BRUSSELS — European Commission President Ursula von der Leyen’s plan to shake up how the EU spends its almost €2 trillion budget is rapidly being diluted. Von der Leyen’s big idea is to steer hundreds of billions in funds away from farmer subsidies and regional payouts — traditionally the bread and butter of the EU budget — toward defense spending and industrial competitiveness. But those modernizing changes — demanded by richer Northern European countries that pay more into the budget than they receive back from it — are difficult to push through in the face of stern opposition from Southern and Central European countries, which get generous payments for farmers and their poorer regions. A coalition of EU governments, lawmakers and farmers is now joining forces to undo key elements of the new-look budget running from 2028 to 2034, less than six months after the European Commission proposed to focus on those new priorities. Von der Leyen’s offer last week to allow countries to spend up to an extra €45 billion on farmer subsidies is her latest concession to powerful forces that want to keep the budget as close as possible to the status quo. Northern European countries are growing increasingly frustrated by moves by other national capitals and stakeholders to turn back the clock on the EU budget, according to three European diplomats. They were particularly irritated by a successful Franco-Italian push last week to exact more concessions for farmers as part of diplomatic maneuvers to get the long-delayed Mercosur trade deal with Latin America over the line. “Some delegations showed up with speaking points that they have taken out of the drawer from 2004,” said an EU diplomat who, like others quoted in this story, was granted anonymity to speak freely. The EU’s Common Agricultural Policy was worth 46 percent of the bloc’s total budget in 2004. The Commission’s proposal for 2028-2034 has reserved a minimum of roughly 25 percent of the total cash pot for farmers, although governments can spend significantly more than that. The Commission had no immediate comment when asked whether the anti-reform camp was successfully chipping away at von der Leyen’s proposal. THE ANTI-REFORM ALLIANCE The Commission’s July proposal to modernize the budget triggered shockwaves in Brussels and beyond. The transition away from sacred cows consolidated a ramshackle coalition of angry farmers, regional leaders and lawmakers who feared they would lose money and influence in the years to come. “This was the most radical budget [ever proposed] and there was resistance from many interested parties,” said Zsolt Darvas, a senior fellow at the Bruegel think tank. A protest by disgruntled farmers in Brussels during a summit of EU leaders on Dec. 18 was only the latest flashpoint of discontent. | Bastien Ohier/Hans Lucas/AFP via Getty Images The scale of the Commission’s task became apparent weeks before the proposal was even published, as outspoken MEPs, ministers and farmers’ unions threatened to dismantle the budget in the following years of negotiations. That’s exactly what is happening now. “The Commission’s proposal was quite radical so no one thought it could go ahead this way,” said a second EU diplomat.   “We knew that this would be controversial,” echoed a Commission official working on the file. A protest by disgruntled farmers in Brussels during a summit of EU leaders on Dec. 18 was only the latest flashpoint of discontent. The terrible optics of the EU’s signing off on Mercosur as farmers took to the streets on tractors was not lost on national leaders and EU officials. Commission experts spent their Christmas break crafting a clever workaround that allows countries to raise agricultural subsidies by a further €45 billion without increasing the overall size of the budget. The extra money for farmers isn’t new — it’s been brought forward from an existing rainy-day fund that was designed to make the EU budget better suited to handling unexpected crises. By handing farmers a significant share of that financial buffer, however, the Commission is undermining its capacity to mobilize funding for emergencies or other policy areas. “You are curtailing the logic of having a more flexible budget for crises in the future,” said Eulalia Rubio, a senior fellow at the Jacques Delors Institute think tank. At the time, reactions to the budget compromise from frugal countries such as Germany and Netherlands were muted because it were seen as a bargaining chip to win Italy’s backing for the Mercosur deal championed by Berlin. The trouble was instead postponed, as it reduces budget flexibility. Darvas also argued that the Commission has not had to backtrack “too much” on the fundamentals of its proposal as countries retained the option of whether to spend the extra cash on agriculture. In a further concession, the Commission proposed additional guarantees to reduce the risk of national governments cutting payments to more developed regions. | Nicolas Tucat/AFP via Getty Images ANOTHER MONTH, ANOTHER CONCESSION This wasn’t the first time von der Leyen has tinkered with the budget proposal to extract herself from a political quagmire. The Commission president had already suggested changes to the budget in November to stem a budding revolt by her own European People’s Party (EPP), which was feeling the heat from farmers’ unions and regional leaders. At the time, the EU executive promised more money for farmers by introducing a “rural spending” target worth 10 percent of a country’s total EU funds. In a further concession, the Commission proposed additional guarantees to reduce the risk of national governments cutting payments to more developed regions — a sensitive issue for decentralized countries like Germany and Spain. “The general pattern that we don’t like is that the Commission is continuing to offer tiny tweaks here and there” to appease different constituencies, an EU official said. The Commission official retorted that national capitals would eventually have made those changes themselves as the “trend of the negotiations [in the Council] was going in that direction.” However, budget veterans who are used to painstaking negotiations were surprised by the speed at which Commission offered concessions so early in the process. “Everyone is scared of the [2027] French elections [fearing a victory by the far-right National Rally] and wants to get a deal by the end of the year, so the Commission is keen to expedite,” said the second EU diplomat. Nicholas Vinocur contributed to this report.

