HELSINKI — Europe’s easternmost countries have a blunt message for Brussels: Russia is testing their borders, and the EU needs to start paying for the response. Leaders from eight EU states bordering Russia will use a summit in Helsinki on Tuesday to press for dedicated defense funding in the bloc’s next long-term budget, arguing that frontline security can no longer be treated as a national expense alone, according to three European government officials. “Strengthening Europe’s eastern flank must become a shared responsibility for Europe,” Estonian Prime Minister Kristen Michal said Monday. The first-of-its-kind summit, spearheaded by Finnish Premier Petteri Orpo, underscores a growing anxiety among the EU’s so-called Eastern flank countries about Russia’s increasingly brazen efforts to test their defenses and stir panic among their populations. In recent months Russia has flown fighter jets into Estonian airspace and sent dozens of drones deep into Polish and Romanian territory. Its ally Belarus has repeatedly brought Lithuanian air traffic to a standstill by allowing giant balloons to cross its borders. And last week, Moscow’s top envoy Sergey Lavrov issued a veiled threat to Finland to exit NATO.  “Russia is a threat to Europe … far into the future,” Orpo told Finnish daily Helsingin Sanomat on Saturday. “There is always a competition for resources in the EU, but [defense funding] is not something that is taken away from anyone.” Tuesday’s confab, attended by Finland, Sweden, Estonia, Latvia, Lithuania, Poland, Romania and Bulgaria, comes during a critical week for Europe. On Monday several EU leaders met with U.S. officials as they strain to hammer out a peace deal in Ukraine, just three days before all 27 EU countries reconvene for a crucial summit that will determine whether they unlock €210 billion in frozen Russian cash for Kyiv. OPEN THE VAULTS At the heart of Tuesday’s discussion will be unblocking EU money.  The frontline countries want the EU to “propose new financial possibilities for border countries and solidarity-based financial tools,” said one of the government officials. As part of its 2028-2034 budget proposal, the European Commission plans to raise its defense spending fivefold to €131 billion. Frontline countries would like some of that cash to be earmarked for the region, two of the government officials said, a message they are likely to reiterate during Thursday’s European Council summit in Brussels. “Strengthening Europe’s eastern flank must become a shared responsibility for Europe,” Estonian Prime Minister Kristen Michal said. | Hendrik Schmidt/Getty Images In the meantime, the EU should consider new financial instruments similar to the bloc’s €150 billion loans-for-weapons program, called the Security Action For Europe, the same two officials said. European Commission chief Ursula von der Leyen told POLITICO last week she had received calls to set up a “second SAFE” after the first iteration was oversubscribed. The frontline countries also want to throw their political weight behind two upcoming EU projects to buttress the bloc’s anti-drone and broader defenses, the two officials said. EU leaders refused to formally endorse the Eastern Flank Watch and European Drone Defense Initiative at a summit in October amid opposition by countries like Hungary, France and Germany, who saw them as overreach by Brussels on defense, two EU diplomats said at the time. A request to reserve part of the EU budget for a specific region may also face opposition from other countries. To get around this, Eastern flank countries should link defense “infrastructure improvements to overall [EU] economic development,” said Jamie Shea, a senior defense fellow at the Friends of Europe think tank and a former NATO spokesperson. Frontline capitals should also look at “opening up [those infrastructure projects] for competitive bidding” to firms outside the region, he added. DIFFERENT REGION, DIFFERENT VIEW Cash won’t be the only divisive issue in the shadows of Tuesday’s gathering. In recent weeks Donald Trump’s administration has repeatedly rebuked Europe, with the U.S. president branding the continent’s leaders “weak” in an interview with POLITICO. Countries like Germany and Denmark have responded to growing U.S. admonishments by directly rebutting recent criticisms and formally branding Washington a “security risk”.  But that approach has rankled frontline countries, conscious of jeopardizing Washington’s commitment to NATO’s collective defense pledge, which they see as a last line of protection against Moscow. This view also reflects a growing worry inside NATO that a peace deal in Ukraine will give Moscow more bandwidth to rearm and redirect its efforts toward frontline countries. “If the war stops in Ukraine … [Russia’s] desire is to keep its soldiers busy,” said one senior NATO diplomat, arguing those troops are likely to be “relocated in our direction.” “Europe should take over [its own] defenses,” the diplomat added. But until the continent becomes militarily independent, “we shouldn’t talk like this” about the U.S., they argued. “It’s really dangerous [and] it’s stupid.” Jacopo Barigazzi contributed to this report from Brussels.

