Czech Prime Minister Andrej Babiš is facing new accusations that he never fully severed ties with his agricultural empire, after publicly promising to do so in order to avoid major conflicts of interest in both Prague and Brussels. On taking up the Czech premiership in December, Babiš pledged to cut all links with his company Agrofert, one of Central Europe’s largest agri-food and chemicals groups. President Petr Pavel required him to take that step before approving his government, and Babiš insisted his children would only take Agrofert stakes after his death. The commitment was meant to address long-standing conflict-of-interest concerns. During Babiš’s previous term, EU and national auditors found the company had improperly received at least €208 million in EU and national agricultural subsidies, triggering payment suspensions and repayment demands. At the EU level, the stakes are heightened by the fact that as prime minister, Babiš is now helping to negotiate the bloc’s next long-term budget, including farm spending from which Agrofert has previously benefited. Babiš’s pledges of a total rupture with Agrofert are now coming into question, even though the prime minister insists he has done much more than the law required. A leaked legal document that purports to map out his new relationship with the company describes a trust structure that removes him from day-to-day decision-making only while he remains in office, and that transfers decision-making powers to a family-run governance mechanism once his political career ends. The 18-page document, dated Dec. 17, was first reported by Czech outlet Seznam Zprávy. POLITICO has seen a copy. The document says the trust is meant to ensure “independent administration during the period in which the [establisher of the trust] holds the office of a member of the Government.” Once that period ends — whether through Babiš’s departure from office or, eventually, his death — the business would automatically transition to “family administration” Opposition lawmakers seized on the document as evidence that Babiš would still have strong personal and family interests tied to Agrofert during his lifetime, potentially motivating his decisions on both the domestic and EU levels. “The news about Andrej Babiš’s unresolved conflict of interest is really just the proverbial cherry on top,” Pirate party parliamentary leader Olga Richterová said in a legislative debate in Prague on Tuesday. “It is becoming clear that you can’t teach an old dog new tricks. The old practices used when Agrofert was previously parked in trust funds appear set to be applied again in a very similar way.” Danuše Nerudová, a European Parliament lawmaker from the Mayors and Independents party, told POLITICO the arrangement preserves a personal incentive to protect family business interests. “His companies benefited improperly from EU agricultural subsidies in the past,” she said. “That incentive does not disappear simply because the structure is renamed.” Given the implications for the EU budget, the European Commission said it was monitoring developments and underlined its rule that “anybody nominated in a member state to be involved in budget implementation … shall not take any action which may bring their own interests into conflict with those of the union.” POLITICO requested comment from Babiš’s office, but did not receive a response before publication. Danuše Nerudová told POLITICO the arrangement preserves a personal incentive to protect family business interests. | Martin Divisek/EPA Babiš responded to the Seznam Zprávy story in another newspaper. He did not deny the authenticity of the document and its reference to a continued family interest, but claimed he was doing nothing wrong. “What I said earlier clearly applies. I did much more than the law required of me. The shares of the company that I built for almost 30 years will never be returned to me,” he told the Deník N newspaper. POLITICAL DEBATE IN PRAGUE When Babiš made his pledge to keep out of Agrofert last year, his language was definitive. “I have decided to irrevocably give up the Agrofert company,” Babiš said in December. “I will never own it, I will not have any economic relations with it, and I will not be in any contact with it.” He added: “My children will only get Agrofert after my death.” Babiš reiterated his defense this week, telling Czech news agency ČTK that the Agrofert shares would never return to him and that he would not benefit from them for the rest of his life. He said the arrangement complied with both Czech and European law, and accused critics of trying to deprive him of his property. The prime minister has previously insisted any conflict would be resolved once the trust takes effect. He missed a self-imposed early-January deadline to complete the share transfer, saying he was still awaiting approval from financial authorities in two EU countries. David Kotora, executive director of Transparency International Czech Republic, said the trust “is currently an inactive shell” because the share transfer has not taken place. Once activated, he said, it would still fail EU standards. “This structure clearly cannot withstand European regulations concerning conflicts of interest in the redistribution of public funds,” Kotora said. During the parliamentary session on Tuesday, Babiš dismissed the renewed scrutiny as a “festival of hypocrisy.” “This is not a spontaneous defense of democracy. It’s political theater,” he said, stressing that Agrofert is not receiving any subsidies until the trust is in effect. “You invented the conflict of interest because you’re incapable of beating me.” Lawmakers from Babiš’s ANO party have rallied behind him, rejecting assessments of unresolved conflicts of interest. In a joint statement to POLITICO, MEPs Ondřej Knotek and Klára Dostálová said the prime minister had taken steps “well beyond what is required by Czech and European law.” He has relinquished ownership and control of Agrofert permanently, they said, and would not benefit from the company for the rest of his life. “If someone finds this insufficient,” they added, “it is no longer about the essence of the matter, but about an effort to constantly question it.” Economist Petr Bartoň, a regulatory and public policy expert, noted Czech conflict-of-interest rules were never designed for politicians with business empires on the scale of Agrofert. “The law does not aim to permanently separate politicians from their assets,” Bartoň said. “It aims to manage conflicts while they are in office.” Promises to go further, he added, may have political value but “no legal force.” Ketrin Jochecová contributed to this report.

