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Council of the European Union European Council
Follow its sittingsAntónio Costa
For this to be possible, it is fundamental to consolidate the work on the new own resources. I will now accelerate the work on this together with the European Commission and with the member states. Moving to the topics we discussed today. Ukraine remains a central priority for Europe, and it was good to have President Zelenskyy around the table. Our resolve to stand by Ukraine and its people is as strong as ever.
At the same time, every genuine step towards peace matters, and we support all genuine efforts towards it. Unfortunately, Russia's actions point the other way, towards escalation. This is why our commitment to peace goes hand in hand with more pressure on the aggressor, not less. We are also supporting Ukraine financially. We have identified the means to cover its needs for this year.
Now we must deliver. This requires continued reform efforts by Ukraine, and our international partners must also step up their support. Finally, we asked the Commission to come forward with a proposal to address Ukraine's additional financing needs for 2027. Supporting Ukraine has never been more relevant as Moscow is intensifying its hybrid campaigns across Europe.
We see acts of sabotage and repeated violations of member states' airspace and territorial waters. These actions will not go unanswered and we will double down on delivering our defense strategy by 2030. Finally, migration. The number of irregular border crossings into the European Union is at its lowest level since 2021. Our system based on the Pact for Asylum and Migration is working.
But the system can still, must still be improved, namely in the area of all types of instrumentalization. And the leaders expressed openness to many of the ideas proposed by President von der Leyen's recent letter on migration, including on a new emergency framework. Migration remains a very political issue where there are different political visions which are known to all of you. The European Council will continue to work on this issue, taking into account that common European solutions are leading to common European results. Thank you very much.
President von der Leyen.
Ursula von der Leyen
Yeah, thank you very much. Good, I was about to say good afternoon, but it's already good evening.
We had indeed a long and very dense European Council. Let me touch on some of the main topics and I will start with competitiveness and immediately go straight into the topic of energy. Indeed, households and industry are paying the price for war far beyond our borders. Since the start of the war in the Middle East, costs for imported fossil fuels have risen by 106 billion euros without a single molecule of energy in addition. Gas prices have risen since late February around 140% and the diesel prices have doubled.
This is the realities we have to deal with today and we discussed this intensively with the member states because of the fact that the member states have very different energy mixes. We know there is no silver bullet as a solution, but we need a whole puzzle of actions and we need to act both on the global level but also on the European level. Five points here. There is first of all the release of 100 million barrels of oil and diesel over the next four months.
The International Energy Agency is starting to manage this release. Second, we will extend in scope and time our temporary state aid framework that we put in place in February. Third, we will postpone the implementation of the methane regulation by one year. The fourth element is the launch of a strategic dialogue on European refineries, mainly to work on having more refineries in the European Union and to lower the prices. And the fifth point is that we will upgrade our task force that is aggregating the demand and so far doing matchmaking, but now we want the task force to work in a way that they task a market operator to go to the global market and buy the necessary energy resources with the full market power of aggregation of the European Union.
This is in the short term.
The challenge is that in the short term we have to act in the situation as it is right now. For the mid-term is important that as long as Europe depends on imported oil and gas and our prosperity remains exposed to the events beyond our control, it is important for us to stay the course of the transition that is a transition towards affordable, clean and homegrown energy sources, that is nuclear and renewables. We must also change the way we consume energy, that is replacing foreign fossil fuels by electricity that is produced in Europe. And of course we must modernize and improve our grids network because the cheap energy has to go where it is needed. I give you an example: last year we installed 80 gigawatts of renewable capacity, that is very good, but six times more renewable energy was waiting to be is waiting to be connected.
So the potential of improving the grid and the network is enormous and therefore the grids package that is in the co-legislative process right now is so important to bring it over the finish line. A word on carbon pricing, that is the emission trading system. We have in July delivered our proposal to modernize ETS 1. It is now with the co-legislators.
The leaders gave strategic guidance to the ministers and what they did is also underline that it is urgent to conclude this file. Another topic at the heart of our competitiveness is indeed the topic of trade imbalances and we focused on the EU-China economic relations and trade including the imbalances. And indeed I can only confirm there was a remarkable unity among the leaders. We all agree that China is an important trade partner for the European Union and we want this partnership to be fair, balanced and mutual beneficial. But this, if we want to reach these goals, requires substantial rebalancing and a fast rebalancing.
