EURACTIV RAPPORTEUR - 19 December 2025 - 🟢 EU leaders shoot down reparations loan, back €90 billion Ukraine financing 🟢 Macron and Meloni push Mercosur signing to mid-January 🟢 Várhelyi plays down backlash over proposed EU food tax in sit-down interview

 

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Welcome to Friday's Rapporteur. This is Nicoletta Ionta in Brussels, with Eddy Wax. Send us your tips, documents and story ideas: eddy.wax@euractiv.com and nicoletta.ionta@euractiv.com Need-to-knows: 🟢 EU leaders shoot down reparations loan, back €90 billion Ukraine financing 🟢 Macron and Meloni push Mercosur signing to mid-January 🟢 Várhelyi plays down backlash over proposed EU food tax in sit-down interview

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In the capital This was meant to be Ursula von der Leyen’s moment of strategic resolve. Instead, Thursday’s EU summit ended with ambitions unmet – and a very public setback for a Commission president who has spent mountains of political capital trying to pull off an unprecedented move: lending Ukraine billions by leveraging immobilised Russian assets. It didn’t fly. “It was like a sinking ship, like the Titanic, and at the end it was finished,” Belgian PM Bart De Wever said early this morning of the now all but dead reparations loan scheme. (Rapporteur, it should be noted, already told you it wouldn’t happen on Wednesday). Von der Leyen first floated the proposal in a speech in September. But two further summits and three months elapsed before she produced a text, giving doubters ample time to mount objections. Throughout, she framed alternatives, like common debt, as unworkable. At the summit, many capitals were nominally supportive. But when it came time to sign on the dotted line, they hesitated. “These leaders are full of slogans, but they don’t dare,” one EU diplomat told me as talks broke up in the early hours. The silent killers were Italy and France: neither openly opposed the plan nor defended it in the run-up to the summit. Though leaders agreed to a package that will finance Ukraine for the next two years, the result was a humiliating political reversal for the scheme’s backers – chiefly von der Leyen and Friedrich Merz – who had billed the plan as the only viable way to ramp up pressure on Moscow while keeping Kyiv solvent. De Wever’s consistent opposition ultimately crushed the scheme. Yet he declined to claim victory afterwards, insisting that Ukraine, not Belgium, had won. The winners of the night, perversely, were the three governments most opposed to supporting Kyiv. Czechia, Hungary and Slovakia agreed to waive their vetoes, allowing the 24 other states to raise €90 billion in common debt, backed by the EU budget, to be paid out as loans to Ukraine. Repaying the loan remains theoretically linked to future Russian war reparations, and the agreement preserves a legal backdoor to tap Russian state assets if Moscow never coughs up for Ukraine. But the bold leap sought by von der Leyen and Merz has been replaced by cautious footwork. Far from quaking, Moscow will likely be shrugging. Merz, spinning the summit’s outcome, hailed the financing deal as a success and insisted the reparations loan had been delayed rather than abandoned. “We have only changed the order,” he said, arguing that Russian assets could still one day serve as collateral. For the German chancellor, this was a double blow: the asset-backed loan went up in smoke, and the EU-Mercosur trade deal was pushed into early next year, largely to accommodate Italian and French reservations. One EU diplomat said the plan was to sign the agreement in Paraguay on 12 January. For von der Leyen, the implications run deeper. This summit exposed the limits of her political leverage and the risks of overselling a legally brittle, politically contentious idea as a silver bullet. When Eddy asked at her 3:30 am press conference if the inability to conclude a reparations loan amounted to political defeat, von der Leyen replied with a terse “it’s good,” before walking off the stage.