BRUSSELS ― Europe’s strategy for convincing the Belgians to support its plan to fund Ukraine? Warn them they could be treated like Hungary. At their summit on Dec. 18, EU leaders’ key task will be to win over Bart De Wever, the bloc’s latest bête noire. Belgium’s prime minister is vetoing their efforts to pull together a €210 billion loan to Ukraine as it faces a huge financial black hole and as the war with Russian grinds on. De Wever has dug his heels in for so long over the plan to fund the loan using frozen Russian assets ― which just happen to be mostly housed in Belgium ― that diplomats from across the bloc are now working on strategies to get him on board. De Wever is holding out over fears Belgium will be on the hook should the money need to be paid back, and has now asked for more safety nets. Nearly all the Russian assets are housed in Euroclear, a financial depository in Brussels. He wants the EU to provide an extra cash buffer on top of financial guarantees and increased safeguards to cover potential legal disputes and settlements — an idea many governments oppose. Belgium has sent a list of amendments it wants, to ensure it isn’t forced to repay the money to Moscow alone if sanctions are lifted. De Wever said he won’t back the reparations loan if his concerns aren’t met. Leaders thought they’d have a deal the last time they all met in October. Then, it was unthinkable they wouldn’t get one in December. Now it looks odds-on. All hope isn’t lost yet, diplomats say. Ambassadors will go line by line through Belgium’s requests, figure out the biggest concerns and seek to address them. There’s still room for maneuver. The plan is to come as close to the Belgian position as they can. But a week before leaders meet, the EU is turning the screws. If De Wever continues to block the plan ― a path he’s been on for several months, putting forward additional conditions and demands ― he will find himself in an uncomfortable and remarkable position for the leader of a country that for so long has been pro-EU, according to an EU diplomat with knowledge of the discussions taking place. The Belgium leader would be frozen out and ignored, just like Hungary’s Viktor Orbán has been given the cold shoulder over democratic backsliding and his refusal to play ball on sanctioning Russia. The message to Belgium is that if it does not come on board, its diplomats, ministers and leaders will lose their voice around the EU table. Officials would put to the bottom of the pile Belgium’s wishlist and concerns related to the EU’s long-term budget for 2028–2034, which would cause the government a major headache, particularly when negotiations get into the crucial final stretch in 18 months’ time. Nearly all the Russian assets are housed in Euroclear, a financial depository in Brussels. | Ansgar Haase/Getty Images Its views on EU proposals will not be sought. Its phone calls will go unanswered, the diplomat said. It would be a harsh reality for a country that is both literally and symbolically at the heart of the EU project, and that has punched above its weight when it comes to taking on leading roles such as the presidency of the European Council. But diplomats say desperate times call for desperate measures. Ukraine faces a budget shortfall next year of €71.7 billion, and will have to start cutting public spending from April unless it can secure the money. U.S. President Donald Trump has again distanced himself from providing American support. Underscoring the high stakes, EU ambassadors are meeting three times this week — on Wednesday, Friday and Sunday — for talks on the Commission’s proposal for the loan, published last week.   PLAN B — AND PLAN C — FOR UKRAINE The European Commission put forward one other option for funding Ukraine: joint debt backed by the EU’s next seven-year budget. Hungary has formally ruled out issuing eurobonds, and raising debt through the EU budget to prop up Ukraine requires a unanimous vote. That leaves a Plan C: for some countries to dig into their own treasuries to keep Ukraine afloat. That prospect isn’t among the Commission’s proposals, but diplomats are quietly discussing it. Germany, the Nordics and the Baltics are seen as the most likely participants. But those floating the idea have a warning: The most significant benefit conferred by EU membership to countries around the bloc is solidarity. By forcing some member countries to carry the financial burden of supporting Ukraine alone, the bloc risks a serious split at its core. Germany in future may not choose to prop up a failing bank in a country that doesn’t stump up the cash for Kyiv now, the thinking goes. “Solidarity is a two-way street,” a diplomat said. For sure, there is another way — but only in theory. De Wever’s fellow EU leaders could band together and pass the “reparation loan” plan via so-called qualified majority voting, ignoring Belgium’s rejections and just steamrollering it through. But diplomats said this is not being seriously considered. Bjarke Smith-Meyer and Gregorio Sorgi contributed reporting.