Officially, the EU’s Mercosur trade deal is a defeat for Europe’s farmers. In reality, farm lobbies just can’t stop winning. EU countries endorsed the bloc’s long-delayed agreement with South American nations on Friday, clearing the way for European Commission President Ursula von der Leyen to fly to Paraguay later this week and close a deal that has haunted Brussels for more than two decades. The agreement is going through despite tractor protests, border blockades and fierce opposition from farm groups and capitals including Paris and Warsaw. But the price of getting Mercosur over the line was steep. In the run-up to the endorsement, Brussels quietly stacked the deck in farmers’ favor. Import safeguards were hardened. Controls tightened. And last week, the Commission unveiled a €45 billion budget maneuver allowing governments to shift more money to farmers under the EU’s next long-term budget. Taken together, the concessions mean Mercosur will enter into force wrapped in protections and paired with a farm budget settlement that leaves the sector stronger than before. “Other sectors complain,” said one Commission official involved in agricultural policy. “Farmers block roads.” The official, like others in this story, was granted anonymity to speak freely. The blunt assessment captures a familiar reality inside the EU institutions. Farmers may represent a shrinking share of Europe’s economy, but they remain one of its most powerful political constituencies, capable of reshaping trade deals, budgets and reform agendas even when they fail to block them outright. Ultimately, to get Mercosur over the line, Brussels had to back away from plans to loosen farmers’ grip on the EU budget and shift money to other priorities. PRESSURE THAT WORKS The leverage farm leaders wield rests on more than theatrics. Few officials in Brussels dispute that large parts of the sector are under real strain. Farm incomes are volatile. Costs for fuel, fertilizer and feed have surged. Weather has become harder to predict. Working days are long and isolation is common in hollowing rural communities. “I understand the anger,” Agriculture Commissioner Christophe Hansen told POLITICO in an interview last month, as Brussels prepared for tractors to roll into the EU quarter. Christophe Hansen said the Commission had “heard the concerns of farmers” and responded with “strong and unprecedented support measures.” | Photo by Omar Havana/Getty Images Sympathy for farmers runs high across much of Europe, tied not just to economics but to culture, place and identity. That has always made farm subsidies one of the most politically sensitive lines in the EU budget — and one the Commission knew would be hardest to touch. That sensitivity was on display again last week, when agriculture ministers traveled to Brussels for a hastily convened meeting outside the formal calendar, called in response to farmer protests only weeks earlier. Inside, the language was ritualistic. Praise for farmers. Assurances they were being listened to. Repeated references to unprecedented safeguards and financial backing. Hansen summed it up afterward, saying the Commission had “heard the concerns of farmers” and responded with “strong and unprecedented support measures.” REFORM MEETS REALITY This outcome marks a sharp reversal of earlier ambitions inside the Commission. It’s also a reminder of just how high the stakes are when farm subsidies are in play. The Common Agricultural Policy remains the single largest line in the EU budget, absorbing roughly a third of total spending and anchoring a political contract that dates back to the bloc’s postwar foundations. Public money, in exchange for food security and rural stability, has long been one of Europe’s core bargains. That bargain has survived decades of reform. The CAP has been trimmed, greened and made more market-oriented. But its central promise — that farming would be protected — has never disappeared. After von der Leyen’s re-election in 2024, officials quietly explored loosening how