EU Insight 20 February 2026

Brussels, 20 February 2026

MUNICH SECURITY CONFERENCE MARKED BY FOCUS ON EUROPEAN DEFENCE INDEPENDENCE

This year’s Munich Security Conference took place against a backdrop of strained transatlantic ties and uncertainty about long‑term US commitments to Europe. After last year’s confrontational speech by Vice‑President Vance, US Secretary of State Marco Rubio struck a more reassuring tone, which EU officials nonetheless treated with caution. In her keynote and a panel with UK Prime Minister Starmer, President von der Leyen argued that Europe ‘must become more independent’ in all areas affecting security and prosperity, from defence and energy to trade, raw materials and digital technologies. She pointed to sharply higher defence spending and EU instruments such as SAFE, urged operationalising the EU’s mutual‑assistance clause from the treaties, and called for moving to qualified majority voting on certain defence decisions in Council.

FINANCE MINISTERS DISCUSS THE EURO’S GLOBAL ROLE, PENSIONS AND E6 FORMAT

Finance ministers met in Brussels to discuss competitiveness, the global economy and macroeconomic governance. In the Eurogroup formation, they examined how to bolster the euro’s global role, linking this to a deeper Single Market and progress on the Savings and Investment Union (SIU), including digital finance and the digital euro. Germany also presented the new ‘E6’ format of the six largest EU economies, described as informal and temporary, aimed at reinforcing European sovereignty, competitiveness and defence capabilities and, where needed, overcoming differences on financial integration via enhanced cooperation. At ECOFIN, ministers then turned to the Commission’s supplementary pensions package, broadly supporting its aim to strengthen occupational and personal pensions as a key pillar of the SIU, designed to mobilise long‑term savings and investment in the EU.

COMMISSION SETS OUT A STRATEGY FOR EU’S EASTERN REGIONS

The Commission has presented a strategy to support EU regions bordering Russia, Belarus, Ukraine and the Black Sea, which are under pressure from hybrid attacks, disrupted trade and depopulation linked to Russia’s invasion of Ukraine. The plan combines defence-related measures with investment, infrastructure and support for local communities, with the aim of making it easier for people and businesses to stay in these areas. It includes an ‘Eastern Flank Watch’ with drone defences, air and space protection systems and reinforced cross-border surveillance, as well as upgrades to cross-border energy, digital networks and dual-use routes. The Commission also proposes an EastInvest Facility to work with public and private financiers to mobilise around 28 billion euros for the region in 2026-2027.

COUNCIL SEEKS TO STABILISE NEW CARBON MARKET AHEAD OF ETS2 LAUNCH

EU ambassadors have endorsed their position, tweaking the market stability reserve linked to the EU’s new carbon market for buildings, road transport and certain other sectors, the so-called ETS2. The aim is to prevent shocks in permit prices when the scheme becomes fully operational in 2028. Under the Council’s approach, the reserve would continue beyond 2030 and hold back 600 million allowances that could be released later if needed. The rules for injecting allowances into the market would become more flexible, with releases happening more often, in different volumes and at an earlier stage as the number of permits in circulation decreases. This is intended to temper sudden cost increases for households and businesses. Talks with the European Parliament will now start.

THE COMMISSION OPENS FORMAL PROCEEDINGS AGAINST SHEIN

The Commission has launched a formal investigation into Shein under the Digital Services Act, focusing on how the platform applies EU rules to its products and user interface. The inquiry will assess whether Shein has effective safeguards to stop illegal products reaching consumers, including items that could be linked to child sexual abuse material, and whether certain features of the service risk encouraging compulsive use, particularly among minors. The Commission will also look at how transparent Shein is about the workings of its recommendation algorithms and how easily users can switch off personalised suggestions. The proceedings allow the Commission to seek additional information, hold interviews and adopt interim measures where necessary, and could ultimately lead to remedial obligations or fines if serious breaches are found.

COMING UP NEXT WEEK

• 23 February: Agriculture and Fisheries Council. On the agenda: CAP, unfair trading practices.
• 23 February: Foreign Affairs Council. On the agenda: Russia’s war of aggression against Ukraine, Middle East.
• 24 February: General Affairs Council. On the agenda: Preparation for the European Council, European Democracy Shield.
• 25-26 February: Informal meeting of health ministers.
• 26 February: College of Commissioners. On the agenda: 28^th regime, counter terrorism and violent extremism, firearms trafficking, Industrial Accelerator Act (tbc).
• 26 February: Competitiveness Council. On the agenda: Consumer agenda 2025-2030, European Competitiveness Fund, industrial resilience.
• 26 February: General Affairs Council. On the agenda: EU agenda for cities, mid-term review of cohesion policy 2021-2027.
• 27 February: Competitiveness Council. On the agenda: Research Fund for Coal and Steel, Horizon Europe Package.