LONDON — The European Commission is unlikely to reach an immediate deal on allowing third-party entry to the EU’s flagship loan program for defense, after talks between London and Brussels ran aground over financial issues.  The EU is negotiating with the U.K. and Canada over access to the EU’s €150 billion Security Action for Europe loans-for-weapons initiative, which allows EU member countries to take low interest loans and then jointly procure weapons systems. Gaining access was once trumpeted by PM Keir Starmer as a key target for a “reset” of post-Brexit relations with the EU. The Commission set an informal deadline of Wednesday evening to reach an agreement, but now does not expect to reach a deal imminently, according to one person familiar with discussions. Major differences remain between the two sides over the level of financial contributions the U.K. would need to make and the minimum mandatory share of components produced inside the EU, with senior British figures signaling they would not seek entry at any price. The U.K. and Canada would not be able to take loans, but are negotiating whether their industries can play a greater role in supplying the weapons systems. Two EU officials – granted anonymity like others in this article to speak freely, and who are involved in discussions with London –characterized the mood as tense. However, a Commission spokesperson sought to smooth the waters, saying: “We welcome the U.K.’s interest in negotiating a higher participation in SAFE. The Commission remains open to negotiate with the U.K., but the contribution has to be proportionate to the benefits the U.K. gains from its participation.” Sandro Gozi, a member of the European Parliament who chairs the EU-U.K. Parliamentary Partnership Assembly, confirmed to POLITICO that “we want to reserve high percentages” of projects for EU defense industries. | Ludovic Marin/AFP via Getty Images Brussels has asked for a contribution of between €4.5 billion and €6.5 billion, according to three diplomats close to negotiations, while the U.K. has proposed a much lower figure of €200 million to €300 million; some officials said that the U.K.’s initial offer was even smaller — in the order of tens of millions of euros. Diplomats said talks with Canada are much smoother.  France has been among those pushing to limit U.K. participation so that only 50 percent of components can be made outside the EU. However, other countries like Germany and the Netherlands are keen on the U.K. being allowed to take part. U.K. Defence Secretary John Healey told journalists at a press conference Wednesday: “We’ve always made clear whilst we were willing to pay a fair share of the costs of this program, any deal had to be good value for money for our British taxpayers.” Sandro Gozi, a member of the European Parliament who chairs the EU-U.K. Parliamentary Partnership Assembly, confirmed to POLITICO that “we want to reserve high percentages” of projects for EU defense industries, adding this was “not to put other partner in an uncomfortable position” but to develop strategic autonomy. Hopes remain high that the U.K. will find an agreement with the EU before the end of November, but officials from both camps warn that the outcome may be more limited than was first envisaged when Starmer and Commission President Ursula von der Leyen exchanged warm words in May. A U.K. official said London’s view was that the sum ought to reflect administration costs and the cost of guaranteeing the loans, adding it was “not reasonable to pay the EU just for the privilege of access.” They stressed the U.K. was taking “a pragmatic approach”, and that the EU-U.K. relationship would sit alongside bilateral partnerships with member states as “valuable pieces of the puzzle” in strengthening Europe’s defense.  Under SAFE’s current rules, components from non-member countries can make up 35 percent of a product to qualify for the loans. Expanding that to 50 percent or more would allow a greater participation for the U.K., which has one of Europe’s largest and most advanced defense industries. Jon Stone contributed to this report.

LONDON — Negotiations are finally underway for Keir Starmer’s much-hyped Brexit reset. Expect to relive some trauma. Six months ago, the British prime minister came to a “common understanding” with the EU at an all-smiles summit in London. The two sides — keen to move on from years of bad blood over Britain’s 2016 exit from the bloc — vowed to smooth trade in food and electricity. They’d make it easier for young people to live abroad, link their carbon markets, and cooperate more closely on defense. And they would round the harder edges off Tory Boris Johnson’s controversial Brexit settlement. The pesky details, they agreed, would be sorted out over the coming year. Six months on, getting down to brass tacks is proving tricky. And as ever, much of the disagreement comes down to money. PROLIFERATING DEMANDS The early stages of talks have been dogged by what the chair of the U.K. parliament’s European Affairs Committee calls “proliferating EU demands for U.K. cash.” Brussels wants London to pay up as part of the planned agri-food agreement. It wants payments for the Erasmus student scheme, money for the electricity trading agreement, and cash for access to the SAFE rearmament scheme. Last week, EU member states agreed among themselves that London should be paying into EU “cohesion” funds — money that would level out inequalities between different EU member states. To an extent, the U.K. was prepared for improved access to EU markets to come with a price tag. Brexit Minister Nick Thomas-Symonds has accepted that Britain would have to make contributions to cover “the cost of administration” and pay its way in schemes that involve pooling resources — though always with a “careful analysis of value for money.” But he’s also been clear that the U.K. “would not make a general contribution into the EU budget” as part of the reset. To anyone who’s read a British newspaper recently, the context in Westminster is obvious. Later this month, Chancellor Rachel Reeves will deliver a painful government budget expected to be stuffed with tax rises and spending cuts. Later this month, Chancellor Rachel Reeves will deliver a painful government budget expected to be stuffed with tax rises and spending cuts. | WPA Pool via Getty Images With Reeves digging around behind the back of the sofa for spare change, the optics — and budgetary wisdom — of forking over billions to the EU would be open to question. TAKING CARE There are even those on the EU side who are concerned that asking the U.K. to write so many cheques might have consequences for the cross-Channel relationship. Last week, a