BRUSSELS — European Commission President Ursula von der Leyen is planning to travel to Australia this month to clinch a security and trade deal, according to a person familiar with the talks. Her trip will follow a meeting next week between European Trade Commissioner Maroš Šefčovič and his Australian counterpart Don Farrell in Brussels, a second person said. Both people were granted anonymity because the schedules are still tentative. The EU and Canberra are moving to revive trade negotiations that collapsed at the end of 2023 amid disagreements over quotas of beef and lamb. The quotas are still being negotiated between Canberra and Brussels, the first person familiar with the talks said. Von der Leyen will take the 20-hour-plus flight to Australia directly after she attends the Munich Security Conference, which takes place in the German city on Feb. 13-15, according to Australian digital newspaper The Nightly, which broke the news of the Commission chief’s four-day trip. EU countries last December allowed the Commission to negotiate a defense deal with Australia. Sealing such a deal would come on the heels of security and defense partnerships signed with the U.K., Canada and most recently India. An agreement with Australia would represent a win for the EU, as it would open access to the country’s vast reserves of strategic minerals. Australia is the world’s largest producer of lithium and also holds the world’s second-largest copper reserves. Coming after the EU’s fraught Mercosur deal with South American countries — criticized by farmers, France and skeptical lawmakers — the pact with Canberra is expected to also trigger pushback due to its significant agricultural component.

Beer sales by German breweries fell sharply in 2025, recording their steepest decline since records began more than 30 years ago. Industry representatives attributed the fall in sales to the growing popularity of non-alcoholic beer and to more modest consumption habits generally. The Brewers’ Association said Monday that alcohol-free beer is the fastest-growing market segment. “Alcohol consumption is declining, especially among young people, which is of course good for public health,” Anke Rehlinger, minister-president of Saarland state in southwest Germany, told POLITICO on Tuesday. The Social Democratic politician was named the country’s “beer ambassador” for 2025 by Germany’s Brewers’ Association lobby. Rehlinger added: “Germans are drinking their beer more consciously. And as a beer ambassador, I advocate for the art of brewing and the craft closely tied to our culture, which combines innovation and diversity with a great deal of tradition.” According to a Monday press release from Germany’s Federal Statistical Office, total domestic and foreign beer sales dropped below 8 billion liters last year for the first time since records began in 1993. Over 80 per cent of the beer was sold in Germany; the figures do not include non-alcoholic beer or malt drinks. According to the Brewers’ Association, non-alcoholic beer accounted for 10 percent of total beer sales and ranked as the third-most popular beer category in Germany. The association added that falling economic consumption by people in general was also weighing on beer sales. “The situation of gastronomy is still worrying,” the statement said. Germany is the world’s largest producer of non-alcoholic beer, the industry lobby noted. “People are looking for high-quality, flavorful beers that fit every life situation,” said Christian Weber, president of the Brewers’ Association. The association urging politicians to lower energy costs, saying energy and labor are the biggest cost drivers for breweries. On the issue, Rehlinger told POLITICO: “Smaller and larger breweries need competitive production conditions, such as affordable energy prices or targeted support — for example, for investments in sustainability.” Another politician on the list of former beer ambassadors is Germany’s Bundestag President Julia Klöckner, who was also elected Wine Queen — an ambassadorial role given by winemakers to a young woman they deem knowledgeable about wine — roughly 30 years ago. POLITICO reached out to Klöckner to ask how the industry could be revived, but her spokeswoman said the president was not available to answer questions on the matter. Pilsner remains the country’s most popular type of beer, with a market share of around 50 percent.

