BRUSSELS — European Commission President Ursula von der Leyen is determined to travel to South America next week to sign the EU’s long-delayed trade pact with the Mercosur bloc, but she’s having to make last-minute pledges to Europe’s farmers in order to board that flight. EU countries are set to make a pivotal decision on Friday on whether the contentious deal with Argentina, Brazil, Paraguay and Uruguay — which has been more than a quarter of a century in the making — will finally get over the line. It’s still not certain that von der Leyen can secure the majority she needs on Friday; everything boils down to whether Italy, the key swing voter, will support the accord. To secure Rome’s backing, von der Leyen on Tuesday rolled out some extra budget promises on farm funding. The target was clear: Italy’s Prime Minister Giorgia Meloni, whose refusal to back the Mercosur agreement forced von der Leyen to cancel her planned signing trip in December. At its heart, the Mercosur agreement is a drive by Europe’s big manufacturers to sell more cars, machinery and chemicals in Latin America, while the agri powerhouses of the southern hemisphere will secure greater access to sell food to Europe — a prospect that terrifies EU farmers. While Germany and Spain have long led the charge for a deal, France and Poland are dead-set against. That leaves Italy as the key member country poised to cast the deciding vote. Von der Leyen’s letter on Tuesday was carefully choreographed political theater. Writing to the EU Council presidency and European Parliament President Roberta Metsola, she offered earlier access to up to €45 billion in agricultural funding under the bloc’s next long-term budget, while reaffirming €293.7 billion in farm spending after 2027. POLITICO was the first to report on Monday that the declaration was in the works. She insisted the measures in her letter would “provide the farmers and rural communities with an unprecedented level of support, in some respects even higher than in the current budget cycle.” The money isn’t new — it’s being brought forward from an existing pot in the EU’s next long-term budget — but governments can now lock it in for farmers early, before it is reassigned during later budget negotiations. Von der Leyen framed the move as offering stability and crisis readiness, giving Meloni a tangible win she can parade to her powerful farm lobby. WILL MELONI BACK MERCOSUR? The big question is whether Italy will view von der Leyen’s promises as going far enough ahead of the crunch meeting on Friday. Early signs suggested Rome might be softening. Meloni issued a statement saying the farm funding pledge was “a positive and significant step forward in the negotiations leading to the new EU budget,” but conspicuously avoided making a direct link to Mercosur. (French President Emmanuel Macron also welcomed von der Leyen’s letter, but there’s no prospect of Paris backing Mercosur on Friday.) taly’s Prime Minister Giorgia Meloni, whose refusal to back the Mercosur agreement forced Ursula von der Leyen to cancel her planned signing trip in December. | Tom Nicholson/Getty Images Nicola Procaccini, a close Meloni ally in the European Parliament, told POLITICO: “We are moving in the right direction to enable Italy to sign Mercosur.” Right direction, but not yet at the destination? The government in Rome would not comment on whether it was about to back the deal. Germany, the EU’s industrial kingpin, is keen to secure a Mercosur agreement to boost its exports, but is still wary as to whether sufficient support exists to finalize an accord on Friday. A German official cautioned everything was still to play for. “A qualified majority is emerging, but it’s not a done deal yet. Until we have the result, there’s no reason to sit back and relax,” the official said. Optimism is growing regarding Rome in the pro-Mercosur camp, however. After all, the pact is widely viewed as strongly in the interests not only of Italy’s engineering companies, but also of its high-end wine and food producers, which are big exporters to South America. Additional curveballs are being thrown by Romania and Czechia, said one EU diplomat, who expressed concern they could turn against the deal on Friday, reducing any majority to very tight margins. The diplomat said they believed Italy would back the deal, however. FINAL STRETCH? The maneuvering is set to continue on Wednesday, when agriculture ministers descend on Brussels for what the Commission is billing as a “political meeting” after December’s farm protests. Officially, Mercosur isn’t on the agenda. Unofficially, however, it’s expected to be omnipresent — in the corridors, in the side meetings, and in the questions ministers choose not to answer. Farm ministers don’t approve trade deals, but the optics matter. Von der Leyen needs momentum — and cover — ahead of Friday’s vote. France — the country most hostile to the deal — will be vocal. On Wednesday, French Agriculture Minister Annie Genevard is expected to open yet another offensive — this time for a lower trigger on emergency safeguards related to the deal. This would reopen a compromise already struck between EU governments, the Parliament and the Commission. It’s a familiar tactic: Keep pushing. “France is still not satisfied with the proposals made by the Commission,” a French agriculture ministry official told reporters on Tuesday, while acknowledging that there has been some improvement. “Paris’ strategy for this week is still to continue to look for a blocking minority.” “Italy has its own strategy, we have ours,” added the official, who was granted anonymity in line with the rules for French government briefings. France’s allies, notably Poland, are equally blunt. Agriculture Minister Stefan Krajewski said the priority was simply “to block this agreement.” If that failed, Warsaw would seek maximum safeguards and compensation. That means it’s all coming down to the wire on Friday. A second failure to dispatch von der Leyen to finalize the agreement would be deeply embarrassing, and would only stoke Berlin’s anger at other EU countries thwarting the deal. For now, it’s still unclear whether von der Leyen will board that plane. Bartosz Brzeziński reported from Brussels, Giorgio Leali reported from Paris, and Nette Nöstlinger reported from Berlin.