minority of member states, including Germany, Belgium, the Netherlands, and Ireland, launched a bid at an EU ambassadors meeting to tone down language on demands for British contributions to cohesion funds. The countries were concerned that pushing too hard might undermine relations to the extent that parts of the Brexit reset that they want to happen — in particular, an agreement on electricity trading — get kicked into the long grass. “We made an agreement in May, that should be the foundation for our conversation,” one cautious EU diplomat told POLITICO. Like others quoted in this article, they were granted anonymity to discuss the ongoing talks. “So we shouldn’t then in November come back and try to add to it the contributions to cohesion funds that we didn’t agree in May, even if that’s the principle that we feel is warranted. We have to take care of our relationship with the U.K.” As softly as some countries want to play it, all agree that such contributions will ultimately be necessary. “You cannot as a third country enjoy benefits that put you in a more favorable position than EU members,” a second EU diplomat told POLITICO. “Throughout the years all third countries with access to the single market have had a requirement to provide budgetary contributions to the cohesion fund … that has always been our approach.” In the end, a compromise wording asks the European Commission to “reflect upon the appropriate level of financial contribution” that London should make, while fast-tracking electricity trading talks to start by the end of the year. The hope is that the agreed position will mean talks can move along at speed, while making clear to London that it is expected to pay for any benefits it gains. PLAYING IT SAFE But there are already signs that the EU’s emphasis on Britain bringing its wallet to talks is holding things up. Talks over U.K. participation in the EU’s SAFE rearmament scheme — meant to bolster European defense in light of the war in Ukraine and Donald Trump’s ambivalence — got going in May. Six months on, the question of cash is still unresolved. Brussels wants around €4.5 to 6.5 billion in exchange for U.K. participation, according to two EU diplomats. Peter Ricketts, the veteran British diplomat who chairs the U.K. parliament’s European Affairs Committee, described the demand as “unbelievable.” “This is a loan scheme. The government are willing to contribute to the costs of running it. But a €6.5 billion fee is so off the scale that it suggests some EU members don’t want U.K. in the scheme,” he said. Downing Street said Keir Starmer told Commission President Ursula von Der Leyen on a call last week that “any deals must result in tangible benefits to the British public.” DEADLINE TIME While the wrangling over cash is holding things up, deadlines are approaching. The U.K. government has set itself the goal of getting the planned agri-food agreement online by 2027 so voters can begin to feel the benefits at supermarket checkouts ahead of the next election. Similarly, if talks on linking emissions trading systems are not concluded by the end of the year — or a temporary bridging deal struck — then British firms will start to be hit by new EU carbon border taxes from Jan. 1. In both cases, the question of cash will need to be dealt with. The hope expressed by chief EU negotiator Maroš Šefčovič is that most topics can be cleared by the time next year’s U.K.-EU summit rolls around — though no date has been nailed down. There’s likely to be “a bit of back and forth during the negotiation” and maybe even some “drama,” the second EU diplomat quoted above reckons — judging it to be “the British negotiating style.” But, ultimately, hopes are still high that the reset can deliver. “There would be absolutely no surprises,” the diplomat added. “They know us very well, we know them very well.” Jacopo Barigazzi also contributed to this report.

Domènec Ruiz Devesa is president of the Union of European Federalists and was an MEP from 2019 to 2024. Negotiations on the EU’s 2028–2034 Multi-annual Financial Framework (MFF) have entered a new phase of political significance. Traditionally, this process follows a familiar pattern: The European Commission proposes a draft budget, the Council bargains behind closed doors, then, at the final stage, the Parliament is called in to give or withhold consent. It’s a sequence of affairs that has long placed the Parliament in a weak position before a nearly finished deal — but not this time. In a break from previous iterations, this time the Parliament intervened early and managed to secure concessions. This is a feat that should be acknowledged. However, recognizing this success shouldn’t obscure the political stakes that remain. Following the Commission’s initial proposal, the Parliament was able to assert itself at the very start of the MFF process through a joint letter from the presidents of its main political groups, expressing clear institutional expectations, financial priorities and political conditions. As a result, the Commission offered improvements regarding the role of regional authorities in the implementation of agricultural and cohesion programs, and accepted an enhanced role for the Parliament to monitor the MFF’s execution. As previously noted by this very publication, the Parliament’s unusually early involvement was able to influence the framework before the Council began its negotiations — a notable break from precedent that should be seen as a strategic gain for parliamentary democracy at the European level. It’s a move that demonstrates the Parliament can impact the overall direction of EU governance when it acts strategically and cohesively. It suggests that parliamentary authority in budgetary affairs isn’t just a legal formality but a tool that can shape policy. And even more crucially, it is an institutional win that the Parliament should take credit for. However, it’s important to note that many in the Parliament still view these changes as insufficient. As highlighted by the Socialists and Democrats, Greens and Renew Europe groups, though this early intervention demonstrates that the Parliament can influence the MFF process, the substance of these modifications doesn’t address other structural concerns regarding the budget’s size, long-term strategic priorities or governance transparency. The decisive phase still lies ahead, and the central negotiations won’t occur between the Parliament and the Commission but between the Parliament and the Council. The Council, representing member countries, traditionally holds the stronger position — especially when unanimity is required. Still, the Parliament’s consent is indispensable. So, if it is to play an equal