BRUSSELS — The European Parliament’s three largest political groups are discussing new safeguards against the unpredictability of President Donald Trump in a bid to break a deadlock over approving the EU–U.S. trade deal, according to two lawmakers and three officials familiar with the talks. Center-left and liberal lawmakers are asking for a clause to be included in enabling legislation that is now before the house, under which the deal would be voided if Trump restarts his threats against the territorial sovereignty of Greenland and the Kingdom of Denmark. “We will need to have safeguards in place with a clear reference to territorial sovereignty directed at Trump’s unpredictability,” said an official of the Socialists & Democrats familiar with the discussions, granted anonymity to speak about confidential deliberations. There are already suspension clauses in the text, but lawmakers want to include definitions — including threats to territorial sovereignty — to strengthen them. Apart from the sovereignty clause, the definitions should specify that new tariff threats would trigger an automatic suspension of the agreement, said an official from the liberal Renew Europe group. That could pave the way for a vote on the Parliament’s position to be scheduled for the next meeting of its International Trade Committee on Feb. 23-24. For the EU to implement its side of the bargain, the Parliament and Council of the EU, representing the bloc’s 27 members, would still need to reach a final compromise. “This could be perhaps a date to vote,” Bernd Lange, the chair of the committee, told POLITICO, referring to the Feb. 23-24 meeting. Lange added that outstanding issues — including whether to schedule a vote on the deal at all — will be discussed at a meeting of lead negotiators scheduled for Wednesday next week. “The question of safeguard[s] is an important one and will be solved in the proper way,” he added. The Parliament froze ratification of the agreement, reached by Trump and European Commission President Ursula von der Leyen last July, after the U.S. president threatened tariffs on European allies backing Greenland, a self-governing Danish protectorate. The center-right European People’s Party has pushed to sign off on the deal following calls from EU countries to unblock the implementation after Trump walked back threats to seize Greenland. But S&D, Renew and the Greens have so far balked, arguing further details are needed on the “framework” deal agreed by Trump with NATO chief Mark Rutte. An EPP official with knowledge of the discussions said the center-right group was open to stricter suspension safeguards in case Trump turns hostile again. “If he threatens [again] then the deal is off, but not the rest of our economic cooperation,” the official said. One of the S&D’s demands had been to officially ask the Commission to launch an investigation into whether Washington is coercing Europe to give up Greenland, which could lead to the launch of the EU’s Anti-Coercion Instrument. This trade “bazooka” is the bloc’s most powerful trade retaliatory weapon — but the EPP strongly opposes deploying it. “Anti-coercion is a serious and nuclear weapon that should be last discussed with strategic allies,” the EPP’s top trade lawmaker Željana Zovko told POLITICO, adding that the tool is “not serious diplomacy, only for drama queens.” Lawmakers are also discussing adding a sunset clause that would require the Commission to review the agreement after a set period, as well as excluding its steel provisions from ratification until the U.S. withdraws its 50 percent tariffs on European goods containing steel. MEPs say this violates the 15 percent all-inclusive rate agreed last summer.

