Written by Annastiina Papunen.
Enhancing the EU’s competitiveness is a key priority for the European Council in the current legislative cycle. In a complex geopolitical environment, in which the international rules-based order is increasingly undermined and core alliances are questioned, it is essential for Europe to be able to stand firmly on its own feet. Strengthening the single market and the EU economic base is ‘an urgent strategic imperative’ in the words of European Council President António Costa, to improve the EU’s competitiveness and develop its strategic autonomy.
On 12 February 2026, EU leaders will meet for an informal leaders’ retreat – ‘a strategic brainstorming session’, according to President Costa – in Alden Biesen, Belgium, to discuss EU competitiveness. This meeting, which 19 EU leaders requested in a letter in October 2025, builds on previous discussions on the topic, notably 1) the informal meeting of 22 January 2026 on transatlantic relations and trade, 2) the strategic discussion on geoeconomy and competitiveness at the December 2025 European Council meeting, and 3) the October 2025 regular meeting on simplification and twin transition. Mario Draghi and Enrico Letta have been invited to join the retreat to share their visions and highlight developments since their groundbreaking reports. European Parliament President Roberta Metsola will also address the meeting; President Costa has met Parliament’s Conference of Presidents ahead of the retreat. No formal conclusions are expected from the strategic debate, but the reflections are likely to feed into the March 2026 European Council conclusions.
Read the complete briefing on ‘Outlook for the 12 February 2026 retreat: Work on competitiveness in the European Council‘ in the Think Tank pages of the European Parliament.
Written by Tim Peters and Jakub Przetacznik with Silke Maes.
On 18 December 2025, the European Council agreed to a €90 billion loan to Ukraine to cover the country’s financial needs in the years 2026 and 2027. The European Commission has subsequently presented three legislative proposals to implement the European Council’s decision: (i) a proposal for a €90 billion Ukraine Support Loan financed by the EU except for Czechia, Hungary and Slovakia; (ii) a proposal to amend the Ukraine Facility to use it for the disbursement of the new loan; and (iii) a proposal to amend the EU’s multiannual financial framework to use it as a guarantee for the loan, and to finance the grants used for the borrowing cost subsidy.
The loan will be financed through EU borrowing on the capital markets backed by the EU budget’s headroom. The EU budget will pay for the interest rates and other associated costs for Ukraine.
While €30 billion of the loan are meant to support the Ukrainian budget, €60 billion will be used to strengthen Ukraine’s defence capabilities. The Commission proposal stipulates that defence products financed from the loan should, in principle, originate from the EU, European Economic Area, European Free Trade Area and Ukraine. Only if products are not available there, or cannot be delivered fast enough, can products from other third countries be bought.
In the past, Article 41(2) of the Treaty on European Union had been seen as an obstacle to financing weapons and military equipment from the EU budget. However, as the proposed Ukraine Support Loan is based on Article 212 of the Treaty on the Functioning of the European Union, the rules on the EU’s common foreign and security policy do not apply.
Legislative ProposalsRead the complete study on ‘EU support for Ukraine for 2026-2027‘ in the Think Tank pages of the European Parliament.