role in shaping the bloc’s strategic future, the Parliament must be willing to use its veto power if necessary. And in order to act effectively, it must link its consent on the MFF to broader issues beyond the budget. The MFF isn’t merely a financial plan — it is the backbone of Europe’s political priorities for the coming decade. And it shouldn’t be adopted in isolation from the bloc’s strategic goals or its capacity to act. But for that to happen, three things must take place: First, the so-called “passerelle clauses” need to be activated. This would allow the Council to shift from unanimity to qualified majority voting in specific policy areas without the need for treaty reform, which is essential to overcome persistent deadlocks. Next comes European defense. Article 42 of the Treaty on European Union provides a mutual defense clause, which could potentially lead to a common defense. In an era of heightened geopolitical tension, reliance on fragmented national capabilities is untenable. However, a credible European security posture would require joint procurement as well as shared operational planning. Therefore, linking MFF funding to concrete steps in defense integration would improve European security while also reinforcing the bloc’s global credibility. Lastly, there has to be movement on treaty reform. In November 2023, the Parliament approved a proposal to reform the EU Treaties, aiming to update the institutional framework, democratize decision-making and enhance the bloc’s capacity to act — particularly in terms of enlargement. But such reform cannot advance without political pressure, as the Council has little incentive to take up the proposal unless the Parliament conditions its agreement to the MFF on progress in the reform process. The MFF negotiations thus present a strategic opportunity. They aren’t only about allocating funds or how these funds are supervised — as fundamental as this is. They’re also about determining the direction of European integration. If the Parliament approves an MFF that doesn’t support the reforms needed to strengthen a potentially larger bloc, then its moment of influence will be wasted. The achievements of the first phase show that coordinated parliamentary action can, indeed, shape outcomes. Now, the next step is to use that influence where it matters most: in negotiations with the Council. The Parliament must be strategic and firm. Only then can it ensure that the next MFF isn’t merely a financial instrument but the foundation for a more capable, united and democratic union.

The U.S. needs to push ahead with a new round of sanctions to cripple Russian industry and finally bring Vladimir Putin to the negotiating table, Finnish leader Alexander Stubb told POLITICO in an interview. Stubb, who previously used a golf trip with U.S. president Donald Trump to press him to take a harder line on the Russian leader, said it’s time for Washington to turn up the economic heat on Moscow. Trump “either goes for carrot or for stick,” the Nordic leader said. “He tried the carrot in Alaska and in his phone conversation with Putin. And when he realized that the Russians are not going to move and they’re not interested in peace, he [Trump] went for stick.” “Right now we’re in stick mode,” said Stubb. “The next step should be sanctions — the sanctions package in the [U.S.] Senate.” He was referring to a sweeping Russia sanctions bill that has wide bipartisan support in the Senate and has stalled pending presidential approval. On Sunday night, Trump said the proposed legislation would be “OK with [him],” emboldening the the Senate to move forward on Monday. Last month, Trump placed new sanctions on two of Russia’s largest oil companies — Rosneft and Lukoil — a move the Finnish president applauded. Stubb said the U.S. is right to move ahead with the bill given Putin’s unwillingness to embrace a ceasefire. “The only person Putin listens to is an oligarch,” Finland’s leader said. “In that sense, if the oligarchs come to the conclusion in Russia that economically this is too complicated, then things might start to happen.” Asked if Europe should try to engage directly with Putin as proposed by Hungarian Prime Minister Viktor Orbán, Stubb said: “Whenever that moment [for direct talks] comes, which it will at some stage … it’ll have to be coordinated.” For now, Stubb said he was happy with Washington’s taking a leading role. “If we can contribute … if we can mediate, if we can have conversations with the Ukrainians, with the Americans, with the Europeans, I think that’s good enough,” he said, adding that a just and lasting peace is more important that Europe getting a photo op. CEASEFIRE ‘NOT IN THE CARDS’ On the prospect of a ceasefire in Ukraine, Stubb was downbeat, noting he had pressed for a ceasefire deadline around Easter, ahead of the Aug. 15 Trump-Putin meeting in Alaska, and again ahead of the upcoming Nov. 22-23 G20 gathering in Johannesburg. “Failing all this and reading the room right now, having had conversations with [Ukrainian President Volodymyr] Zelenskyy on Friday, with my American friends and European friends over the past few weeks, I just don’t see that [a ceasefire] in the cards,” he added. The best way to bring a ceasefire closer is to maintain pressure on Russia and keep backing Ukraine, he said. Stubb’s visit to Brussels comes as the EU scrambles to keep Ukraine financially afloat beyond the first quarter of 2026. European Commission President Ursula von der Leyen has proposed tapping a trove of Russian frozen assets held in Belgium, but the country’s prime minister has so far resisted, citing concerns about Russian retaliation. The Finnish leader, who met with Belgian Prime Minister Bart de Wever earlier on Monday, said he didn’t want to put  “public pressure” on de Wever but predicted with “high confidence” that Europe would ultimately come up with a funding solution. One way is to combine various options spelled out in a Commission paper, he said, rather than take the entire amount needed to cover Ukraine’s funding shortfall from the Russian assets. The Commission has proposed increasing the EU budget or having capitals raise debt for Ukraine in addition to seizing the assets. “It could also be a combination of these three options, but that’s for the European Council to decide. And of course for Belgium itself,” said Stubb, who also met with von der Leyen and NATO Secretary-General Mark Rutte on Monday. Earlier Monday, Polish leader Donald Tusk denounced an explosion on a Polish rail line used to deliver aid to Ukraine as an “act of sabotage.” “This is the new normal,” Stubb said. “My recommendation is to stay calm. Have a little bit more sisu [grit]. Don’t get too flustered.”