tightly farm spending is locked into the EU budget. Draft ideas for the post-2027 budget would have made farm funds more flexible and easier to redirect to priorities such as defense, climate transition or industrial policy. It was a technocrat’s answer to a crowded budget. It did not survive contact with politics. The proposal landed as farm incomes came under pressure from rising costs, climate volatility and disease outbreaks. Tractors returned to Europe’s streets. Agriculture ministers closed ranks, warning of political fallout in rural heartlands. Farm lobbies mobilized in force. Hansen spent much of his first year in office traveling to farms and meeting unions, describing agriculture as a strategic asset and warning of a “convergence of pressures” hitting the sector. Behind closed doors, he fought to keep large chunks of farm funding protected. Tractors park in front of the Arc de Triomphe during a demonstration of the French agricultural union Coordination Rurale (CR) in Paris, France, on January 8, 2026. | Jerome Gilles/NurPhoto via Getty Images Those efforts didn’t calm farmers’ anger. Instead, pressure became constant, feeding into a series of concessions that steadily narrowed the scope for reform. First came assurances that most farm spending would remain ring-fenced in the post-2027 budget. Then came a new rural spending target, designed to funnel more money back into countryside projects. Last week, to get the Mercosur deal over the line, the Commission went further, proposing that farmers get early access to up to €45 billion from a broader cash pot the EU would have been saving for a rainy day. In effect, much of the post-2027 EU farm budget is on track to be sealed at levels approaching today’s, before negotiations have even begun in earnest. LOSING THE TRADE FIGHT, WINNING THE POLITICS The €45 billion now being front-loaded was originally conceived as crisis insurance. After the Covid-19 pandemic and Russia’s invasion of Ukraine, Brussels concluded that future EU budgets needed more flexibility to respond quickly to shocks. Money reserved for incremental spending reviews was meant to be the first line of defense in the next crisis. If national capitals embrace the Commission’s proposal, much of that money would be locked in for farmers before the cycle even starts, leaving less for other priority areas. Mercosur became the perfect vehicle for that pressure. Long championed by industrial exporters, the deal turned into shorthand for everything farmers fear about global competition and loss of control. The reality is more uneven. Some EU farmers, particularly in high-end food, wine and dairy, stand to gain from better access to Mercosur markets. Others, especially in beef and poultry, face tougher competition. Yet even there, trade analysts have long dismissed fears of South American goods flooding the EU as exaggerated. But nuance rarely survives a protest banner, and even the unprecedented concessions haven’t stopped farmers from protesting. The EU’s largest farm lobby, Copa-Cogeca, said Friday that the process of getting the Mercosur deal across the line “erodes trust in European governance, democratic processes and parliamentary scrutiny at a time when institutional credibility is already under strain.” The group said it would continue mobilizing farmers. Privately, Commission officials express frustration about the farm lobbies’ hardening demands.  One said that even though Brussels bends over backwards to meet farmers’ demands, every concession still falls short for farm leaders. Another pointed to Commissioner Hansen’s efforts to engage in direct dialogue with farmers across the EU. “And still, they talk as if we had done nothing,” the official said, referring directly to Copa-Cogeca. For now, farm leaders are winning.  Von der Leyen might be boarding that plane to South America. But when she returns to Brussels, they will already be gearing up for the next fight, confident they can lose the trade battle and still bend Europe’s policy in their favor.

