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Europe Daily Bulletin No. 13854
NICOSIA SUMMIT / European council

In Cyprus, EU leaders to focus their discussions on Mediterranean issues and EU’s 2028-2034 budget

On Thursday 23 and Friday 24 April in Nicosia, the heads of state or government of the countries of the European Union will discuss the war in the Middle East, at a time when the ceasefire between the United States and Iran has been extended and talks have been initiated between Israel and Lebanon.

At this extraordinary European summit, which will take place in an EU country anchored in the eastern Mediterranean and partly occupied by Türkiye, the twenty-five leaders present (the outgoing Hungarian Prime Minister, Viktor Orbán, and the Austrian Chancellor, Christian Stocker, will be absent, editor’s note) will discuss the security situation in the region with several leaders of Mediterranean countries (Egypt, Jordan, Lebanon, Syria) as well as the Secretary General of the Gulf Cooperation Council.

The meeting will provide an opportunity for an in-depth discussion on regional stability, the prospects for a ceasefire in the Middle East and the conditions for reopening the Strait of Hormuz. At the initiative of France and the United Kingdom, several EU countries have said that if the fighting stops, they are prepared to set up a coalition to provide defensive security for shipping in the Straits.

European leaders will also try to identify ways of strengthening political, economic and intercultural partnerships with the countries around the Mediterranean, at a time when the European Commission has just presented some twenty measures to give concrete form to the ‘Pact for the Mediterranean’ (see EUROPE 13851/1).

All affected by the war, these countries want to continue the intensive dialogue with the EU and cooperate in a number of areas”, noted a senior European diplomat on Tuesday 21 April.

In particular, to note that Cyprus will host a civil protection centre designed to coordinate Europe’s response to natural disasters.

Article 42.7. At the dinner on Thursday evening, some of the leaders may also bring up Article 42.7 of the EU Treaty, which provides for mutual support between EU countries in the event of external armed aggression against a Member State.

At the beginning of March, several drones flew over Cypriot territory, causing disruption to air traffic. Without formally activating this clause, the Cypriot authorities obtained military support from several countries, including France, which dispatched an aircraft carrier to help secure Cyprus, an EU country that is not a member of NATO, and the host country of the extraordinary European summit.

Within NATO, a specific clause (Article 5) requires mutual assistance between Allies in the event of military aggression. But since Donald Trump’s return to power, the United States has maintained ambiguity about US intervention in the event of an attack on another ally. Not to mention the ‘Trumpian’ designs on Greenland, a territory associated with the Danish crown.

Not expecting “any concrete results” from this discussion, this European source indicated that it would be up to the High Representative of the Union for Foreign Affairs, Kaja Kallas, to inform the leaders about “the work in progress aimed at making Article 42.7 operational”.

Energy crisis. At Thursday’s dinner, the EU27 will discuss as well the EU’s response to the surge in energy prices caused by the war in the Middle East.

Although the EU is less affected than Asia in terms of its fossil fuel supplies, it is under pressure in certain market segments, such as kerosene, and is faced with soaring prices which, if the fighting continues, could affect many sectors of the economy.

Europe’s leaders will vote on the measures presented by the Commission this Wednesday (see EUROPE 13854/1, 13854/2). According to the Commission, short-term measures to protect vulnerable households and businesses should be targeted and temporary. Other initiatives will help to coordinate preparations for the campaign to replenish oil and gas stocks.

In the longer term, the recommended measures will help keep the European economy on track towards decarbonisation, by giving priority to electrification and local electricity production from renewable energies and nuclear power.

The President of the Commission, Ursula von der Leyen, will also discuss the repercussions of the war in the Middle East on food security, in particular the tensions linked to fertiliser prices. And she is expected to tell the members of the European Council that the population displacements observed in Iran and Lebanon have no impact at this stage on migratory flows towards the EU.

Ukraine. The heads of state or government will no doubt welcome the lifting of Hungary’s veto both on the EU’s €90 billion loan to Ukraine for 2026 and 2027, and on the 20th package of sanctions against Russia (see EUROPE 13854/5).