LONDON — How should we handle Brexit Britain? That was the question keeping some EU diplomats up on Tuesday night. U.K. PM Keir Starmer wants to “reset” relations with the bloc and is keen to start talks as soon as possible. But before that can happen, EU countries need to agree their own joint negotiating position. Ambassadors from the 27 countries were hoping to hash one out at a high-level meeting in Brussels on Tuesday — after falling flat during an earlier attempt on Friday. But they remained deadlocked after a second day of talks and will now be coming back for more on Wednesday. The big divide is over U.K. payments to EU budget funds: While all countries are in favor of the Brits chipping in, some want to take things slow. THE PRICE OF ACCESS The most common position, held by a dozen member states including France, is that the U.K. should start making “imminent” or swift payments as the price of access to the single market, according to one EU official with knowledge of the discussions who was granted anonymity to speak freely. Starmer wants the U.K. to rejoin the bloc’s internal electricity market and sign a separate deal granting single-market-like access in the agri-food sector — but that’s likely to come at a price. That price, moreover, will be subject to negotiation. And countries including Germany, the Netherlands, Ireland, Belgium and Luxembourg have been pushing for a more cautious line. They point out that the agreement struck at Starmer’s London Brexit summit in May didn’t explicitly include U.K. contributions to cohesion funds. “We made an agreement in May — that should be the foundation for our conversation,” said a second person, an EU diplomat, also granted anonymity to speak freely about the talks. “So we shouldn’t then in November come back and try to add to it the contributions to cohesion funds that we didn’t agree in May, even if that’s the principle that we feel is warranted … We have to take care of our relationship with the U.K.” The diplomat summarized the divide: “Do you say to the Commission: You have to make the U.K. pay … or do you say, you know, we should explore whether it’s possible for the U.K. to pay.” PAY TO PLAY Cash payments to the EU budget are a touchy political subject in Westminster and were a key feature of the Brexit campaign — where the Leave campaign complained loudly about the amount of cash sent to Brussels. While the U.K. is open to paying for access to EU programs, London says it wants value for money. Previous negotiations over the U.K.’s rejoining the Horizon science research program dragged on amid U.K. bartering over the cost, and Starmer’s government this week pushed back on the EU’s opening offer of €6.75 billion for access to its SAFE rearmament program, Bloomberg reported. The clock is ticking, however. The mandates under discussion in Brussels this week would cover the proposed agri-food agreement as well as linkage of the U.K. and EU emissions trading schemes. London wants the former agreement operational by 2027 so British consumers begin to feel the benefits at the supermarket check-out before the next election. The latter is required to stop U.K. businesses from being hit by new EU border taxes next year. So far, Starmer’s reset has had plenty of warm words. Converting those into legal texts was always going to be the hard part.

