EU Insight 21 March 2025

Brussels, 21 March 2025

THE EU CONTINUES TO BACK UKRAINE WHILE TRUMP NEGOTIATES WITH PUTIN
After a two-hour call between Washington and Moscow, Trump’s recent peacemaking efforts yielded some results this week, with Putin accepting a standstill on strikes targeting Ukrainian energy infrastructure. However, he outright rejected the US-proposed 30-day ceasefire demanding as a pre-condition an immediate end to military aid and intelligence assistance for Ukraine – making the idea of a ceasefire a still very much distant prospect. Almost in defiance to Russia’s demands, the Commission dished out an additional €1 billion to Ukraine as part of its loan backed by Russia’s frozen assets. Amid a continent-wide push for enhanced security, while Trump attempts to broker a “peace-deal” in his own way, the EU continues to support Ukraine to be in the strongest possible position ahead of eventual peace-negotiations.

COMMISSION UNVEILS AWAITED STRATEGY TO BOLSTER EUROPEAN DEFENCE
The Commission unveiled its White Paper for European Defence and the ReArm Europe Plan/Readiness 2030, outlining a strategy to strengthen European security. Both initiatives present measures aimed at closing critical capability gaps, boosting defence industry investment and joint procurement as well as deepening the defence industrial base in the EU. The Commission’s defence strategy outlines actions to bolster defense spending and Europe’s long-term military readiness, such exempting Member State defence spending from the EU’s strict fiscal rules or streamlining regulations burdening the EU’s defence sector. The plan also includes a new €150 billion instrument composed of loans backed by the EU budget, which should further strengthen Member State investments capabilities in defence and security.

COMMISSION AIMS TO STRENGTHEN CAPITAL MARKETS AND CITIZEN’S INVESTMENTS
As evidenced by the Letta, Draghi and numerous previous reports, fragmented and inefficient capital markets stand in the way of mobilising investments towards the EU’s strategic sectors and businesses. Aiming to address that glaring issue, the Commission presented this week its Communication on the Savings and Investment Union (SIU). The document serves as a roadmap to develop the EU’s capital markets while effectively involving citizens therein – necessary actions for the EU’s competitiveness, whilst also supporting the financing of the EU’s defence sector, according to the Commission. Although the idea of fostering vibrant capital markets in the EU is far from new, with measures to better mobilise pension savings, reduce market, regulatory and supervisory barriers, the Commission aims to revitalise a previously blocked project.

EUCO REACTS TO UKRAINE, DEFENSE AND SAVINGS AND INVESTMENTS UNION DEVELOPMENTS
Amidst significant geopolitical developments EU leaders convened in Brussels for the latest European Council this week, an occasion they also used to react to several of the Commission’s recent initiatives. On Ukraine, EU heads of state reaffirmed their support, and welcomed the US-backed ceasefire talks while urging Moscow to commit to credible peace talks. In relation, the European Council endorsed the Commission’s ReARM Europe Plan and called for an increased build-up in the EU’s defence capabilities. Lastly, as a key pillar for the EU’s competitiveness, EU leaders welcomed the Commission’s SIU strategy and urged that work be undertaken to develop the EU’s capital markets as a “matter of urgency”.

COMMISSION UNVEILS PLAN TO BOOST COMPETITIVENESS IN STEEL AND METALS SECTOR
The Commission released its European Steel and Metals Action Plan, building upon measures announced in the Clean Industrial Deal and the Action Plan for Affordable Energy. In light of the current context of soaring electricity prices and global trade pressures, the Commission aims to boost European competitiveness in the steel and metals industry. Structured around six pillars, the Action Plan aims to tackle energy costs, carbon leakage, industrial capacity, circularity, jobs and investment security in the sector. Key measures under the plan include the upcoming review of the Carbon Border Adjustment Mechanism (CBAM), new recycling targets, and expanded safeguards for steel and aluminium. The Commission also plans to foster clean steel production through state aid and procurement initiatives.

COMING UP NEXT WEEK

• 24 March: Agriculture and Fisheries Council. On the agenda: The future of agriculture and food, Common fisheries policy.
• 24-25 March: Informal meeting of health ministers. On the agenda: Mental health, Medicine security in the EU.
• 26 March: College of Commissioners. On the agenda: EU Preparedness Union Strategy, A reform agenda for Cohesion policy: The mid-term review of 2025.
• 27 March: Environment Council. On the agenda: Clean Industrial Deal, Global environment policies.
• 27 March: General Affairs Council. On the agenda: cohesion policy.

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Kreab • Tel: +32 2 737 6900 • tuomas.tierala@kreab.com • www.kreab.com/brussels • X: @KreabEU  •  LinkedIn: Kreab Worldwide