Week Ahead (17 November)

W/C Monday, 17 November – Pressure to intensify on Belgium as EU races to unlock proposed €140 billion loan to Ukraine amid narrowing time window 

This week, EU negotiations over a proposed €140 billion loan for Ukraine backed by frozen Russian state assets are expected to accelerate as the Commission seeks to overcome Belgium’s continued blockage of the plan. The Danish Council Presidency formally asked the Commission last Thursday to advance work on the asset-backed loan, but Brussels remains at a standstill due to Belgium’s refusal to endorse the core financing mechanism. 

Belgium’s opposition stems from its unique exposure, given that the bulk of immobilised Russian state assets in the EU are held by Euroclear, headquartered in Brussels. The Belgian government fears that using the assets as collateral could trigger significant legal and financial liabilities, especially if Moscow challenges the EU’s actions before international courts. Belgian officials also worry that once the war ends, political pressure may build to return the assets to Russia, leaving Belgium responsible for covering loan losses. To that end, Prime Minister Bart De Wever has demanded strong, legally binding guarantees that EU governments would jointly repay the loan should the assets have to be released in the future. 

The urgency stems from Ukraine’s rapidly deteriorating fiscal outlook. According to internal assessments, Kyiv will begin tightening its budget as of April 2026 if no new financing arrives, initially by front-loading dividends from state-owned banks and resorting to additional domestic borrowing. 

Due to the ongoing impasse and the narrowing time window, President von der Leyen has begun floating alternatives: following Thursday’s ECOFIN meeting, she warned that if the Russian-asset plan cannot move forward, the EU could resort to joint borrowing, repaid by national capitals, or require direct national contributions. Both options face resistance: high-debt countries such as Italy and France oppose paying through national budgets, while several fiscally conservative Northern states are reluctant to embrace new common debt. Economy Commissioner Piotr Serafin has also cautioned that additional borrowing or direct outlays could require further adjustments to the EU’s Growth and Stability framework, complicating the fiscal process. 

On Friday afternoon, von der Leyen met with De Wever in an effort to break the deadlock. However, there are no indications yet that their 1-hour private meeting led to a breakthrough. Talks are expected to intensify in the coming days, with EU governments aiming to reach a political agreement by the 18 December European Council, the final summit of 2025. 

Monday, 17 November – German Defence Minister Pistorius visits Paris for meeting with French counterpart; FCAS to feature high in the agenda 

German Defence Minister Boris Pistorius will be in Paris today for his first bilateral meeting with Catherine Vautrin, France’s new armed forces minister. Berlin confirmed the visit last week, noting that the talks will centre on Franco-German defence cooperation, with the Future Combat Air System (FCAS) at the top of the agenda. 

FCAS, the flagship joint France-Germany-Spain defence initiative to develop a next-generation air combat system by 2040, was originally intended to stand as Europe’s flagship example of strategic autonomy and industrial cooperation but has become increasingly strained in recent months. 

The main dispute centres on industrial leadership of the Next Generation Fighter (NGF), the programme’s core platform. Dassault Aviation insists on retaining around 80% control over the NGF workshare, reflecting its experience as France’s national combat-aircraft champion. Οn the other hand, Berlin argues this setup is unbalanced and undermines Airbus Defence and Space’s role in the project. The resulting impasse has slowed progress across multiple “pillars” of FCAS and has become politically charged in both capitals. 

Tensions escalated further after Vautrin stated in an interview earlier this month that “Germany does not have the capacity to manufacture an aircraft”, a remark that prompted firm reactions from German officials ahead of her meeting with Pistorius. Overall, the meeting this week comes at a time-sensitive moment since Berlin has set a year-end deadline to decide whether to continue FCAS as currently structured, seek a rebalancing, or consider alternatives with partners such as the UK or Sweden. During his recent meeting with UK Defence Secretary John Healey, Pistorius reiterated that a final decision on FCAS is expected by the end of 2025, with Chancellor Merz backing a hard timeline. 

Therefore, the coming weeks will determine whether the project will go through in the originally foreseen format or whether Berlin accelerates the pursuit of alternative options. It is worth noting that ultimately, the Bundestag will decide on whether FCAS proceeds at all.   

Tuesday, 18 November – Deadline for feedback of the review of the FSR  

Tuesday marks the deadline for stakeholders to submit comments to the European Commission’s first review of the Foreign Subsidies Regulation (FSR), the EU’s flagship tool for policing market distortions caused by non-EU state support. The consultation marks the start of a broader assessment of whether the FSR, in force since mid-2023, is functioning as intended and whether any adjustments or simplifications are needed. 

Adopted in July 2023, the FSR is designed to level the playing field between EU and non-EU firms by addressing market distortions caused by foreign state support, such as preferential loans, guarantees, or equity injections. It complements EU state aid rules, which only apply to member governments, and requires firms to notify large mergers and public tenders if they have received significant non-EU financial contributions. Violations can result in fines, divestments, or blocked acquisitions. 

So far, the tool has been applied primarily to Chinese and Gulf state-backed entities. Beijing has been openly critical of the instrument, with the Chinese Ministry of Commerce branding it a “trade and investment barrier” in January 2025 and launching its own investigation into the FSR’s legality under WTO rules. Chinese officials and business groups have repeatedly accused Brussels of using the regulation as a geopolitical instrument to deter Chinese investment. 