BRUSSELS — It’s only November, but gift-giving season has arrived in the EU. Facing an emboldened European Parliament intent on voting down her plans for the EU’s next long-term budget, Ursula von der Leyen handed out concessions. The changes she made to the European Commission’s budget proposal managed to appease the centrist groups in the Parliament, and did so without angering EU countries. But lawmakers are already signaling they’ll be back to ask for more. Bowing to the Parliament’s demands shows the new dynamics at play between the EU’s main institutions, with von der Leyen paying extra attention to an assembly that now leans further right than ever before and has already tried to bring her down on several occasions. It shows that she needs the Parliament on side, and is prepared to go to great lengths to make sure that happens. MEPs had been restless for weeks about plans for the next seven-year EU budget. Many were furious about how the Commission wanted to handle EU cash for regions and farmers, and they threatened to vote down the plans on Thursday. To head off that rebellion, on Sunday von der Leyen offered several changes to its initial proposal, including introducing a “rural target” for capitals’ agricultural spending and giving regional leaders more power to determine how cash is distributed. The compromise showed von der Leyen was prepared to bow to many of the Parliament’s demands — a rare move by the Commission at this stage of budget talks. Previous budget negotiations have seen the Parliament all but ignored for large parts of the process. It helped that many of the changes are already on some EU countries’ budget wishlists, and would have likely ended up in the text anyway. The changes will now be added to the legal text by the Council, as withdrawing and re-presenting the Commission’s proposal would majorly delay the process. Yet many lawmakers are still grumbling that they want a bigger say on how the budget shapes up. “The proposal on the rights of the European Parliament [is] weak. We should get more decision power, [not non-binding] working groups and coffee meetings,” said Green MEP and budget expert Rasmus Andresen. “The big question is if the Council will accept the additional ideas or not.” There have been three motions of no confidence filed against von der Leyen by the Parliament this year and while she defeated them all comfortably, they have exposed deep divisions within the centrist alliance that has long ruled the roost in Brussels. So von der Leyen is paying closer attention to what MEPs want from the Commission. The size of right-wing and far-right groups swelled in the last election, destabilizing the centrist majority that usually backs her — her own political family, center-right European People’s Party, plus the Socialists and Democrats and the liberals of Renew. The EPP has repeatedly threatened to team up with the far right, planting distrust and blowing up negotiations. “This is the most unstable Parliament ever. It is very difficult for the Commission to predict their moves and what to expect from votes, it’s generating a lot of frustrations in the Berlaymont,” an EU official said when the centrists failed to back a deal on green rules for businesses, key to von der Leyen’s agenda. The official was granted anonymity to speak freely, as were others in this piece. SETTING A PRECEDENT By appeasing the Parliament on the budget by suggesting changes that are acceptable for EU countries, von der Leyen has avoided a boxing match between the EU’s co-legislators — for now. Spokesperson for the Commission Balazs Ujvari said Monday the EU executive has “listened to these discussions and the positions formulated by various actors.” | Thierry Monasse/Getty Images On one side of the ring is the EU Council, representing the countries. It wants to protect its status as EU top dog, and believes that the Parliament should simply rubber-stamp the budget once it has been agreed upon by national capitals (as is envisaged in the EU’s official rules). On the other side? The most polarized Parliament in history, keen on securing power and pushing for its position to be greater. “We can do whatever we want, we can use our consent power … we would be dumb not to use it,” said a senior Parliament official after the Commission’s concessions, echoing the views of many of his colleagues. “The Council should not play too much on the institutional role … we have the power so we will use it until the very end to try to get more concessions.” That echoes fears from EU diplomats representing countries who, in recent weeks, had warned the Commission against giving in to the demands of MEPs. “The letter from the European Parliament [setting out their concerns and sent in late October] has nothing to do with agriculture and regions. It’s about an inter-institutional struggle,” said an EU diplomat last week. “They are using the weakness of the Commission to strengthen the role of the European Parliament in the budget negotiations.” Spokesperson for the Commission Balazs Ujvari said Monday the EU executive has “listened to these discussions and the positions formulated by various actors.” “As a matter of general practice, the Commission acts as an honest broker, ready to move things forward by clarifying and suggesting proposals,” he said. MORE DEMANDS INCOMING While the lead negotiator on the budget, EPP lawmaker Siegfried Mureșan, was quick to claim victory for the Parliament, officials from the S&D and Renew are already drawing up future demands. What those will be won’t be clear until the groups’ top brass meet in the coming days. “We appreciate President von der Leyen’s efforts to address the issues,” said an S&D official, but the proposal is a “cosmetic change that does not address the real concerns expressed by the leaders in their letter.” The official also argued that “the role of the European Parliament is left behind” and that the Socialists want a greater role in establishing how EU funds are spent. “Our main goal is having an ambitious [budget] fit for the challenges of the current global context and that serves our people. This can only happen with an amended proposal meaningfully reflecting the Parliament’s key requests,” the official said. A liberal official argued that the group wants to see more EU-generated revenue streams to finance the budget, such as EU-wide taxes, and a more binding say by regional governments on how national capitals spend the bloc’s cash. “Renew’s approval is also linked to this,” the official said. Gabriel Gavin contributed reporting.