NEW DELHI — The European Union and India locked arms against U.S. President Donald Trump’s tariff offensive and China’s flood of cheaper goods to conclude talks on a landmark trade pact on Tuesday.  Under the deal, India will lower tariffs on European cars and wine, while the EU signaled it would assist Indian companies with decarbonization and negotiate duty-free quotas for Indian steel.  “Two giants who choose partnership, in a true win-win fashion. A strong message that cooperation is the best answer to global challenges,” said European Commission President Ursula von der Leyen, standing next to Indian Prime Minister Narendra Modi. The announcement rounded off a year of intensive negotiations in which the EU sought to lock down a trade deal with the world’s most populous nation. Von der Leyen and European Council President António Costa were guests of honor at India’s exuberant Republic Day celebrations on Monday. Ties between India and the U.S. reached a low point last August, when Trump imposed a 50 percent tariff on goods from the South Asian nation over its purchases of Russian oil.  “Both know that they need each other like never before and in this fractured world where trusted partnerships are very, very hard to come by,” said Garima Mohan, who leads the German Marshall Fund’s work on India. Under the deal, India will gradually slash tariffs on European cars, reducing tariffs from 110 to 10 percent on 250,000 cars every year.  A range of agricultural goods will also see their tariffs drop, coming as a reassurance for the European Parliament and the EU’s farmers who have been heavily protesting in recent months over fears that they would be undercut by cheap farm produce.  Tariffs on wine will be reduced from to 20 and 30 percent from 150 percent now, depending on value. European olive oil will also enter duty free into India, instead of facing a 45 percent tariff. STEEL DEAL The stickiest issues related to steel and the EU’s carbon border tax: New Delhi, a major steel exporter, wanted to make sure that its metals wouldn’t be impacted by an upcoming 50 percent EU tariff on steel, and the carbon levy that has just entered force. In response to those concerns, the EU plans to give India a significant share of the 18.3 million metric tons of steel allowed to enter the bloc duty free — Brussels will negotiate this with its partners as is required by global trade rules.  “There will of course be a difference in how you treat this negotiation on application of steel measures between FTA and non-FTA partners. Therefore I think it was strategic from both sides that we have the agreement now and that India will be treated as an FTA partner,” EU trade chief Maroš Šefčovič told POLITICO.  On the carbon border tax, a new levy on carbon emissions that has irked countries such as the United States and Brazil, Brussels will “help Indian operators to have a smooth introduction of CBAM with all the technical assistance and all the additional advice we can provide,” Šefčovič added, stressing that the Commission would treat all its partners equally.  For India, the deal represents an opportunity to boost its exports of pharmaceuticals, textiles and chemicals.  This story has been updated.

BRUSSELS — Pressure is mounting on the European Commission to exempt fertilizers from its new carbon tariff scheme, as national capitals side with farmers over industry to unpick one of the EU’s newest climate policies. During a discussion requested by Austria on Monday, 12 countries called for a temporary exclusion of fertilizers from the European Union’s carbon border adjustment mechanism (CBAM), a levy on the greenhouse gas emissions of certain goods imported into the bloc. They argued that CBAM, which only became fully operational on Jan. 1, is sending already-rising fertilizer even higher, adding to economic difficulties for crop farmers. “European arable farmers are currently facing not just low producer prices, but also rising production costs. The main cost drivers are fertilizer prices, which have increased markedly since 2020,” Johannes Frankhauser, a senior official in Austria’s agriculture ministry, told ministers gathered in Brussels. Eleven countries backed Vienna in Monday’s meeting. Yet critics — which include fertilizer producers, environment-focused MEPs and several governments — warn that such an exemption would not only penalize the EU’s domestic producers but threaten the integrity of the carbon tariff scheme. “High prices of production inputs, including fertilizers, have a direct impact on the economic situation of farms… However, we want an optimal solution in order to maintain food security on one hand and on the other [avoid] possible negative impacts on the competitiveness of EU fertilizer producers,” said Polish Agriculture Minister Stefan Krajewski, whose country is a major fertilizer producer.  Germany, Belgium, Finland, Sweden and the Netherlands expressed similar sentiments.  CBAM was phased in over several years and is supposed to protect European producers of heavily polluting goods — cement, iron, steel, aluminum, fertilizers, electricity and hydrogen — from cheap and dirty foreign competition. EU manufacturers of these products currently pay a carbon price on their planet-warming emissions, while importers didn’t before the CBAM came into force. By introducing a levy on imports from countries without carbon pricing, the EU wants to even out the playing field and encourage its trading partners to switch to cleaner manufacturing practices. (Those partners aren’t too happy.) The CBAM price is paid by the importers, which are free to pass on the cost to buyers — in the case of fertilizers, farmers.  