Week Ahead (12 January)

 W/C Monday, 12 January – US Secretary Rubio to meet with Danish officials  amid growing US assertiveness over Greenland 

This week, US Secretary of State Marco Rubio is due to meet Danish officials amid a sharp escalation in US–European tensions over Greenland, after President Trump publicly revived and hardened his ambition for US control of the Arctic island. Trump has argued that Greenland is critical for US military posture and missile defence, and has not ruled out coercive options, raising concerns across Europe and within NATO. 

The renewed pressure has forced a recalibration in European capitals in recent days. Early last week, EU leaders initially sought to downplay the issue to avoid jeopardising sensitive negotiations with Washington over Ukraine security guarantees. However, that approach shifted decisively after Trump reiterated that US “ownership” of Greenland, rather than a lease or expanded cooperation, was, in his words, “psychologically necessary,” and acknowledged it could come at the expense of the NATO alliance cohesion. France has since confirmed it is coordinating with partners on contingency planning should Washington attempt to move beyond rhetoric. 

Copenhagen has responded with a more assertive, multi-track strategy. In recent days, Danish representatives have launched a lobbying push on Capitol Hill, pressing lawmakers from both parties to oppose any attempt to alter Greenland’s status. Simultaneously, Copenhagen has also elevated the issue at the EU level, placing Greenland on the agenda of today’s Coreper II, a notable shift from its earlier reluctance to “Europeanise” the dispute. 

The dispute reflects the strategic weight of Greenland despite its small population. The island sits at the centre of US missile defence architecture and transatlantic security planning and is covered by Denmark’s NATO commitments, while its mineral potential intersects with US efforts to reduce reliance on China. With Rubio’s visit approaching and Trump showing no sign of softening his position, European governments are now openly preparing for a prolonged and politically sensitive standoff. 

W/C Monday, 12 January – European Parliament to push freezing of ratification of EU-US trade framework 

Tensions over Greenland are spilling into EU trade politics, with MEPs from Socialists and Democrats, Greens/EFA and Renew Europe increasingly signalling readiness to block ratification of the EU–US Framework Agreement agreed over the summer. Lawmakers argue that advancing trade concessions while Washington maintains territorial pressure on Denmark is politically unsustainable. 

Last Thursday, Greens trade lead Anna Cavazzini said she could not see Parliament approving measures that benefit the US. “in the current situation,” while Brando Benifei (S&D) said a political confrontation over the deal was now “inevitable.” Renew’s trade heavyweight Karin Karlsbro warned that US support for the agreement could not be assumed unless Washington halted both tariff pressure and security-related threats. 

The centre-right European People's Party (EPP), the Parliament’s biggest political group, remains officially non-committal, but lacks the numbers to pass the deal alone. Thus, a coordinated stance by S&D, Renew and the Greens would be sufficient to halt ratification. Danish MEP Per Clausen is currently gathering signatures to formally request suspension of the ratification process unless the US withdraws its Greenland claims, with a deadline set for this week. Separately, Bernd Lange, chair of the Parliament’s Trade Committee (INTA), confirmed broader discussions on freezing the deal altogether, citing alleged US breaches, notably the decision to raise steel and aluminium tariffs from 15% to 50% only weeks after the agreement was signed. 

US officials have since made clear they view the EU as procedurally behind. Trade Representative Jamieson Greer has publicly noted that Washington has already adjusted its tariff schedule under the framework, while Brussels has yet to complete its internal legal steps, making further US concessions politically unlikely in the short term. 

On the EU side, institutions are now trying to close that gap. In late November, the Council approved the Commission’s tariff-cut proposal for US industrial goods and seafood, adding a stronger safeguard clause. INTA has begun scrutiny, with Lange proposing amendments including an 18-month sunset clause. A committee vote is scheduled for 26 January, after which trilogues could begin. However, until Parliament concludes its work, the EU cannot fully implement its own commitments. 

The political pushback comes as implementation of the framework agreement remains incomplete. The Commission has yet to table its list of tariff requests, while the Council and Parliament are still finalising the EU’s own tariff adjustments. 

W/C Monday, 12 January – Commission to unveil €90 billion joint-debt plan after Russian-assets option stalls 

This week, the European Commission is expected to formally present a €90 billion financing package for Ukraine, aiming to ensure funds can be disbursed before Kyiv faces a projected liquidity shortfall in the spring. According to EU officials, the proposal will centre on €45 billion in loans over the next two years, with EU budgets covering interest costs, estimated at around €3 billion per year from 2028. 

As a procedural step, EU ambassadors are expected to approve an enhanced cooperation mechanism, enabling the Commission to issue joint debt while excluding Hungary, Slovakia and Czechia from repayment obligations. This clears the way for borrowing without unanimity, reflecting widening divisions over burden-sharing. 

