EU summit begins with budget, China, and Ukraine on agenda; Merz rejects new debt

European Union leaders gathered in Brussels for a summit addressing critical issues including the bloc's next long-term financial framework, the ongoing war in Ukraine, and the EU's strategic relationship with China. Ukrainian President Volodymyr Zelenskyy is also attending the summit.

“

New European debt cannot exist. The budget must be balanced.

Ahead of debates on the EU's finances from 2028 onwards, German Chancellor Friedrich Merz firmly stated his opposition to new European debt. "There can be no new European debt," Merz declared, emphasizing that "the budget must be balanced." He described reaching an agreement among the 27 member states on the seven-year financial framework within the second half of 2026 as a "major effort." Disagreements persist over the budget's total amount and its priorities, with finance ministers scheduled to discuss proposals on Friday.

The summit also tackled the EU's approach to China, focusing on Europe's competitiveness and global economic disparities. Leaders are examining how to respond to China's extensive state subsidies, which the EU argues give Chinese companies an unfair advantage in the global market. While there is broad consensus among EU nations that the current economic imbalance with China is problematic and requires action, the specific measures remain a point of discussion.

“

A billion euros per day deficit is something that calls for action.

Several EU countries advocate for a tougher stance, while Germany, mindful of its significant business interests in China, has adopted a more cautious approach. The EU has already imposed tariffs on electric cars and can exclude companies from public tenders if they receive undue subsidies. EU Trade Commissioner Maroš Šefčovič has called for addressing the trade deficit, stating, "Not a course of confrontation, but a rebalancing." The Netherlands' Prime Minister Rob Jetten noted the need for better coordination among EU countries to "protect our economy," citing a daily deficit of one billion euros with China as a cause for action.

“

Not a course of confrontation, but a rebalancing.