EU Leaders Meet in Brussels Amid Energy Crisis and Budget Disputes

European Union leaders began a two-day summit in Brussels on Thursday under pressure from soaring energy prices and deep divisions over the next seven-year budget. The meeting follows a U.S.-Russia agreement on Ukraine and escalating conflict in the Middle East, though EU leaders appear reluctant to discuss those issues in detail.

Greece and Italy are demanding greater fiscal flexibility to fund targeted support for households and businesses ahead of a difficult winter. Prime Ministers Kiryakos Miçotakis and Giorgia Meloni have written to the Commission arguing that high electricity costs hurt competitiveness, particularly for small and medium enterprises.

“Priority must be the reduction of energy prices and the search for ways of targeted and temporary support for households and businesses.”

The European Commission, however, opposes relaxing fiscal rules, warning that crisis response must not jeopardize budgetary stability. An emergency tax on energy companies' windfall profits is also on the table as a potential funding mechanism.

Negotiations over the next multiannual financial framework, worth approximately 1.62 trillion euros, have exposed a rift between members seeking spending cuts and those demanding more resources for development, agriculture, and social cohesion. Funding for Ukraine remains another contentious item.