Fertilizers make up a substantial share of farms’ operating costs, and EU-based companies do not produce enough to match demand. CBAM is therefore expected to push up fertilizer costs, though estimates on by how much vary greatly. A group of nine EU countries led by France mentioned a 25 percent increase in a recent missive, while Austria reckons it’s 10-15 percent.  The main cost drivers are fertilizer prices, which have increased markedly since 2020,” Johannes Frankhauser, a senior official in Austria’s agriculture ministry, told ministers gathered in Brussels. | Olivier Hoslet/EPA Carbon pricing analyst firm Sandbag, however, says it’s far lower for the next two years — less than 1 percent, or a couple of euros per ton of ammonia, a fertilizer component that costs several hundred euros per ton without the levy. Responding to governments on Monday, Agriculture Commissioner Christophe Hansen noted that the EU executive already tweaked the policy to provide relief to farmers in December, and followed up in January with a promise to suspend some regular tariffs on fertilizer components to offset the additional CBAM cost. SUSPENSION SUSPENSE The Commission in December set in motion legislative changes that could allow it to enact such a suspension in the event of “serious and unforeseen circumstances” harming the bloc’s internal market — in effect, an emergency brake for CBAM. The suspension can apply retroactively, the EU executive said earlier this month. Yet EU governments and the European Parliament each have to approve this clause before the Commission could make such a move, a process expected to take the better part of this year. Environment ministers can vote on the changes in March or June, and MEPs haven’t even chosen their lead lawmakers to work on the Parliament’s position yet. That’s why Austria on Monday called on the Commission to “immediately” suspend CBAM until “the regular possibility to temporarily suspend CBAM on fertilisers is ensured.” The legal basis for such a move is unclear, as the legislation in force does not feature an exemption clause.  Vienna’s request for a debate came after a group of nine countries — Bulgaria, Croatia, France, Greece, Hungary, Latvia, Luxembourg, Portugal and Romania — wrote to the Commission requesting a suspension earlier this month. During Monday’s discussion, Croatia and Estonia also expressed support for such a move.  Ireland welcomed the Commission’s proposal of a suspension clause but asked for additional details.  Spain was ambivalent: “We need to strengthen our industrial capacity to contribute to the strategic autonomy of the European Union. But clearly, the decarbonisation of this sector mustn’t jeopardize farmers’ livelihoods,” said Spanish Agriculture Minister Luis Planas.  Italy, which previously signaled its support for a suspension, did not explicitly endorse such a move — merely backing the Commission’s already-announced tweaks to normal fertilizer tariffs in its intervention on Monday.  Not all countries took to the floor. Czechia, for example — whose new government is opposed to large parts of EU climate legislation, but whose prime minister owns Europe’s second-largest nitrogen fertilizer producer — remained silent. The Czech agriculture ministry did not respond to a request for comment. INDUSTRY ALARMED While exempting fertilizers may win governments kudos from farmers, European fertilizer manufacturers would be irate. The producers’ association Fertilisers Europe warned that such a move would be “totally unacceptable” and “undermine the competitiveness” of EU companies. Yara, a major Norwegian fertilizer producer, said that “CBAM was designed to ensure a level playing field. Weakening it through tariff reductions or retroactive suspension sends the wrong signal to companies investing in Europe’s green transition.” Mohammed Chahim, the vice president of the center-left Socialists and Democrats in the European Parliament, said that EU companies “need regulatory stability.” “European fertilizer producers have spent precious time and significant resources, often with support from taxpayer money, to decarbonize,” said the Dutch MEP, who drafted the Parliament’s position on the original CBAM law. “Any exemptions for CBAM send a terrible signal — not just to our own industry, but to the world.”  It’s not only makers of fertilizer that are up in arms. Companies in the heavy industry sector — whose competitiveness CBAM is supposed to protect — are warning that granting an exemption once could produce a domino effect, encouraging buyers of all CBAM goods to lobby for relief.  German MEP Peter Liese, environment coordinator of the center-right European People’s Party, said earlier this month that a retroactive exemption would be “theoretically possible” but that he was “very much against it because I believe that if we start doing that, we will end up in a cascade. | Ronald Wittek/EPA “Once one sector gets an exemption, other sectors will want this too,” warned the Business for CBAM coalition, a lobby group of companies and industry groups. “We therefore call on the European Parliament and [ministers] to remove” the exemption clause, it added.  Similarly, German MEP Peter Liese, environment coordinator of the center-right European People’s Party, said earlier this month that a retroactive exemption would be “theoretically possible” but that he was “very much against it because I believe that if we start doing that, we will end up in a cascade. If we suspend it for fertilizers, there are immediately arguments to suspend it in other sectors as well.” 