Europe’s biggest ever trade deal finally got the nod Friday after 25 years of negotiating.  It took blood, sweat, tears and tortured discussions to get there, but EU countries at last backed the deal with the Mercosur bloc — paving the way to create a free trade area that covers more than 700 million people across Europe and Latin America.  The agreement, which awaits approval from the European Parliament, will eliminate more than 90 percent of tariffs on EU exports. European shoppers will be able to dine on grass-fed beef from the Argentinian pampas. Brazilian drivers will see import duties on German motors come down.  As for the accord’s economic impact, well, that pales in comparison with the epic battles over it: The European Commission estimates it will add €77.6 billion (or 0.05 percent) to the EU economy by 2040.  Like in any deal, there are winners and losers. POLITICO takes you through who is uncorking their Malbec, and who, on the other hand, is crying into the Bordeaux. WINNERS Giorgia Meloni Italy’s prime minister has done it again. Giorgia Meloni saw which way the political winds were blowing and skillfully extracted last-minute concessions for Italian farmers after threatening to throw her weight behind French opposition to the deal.  The end result? In exchange for its support, Rome was able to secure farm market safeguards and promises of fresh agriculture funding from the European Commission — wins that the government can trumpet in front of voters back home. It also means that Meloni has picked the winning side once more, coming off as the team player despite the last-minute holdup. All in all, yet another laurel in Rome’s crown.  The German car industry  Das Auto hasn’t had much reason to cheer of late, but Mercosur finally gives reason to celebrate. Germany’s famed automotive sector will have easier access to consumers in LatAm. Lower tariffs mean, all things being equal, more sales and a boost to the bottom line for companies like Volkswagen and BMW. There are a few catches. Tariffs, now at 35 percent, aren’t coming down all at once. At the behest of Brazil, which hosts an auto industry of its own, the removal of trade barriers will be staggered. Electric vehicles will be given preferential treatment, an area that Europe’s been lagging behind on.  Ursula von der Leyen Mercosur is a bittersweet triumph for European Commission President Ursula von der Leyen. Since shaking hands on the deal with Mercosur leaders more than a year ago, her team has bent over backwards to accommodate the demands of the skeptics and build the all-important qualified majority that finally materialized Friday. Expect a victory lap next week, when the Berlaymont boss travels to Paraguay to sign the agreement. Giorgia Meloni saw which way the political winds were blowing and skillfully extracted last-minute concessions for Italian farmers after threatening to throw her weight behind French opposition to the deal. | Ettore Ferrari/EPA On the international stage, it also helps burnish Brussels’ standing at a time when the bloc looks like a lumbering dinosaur, consistently outmaneuvered by the U.S. and China. A large-scale trade deal shows that the rules-based international order that the EU so cherishes is still alive, even as the U.S. whisked away a South American leader in chains.  But the deal came at a very high cost. Von der Leyen had to promise EU farmers €45 billion in subsidies to win them over, backtracking on efforts to rein in agricultural support in the EU budget and invest more in innovation and growth.   Europe’s farmers  Speaking of farmers, going by the headlines you could be forgiven for thinking that Mercosur is an unmitigated disaster. Surely innumerable tons of South American produce sold at rock-bottom prices are about to drive the hard-working French or Polish plowman off his land, right?  The reality is a little bit more complicated. The deal comes with strict quotas for categories ranging from beef to poultry. In effect, Latin American farmers will be limited to exporting a couple of chicken breasts per European person per year. Meanwhile, the deal recognizes special protections for European producers for specialty products like Italian parmesan or French wine, who stand to benefit from the expanded market. So much for the agri-pocalpyse now.  Mercosur is a bittersweet triumph for European Commission President Ursula von der Leyen. | Olivier Matthys/EPA Then there’s the matter of the €45 billion of subsidies going into farmers’ pockets, and it’s hard not to conclude that — despite all the tractor protests and manure fights in downtown Brussels — the deal doesn’t smell too bad after all.  LOSERS Emmanuel Macron  There’s been no one high-ranking politician more steadfast in their opposition to the trade agreement than France’s President Emmanuel Macron who, under enormous domestic political pressure, has consistently opposed the deal. It’s no surprise then that France joined Poland, Austria, Ireland and Hungary to unsuccessfully vote against Mercosur.  