Just one figure: in 2025 our trade deficit with China was 1 billion euros a day. And we know that in 2026 it will be even worse. This is structural, this is unsustainable and we all agree that it cannot go on like this. Therefore what we need is work on, as we said, three different pillars. The first pillar is dialogue, very important, but of course this dialogue has to deliver.
The trade commissioner was just in Beijing and indeed the dialogue delivered first results. There have the the dialogue has delivered China's first ever agreement to moderate its exports on hybrid vehicles, better market access for several EU industrial and agri-food exports, and more predictability on export controls, in particular for rare earths and magnets. But we also know that progress in one sector, now the electric vehicle sector and the hybrid sector, cannot fix a structural imbalance. And this is why we need to act also on the second pillar, using our trade defense instrument that we have in place. Leaders clearly supported this.
Our industries have called for action and we have heard them and we will respond, including some more safeguards. The third element or the third pillar is that we will work on new instruments to address the structural imbalances, that is no more dependencies on one single supplier. And for that, in December we will present what we call Diversify EU.
This instrument will be country agnostic and it will mean faster de-risking by companies. We will also propose a solidarity mechanism. It will set out what we can do when one of us is subject to coercion or retaliation. Finally, we had the Franco-German paper which I very much welcome. And building on this Franco-German paper, we will develop a new instrument for decisive action by limiting the access to the single market where this is in the Union's interests fast and immediately.
And let me be clear, new tools are not an alternative to the full use of existing instruments. We should use them to the fullest just as it is needed in the different situations. What is paramount in moving forward is European unity and this was very much shown in this European Council. I also want to comment on the MFF. This budget was explicitly designed to address our priorities, the European priorities.
And I refer to priorities that in each and every European Council over the last seven years have been discussed. Leaders in every EUCO came out and asked for more Europe on these priorities. So no one questions what needs to be done, but how to achieve these priorities, that was of course the center of our discussion. One point I want to emphasize is the discussion about flexibilities. If there's one lesson we have painfully learned over the last seven years, that is the lesson that we are in a very fast-changing and volatile world and that there will be more crises.
We just don't know what is going to be happening. I experienced in my term in these seven years COVID, completely unexpected, fires, floods, droughts, earthquakes, the energy crisis, the war in Ukraine, the war in our neighborhood. The list is long and I could continue this. I could only act in these crises because of the flexibilities in the budget. That is the instrument with which you can respond to what kind of crisis is there.
And in each crisis, everybody was calling for Europe to step in and this is what we did because we had flexibilities. And believe me, it was not enough because you might recall that this was actually the reason why mid-term we had to revise the budget. Now, the new proposal comes with even less flexibilities. The negotiation box has a 50% cut compared to today. In other words, this proposal puts us in kind of a straitjacket because 99.5% would be fixed today, basically for the next 10 years, while we know that the world will not stay as it is today.
Finally, as I said, the question before us is not which priorities we should abandon, but how to finance these priorities. And this is why we need to work actively indeed on an ambitious package of new own resources. We know that the budgetary equation will only function with new own resources and indeed we had a broad discussion on the different options. Ukraine. President Zelenskyy, as you know, participated this morning and it was a good discussion.
Our support matters more than ever, with Russia testing Ukraine's resilience and endangering its economy. So first on defense, we are accelerating support for Ukraine's most urgent needs. You know the Ukraine support loan, it is delivering. We have dispersed almost 16 billion under the defense leg of the loan, and we continue to support Ukraine's budget, that's the other leg. A further 17 billion euro can still be dispersed before the end of the year, of course provided that Ukraine delivers the necessary reforms.
Europe is doing a lot, but the reality is simple: as long as this war continues, Ukraine's financing needs will keep growing. Right now, the European Union and its member states account for 80% of external aid to Ukraine and we will continue to lead, but we urgently need also other partners to step in. At the same time, we're engaging with Ukraine and the United States in discussions on how to end the war. President Zelenskyy briefed leaders on the latest developments.
As throughout these five years of war, no one wants more peace than the people of Ukraine and it is our duty to support them to be in the position to find a just and sustainable peace for Ukraine. Now the final topic I want to discuss in the introduction is migration. We have made tremendous progress and it is important to recognize that and this was also the underlying tone in the whole debate that there's an enormous progress that we have by all the leaders indeed. We have slides that we will distribute where you can see the different improvements in different categories. One of the reasons is the pact on migration and asylum that is now fully applicable.