BRUSSELS — The European Union’s environment ministers struck a deal watering down a proposed 2040 target for cutting planet-warming emissions and set a new 2035 climate plan. Following marathon negotiations all day Tuesday and into Wednesday morning, ministers unanimously approved the bloc’s long-overdue climate plan, rescuing the EU from the international embarrassment of showing up empty handed this month’s COP30 summit. The plan, which is a requirement under the Paris Agreement, sets a new goal to slash EU emissions between 66.25 percent and 72.5 percent below 1990 levels until 2035. That plan is not legally binding but sets the direction of EU climate policy for the coming five years. The range is similar to an informal statement that the EU presented at a climate summit in New York in September. Ministers also adopted a legally-binding target for cutting emissions in the EU by 85 percent by 2040. The deal mandates that another 5 percent reduction be achieved by outsourcing pollution cuts abroad through the purchase of international carbon credits. On top of that, governments would be allowed to use credits to outsource another 5 percentage points of their national emissions reduction goals. Ministers also backed a wide-ranging review clause that allows the EU to adjust its 2040 target in the future if climate policy proves to have negative impacts on the EU’s economy. The deal also foresees a one-year delay to the implementation of the EU’s new carbon market for heating and car emissions, which is set to start in 2027. Hungary, Slovakia and Poland did not support the 2040 deal, while Bulgaria and Belgium abstained. The rest of the EU27 countries backed it. Lawmakers in the European Parliament now have to agree on their own position on the 2040 climate target and negotiate with the Council of the EU before the target becomes law. 

Listen on * Spotify * Apple Music * Amazon Music Beim EU-Gipfel trifft Friedrich Merz auf die Realität europäischer Politik und auf die Blockade des belgischen Premiers Bart De Wever. Der Streit um die Nutzung eingefrorener russischer Staatsvermögen für einen 140-Milliarden-Euro-Kredit an die Ukraine bringt die Verhandlungen ins Wanken. Hans von der Burchard berichtet über Druck, Deals und womögliche diplomatische Nachtschichten. Das Berlin Playbook als Podcast gibt es jeden Morgen ab 5 Uhr. Gordon Repinski und das POLITICO-Team liefern Politik zum Hören – kompakt, international, hintergründig. Für alle Hauptstadt-Profis: Der Berlin Playbook-Newsletter bietet jeden Morgen die wichtigsten Themen und Einordnungen. Jetzt kostenlos abonnieren. Mehr von Host und POLITICO Executive Editor Gordon Repinski: Instagram: @gordon.repinski | X: @GordonRepinski.

BRUSSELS — A weeks-long stalemate holding up the latest package of sanctions against Russia was ended Wednesday night after Slovakia lifted its veto, the Danish presidency of the Council of the EU confirmed. The bulk of the package — the 19th to be imposed on Moscow since the start of its full-scale invasion of Ukraine more than three years ago — focuses on sapping the Kremlin’s war chest by imposing restrictions on energy traders and financial institutions, many of them in third countries. Companies helping the Russian war effort will be targeted, in addition to 117 new tankers considered to be part of the shadow fleet that ships Russian fossil fuels in violation of the oil price cap. Earlier this week, energy ministers from 27 member countries agreed by qualified majority to a landmark phaseout of Russian gas, against the objections of Slovakia and Hungary. Slovakia had vowed to hold up the sanctions package unless it was given assurances on how to combat high energy prices and aid heavy industries like car making. Austria and Hungary had also expressed concerns over the sanctions package but lifted their veto in recent days. Slovakia was the last country blocking the new restrictions — and had sought concessions in the statement to be agreed at Thursday’s summit of EU leaders in Brussels. “All our demands … were included [in the statement],” a Slovak diplomat confirmed to POLITICO. The summit will seek to stress the EU’s support of Ukraine, in light of U.S. President Donald Trump’s pressure on Kyiv to cede territory to Russia. Ukrainian President Volodymyr Zelenskyy is expected to join parts of the meeting in Brussels. Leaders are expected to emphasize the need to further hit Moscow with hefty sanctions over its war against Ukraine. Defense spending as well as the use of frozen Russian assets to support Kyiv are all on the agenda. The sanctions package will also significantly expand the number of non-Russian companies banned from doing business with the bloc in a bid to prevent Moscow from circumventing the restrictions. Defense spending as well as the use of frozen Russian assets to support Kyiv are all on the agenda. | Sergey Shestak/EPA Specifically, the bloc seeks to add export controls on another 45 companies that are deemed to be working together to evade sanctions. Those include 12 Chinese, two Thai and three Indian entities that have enabled Russia to circumvent the bloc’s sanctions. The package also restricts the movement of Russian diplomats within the EU. They will have to notify other EU governments of their movements before crossing the border of their host country. The package will now go through a so-called written procedure, where capitals have until Thursday morning to speak up. If no one does, the text is approved.