The former investment banker might be a free-trading capitalist at heart, but he knows well that, domestically, the deal is seen as a knife in the back of long-suffering Gallic growers. Macron, who is burning through prime ministers at rates previously reserved for political basket cases like Italy, has had precious few wins recently. Torpedoing the free trade agreement, or at least delaying it further, would have been proof that the lame-duck French president still had some sway on the European stage.  Surely innumerable tons of South American produce sold at rock-bottom prices are about to drive the hard-working French or Polish plowman off his land, right? | Darek Delmanowicz/EPA Macron made a valiant attempt to rally the troops for a last-minute counterattack, and at one point it looked like he had a good chance to throw a wrench in the works after wooing Italy’s Meloni. That’s all come to nought. After this latest defeat, expect more lambasting of the French president in the national media, as Macron continues his slow-motion tumble down from the Olympian heights of the Élysée Palace.  Donald Trump Coming within days of the U.S. mission to snatch Venezuelan strongman Nicolás Maduro and put him on trial in New York, the Mercosur deal finally shows that Europe has no shortage of soft power to work constructively with like-minded partners — if it actually has the wit to make use of it smartly.  Any trade deal should be seen as a win-win proposition for both sides, and that is just not the way U.S. President Donald Trump and his art of the geopolitical shakedown works. It also has the incidental benefit of strengthening his adversaries — including Brazilian President and Mercosur head honcho Luiz Inácio Lula da Silva — who showed extraordinary patience as he waited on the EU to get their act together (and nurtured a public bromance with Macron even as the trade talks were deadlocked). China  China has been expanding exports to Latin America, particularly Brazil, during the decades when the EU was negotiating the Mercosur trade deal. The EU-Mercosur deal is an opportunity for Europe to claw back some market share, especially in competitive sectors like automotive, machines and aviation. The deal also strengthens the EU’s hand on staying on top when it comes to direct investments, an area where European companies are still outshining their Chinese competitors. Emmanuel Macron made a valiant attempt to rally the troops for a last-minute counterattack, and at one point it looked like he had a good chance to throw a wrench in the works after wooing Italy’s Meloni. | Pool photo by Ludovic Marin/EPA More politically, China has somewhat succeeded in drawing countries like Brazil away from Western points of view, for instance via the BRICS grouping, consisting of Brazil, Russia, India, China and South Africa, and other developing economies. Because the deal is not only about trade but also creates deeper political cooperation, Lula and his Mercosur counterparts become more closely linked to Europe. The Amazon rainforest  Unfortunately, for the world’s ecosystem, Mercosur means one thing: burn, baby, burn. The pastures that feed Brazil’s herds come at the expense of the nation’s once-sprawling, now-shrinking tropical rainforest. Put simply, more beef for Europe means less trees for the world. It’s not all bad news for the climate. The trade deal does include both mandatory safeguards against illegal deforestation, as well as a commitment to the Paris Climate Agreement for its signatories. 

PARIS — France’s inability to block the EU-Mercosur trade deal on Friday allows opposition parties to twist their knives into an already weakened Emmanuel Macron for the rest of his presidency. Hostility to the landmark agreement — largely over the vulnerability of farmers to exports from South America — unites French politicians across the spectrum, and they now need someone to blame. France’s Europhile president failing to stop the accord is a humbling reflection of the fading power of Paris in the EU, where it was long notorious for its exceptionalism and veto power. Jordan Bardella, head of the far-right National Rally and front-runner for the presidency in 2027, accused Macron of being a hypocrite by pretending to oppose the deal and “betraying French farmers” by not doing enough to stop it. Bardella said the National Rally would submit a motion of no confidence against the government. The far-left France Unbowed submitted its own motion Friday morning after France was “humiliated” in Brussels, party heavyweight Mathilde Panot said. While those efforts are unlikely to succeed, parliamentary debates on the trade deal will again remind the French public that Macron could not to stand up to Brussels. The more center-leaning political forces are calling on French authorities do to more in the coming days to stop the deal, rather than take down the government. Leaders from the conservative Les Républicains and the Socialist Party, ideological opponents, both urged Macron’s government to take the fight against