Europe might call Putin European leaders and Ukraine should be prepared to engage directly with Russian President Vladimir Putin if US-led peace talks fail, French President Emmanuel Macron said on Friday, signalling a potential shift in the bloc’s role in negotiations to end the war, my colleague Aurélie Pugnet reports. If the US-led peace talks break down, “we will have to, in the coming weeks, find ways for Europeans to re-engage in a full-fledged dialogue with Russia, in full transparency with Ukraine,” Macron said. He added that negotiations could move forward in the “next hours.” The situation is “not ideal,” Macron added. “It will soon be useful again to talk to Vladimir Putin.” Merco-later Von der Leyen told EU leaders on Thursday that the signing of the controversial EU-Mercosur trade agreement, originally planned for Saturday in Brazil, will be postponed until January, my colleagues Sofía Sánchez Manzanaro and Alice Bergoënd reported. An EU diplomat said the plan is now to sign the deal in Paraguay on 12 January. The setback extends a saga 25 years in the making. The agreement remains stalled and has become a flashpoint for some of the EU quarter’s most violent protests in months, forcing officials to evacuate buildings on Thursday as farmers’ anger boiled over. “Delaying the deal for a few weeks while serious issues affecting beef farmers are worked out could be worth it in the end,” Ireland’s Europe Minister Thomas Byrne told Euractiv. Ireland is among the countries hesitant to back the deal, citing risks to its cattle sector. Former EU Trade Commissioner Cecilia Malmström said it was “sad,” adding that the bloc “missed an opportunity to show strength and unity today. By again postponing the EU-Mercosur agreement, it is losing credibility.” Von der Leyen cited difficulties in meeting the demands of two countries. France and Italy have led calls for more time, arguing that safeguards designed to protect EU farmers from market distortions caused by imports are not yet finalised or implemented. Várhelyi’s chips act EU Health Commissioner Olivér Várhelyi has sought to play down backlash against his proposal for a new levy on food products, after at least four Commission departments issued negative opinions, according to documents seen by Euractiv last month. The plan would introduce charges on so-called ultra-processed foods, as well as products high in fat, sugar and salt. Speaking to my colleagues Brenda Strohmaier and Sarantis Michalopoulos in a sit-down interview, Várhelyi insisted the measure was modest in scope. “I would not call it a tax; I would call it a micro-levy,” he said. “Roughly, we have an idea of 5 cents on a bag of chips. So nothing punitive.” EU’s to-do list The EU’s three institutions on Thursday agreed on their legislative priorities for 2026, offering a snapshot of where Brussels sees its main pressure points. Defence and security top the agenda, with plans to ramp up procurement, industrial capacity and military mobility by 2030, alongside renewed efforts to phase Russian oil and gas out of the energy mix. Competitiveness follows closely behind, driven by a broad simplification push, lower energy costs, deeper capital markets, and a fast-tracked Energy Union. Migration policy also features, with an emphasis on returns and border control, while social policy receives a lighter touch through initiatives on housing and labour mobility. Christmas comes early for Parliament staff European Parliament staff will get an extra day of holiday this Christmas, after Secretary-General Alessandro Chiocchetti informed officials that offices will be closed on Tuesday 23 December. “Annual leave already granted for that day will be automatically annulled,” Chiocchetti wrote. A Parliament spokesperson told Rapporteur the move reflected an “old tradition” of granting an additional day off over the winter break when the calendar allows. Parliament will also be closed from 24 December until 2 January. Frontex can’t dodge pushback liability The EU’s top court has ruled that the bloc’s border agency, Frontex, can be held liable for rights violations during pushbacks, easing the burden of proof on victims. In a landmark judgment, the Court of Justice overturned a lower-court ruling, finding that asylum seekers cannot be expected to provide “conclusive proof” when key evidence is controlled by the agency itself. The case, brought by a Syrian asylum seeker over an alleged pushback in the Aegean in 2020, will now return to the lower EU court. Green MEP Tineke Strik said she would summon Frontex and the European Commission to explain the ruling’s implications.

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The capitals PARIS 🇫🇷 Facing protests by livestock farmers over its handling of the outbreak of contagious nodular dermatitis (CND), the government has announced plans to vaccinate 750,000 cattle by 31 December, mainly in the country’s south-west. So far, 113 outbreaks have been recorded across 79 farms, with 3,300 animals culled – a toll that has triggered nationwide demonstrations. The unrest comes at a politically sensitive time for the government, which is locked in difficult negotiations over the 2026 state budget and under mounting pressure from Brussels to sign the Mercosur free trade agreement, a deal opposed by all French farming unions. – Laurent Geslin ROME 🇮🇹 A last-minute rewording of amendments pushed by Italy’s government in its budget bill has stirred controversy by laying the groundwork for a broad expansion of defence production. The measure would give the defence and infrastructure ministries new powers to designate strategic areas, activities and projects for the construction, expansion or conversion of industrial sites linked to the military sector. The provision has triggered a sharp political backlash. Opposition parties have framed the move as a step towards a “war economy” – a sensitive charge in a country where public opinion remains among the most sceptical in Europe about higher defence spending and militarisation of industry. – Alessia Peretti MADRID 🇪🇸 Pedro Sánchez said on Thursday that his ruling Socialist Party and coalition partner Sumar must continue to work together "despite their differences.” His remarks followed a call by Sumar leader Yolanda Díaz for the government to pursue "profound renewal measures" after fresh anti-graft operations and sexual harassment allegations involving senior Socialist figures last week. The prime minister also criticised the main opposition Popular Party from the centre-right, accusing it of "whitewashing the far right” and blaming the party, led by Alberto Núñez Feijóo, for the rise of far-right support in Spain. – Inés Fernández-Pontes BRATISLAVA 🇸🇰 The Council of Europe has raised concerns about the independence of Slovakia’s public broadcaster, STVR, according to Denník N. In a statement issued in early December, the body warned of potential political influence over the broadcaster, citing weakened editorial and financial independence and a lack of transparency in its governance. It also noted that the deputy chair of the STVR Council, Lukáš Machala, is a close associate of the culture minister. The Ministry rejected the criticism. Robert Fico’s government pushed through a controversial reform of STVR after taking office, despite objections from the EU. – Natalia Silenska

Schuman roundabout From farm to street: After hundreds of angry farmers flooded Brussels to protest the EU’s potential trade deal with Mercosur countries, some demonstrators came armed with ammunition in the form of large potatoes. While a few reached the walls of Parliament and the Commission, most ended up in untidy piles along the roadside. Euractiv spotted Bruxellians quick to see the upside, salvaging the less bruised ones. That should do nicely for a stew.

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Today's newsletter was brought to you by Newsletter Editor Eddy Wax Politics Reporter Nicoletta Ionta Contributors: Magnus Lund Nielsen, Aurelie Pugnet, Thomas Møller-Nielsen, Jacob Wulff Wold, Sofia Sánchez Manzanaro, Elisa Braun, Alice Bergöend, Victoria Becker, Martina Monti, Joshua Posaner, Kjeld Neubert Editors: Christina Zhao, Sofia Mandilara

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