NEW DELHI — The EU and India have concluded trade talks on a free trade agreement, a senior Indian official told POLITICO.  “Official-level negotiations are being concluded and both sides are all set to announce the successful conclusion of FTA talks on 27th January,” Commerce Secretary Rajesh Agrawal told POLITICO.  Under the deal, India is expected to significantly reduce tariffs on cars and machinery as well agricultural goods such as wine and hard alcohol. “This would be a very good story for our agriculture sector. I believe we are aiming to start a completely new chapter in the field of cooperation in the automotive sector, in machinery,” EU trade chief Maroš Šefčovič told POLITICO. On trade in services, the trade chief said that sectors like telecoms, maritime and financial services were expected to benefit. “This is again something where also India is making groundbreaking steps to new levels of cooperation, because we are the first one with whom they’re ready to consider this cooperation,” he said.  The conclusion to the talks arrived as the EU leadership was on a three-day visit to India for a summit to boost trade and defense ties between New Delhi and Brussels.  With the talks between the two sides having been on and off since 2007, the pact comes at an ideal moment as New Delhi and Brussels battle steep tariffs from the U.S. and cheap goods from China. 

BRUSSELS — The U.S. and EU are hoping to attract $800 billion of public and private funds to help rebuild Ukraine once Russia ends its full-scale invasion, according to a document obtained by POLITICO. The 18-page document outlines a 10-year plan to guarantee Ukraine’s recovery with a fast-tracked path toward EU membership. The European Commission circulated the plans with EU capitals ahead of the leaders’ summit Thursday evening where the document, dated Jan. 22, was addressed, according to three EU officials and diplomats who were granted anonymity to talk about the sensitive topic. While Brussels and Washington are lining up hundreds of billions of dollars in long-term funding and pitching Ukraine as a future EU member and investment destination, the strategy hinges on a ceasefire that remains elusive — leaving the prosperity plan vulnerable as long as the fighting continues. The funding strategy stretches until 2040 alongside an immediate 100-day operational plan to get the project off the ground. But the prosperity plan will struggle to attract outside investment if the conflict rumbles on, according to the world’s largest money manager, BlackRock, which is advising on the reconstruction plan in a pro-bono capacity. “Think about it. If you’re a pension fund, you’re fiduciary towards your clients, your pensioners. It’s nearly impossible to invest into a war zone,” BlackRock’s vice chairman, Philipp Hildebrand, said Wednesday in an interview at the World Economic Forum in Davos. “I think it has to be sequenced and that’s going to take some time.” The prosperity plan is part of a 20-point peace blueprint that the U.S. is attempting to broker between Kyiv and Moscow. It explicitly assumes that security guarantees are already in place and is not intended as a military roadmap. Instead, it focuses on how Ukraine can transition from emergency assistance to self-sustaining prosperity. A three-way meeting between Ukraine, Russia and the U.S. will take place in Abu Dhabi on Friday and Saturday, as the all-out conflict nears its fourth anniversary. The U.S. is set to play a prominent role in Ukraine’s recovery. Rather than framing Washington primarily as a donor, the document positioned the U.S. as a strategic economic partner, investor and credibility anchor for Ukraine’s recovery.  The note anticipates direct participation by U.S. companies and expertise on the ground, and highlights America’s role as a mobilizer of private capital. BlackRock’s chief executive, Larry Fink, has sat in on peace talks with Kyiv alongside U.S. President Donald Trump’s son-in-law, Jared Kushner, and his special envoy, Steve Witkoff. SHOW ME THE MONEY Over the next 10 years, the EU, the U.S. and international financial bodies, including the International Monetary Fund and the World Bank, have pledged to spend $500 billion of public and private capital, the document said. The Commission intends to spend a further €100 billion on Kyiv through budget support and investment guarantees, as part of the bloc’s next seven-year budget from 2028. This funding is expected to unlock €207 billion in investments for Ukraine. The U.S. pledged to mobilize capital through a dedicated U.S.-Ukraine Reconstruction Investment Fund, but did not attach a figure.  While Trump has slashed military and humanitarian support to Ukraine during the war, it showed willingness to invest in the country after the end of the conflict. Washington said in the document that it will invest in critical minerals, infrastructure, energy and technology projects in Ukraine.  But business is unlikely to boom before the eastern front falls silent. “It’s very hard to see that happening at scale as long as you have drones and missiles flying,” BlackRock’s Hildebrand said. Kathryn Carlson reported from Davos, Switzerland.