Denmark summoned the top U.S. diplomat in Copenhagen on Wednesday after Danish media reported that Americans with ties to President Donald Trump had carried out covert influence operations in Greenland. Danish broadcaster DR reported that at least three U.S. citizens linked to the U.S. government were involved in activities that, reportedly, authorities fear could be used covertly to support Trump’s desire to make Greenland part of the United States. Foreign Minister Lars Løkke Rasmussen said the U.S. chargé d’affaires — currently its most senior diplomat in Denmark — had been summoned in response. He called any interference in Danish affairs “unacceptable,” and emphasized that Copenhagen “will of course not accept covert operations on our territory,” in a statement emailed by his ministry, according to the AP. “It worries me greatly because we do not spy on friends,” Rasmussen also said in response to a report in The Wall Street Journal. According to DR, one of the men compiled lists of Greenlanders supportive of, or critical toward, U.S. influence, while others maintained political and business contacts on the island. It was unclear whether they acted independently or under direction from U.S. officials. The move comes amid ongoing tensions over Greenland, a mineral-rich, self-governing Danish territory. Earlier this year, Trump told CNN that Washington would “100 percent” gain control of Greenland, even repeatedly threatening to use military force. Greenland is strategically important for U.S. military and Arctic security interests. Contacted by DR, Denmark’s security and intelligence service, known as PET, said the territory “is the target of influence campaigns of various kinds” and had strengthened monitoring in cooperation with Greenlandic authorities.

Denmark is prepared to face down the European Parliament over tougher migration rules, Prime Minister Mette Frederiksen told lawmakers as her country takes up the six-month presidency of the Council of the EU. “We have to lower the influx of migrants to Europe,” she said in Strasbourg on Tuesday. Frederiksen has built a reputation as the black sheep of European social democrats because she often sides with the right in pushing forward tougher rules on asylum and border checks. “What has been mainstream among our populations for quite many years is now mainstream for many of us politicians as well, finally,” she said. “Maybe not in Parliament, but gladly, and I am really happy about that, in the European Council,” where several leaders of EU countries leaders are determined to address migration problems. In pushing for a tougher approach Frederiksen finds herself on the same side as right-wing Italian Prime Minister Giorgia Meloni and center-right Polish Prime Minister Donald Tusk. The Parliament ― the bloc’s only directly elected body ― is more divided than Europe’s governments, however. With a right-wing bloc pushing for stricter rules, and a center-left bloc opposing them, it will be complicated for the house’s centrist political families to come to any agreement on legislation. Following the EU election in June last year, which saw a surge in support to right-wing and far-right parties elected on an anti-migration base, the European Commission announced it would propose rules that would increase deportations, as well as a revision of the safe third country concept to allow for easier returns of migrants to countries they are not originally from. It would also make it easier for countries to set up so-called return hubs. TOUGH PRIORITY Migration is one of the topics where the center-right European People’s Party could bypass its traditional mainstream allies and use the support of right-wing and far-right groups. “It is challenging Europe, affecting people’s lives, and the cohesion of our societies,” Frederiksen said. “We saw it very clearly in the European Parliament elections last year. Migration was a tough priority for many Europeans, including myself.” Denmark, whose EU presidency will run until the end of 2025, will prioritize the proposals the Commission has already set out, and also “provide a much more effective response to Russia,” which, Frederiksen said, was “using migration as a weapon at our eastern borders.” “Our citizens expect us politicians to find new solutions with a good reason and European citizens have a right to feel safe in their own countries,” she said. “That is why we need to strengthen our external borders.”

