Week Ahead (26 May)

Monday, 26 May – Ribera to attend European Competition Day in Warsaw  

EU competition policy is expected to take centre stage today as the Polish Presidency hosts European Competition Day in Warsaw. The event, which takes place a time when market participants are trying to determine how willing EU competition authorities are willing to bend competition rules in the name of industrial competitiveness, will feature Commissioner Teresa Ribera as well as Andreas Mundt and Benoit Coeure, the respective heads of the German and French competition authorities. 

The Draghi Report on EU competitiveness in September 2024 highlighted Europe’s urgent need to foster industrial scale and technological autonomy, particularly in sensitive sectors like defence. Ribera, who succeeded Margrethe Vestager at the helm of DG COMP late in 2024, has already signalled a pivot, launching a review of the EU’s merger guidelines and Clean Industrial State Aid Framework, with a clear aim to adapt competition tools to the EU’s shifting economic and geopolitical landscape. 

The Commission will soon face major decisions on high-profile subsidy and consolidation cases, most notably, Germany’s multibillion-euro scheme to lower electricity costs for energy-intensive industries, which has triggered concerns among smaller member states over fair competition. Another is the proposed consolidation of Europe’s satellite launcher sector by Airbus, Thales Alenia, and Leonardo, pitched as the EU’s answer to Elon Musk’s SpaceX. 

Yet not all regulators are on board. In July 2024, Coeure pushed back against the narrative that competition rules are to blame for Europe’s lag in tech, arguing that US dominance stems more from public investment and a risk-taking culture than from permissive merger policy. However, momentum is clearly shifting. The debate is no longer about whether competition rules should flex in the name of competitiveness but how far, and for whom. Against this backdrop, today’s gathering in Warsaw and its keynote speeches could provide a clearer indication of how this conversation evolves. 

W/C Monday, 26 May – Ukraine to push new Russia sanctions proposal at EU level 

Following the adoption of the EU’s 17th sanctions package against Russia last week, Ukraine is preparing a high-stakes diplomatic effort in Brussels this week to keep pressure on Moscow, even as US momentum on sanctions appears to be stalling. 

The 17th EU sanctions package, approved on Tuesday, targets Moscow’s so-called shadow fleet of oil tankers used to circumvent Western price caps. The number of vessels on the EU’s blacklist has doubled. Additional restrictions were also placed on a Russian oil producer, a shipping firm, and over 45 individuals and entities linked to Russia’s military-industrial base. Notably, three Chinese companies were sanctioned for their role in supplying dual-use goods. 

Nevertheless, Ukraine fears this may not be enough to deter Russia long-term. As a result, the Ukrainian government is set to present a detailed white paper to EU officials, urging the bloc to take a significantly tougher stance. The 40-page document will propose new tools to enforce sanctions, including faster procedures for asset seizure and even secondary sanctions on foreign buyers of Russian oil. This move would represent a sharp escalation, particularly in relation to key Russian energy markets like India and China. 

Among the most contentious proposals expected this week is a legal pathway to confiscate Russian state-linked assets frozen in Europe and redirect them to Ukraine, while allowing sanctioned individuals to seek compensation from Russia directly. Previous estimates suggested that over €300 billion of Russian assets are currently frozen in the EU. Using frozen Russian assets to support Ukraine’s reconstruction was recognised by the European Council in May 2022 as an option.  Assets of Russian oligarchs such as yachts and lavish houses have so far been seized under EU sanctions. However, the plan was previously set aside after several legal questions were raised especially for the currency reserves since assets owned by the Russian state are protected under international law. 

The document also calls on EU institutions to explore majority voting mechanisms for sanctions, a potentially politically sensitive proposal given the bloc’s reliance on unanimity. Ukrainian officials hope these proposals will facilitate a more assertive and independent EU sanctions policy, even in the absence of strong US alignment. Thus, this renewed Ukrainian push comes amid signs of wavering commitment from Washington. After speaking with President Putin last Monday, US President Donald Trump reportedly opted not to escalate sanctions further, despite weeks of lobbying from European and Ukrainian leaders as well as prominent figures within the Republican party. 

