facility has provided €374 million in grants for 206 projects across the European Union, supporting investments of over €12.7 billion. For nearly 37 years, the NFEPWM has led green transformation financing in Poland, improving the natural environment and quality of life. It has co-financed environmental protection and water management investments totaling nearly 160 billion złoty. Thanks to the NFEPWM, green investments worth approximately 340 billion złoty have been implemented in Poland. Under the Ministry of Climate and Environment, NFEPWM supports EU environmental and energy policy objectives. -------------------------------------------------------------------------------- Polish National ELENA Pilot Programme Co-funded by the InvestEU Advisory Hub of the European Union