the trade deal to the Court of Justice of the European Union. “We have abdicated, abandoned our food sovereignty,” Les Républicains leader Bruno Retailleau, another likely presidential hopeful in 2027, said Thursday. French farmers who descended Thursday on Paris to vent their fury parked tractors outside the Arc de Triomphe and the National Assembly, where they confronted both National Assembly President Yaël Braun-Pivet and Agriculture Minister Annie Genevard. One held a poster saying that European Commission President Ursula von der Leyen “really takes us for idiots.” Frédéric-Pierre Vos, a National Rally lawmaker who represents a rural district in northern France, stood alongside them and slammed the Mercosur deal as “a sacrifice of French agriculture to save the German car industry.” With the deep unpopularity of the agreement at home, Macron has been left in the uncomfortable position of having to oppose the deal, while trying to defend the concessions he obtained.   Writing on X, Macron said Thursday he was fighting for “farming sovereignty” and hailed pledges from the European Commission to increase the budget for the Common Agricultural Policy in the next EU budget.  An Elysée official on Thursday also told reporters that “a number of advances” had been made on the trade deal, including clauses that would protect European farmers and consumers from sudden floods of goods from Latin America. The French president also tried to strike a defiant tone, insisting “the signature of the agreement is not the end of the story” in his statement online.   But for Macron, the sting of this loss is likely to last.   His political opponents — especially the National Rally — are sure to seize on the vote as a public humiliation for France ahead of local elections in March and next year’s presidential race. Victor Goury-Laffont contributed to this report.

BRUSSELS — Ursula von der Leyen wanted her next EU budget to have a rainy-day fund in case of war, pandemic or competition from other world powers. Instead, the European Commission president is already raiding it to pay off farmers and nail down the Mercosur trade deal. National leaders — including those of Mercosur holdouts France and Italy — have rushed to claim credit for the offer to free up €45 billion for Common Agricultural Policy spending years ahead of schedule. Budget analysts and diplomats, however, called it a major step back from the Commission chief’s initial ambition to help the bloc spend more nimbly in response to global chaos. The concession is part of an attempt to make the EU-Mercosur deal palatable for the bloc’s farmers, who fear their products will be undercut by Latin American exports. The sense of urgency was on full display Wednesday as agriculture ministers made their way to Brussels through snowfall and travel disruption for an extraordinary meeting called in response to last month’s farmer protest in the EU capital. Inside, the exchanges followed a familiar script. Praise for farmers was paired with assurances they had been heard, alongside repeated references to safeguards, support measures and flexibility built into the EU’s draft budget. Yet farmers, in early reactions, seemed less than impressed. In a statement, the Irish Farmers Association said von der Leyen’s proposal “smacks of desperation.” TRADING AWAY THE BUDGET The European Commission’s additional money for farmers isn’t new — it’s been brought forward from an existing rainy day fund in the EU budget proposal, which is still being negotiated and will only come into force in 2028. The Commission set aside a financial buffer to tackle unforeseen emergencies during the mid-term review of the budget in 2030 in an attempt to make the EU’s common cash pot less rigid than it currently is. In order to lock in France and Italy’s support for the Mercosur trade deal, the Commission on Tuesday offered countries the possibility of immediately handing over €45 billion from that cash pot to farmers. Trade Commissioner Maroš Šefčovič said after the ministers’ meeting that the concessions were part of a broader effort to secure backing for the Mercosur deal, which he described as “the biggest free-trade agreement we have negotiated.” Brussels, he added, had gone “further than ever before” with safeguards to address agriculture fears. “We listened to the concerns of farmers and rural communities, and we acted,” Agriculture Commissioner Christophe Hansen said, arguing that the proposed €45 billion could be mobilized as soon as the next EU budget begins in 2028. While this will significantly increase the EU’s agricultural funding in the short term, it will empty the EU’s crisis fund further down the line. “Farmers are taking all the remaining flexibility in the budget,” said Eulalia Rubio, a senior fellow at the Jacques Delors Center think tank, noting that it will eat up EU spending on other areas.  