The review comes amid an active enforcement period. Last Friday, the Commission conditionally approved ADNOC’s €14.7 billion acquisition of Covestro following an in-depth FSR investigation. Brussels found that UAE-backed support, including an unlimited state guarantee and a committed capital increase, risked distorting the internal market. To ease DG COMP’s concerns, ADNOC offered a package of ten-year commitments, removing the guarantee and agreeing to licence certain sustainability-related patents on transparent terms. The procurement pillar of the FSR is also gaining momentum. Earlier in November, the Commission opened an in-depth investigation into CRRC’s bid for Lisbon’s “violet line” light-rail project, assessing whether Chinese state support gave the firm an undue competitive advantage. 

In terms of next steps, the Commission will use the feedback submitted by Tuesday to prepare its FSR review report for the European Parliament and the Council. Under the regulation, Brussels must conduct such a review by July 2026 and every three years thereafter, potentially paving the way for legislative changes if parts of the regime prove overly complex, burdensome, or disproportionate. 

Wednesday, 19 November – European Commission to unveil Digital Omnibus package, including 1-year delay of next implementation phase of the AI Act  

On Wednesday, the European Commission is set to unveil its highly-anticipated Digital Omnibus package, a core element of Brussels’ post-Draghi report competitiveness push aimed at streamlining the EU’s digital rulebook and reducing compliance burdens for companies across the Single Market. The package is expected to include the first formal adjustment to the AI Act since adoption, with the Commission preparing to propose a 12-month delay to the application of the law’s high-risk requirements. 

Under the draft amendment, obligations for developers of high-risk AI systems, in particular those impacting safety, health, or fundamental rights, would shift from August 2026 to August 2027. The move follows warnings from EU countries, companies, and standards bodies that the supporting technical standards were not delivered on time and are now only expected in early 2026, leaving too little preparation time. The delay also comes amid sustained pressure from Washington and major US tech firms urging Brussels not to impose overly rigid timelines that risk weakening Europe’s position in the global AI race. 

The amendment will be tabled as part of the Omnibus and will require approval from the European Parliament and EU governments. Denmark, which holds the rotating Council Presidency, has been pushing for at least a one-year delay, with Germany, Sweden, Poland and the Czech Republic expressing similar concerns.  

Other key elements of the upcoming omnibus will be: 

• GDPR reforms: Despite the Commission presenting these as “targeted” changes, leaked drafts suggest significant modifications to the GDPR aimed at easing constraints for AI training and data processing. This marks the first reopening of the GDPR since 2018. Civil-society groups have warned that the amendments would constitute “the biggest rollback of digital fundamental rights in EU history,” while several parliamentary groups, namely the Socialists and Democrats, Renew Europe and the Greens have sent letters flagging “serious concerns” about the process and its heavy reliance on industry input. 

• Single reporting channel: The package will also propose a mandatory single-entry point for companies to report cybersecurity incidents and data breaches across multiple laws, including NIS2, GDPR, DORA, the EUDI Regulation and the Critical Entities Resilience Directive. Businesses have long complained about overlapping obligations that require reporting the same incident multiple times under different deadlines. 

The Omnibus will be accompanied by the publication of the Data Union Strategy, first announced by President von der Leyen in her 2024 State of the Union address, although political and market attention will focus primarily on the proposed AI Act delay and GDPR revisions. 

Wednesday, 19 November – European Commission to unveil Defence package with focus on military mobility 

Also on Wednesday, the European Commission will present its new Defence Package, composed of the Military Mobility Package and a Defence Industry Roadmap. The primary emphasis will be on military mobility, which is now being increasingly viewed as one of the EU’s most urgent capability gaps and a critical pillar of the EU-NATO cooperation agenda following Russia’s full-scale invasion of Ukraine in 2022. 

Military mobility has risen to the top tier of EU defence priorities as Russia’s war has exposed major logistical bottlenecks, cross-border permissions delays, and physical infrastructure limits that hinder the swift movement of troops and heavy equipment. Improving rail, road, port and bridge infrastructure, especially where it supports both civilian and military transport, has become central not only to deterrence but also to EU cohesion, given the tangible dual-use benefits for trade, supply chains and connectivity.  

NATO spending decisions reinforce this direction. At the June summit in The Hague, European allies agreed to move toward devoting 5% of GDP to defence, with up to 1.5% allowed to come from defence-related infrastructure, including roads, bridges, rail lines and ports designed for military mobility. This flexibility is expected to unlock national investment pipelines and dovetail with EU-level funding. 

As a result, the financial dimension has also shifted significantly. In its proposal for the next Multiannual Financial Framework (2028–2034), the Commission earmarked €18 billion for military mobility, a dramatic rise from the €1.7 billion in the current budget, supported by a broader €51 billion CEF transport envelope. Nearly all planned corridors align with the existing TEN-T network, allowing military upgrades to be combined with civilian infrastructure modernisation. 

Against this backdrop, the Commission is expected on Wednesday to propose new harmonised rules for cross-border troop and equipment movements, including simplified permissions, standardised procedures, and a “crisis” legal framework that would activate accelerated movement timelines. Member states will also be tasked with identifying concrete projects by mid-2026, based on four priority corridors and roughly 500 bottlenecks mapped earlier this year. The package forms part of the Commission’s broader Defence Readiness Roadmap 2030.