Greek PM calls on EU’s biggest party to back defence spending initiatives

Good morning. US President Donald Trump struck a more conciliatory note on Ukraine during his mainly domestic-focused speech to Congress overnight, hailing an “important letter” from Ukrainian President Volodymyr Zelenskyy that indicated readiness to negotiate a peace deal with Russia and agree US access to its critical minerals. But Trump did also insist that he would “get” Greenland “one way or another”. Read how the speech unfolded.

Today, I reveal a push by Greece’s prime minister to get his political allies to back initiatives to increase European defence spending, and our trade correspondent reports on plans to help Europe’s battered steel industry.

Bucks for bangs

The EU’s most powerful political party has been urged by one of its national leaders not to “sacrifice speed for perfection” and swing behind Brussels’ funding proposals designed to increase spending on European defence capabilities.

Context: Donald Trump’s threat to end US protection for Nato allies who don’t spend enough on defence and his push for a rapid Ukraine peace deal and rapprochement with Russia has spooked European allies and led to a surge in demand for financing options to buy arms.

Kyriakos Mitsotakis, Greece’s prime minister and leader of Nea Demokratia, one of the largest national groups in the centre-right European People’s party, will urge his EPP colleagues to back a declaration endorsing defence funding initiatives at a party gathering tomorrow morning ahead of a summit of all 27 EU national leaders later that day.

European Commission president Ursula von der Leyen, an EPP member, unveiled five funding proposals yesterday, including €150bn in fresh loans for EU defence spending, and repurposing of existing funds.

“The need for Europeans to urgently strengthen their defence is today clearer than ever,” states Mitsotakis’s draft declaration, seen by the Financial Times. “However, we are still falling short, and time is not on our side.”

The EPP is the EU’s largest political party, with the most members in the European parliament and representatives among the 27 national leaders.

“We should remain open to those [funding] options, without sacrificing speed for perfection . . . [and] pursue some gamechangers to send a clear message to both friends and foes about our commitment to take EU defence seriously,” the declaration states.

“The new US administration has shown its inclination to redefine and redraw its engagement in European security,” it continues. “The future of the EU’s defence efforts will be shaped by how we approach the questions of funding, by how the EU structures its defence tools, and by its stance towards partnerships.”

Donald Tusk, Poland’s prime minister and Mitostakis’s EPP ally, described the commission’s funding proposals yesterday as “a fundamental shift in terms of the possibilities of financing the defence capabilities of Europe and the member states”.

Chart du jour: Countdown

The US decision to suspend military supplies to Ukraine means Kyiv will probably run out of its last American weapons in “two or three months”.

Yesterday’s CdJ was sent in error, sorry. You can find the correct chart here.

Heavy metal

After trying to save the European car industry by weakening its reduction targets for carbon emissions on Monday, the European Commission moved yesterday to erect comparable shields for the steel industry — partly from its own green policies, writes Andy Bounds.

Context: The EU steel industry lost 18,000 jobs last year and 9mn tonnes of capacity, beset by high energy prices, slowing demand and cheap imports.

Ursula von der Leyen, commission president, launched work on a Steel Action Plan, to be published on March 19 by meeting bosses and unions in Brussels. “Steel is everywhere, from wind power to defence. But European steelmakers are at a crossroads, facing the challenges of necessary decarbonisation and partly unfair global competition,” she said.

She admitted that steelmakers did not have the profits to convert coal-fired blast furnaces to new fuels such as green hydrogen. One reason is global overcapacity: China in particular has far lower coal costs and now produces around half the steel made globally.

Trade safeguard measures introduced in 2018, which put tariffs on all imports above a historic quota level, must end in June 2026. 

Axel Eggert, head of steel industry group Eurofer, said the commission had promised to tighten the measures to clamp down on sudden surges.

It will also propose protective measures by autumn to replace them, he said. The commission declined to comment.

The US is expected to cause further havoc with 25 per cent steel and aluminium tariffs on the EU and almost all other trade partners next week.

That could push more cheap metal to the bloc, Eggert warned. And with most countries failing to embrace low-carbon production, which is more expensive, “we need also to give preference for steel made in the EU and in particular green European steel,” he said.

What to watch today

1. Hungarian Prime Minister Viktor Orbán meets France’s President Emmanuel Macron in Paris.

2. Meeting of EU justice and home affairs ministers in Brussels

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