Italian Prime Minister Giorgia Meloni and German Chancellor Friedrich Merz will call for “swift entry into force” of the EU trade agreements with South American countries of the Mercosur bloc and with Mexico in a joint declaration to be signed by the two leaders in Rome on Friday, seen by POLITICO. Earlier this week, Merz called on the European Commission to implement the controversial trade deal on a provisional basis despite lawmakers voting Wednesday to send the accord for judicial review, stalling its ratification for up to two years. After an informal meeting of the EU’s 27 leaders in Brussels on Thursday evening, European Commission President Ursula von der Leyen said there was “clear interest” in implementing the EU’s trade deal with Mercosur as soon as possible. “The question of provisional application was raised by several leaders tonight,” von der Leyen said, adding it was important to push forward the trade pact’s “benefits” as soon as possible. More than 20 ministers from Italy and Germany are meeting today at Rome’s opulent Villa Doria Pamphilj to discuss closer cooperation in areas including security and defense and resilience. Meloni and Merz will also call for “the finalization of agreements with important partners in the Indo-Pacific,” just as EU and India could sign a trade deal next week. In what sounded like a reference to tariff threats by U.S. President Donald Trump, the two leaders will say they “oppose the unilateral use of trade measures as well as the impact of non-market policies disrupting global trade.” Seb Starcevic contributed to this report.

LONDON — British businesses that have plowed millions into border control facilities are demanding compensation from the U.K. government over its Brexit “reset” deal with the European Union. Since the U.K. left the bloc, dozens of firms importing plants and fresh produce from the continent have invested in purpose-built inspection facilities, known as “control points,” in an attempt to reduce the border friction and costs associated with EU trade.  By developing in-house facilities, businesses had hoped to bypass the expense and disruption that had plagued larger border control posts, like the government’s Sevington site in Kent. But as the U.K. and EU negotiate a sanitary and phytosanitary (SPS) deal — which is expected to remove the need for most border checks on food imported from the bloc — business owners now fear these facilities will be rendered redundant. Nigel Jenney, CEO of the Fresh Produce Consortium, said several members had spent “anything from a few hundred thousand to several millions” on control points to accommodate checks on imports of fresh fruit and vegetables and cut flowers. “In good faith, the industry proactively responded to the requests of government; and now it’s been hung out to dry, costing modest family businesses huge amounts of money,” Jenney added. ‘BITTERSWEET’ DEAL Provender Nurseries, a wholesaler of plants and plant products that imports 80 percent of its stock from the EU, is one of many firms in this predicament. In 2024, it splashed out around £250,000 to convert a large general-purpose barn into a control point, the culmination of three years of paperwork.   Speaking to POLITICO on site in Swanley, Kent, where workers were busy unloading a shipment of trees from Italy ready for inspection, Provender’s site operations manager Stuart Tickner said the prospect of an SPS deal was “bittersweet” for the business. “I fully support and back up the SPS agreement,” Tickner said, pointing out that it would decrease border friction with the EU. “But at the same time, we’ve spent a lot of time, money and effort to achieve it [the control point]. So it’s gutting that it’s got to go.” Investment in the control point has also restricted the business’s ability to grow, he claims.  “We’ve pumped so much money into it [the control point] that the directors are reluctant to invest in more at the moment,” Tickner added. Provender Nurseries, a wholesaler of plants and plant products that imports 80 percent of its stock from the EU, is one of many firms in this predicament. | Photo by Provender Nurseries A U.K. government spokesperson said: “We are focused on delivering a food and drink deal that could add up to £5.1 billion a year to our economy, supporting British producers and businesses, backing British jobs, and putting more money in people’s pockets.” “With negotiations ongoing, our aim is to reduce regulatory barriers, slash costs, and cut red tape for businesses, while maintaining the UK’s high biosecurity standards.” CALLS FOR COMPENSATION  Shortly after the U.K. and EU announced plans for an SPS deal last May, Tickner and two other horticultural businesses wrote to former Farming Minister Daniel Zeichner asking for a meeting on the issue of compensation for control points.   