Member states have made good progress in its implementation. We have now the mandatory screening and border procedure in place, that means across the whole European Union wherever you arrive at the border there is the same standardized procedure. We have a new return regulation. We have strong partnerships along all key migratory routes. And let me give you three figures, actually four figures, because these results speak for themselves.
The illegal border crossings have decreased in the last two years by over 56%, so more than halved. And if we look at this year, in the first nine months of this year, it's down by 34%. Asylum applications are also falling, 16% so far, with several member states, as you said, registering historic lows. And the return rate with the new return regulation is now over 30%. These trends need to continue.
To remain successful, we must continue to act together. Today, I presented three priorities. The first is of course the full implementation of the Pact for Asylum and Migration, with responsibility and solidarity going hand in hand. And important progress was made, but efforts need to continue. The second priority is we need to strengthen the management and the protection of external borders.
Therefore, we will propose to reinforce Frontex, giving it the capacity to support member states whenever and wherever needed. And the third topic is that we must be better prepared for crises at our external borders, because a new phenomenon that we see over the past years is that states and non-state actors are engineering sudden mass movements of people with a very clear goal: to overwhelm the authorities, to cause panic, and most of all, to divide us. Such situations are emergency, and they call for an emergency tool. And this is why we as a Commission will propose a new European emergency response framework. It will equip member states with the means to respond swiftly to serious threats at our external borders and to protect our internal security.
So our message is clear: we will always uphold our values and fundamental rights, but we will never compromise on protecting our borders. We will now work very closely with the member states and come forward with this framework before the end of the year. So, two days of discussions, and we're happy to take your questions, or I give the ball back to you, if I may say so.
Thomas Gutschker
Thanks so much. Thomas Gutschker with Frankfurter Allgemeine Zeitung.
My question is on Ukraine financing. During your meeting, President Zelenskyy called explicitly for another 70 billion euros that he needs next year. Are these the same 70 billion euros that your services have identified so far? And how much headroom is left to actually finance another loan to Ukraine? That is to you, Madam President.
And to you, President Costa, the discussion on Ukraine took a very long time. Is this because leaders already got into the financing issue, and do you think a decision needs to be taken by the end of the year on that as well? Thanks.
Ursula von der Leyen
So, the headroom question I cannot answer from the top of my head because I need to check what the figures are. You recall we have approved the 90 billion euro support loan for Ukraine. We've always said this covers two-thirds of the necessary budgetary and defense support.
We are dispersing 45 billion all in all this year and another 45 billion is planned for next year. And indeed, the gap that we see for 2026 is covered. But the gap that we see is in 2027. It is 70 billion euros. Part of it is the financing by partners that is required, this one-third that we need.
And of course, as a war is ongoing and hard to predict, at the time where we planned for the 90 billion, we could not foresee how 2027 would look like. But now, it is clearer that we have a gap of 70 billion that has to be covered.
António Costa
Well, we discussed Ukraine interconnected with our own security and defense. And in fact, the two issues are interlinked. That's the basic reason because we took more time because we didn't discuss only Ukraine, but also the European Union and our member state security and defense, namely the attacks in the Black Sea, hybrid threats, hybrid attacks, not hybrid attacks and not hybrid threats.
Then it was a large discussion on all these different issues. Regarding financing, we didn't spend a lot of time. We agreed immediately that we need to address the additional needs of financing Ukraine to 2027, and we tasked the Commission to come with a concrete proposal to debate and approval.
Karin Axelsson
Yes, hello, Karin Axelsson from the Danish daily Politiken. This is a question for you, Madam President. This morning, the Danish Prime Minister said that she has asked you to engage in this situation on migration, asking the Commission to look into a situation where a country acts very different from the interest of the others. And here obviously she was thinking about Spain and the legalization of migrants.
So can you clarify to us what has the Danish Prime Minister asked you concretely and how have you responded to this request and how can you interfere in this very divisive subject? Thanks.