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

Listen on * Spotify * Apple Music * Amazon Music Die Strompreise bleiben hoch – und die versprochene Entlastung für Haushalte kommt nicht. Friedrich Merz und Lars Klingbeil geraten unter Druck, weil ihr Koalitionsvertrag eine Senkung der Stromsteuer versprach – doch im verabschiedeten Haushalt fehlt davon jede Spur. Selbst in der SPD wächst der Unmut. Rasmus Buchsteiner erklärt, warum es zwischen Union und SPD jetzt auf eine leise Lösung ankommt. Im 200-Sekunden-Interview begegnet Armand Zorn (SPD) der Kritik direkt – und verteidigt das bisherige Vorgehen mit Blick auf den Haushalt und die Verantwortung. Und: Die dänische EU-Ratspräsidentschaft beginnt – mit ehrgeizigen Zielen bei Klima und Wettbewerbsfähigkeit. Johanna Sahlberg analysiert, wie Dänemark gegen den Brüsseler Gegenwind segeln will, auch wenn das schwierig wird.  Das Berlin Playbook als Podcast gibt es morgens um 5 Uhr. Gordon Repinski und das POLITICO-Team bringen euch jeden Morgen auf den neuesten Stand in Sachen Politik — kompakt, europäisch, hintergründig. Und für alle Hauptstadt-Profis: Unser Berlin Playbook-Newsletter liefert jeden Morgen die wichtigsten Themen und Einordnungen. Hier gibt es alle Informationen und das kostenlose Playbook-Abo. Mehr von Berlin Playbook-Host und Executive Editor von POLITICO in Deutschland, Gordon Repinski, gibt es auch hier:   Instagram: @gordon.repinski | X: @GordonRepinski.

As the EU Digital Summit opens today in Gdańsk under the auspices of the Polish EU Presidency, the AI Chamber unveiled the CEE AI Action Plan – a landmark initiative aimed at transforming Central and Eastern Europe into a globally competitive hub for artificial intelligence innovation. Backed by compelling economic data and crafted over months of regional consultation, the CEE AI Action Plan arrives at a critical moment: with over 150 million citizens and a combined GDP of €2.5 trillion, CEE is at a tipping point – one where the adoption or neglect of AI in the next 24 months could define the region’s economic trajectory for decades. High stakes for an undervalued region The CEE AI adoption rate remains far below Western Europe. By 2024, only 4–6% of CEE firms had adopted AI – compared to the EU’s average of 13.5%, well below the EU’s target of 75% by 2030. SMEs are even further behind, with most still at the experimentation stage. The region holds 22% of the EU’s population but only 11% of its GDP. Yet, unlocking AI could boost CEE’s GDP by up to €100 billion annually (5%), equivalent to adding an economy the size of Croatia every year. In a more ambitious scenario, the gain could reach €135 billion, or 8% of GDP. But the window is rapidly closing and without fast, coordinated action, the upside could shrink to a mere €15 billion a year. CEE’s core strengths – a strong track record of creating cutting-edge technologies, world-class STEM education, deep technical talent, and a growing startup ecosystem – offer a unique opportunity. AI, the Chamber argues, could serve as a “force multiplier” to empower SMEs, scale globally competitive startups, attract investment, and ultimately raise living standards across the region. A five-pillar roadmap for regional transformation The CEE AI Action Plan lays out a concrete, region-specific roadmap of tailored, actionable recommendations to boost productivity, scale breakthrough innovation, and drive competitiveness for the region.Framed around coordinated action that leverages the unique regional strengths and fosters cooperation rather than fragmented national efforts, the strategy calls for alignment across governments, businesses, academia, and civil society to turn CEE into an AI powerhouse. The Plan offers a strategy to foster innovation and productivity across five critical areas: infrastructure, data, talent, regulation, and innovation. The focus is on SMEs, which make up 99% of all businesses and contribute around half of CEE GDP. “This is a roadmap to transformation – but it’s not one-size-fits-all. We will work together with local authorities, ministries, and partner organizations in every CEE country to adapt and implement this plan where it matters most.” says Tomasz Snażyk, CEO of the AI Chamber. Building capacity and removing friction The Plan envisions a regionally integrated high-performance computing network linking existing national supercomputers to provide startups, SMEs, and researchers with the computing power needed to build advanced AI solutions or launch of testbed facilities in sectors like healthcare and autonomous vehicles. In terms of data, the Plan outlines the creation of a CEE Open Data Knowledge Network for public institutions to share best practices and make national Open Data Portals more accessible to developers and researchers. By introducing common governance standards and launching cross-border data trusts in sectors like healthcare and manufacturing, stakeholders would be able to securely pool data – laying the groundwork for more powerful and reliable AI model training. When it comes to talent, the Plan outlines targeted financial incentives, such as 1,000 fully funded AI fellowships, new academic programs, and a Brain Circulation program to both retain talent at home and attract top professionals from abroad. On regulation, the Plan advocates the creation of a CEE AI Policy Council to give the region greater influence in Brussels, ensuring that EU-wide rules reflect the region’s needs – such as protecting SMEs from disproportionate burdens. It also calls for regional regulatory sandboxes where startups could test AI systems safely, without drowning in legal complexity. Mobilizing capital for AI-driven growth In 2024, CEE startups raised just €2.3 billion in venture funding – a fraction of Western Europe’s total. With less than 10% of EU AI investment reaching CEE, AI Chamber’s strategy proposes a network of AI innovation hubs near top universities, challenge-driven National AI R&D funding, and region-wide technology transfer programs. These would help transform promising ideas – especially in traditional sectors like manufacturing and agriculture – into real products and growth companies. “The CEE region doesn’t have the luxury of waiting. The next 12 to 24 months are pivotal,” comments Snażyk. “If we empower SMEs with the right tools, data, and capital, they won’t just compete – they will lead.” Changing the narrative: from outsourcing to leadership The Plan is also about repositioning CEE globally. It proposes a CEE AI Champions portfolio featuring companies like UiPath, Rossum, and Infermedica, and a regional branding campaign to shift the perception of CEE from outsourcing center to AI innovation hub. “CEE doesn’t need to copy Silicon Valley to succeed – it needs to amplify its own strengths,” emphasizes Snażyk. “With strong local ecosystems and affordable talent, we can build startups that scale from Prague, Sofia, or Vilnius – not just from London or San Francisco.” A European challenge – and a regional answer The urgency is both regional and continental. AI is emerging as a crucial lever to offset demographic decline, counter rising labor costs, and sustain global competitiveness. The persistent digital divide with the West continues to limit AI’s potential in critical sectors including manufacturing, healthcare, and public administration. “CEE has a key advantage: there is far less legacy thinking and resistance to change than in many other places – giving us a real chance to leapfrog ahead. But seizing this opportunity will require strong public-private partnerships and profound changes in education and other key areas, as AI affects everyone and everything. We’ll also need stronger regional coordination – something this Action Plan calls for.” – says Mark Boris Andrijanič, member of the EIT Governing Board, Vice President of International Markets at Kumo.AI and former Minister of Digital Transformation for Slovenia. Message to Brussels: CEE is ready to lead Crafted in close alignment with the EU’s digital agenda and launched during Poland’s EU Council Presidency, the Plan signals that the region is no longer content to follow – it is ready to help lead Europe’s AI future.

