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