Tuesday, 27 May – EU General Affairs Council to adopt SAFE regulation  

On Tuesday, at the General Affairs Council, the ministers responsible for EU affairs are expected to formally adopt the €150 billion Security Action for Europe (SAFE) regulation. Proposed by the Commission in March, as part of its broader ReArm Europe initiative, the SAFE Regulation aims to enhance the EU’s joint defence procurement capacity and reduce reliance on non-EU suppliers. 

In previous weeks, talks between member states had stalled over subcontractor eligibility rules. However, last Wednesday, the EU ambassadors representing the 27 member states reached a political agreement on the final text, paving the way for adoption. The compromise keeps the core of the Commission’s original proposal: projects funded under SAFE must source at least 65% of their value from defence firms based in the EU, Norway, or Ukraine. To address member state concerns, especially from Italy and Sweden, the final text introduces a more flexible framework for third-country subcontractors, aiming to strike a balance between safeguarding EU industrial interests and maintaining continuity across complex defence supply chains. European Council President Antonio Costa welcomed Wednesday’s agreement as “an important step toward a stronger Europe.” 

Once adopted, the regulation will enter into force in the coming weeks. Member states will then have six months to submit national implementation plans. However, Belgium, Italy, and Portugal have called for a 12-month extension, arguing more time is needed to map national capabilities and coordinate industrial efforts. The Commission and the Polish Council Presidency remain opposed, seeking to operationalise the fund as quickly as possible. 

The agreement came just two days after the UK and EU signed a new defence and security partnership at the 19 May “reset” summit in London. Even though this satisfies the first requirement for third-country access, a separate defence industrial cooperation deal is still needed for full UK participation in SAFE, including budgetary contributions and reciprocal access terms. 

Wednesday, 28 May – European Commission to unveil Startup and Scale-up strategy  

On Wednesday, the European Commission is scheduled to unveil Startup and Scale-up Strategy, aiming to close Europe’s persistent innovation gap and ensure that high-potential startups can grow and stay within the EU. According to the drafts circulated in previous days, the strategy will span five main pillars: regulatory harmonisation, access to finance, access to markets, talent support, and infrastructure. 

In the Commission’s own words, this new framework will be part of a broader push to “close the innovation divide between the EU and its global competitors and boost competitiveness’’ will feed into upcoming legislative proposals such as the European Innovation Act and the so-called 28th legal regime for startups. The strategy also responds to concerns flagged by the Draghi report last September, which warned that while Europe leads in research, it lacks the scale-up capabilities of the US or China. Besides red tape and bureaucratic obstacles, Draghi’s report also highlighted a growing funding gap among the main hurdles for European tech companies. Thus, in 2024, European AI companies raised $11 billion in funding, compared with $47 billion by US-based AI companies. 

Earlier this month, the Commissioner in charge of innovation, Ekaterina Zaharieva, clarified that the ‘’Commission is not working against startups’’ calling for a more ‘’innovation-friendly’’ and ‘’business-friendly’’ approach. She also stressed that the strategy’s success will depend on follow-up action. 

An updated version of the strategy circulated on Friday includes two major additions. First, the Commission plans to launch a dedicated scale-up fund in 2026 to support AI and quantum technology companies seeking to expand across markets. The fund will be backed by EU resources but managed privately, with co-financing from private investors, targeting what is widely seen as one of the most critical step for the survival of European start-ups: the scale-up phase. Second, the revised text outlines a proposal for the first quarter of 2026 to create a single, digital-first regulatory regime for startups choosing to operate under a unified framework across the EU. The Commission is also exploring ways to allow companies to set up operations within 48 hour, removing a major administrative hurdle that often delays or discourages cross-border scaling. 

One of the most politically significant shifts in the strategy remains the formal inclusion of defence tech startups, with new EU instruments to support the sector also expected by 2026.  This marks a departure from previous funding exclusions under Horizon Europe and reflects a more pragmatic approach with defence tech no longer considered taboo. Instead, it is now framed as a legitimate driver of innovation and strategic autonomy. As the draft puts it, this move is intended to help ensure startups “make the most of the new opportunities created by the current geopolitical context and limit the incentives to relocate outside the EU.”