The Commission is showing “its willingness to accept that member states use all flexibility in favor of agriculture [and] not in favor of cohesion [funding to poorer regions]” or other priorities, she said. In a further concession to farmers, the Commission also pointed to a vaguely defined “rural target” worth €48 billion, floated late last year to keep the European Parliament on side during budget talks, as a pot that could be used first and foremost for agriculture. “This comes at the expense of one of the key features of the reform — flexibility,” said an EU diplomat.  Ultimately, without new funding pots, farmers don’t see much to cheer at this point. | Tobias Canales/Hans Lucas/AFP via Getty Images CLAMORING FOR CREDIT Von der Leyen could be encouraged by the initial reactions from capitals: National leaders claimed victory, presenting it as a trophy they had personally scored for their farmers. French President Emmanuel Macron credited his “constant commitment to [France’s] farmers” for the win, while Greek Prime Minister Kyriakos Mitsotakis said it “shows Greece’s voice in Europe is heard more loudly and more clearly.”  And with Rome set to cast the tie-breaking vote on a Mercosur measure Friday, Italian Agriculture Minister Francesco Lollobrigida called the “good news” evidence of “the seriousness of the work carried out by Italy.” Not all ministers were quite so quick to celebrate. Speaking after the extraordinary meeting, Spanish Agriculture Minister Luis Planas described the €45 billion offer as “an interesting and important step forward,” but added that, evidently, discussions on the future CAP were far from over.  Farm lobbyists were more guarded in their praise, however. For Luc Vernet, secretary-general at Farm Europe, the move is “potentially an improvement.”  Vernet zeroed in on the fact that von der Leyen’s offers are merely optional for capitals, “not an obligation” to hand over the cash to farmers. In his view that could lead to disparate outcomes around the bloc, depending on the success that farmers enjoy in negotiating with their governments, “further undermining the C [Common] of the CAP.” Ultimately, without new funding pots, farmers don’t see much to cheer at this point.  “Bringing forward €45bn that has already been promised to Member States isn’t the same as an additional €45bn,” said the Irish Farmers Association. Nektaria Stamouli contributed reporting from Athens.  This article has been updated.

BRUSSELS — Brussels is making a final push to get the European Union’s long-awaited trade deal with the Latin American Mercosur bloc over the finish line this week. The European Commission is expected to issue a declaration aimed at reassuring countries that have held out against the deal before a decisive vote on Friday, five officials with direct knowledge of the discussions told POLITICO. While the substance of the declaration is still unclear some of the officials, speaking on condition of anonymity, suggested they could include reassurances on payments to European farmers. That would be critical for winning back the support of Italian Prime Minister Giorgia Meloni, who pulled the emergency brake before an EU leaders’ summit in Brussels last month under pressure from her country’s powerful farming lobby. Under the EU’s voting rules, a so-called qualified majority — of 15 out of the bloc’s 27 member countries representing 65 percent of its population — would be needed to back the deal that has been in the works for a quarter century. Italy, with its large population, effectively holds the casting vote. If the Commission can offer reassurances on some money for farmers under the EU’s next seven-year budget, which runs from 2028 to 2034, that would help soften the impact of a proposed one-fifth reduction in the Common Agricultural Policy, under which the bloc distributes subsidies to farmers. The new concessions may not win over France and Poland, the main opponents of the accord with Mercosur — which groups Argentina, Brazil, Paraguay and Uruguay. But, without Italy, they and their allies would lack the votes to block the deal on Friday. The agriculture ministers of France and Poland are expected to visit Brussels Wednesday to seek reassurances that supplementary safeguards agreed on by the EU institutions to prevent European farmers from being undercut by a possible glut of South American produce are strong enough. If the vote goes through, Commission President Ursula von der Leyen would finally be free to fly to Paraguay as early as next week to sign the deal, which has been under negotiation for over a quarter of a century and would create a free-trade area of more than 700 million people and abolish duties on 90 percent of EU exports. If the vote goes through, Commission President Ursula von der Leyen would finally be free to fly to Paraguay as early as next week to sign the deal. | Olivier Hoslet/EPA POLITICO has reached out to the European Commission for comment. Earlier on Monday, chief spokesperson Paula Pinho said: “We are on the right track to envisage a signing of the agreement and we do hope that will take place quite soon.” The Italian government did not immediately respond to a request for comment.