In their letter, shared with POLITICO, the businesses warned of “significant knock-on effects” for businesses like theirs that have invested in control points.  “This process involved not only major capital expenditure, but also serious operational impacts, including staffing adjustments, the implementation of import software and compliance systems, and long-term contractual commitments,” they said. “Importantly, the building of these control points also caused substantial disruption to our day-to-day operations,” they added. “Many of us had to redesign or repurpose areas of our business premises, manage construction activity around ongoing operations, and absorb the associated delays and interruptions to normal business.” Neither Zeichner nor his successor, Angela Eagle, responded to the letter or follow-up messages sent by Tickner.  These are just the latest calls for compensation for potentially redundant Brexit border facilities. Last year, POLITICO reported that the British taxpayer had spent more than £700 million on border control posts, which may no longer be needed once the SPS deal comes into effect.  That’s not counting the £120 million that British ports themselves splashed out on specialist facilities. Ports are also demanding compensation from the government.  While Tickner and his colleagues have managed to make good use of their control point since the introduction of checks on imported plants from the EU in April 2024, other businesses with control points have been less fortunate. In June last year, the government announced that it would scrap checks on fruit and vegetables in anticipation of the SPS deal, meaning many of these facilities are underused. More recently, the government announced that it would reduce inspection rates for four popular varieties of cut flowers imported from the EU. “The government is constantly changing its mind. I’ve lost count of the amount of U-turns,” Fresh Produce Consortium CEO Jenney said, the exasperation clear in his voice.  Speaking to POLITICO on site in Swanley, Kent, where workers were busy unloading a shipment of trees from Italy ready for inspection, Provender’s site operations manager Stuart Tickner said the prospect of an SPS deal was “bittersweet” for the business. | Photo by Provender Nurserie “We have secured confirmation of a low-risk position for fruit and vegetables and most cut flowers from Europe. But that’s after the industry has spent a small fortune doing what the government wanted us to do. There is now no likelihood of future income because the reset would appear to remove that requirement.” PILOT SCHEME SCRAPPED To make matters more difficult for these businesses, the Department for Environment, Food and Rural Affairs last year cancelled the rollout of an “Authorised Operator Scheme,” which would have allowed businesses to carry out their own checks on imports, following a pilot.  Firms running control points must instead rely on government inspectors to check imports, who only work certain hours of the week, defeating a key purpose of control points. “Government gave businesses a clear message and advice that for those importing perishable and sensitive goods at scale, investing in control points to then have the chance to achieve Authorised Operator Status was the best option to control your supply chains and give critical certainty,” said Jennifer Pheasey, director of policy and public affairs at the Horticultural Trades Association.  By canning the Authorised Operator Scheme scheme and agreeing to an SPS deal, control points “cannot deliver real returns and will be underutilized,” she added. HTA is now joining calls for government support for businesses that have invested in control points to help them mitigate and repurpose.  Like plant importers, Jenney would also like to see his members compensated for their investment in control points.  “We’d love to see businesses compensated for the losses they’ve incurred through no fault of their own — but we also accept that the government might find that difficult. What there does need to be is a genuine awareness of the cost burden that they’ve placed on industry and to make sure it never, ever happens again.”