Denmark’s Prime Minister Mette Frederiksen said Tuesday she is ready to abandon her country’s traditionally thrifty stance on the EU budget in the face of the threat posed by Russia. “Last time we had a leading role in the frugal four. Next time we’ll have a leading role in another group,” Frederiksen said Tuesday, referring to the customarily frugal alliance consisting of Denmark, Sweden, Austria and the Netherlands. “As Danes, we will always be tough in the negotiations on the budget,” Frederiksen added during a press conference alongside European Parliament President Roberta Metsola, ahead of Denmark’s Council of the EU presidency. “But being a part of the frugal force is no longer the right place for us.” Frederiksen argued the EU needs the funds to bolster its defenses amid Russia’s assault on Ukraine. “For me, the most important thing is to rearm Europe,” Frederiksen said. “That’s my starting point and that’s my conclusion in all discussions, because if Europe is not able to protect ourselves and to defend ourselves, then it’s game over at some point.” Europe, she added, is “running out of time because of Russia’s behavior” and needs “a new profile on the budget.” Frederiksen argued the EU needs the funds to bolster its defenses amid Russia’s assault on Ukraine. | Sergey Kozlov/EFE via EPA Negotiations for the next budget — the EU’s Multiannual Financial Framework — for the years stretching from 2028 to 2034 are set to start after the summer. Denmark’s stance is key, as the country will hold the Council presidency starting in July. Frederiksen signaled a fiscal U-turn in December, saying Denmark was looking at European common debt — traditionally a taboo topic for the Nordic country — with “new eyes.” In her New Year’s speech she doubled down, calling for more investment and arguing that state aid may be necessary to revive European economies. In March, Danish officials also attended a secret gathering of senior finance ministry officials from Sweden, Denmark, Finland, Poland, the Netherlands and the United Kingdom to float the idea of creating a supranational bank specifically for the purpose of jointly buying weapons and slashing the cost of defense procurement, according to officials familiar with the matter.