BERLIN — A high-ranking German lawmaker belonging to Chancellor Friedrich Merz’s conservative bloc issued a simple warning to countries holding up the EU-Mercosur trade agreement: Without such deals, Germany won’t be able to pay more into EU coffers. “Germany is an export nation, from which, incidentally, all other EU countries also benefit,” Sepp Müller, deputy chairman of Merz’s conservative parliamentary group in the Bundestag, said on Wednesday when asked about the leverage Germany has in ongoing negotiations over the trade deal with the Latin American bloc. “If Germany does not return to being a strong export nation, then we will not be able, economically and financially, to bear any further additional burdens for an increasing multi-year financial framework,” he added, referring to the European Commission’s €2 trillion 2028-2034 budget proposal that is now under discussion. “Now Europe must decide: Does it want to put the German economy back on the path to growth and thus support and grow the largest net contributor to the European coffers?” he said. Chancellor Friedrich Merz, speaking in the German Bundestag ahead of an EU summit, exhibited frustration over persisting disagreements that are holding up the Mercosur trade agreement. The agreement, in the works for over 25 years, is within sight of the finish line, but France and Italy are calling for a delay to finalize additional safeguards to protect European farmers from heightened South American competition. Only if they come round will European Commission President Ursula von der Leyen be able to fly to Brazil on Saturday, the day after the EU summit, to sign the deal. “The European Union’s ability to act is also measured by whether, after 26 years of negotiations, we are finally in a position to conclude this trade agreement and thus also to swiftly move forward with the trade agreements negotiated in Mexico and Indonesia,” Merz said. “If in the situation we find ourselves in today, in the times we live in today, we are still haggling over the details of major trade agreements that we as Europeans want to conclude with large economic areas around the world, then those who are doing so still do not properly understand the priorities we are setting now.” Asked about Müller’s comments, the chancellor’s spokesperson, Stefan Kornelius, said: “The government’s policy is to implement Mercosur. The budget is a different matter. A budget only works if we have growth.” Germany contributes around €47 billion to the EU budget annually, corresponding to around 23.6 percent of its funding and over 1 percent of Germany’s gross domestic product. If Germany maintains roughly its current share of the budget, its annual contribution would rise to around €67.3 billion in the next fiscal cycle. Hans von der Burchard contributed to this report.

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.

BRUSSELS ― The European Commission is considering tweaking its €1.8 trillion 2028-2034 budget proposal to win backing from the Parliament, European Budget Commissioner Piotr Serafin told POLITICO. “We are reflecting on the right process, but it’s clear that we need to think about the legal changes,” Serafin said after meeting with leading MEPs on Wednesday.  The Commission and Parliament have until Nov. 12 to find a compromise. On that day, lawmakers are expected to pass a resolution officially rejecting a section of the seven-year budget (the multiannual financial framework, or MFF) unless their demands are met. At the center of the dispute are the Commission’s plans for changes to regional and agricultural payments, which MEPs claim cut the Parliament and regional leaders out of decision-making regarding budget allocation. Serafin said he was working with other commissioners with responsibility for this element, which he acknowledged was “the bone of contention,” on how to “address concerns of the European Parliament.” He added: “It has never been the intention of the Commission to eliminate the regions from the picture. I mean, this is not a coincidence that we do not talk about national plans, but national and regional partnership plans. But this is an issue on which we will work.” He declined to say what specific concessions the Commission might make. HASHING OUT A DEAL Serafin announced during the meeting with the Parliament that Commission President Ursula von der Leyen would call a meeting between Parliament chief Roberta Metsola and officials from Denmark, which holds the rotating presidency of the Council of the EU, so that countries and Parliament can hash out a deal among themselves.  “It’s important because you know, the MFF, we are not doing only the Commission, the Parliament, but we also need to remember about the member state dimension,” Serafin said. “But it could also be an opportunity actually to, if some elements are agreed, to make actually progress in the negotiations much faster than expected.” Serafin needs to square Parliament’s demands with pressure from member countries who are in favor of the reforms the Parliament opposes. One national diplomat, granted anonymity to speak candidly about confidential discussions, said people in governments had been increasingly complaining that MEPs are “blocking everything” and “risking leaving our countries without a clear plan for investment.”