The move marks a shift away from the Commission’s earlier plan to use frozen Russian sovereign assets as collateral for Ukraine financing. That approach ran into resistance at the December European Council, despite agreement to indefinitely immobilise the assets under Article 122 to avoid renewal risks. Belgium, home to Euroclear, emerged as the key holdout, warning of legal exposure and financial liability. Prime Minister Bart De Wever questioned the legal basis for a permanent freeze and flagged the risk of retaliation and litigation, concerns reinforced after Russia launched court action in Moscow against Euroclear. 

Opposition to the asset-backed model broadened in late December, with Italy, Malta, Bulgaria and Andrej Babis publicly distancing themselves, leaving the Commission with little political room to proceed. Against that backdrop, this week’s proposal is expected to rebalance spending priorities, allocating a larger share to budget support rather than defence compared with the December draft, though capitals will retain control over the most sensitive parameters, including eligibility rules for arms procurement, where US participation remains contentious. 

Wednesday, 14 January – Dutch Court hearing to test scope of state intervention into Nexperia and China-linked supply chain risks  

A Dutch court will hold a public hearing on 14 January to determine whether to open a formal investigation into alleged mismanagement at Nexperia, marking the first time the dispute surrounding the Chinese-owned chipmaker is debated in open court. The hearing follows preliminary rulings in early October by the Amsterdam Enterprise Chamber, which suspended Nexperia’s former CEO and temporarily transferred voting rights over shares held by its Chinese parent Wingtech to a Dutch court-appointed trustee. The case has since evolved from a corporate governance issue into a high-profile test of how far a European government, under US pressure, is willing to intervene in a China-linked technology asset on national security grounds. 

The confrontation traces back to September, when the Dutch government invoked a Cold War-era emergency law to assert control over Nexperia’s governance, following reported security concerns raised by Washington. Beijing retaliated by blocking exports from Nexperia’s packaging and testing operations in China, triggering shortages of low-cost but indispensable components used in automotive braking systems, power management and electric vehicle electronics. Although some exports were allowed to resume in November after the economic truce reached between US and China in South Korea on 30 October, the episode exposed how deeply European industry depends on Chinese-based production even for legacy chips such as diodes and transistors, components that are embedded across entire industrial ecosystems. 

The legal escalation comes amid increasingly sharp rhetoric from Beijing. In late December, China’s Ministry of Commerce of the People's Republic of China publicly urged the Netherlands to “immediately correct its mistakes” over Nexperia, accusing The Hague of irresponsibly endangering global semiconductor supply-chain stability. Chinese officials warned that technology-transfer concerns were being politicised and that the continued freezing of Wingtech’s control over its Dutch subsidiary risked prolonging disruptions that had already alarmed global automakers. Industry groups have cautioned that, despite partial resumptions of shipments, supply risks have not been fundamentally resolved. 

Saturday, 17 January – EU leaders to sign Mercosur deal in Paraguay after Council breakthrough; European Parliament to be the next front 

European Commission President Ursula von der Leyen along with the European Council’s President Antonio Costa will travel to Paraguay at the end of this week for the formal signing of the EU–Mercosur trade agreement, following a late breakthrough at Council level on Friday. A qualified majority of member states backed signature, clearing the way for a deal that has been under negotiation for more than 25 years. 

The Council shift was enabled by Italy’s decision to support the agreement, after the Commission offered additional safeguards and budgetary assurances aimed at protecting sensitive agricultural sectors. These include tighter monitoring mechanisms, strengthened emergency safeguard clauses, early access to Common Agricultural Policy funding from 2028, and a freeze on the EU’s carbon border tax for fertilisers. With Italy on board, the French-backed group opposing the deal failed to assemble a blocking minority. France, Poland, Austria, Hungary and Ireland voted against, while Belgium abstained. 

From Brussels’ perspective, the agreement is framed as a geopolitical and geoeconomic win, creating a free-trade area covering roughly 700 million consumers across the EU and Mercosur (Argentina, Brazil, Paraguay and Uruguay), and reinforcing EU influence in Latin America amid intensifying competition from China and renewed US tariff pressure. Germany and Spain, long-time backers, argue the deal strengthens supply-chain diversification and market access for EU firms. 

Attention now shifts to the European Parliament, where opposition remains significant. French authorities have made clear their focus is moving to Strasbourg, urging MEPs to challenge the agreement during the consent phase. Parliament is expected to vote as early as next week on whether to seek a legal opinion from the European Court of Justice on the agreement’s compatibility with the EU treaties. If approved, such a referral would delay Parliament’s final vote by 18–24 months. 

It is worth noting that the Parliament cannot amend the text and must ultimately approve or reject the agreement as a whole, leaving the coming weeks decisive for whether the Mercosur deal proceeds beyond signature into provisional application and ratification.