Ursula von der Leyen
So our discussions always go the way that we have a broad discussion with many, many questions coming, sometimes questions on the same topic, sometimes questions on different topics. So without relating to a specific question, indeed migration is a European challenge that is for all of them very important that we constantly acknowledge that that needs a European solution. Decisions to regularize irregular migrants are a national competence, but as other national decisions they can have a cross-border impact. And for this reason coordination and close cooperation in the Schengen area is important. This is what I stressed also in my letter for migration, I also sent a letter with an annex that summarizes lots of the things we've done and actual issues.
The Council already has a mechanism to exchange information on national migration decisions with cross-border implications. So this situation, and we can strengthen it, and the Commission stands ready to support this through our existing Schengen tools and networks. Thank you. Next. 2006.
Oh. This instrument. Good. You have a good memory. Yes.
Razia Akoc
Thank you. Razia Akkoce, AFP news agency. My question is going to be on the budget. First, it's for you, President Costa. After the leaders' talks, do you feel more confident that there can be an agreement by December on the budget?
And to you both, Marine Le Pen on the eve of the summit said it would be undemocratic to push through the EU budget before elections in France and elsewhere. Does she have a point? Thank you.
António Costa
Well, first of all, it's very important to understand why we have, how we need a budget agreed by the end of this year. Normally, the member states and the European administration needs at least one year, one year and a half to start implementing a new budget.
This future budget, it will be more difficult than usually. Why? Because the Commission presented and the member states approved a completely new different, a more with a modernized architecture. We are not talking anymore only about cohesion or agriculture. Now we are talking on security, on defense and most important on competitiveness.
And with a completely different method to allocate the funds. Then both the European administration and the national administrations need more time to implement on this. And my question is, we can save in the urgency to approve this by the end of this year in order to ensure that we have a new budget since the first of January 2028? My answer is clearly no. All the national budgets are under pressure.
We have already conclude the Next Generation. We are concluding the current budget. And our farmers, our businesses, our researchers, our citizens are waiting for a new budget in the first of January 2028.
Then that is the main reason because we have to approve this budget, new budget, by the end of this year. If not, it's not possible to implement this new budget timely. Then that is nothing about elections. Because we are living in 27 democracies. More or less every month we have one election.
Then if it's about elections, we never could approve a new, a new budget. But unfortunately, the life is not only elections. We are talking about our farmers, our companies, our students, our researchers, our universities. And they are waiting for new European funds. And we need to deliver on this.
Speaker 20
Because we work together indeed. So we run the figures of the budget. Well, yes, I couldn't have said it better.
Speaker 9
Okay, thank you. We will take one final question and I'll give it to Jorge here.
Jorge Valero
Jorge Valero with Bloomberg. A question on trade for both of you. Less than a week after the agreement reached with China to limit the export of the Chinese hybrid vehicles, the leaders have mandated the Commission with coming up with this powerful instrument that you described, Madam President, that could be used if China or another country attacks the European economy. So are we preparing for a trade war with China because the rebalancing is going to bring trade tensions? And a second question also in this case for you, Madam President.
If you don't reach an agreement with Beijing on this to rebalance, to reduce the exports on these sectors like machinery and chemical products, will you move ahead imposing the export restrictions on these two sectors, imposing the unilateral safeguards? Thank you.
Ursula von der Leyen
Look, we have been successful with the principle dialogue first.
And indeed, Commissioner Šefčovič's dialogue in Beijing resulted in the acceptance by the Chinese that we will apply safeguards for the hybrid vehicles. This was preceded by many, many talks. So it's not one visit, but we have discussed a lot with our counterparts that first it started with the electric vehicles, where we saw a massive surge of electric vehicles in the European Union sold. We investigated the subsidies and you know we put tariffs in compensation on the electric vehicles. The effect was that then the hybrid and the plug-in vehicles sales, Chinese sales in the European Union surged enormously.
And we discussed this in the dialogue with the Chinese. I think it's this transparency that also allowed it to have a safeguard that we very transparently have explained to our Chinese partner and where we have this result that came from the dialogue back from Beijing.
It is important to have different instrument for different situations. We also do not know what's going to happen, so we have to be able to act and to react fast in whatever situation when we see that there is a critical imbalance on our single market. And therefore, besides the dialogue, we are using or looking at the range of trade defense instruments that we have. And knowing that the procedures that we sometimes apply are relatively slow, we are also aiming at developing this new instrument that would be much faster and much more precise.
Speaker 23
Well, if you allow me to quote President von der Leyen, I can't do and say better. Thank you.
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