BRUSSELS — The European Parliament’s centrist political groups are backing down on a threat to vote against a key part of the EU’s long-term budget, following concessions made by the European Commission. After weeks of pressure from the political groups, the Commission on Sunday evening proposed several changes to its plan for the next seven-year EU budget in an effort to avert an all-out rebellion during a vote on Thursday, according to a document seen by POLITICO. The presidents of the Commission and Parliament — Ursula von der Leyen and Roberta Metsola — and Danish Prime Minister Mette Frederiksen, whose country holds the rotating presidency of the Council of the EU, spoke Monday to discuss the budget plan. The center-right European People’s Party, the Socialists and Democrats, the liberals of Renew Europe, and the Greens had on Oct. 30 sent a letter to the Commission demanding changes to the proposal — especially the way it deals with EU cash for regions and for farmers — and threatening to refuse to engage in negotiations if those changes were not made. Hours after the Commission changed its plans, those groups are now backing down. “Victory for the European Parliament in defending farmers and regions in the next long-term EU budget,” Siegfried Mureșan, the EPP’s lead negotiator on the budget, wrote on social media on Monday. A Renew Europe official, granted anonymity to speak freely, told POLITICO that the group “will not ask for a resolution rejecting national plans to be tabled for a vote in the plenary this week.” Lawmakers and officials from S&D and Greens also indicated that the resolution is unlikely to come to fruition, despite some misgivings about the Commission’s proposed compromise. “There is nothing substantial to answer the main demands of the [European Parliament’s] letter,” Jean-Marc Germain, a Socialist lawmaker who works on the budget file, told POLITICO. The French MEP added that he still supports rejecting a major part of the Commission’s budget proposal — although several colleagues privately admitted that any resolution seeking to bring down the proposals is unlikely to pass without the support of EPP and Renew. COMPROMISE PLEASES EU COUNTRIES The Commission’s changes also have to be backed by national capitals, which are generally reluctant to give concessions to the Parliament early in the negotiating process. Frederiksen did not oppose the Commission’s suggested changes during the meeting with Metsola and von der Leyen, according to an official with knowledge of the talks.  A senior EU diplomat, granted anonymity to speak freely, said on Monday that “I don’t have many issues with the content of the [Commission’s] paper.” The proposals “overlap significantly with positions expressed by member states in Council,” the diplomat added. This is a significant dial-down from previous threats by the Council that caving in to Parliament’s demands could have thrown a spanner into the negotiations. “The Commission forced the Danish presidency to accept these changes over the weekend” to avert Parliament’s rejection, said an EU official with knowledge of the discussions. Parliament is opposed to the Commission’s plan to pool funds for regions and farmers into one single pot, which makes up around half of the total budget, as many MEPs claim that this will cut Parliament and regional leaders out of decision-making and hand too much power to national governments. To address these complaints, the Commission on Sunday proposed a “rural target” that would compel governments to spend 10 percent of the amount of money in the national plans on agriculture. The Commission has also suggested giving regional leaders more power to determine how the money is being spent ― including by giving them a seat at the table in key planning meetings between national governments and Commission officials. Finally, the Commission suggested giving Parliament a bigger role in deciding how the EU’s public funding is being spent. In a further concession, the Commission on Monday morning sent an updated document, seen by POLITICO, in which it used language that is more aligned with Parliament’s position. It described the suggested compromises as “proposals in the legal text,” as requested by Parliament.

BRUSSELS ― The European Commission proposed several changes to its next seven-year EU budget in an effort to avert a rebellion in the European Parliament, according to a document seen by POLITICO. By giving ground on sensitive issues, the powerful EU executive is aiming to neutralize a threat by a majority of EU Parliament lawmakers to reject its €1.8 trillion plan to fund the EU. The Commission’s move comes hours before a crucial virtual meeting on Monday between Commission President Ursula von der Leyen, European Parliament President Roberta Metsola and Danish Prime Minister Mette Frederiksen, whose country holds the rotating presidency of the Council of the EU. Monday’s gathering is a last-ditch attempt to broker a compromise in the face of increasingly tense relations between Parliament and Commission. The new budget requires Parliament’s approval before it comes into force in 2028. The Commission proposing changes to its own budget proposal is highly unusual ― and is a response to pressure from key parties in Parliament, including the center-right European People’s Party and the left-leaning Progressive Alliance of Socialists and Democrats. WHAT ARE THE PROPOSED CHANGES? Parliament is opposed to the Commission’s MFF plan over important changes to regional and agricultural payments, which make up around half of the total budget. A majority of MEPs claim that the proposed reforms will cut Parliament and regional leaders out of decision-making and hand too much power to national governments. To address these complaints, the Commission on Sunday proposed a “rural target” that would compel governments to spend 10 percent of the total amounts of the national plans on agriculture. This is in addition to the €300 billion in direct funding for farmers already included in the original proposal in July. “It’s more or less what we asked for,” said a senior lawmaker who is involved in the discussions. Another point of contention is the Commission’s proposal to merge the regional and agricultural budget into a single cash pot handled by national governments ― who would get significant leeway over how to spend the money. The Commission’s move comes hours before a crucial virtual meeting between Ursula von der Leyen, European Parliament President Roberta Metsola and Danish Prime Minister Mette Frederiksen. | Johnathan Nackstrand/Getty Images This has sparked outrage among mayors and regional leaders, who fear they will have no say regarding the funds. In order to fix this issue, the EU executive has now suggested giving regional leaders more power to determine how the money is being spent ― including by giving them a seat at the table in key planning meetings between national governments and Commission officials. In a further concession, the Commission proposed guarantees to reduce the risk of national governments cutting payments to more developed regions. This comes on top of a €218 billion guarantee for payments to poorer areas in July. Finally, the Commission suggested giving Parliament a bigger role in deciding how the EU’s public funding is being spent. The proposed changes will prove controversial with national capitals, who are currently amending the Commission’s proposal and generally oppose giving early concessions to Parliament. Bartosz Brzeziński contributed to this report.