As the presence in Cyprus of Ukrainian President Volodymyr Zelensky has been confirmed, the discussions could also focus on the security guarantees to be provided to Ukraine as part of a comprehensive peace agreement with Russia, with EU membership itself being a security guarantee.

MFF 2028-20234. For the first time since the proposal was presented in July 2025, European leaders will be discussing the Multiannual Financial Framework (MFF) for 2028-2034.

With the aim of reaching a unanimous agreement among the Member States by the end of 2026, the President of the European Council, António Costa, wants his counterparts to vote on how to finance the future MFF via new resources specific to the EU budget, in line with the commitment made by the European Council in June 2020.

At this stage, however, no progress has been made on the Commission’s proposal, which suggests several new own resources: a tax on uncollected electronic waste, excise duties on tobacco, a tax on the turnover of large companies and a levy on revenue from the Emissions Trading System (ETS) and the Carbon Border Adjustment Mechanism (CBAM) (see EUROPE 13728/20, 13680/2).

The equation is as follows: to finance new political priorities (defence, migration, competitiveness, etc.) as well as the EU’s traditional priorities (agriculture, cohesion) and to repay the Next Generation EU loan (€25 billion from 2028), the EU needs new funding. However, given the reluctance of the Member States to increase their national contributions, the other ways of financing the EU budget are through increased own resources or even new common debt.

According to this European source, the discussion will focus on the potential own resources identified by the Commission. The aim will be for the leaders to provide “political guidance” on the continuation of the work led by the Cyprus Presidency of the EU Council. Following an informal meeting of European Affairs ministers in Cyprus in mid-May, the Commission will draw up a draft Negotiating Box with figures for the European summit in June. The aim is to reach a partial political agreement on legislative proposals to implement future European programmes.

On Wednesday, in Warsaw, several leaders of countries belonging to the ‘Friends of Cohesion’ group (Spain, Poland, Portugal and Romania) reaffirmed their position that: - cohesion policy cannot be the ‘poor relative’ of the future EU budget; - the management of European funds must be simplified; - Member States must be able to exercise greater control over the programme and implementation of the MFF 2028-2034.

At the Commission, the fact that Member States are no longer questioning the innovative architecture proposed for the future MFF is welcomed, namely the creation of national and regional partnerships to finance and manage several policies such as agriculture, cohesion, social affairs and migration.

Such an architecture is also validated by MEPs, who nevertheless grant minimum envelopes to certain European policies. The European Parliament will adopt its position on the post-2027 EU budget, with an allocation of 1.27% of GNI, next week in Strasbourg (see EUROPE 13849/14).

Internal Market. Finally, although the Commission’s ‘roadmap’ for ‘One Europe, One Market’ was sent to the EU27 ahead of the informal European summit (see EUROPE 13851/6), EU leaders are not expected to discuss the document in detail.

Sent to the Member States on Tuesday evening, a new version, seen by Agence Europe, revises the ambition of the ‘roadmap’ downwards, for example on the references to enhanced cooperation that a group of countries could put in place to move forward in certain areas.

According to one source, the reception given by the Member States’ ambassadors to the EU (Coreper) on Wednesday was mixed. The Cyprus Presidency has nevertheless launched a written procedure with a view to the EU Council’s approval of the final text and the presentation of the ‘roadmap’ at the European Summit in Cyprus.

See the revised version of the ‘One Europe, One Market’ roadmap: https://aeur.eu/f/LNJ

The EU’s competitiveness will also be addressed as part of the general discussion on the next MFF, via the ‘European Competitiveness Fund’. (Original version in French by Mathieu Bion and Solenn Paulic)

Contents

WAR IN MIDDLE EAST
SOCIAL AFFAIRS - EMPLOYMENT
NICOSIA SUMMIT
Russian invasion of Ukraine
EXTERNAL ACTION
SECTORAL POLICIES
ECONOMY - FINANCE - BUSINESS
INSTITUTIONAL
COUNCIL OF EUROPE
NEWS BRIEFS
Op-Ed