Good morning from Brussels. It’s Tuesday 10 November. After PM drops in your inbox today, we will be taking a break for Armistice Day and will see you again on Thursday.

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In today’s Rapporteur AM:

• No budget without Ukraine deal, Merz warns

• Sweden lays out Russian visa hurdles 

• EESC blames media amid corruption scandal

On the roundabout: Meghan Markle cancels EU appearance after father’s arrest; Magyar’s constructive veto

Friedrich Merz has made a daring move to make Germany’s approval of the next EU budget conditional on a broader agreement on Ukraine’s financing. 

A unanimous agreement to back Ukraine is a "prerequisite" for a budget deal, Merz warned in his letter to António Costa, seen by Rapporteur.

EU leaders are racing to agree on both topics by the end of the year, and Germany – as the largest net contributor – is flexing its negotiating muscle. 

Frugal leaders such as Merz have been irked by the suggestion they should cough up more money for cohesion funding in poorer EU countries and accept that four of those very countries – Hungary, Bulgaria, Slovakia, and the Czech Republic – opt out of the new €45 billion EU loan for Kyiv. 

His dramatic political intervention on Monday, while Péter Magyar himself was in Berlin, also included a high-risk demand that EU leaders agree to drop the requirement for unanimity on future loans for Ukraine.

Such a signal, diplomats believe, could send a powerful message to the Kremlin at a time when Vladimir Putin is waiting for more Ukraine-sceptic leaders to enter the EU fray after a slew of national elections next year.

It also comes as Ukraine, Russia and the US meet in Abu Dhabi for fresh peace talks today, with expectations of a breakthrough low. 

Late last night Valdis Dombrovskis, the EU economy commissioner, gave a clear indication that his forthcoming ‘options paper’ on how to finance Ukraine next year will demand agreement by all. “We will be seeking to make sure that those are proposals covered by the EU 27, not by the EU 24 or other number of countries,” he said. 

Berlin’s push is not only resisted by many poorer, net-recipient member states in the EU’s south and east. Some net contributors bordering Russia, like Finland, also oppose the move, warning that linking the two issues could ultimately jeopardise Ukraine’s war effort.

Estonia has rebuffed Berlin’s bid to condition a bigger budget on Ukraine financing. Its finance minister, Jürgen Ligi, noted that Nordic and Baltic countries – including Estonia – provide significantly more support to Ukraine relative to their economic heft.

“The ones who are talking in the loudest voice are not necessarily offering the most,” he told my colleagues Thomas Møller-Nielsen and Victoria Becker in this interview.

New hurdles for Russian athletes

Sweden is urging the European Commission to tighten visa restrictions on Russian athletes, coaches and sports officials competing in Europe.

“The next Olympic Games may still be some time away, but qualification events and international competitions are already taking place, many hosted by EU member states,” Johan Forssell, Sweden's home affairs minister, wrote in a letter – seen by Rapporteur – to Commissioners Magnus Brunner and Glenn Micallef.

“I would have wished for politics and sports not to be mixed. But it is a fact that in Russia, sports and politics are mixed together,” Forssell told Nicoletta. “These men and women, they're also used in state propaganda in Russia,” he added in the letter.

Forssell also said Stockholm was open to different restrictions for Russian athletes in European competitions. Three diplomats said the next EU sanctions package will feature restrictions on Russian participation in sports competitions.

EESC official faces Parliament grilling

Isabelle Le Galo Flores, the top official at the European Economic and Social Committee (EESC), will today answer questions in public for the first time about the corruption scandal rocking her institution.

The EESC has resolutely backed her, even after anonymous allegations of contract-rigging and a subsequent cover-up operation have swirled on Rue Belliard. MEPs will this afternoon quiz her on the handling of the scandal, which was passed to criminal prosecutors last month. 

Her boss, EESC President Séamus Boland, has doubled down on his argument that sloppy journalism – surely not by Rapporteur?! – is at fault. He wrote to staff on 20 October to correct the “sometimes incorrect media coverage” about his handling of the crisis. 

A spokesperson for Boland strongly denied any allegation of an internal witch hunt – a phrase used earlier this year by the institution’s own in-house staff unions. 

Boland also let slip in his email that a hitherto unmentioned “initial internal assessment” found nothing wrong with the contracts in question. Which makes OLAF’s decision to refer the case to EPPO all the more curious. 

Close but no snus

You could have put a cigarette paper between EU countries as diplomats gathered to strike a deal on overhauling EU tobacco taxes last night. But as my colleague Magdalena Kensy reported, mighty Malta stood in the way. 

The thrilling battle, as she put it, saw chief negotiator Ireland thwarted by a single ‘no’ from Valletta, even after Sweden, Finland and Estonia were convinced to get on board late in the day. Sweden was poised to win a major concession from the EU on protecting its traditional ‘white snus’ – tobacco-free nicotine pouches.

Malta was not convinced about moves to automatically adjust tax levels over time. In the end Malta was 'the bad guy', one EU diplomat told Magdalena. A deal has not gone up in smoke yet, and negotiations with the Maltese will continue. Read the full piece here.

Sánchez’s love campaign gets reality check 

Pedro Sánchez, Spain’s scandal-hit Socialist prime minister, had a different kind of campaign in mind for this month’s election.

Rather than the usual political rallies, he wanted to reach voters through podcasts, pop music and a more personal style of campaigning, aiming especially at younger voters.

October’s deadly train crash in southern Spain, which killed 69 people and shocked the country, has forced him to shelve that strategy. 

“The campaign of love and joy has to be parked,” said Pablo Allende, a political analyst at polling firm SW Demoscopia. Read the full story.

Here are three new stories from Rapporteur: 

• Lame-duck Trump puts Greece, Turkey and Israel on edge

• Taxing tofu: EU countries diverge on levies for veggie foods

• Unpacking the Commission's 'digital transformation' package

‘EASYGOING’ MAGYAR WILL STILL USE VETO: Shortly after ousting Viktor Orbán, Péter Magyar introduced himself to EU leaders as an easygoing guy who would be constructive but not a pushover, he recalled at the Konrad-Adenauer-Stiftung in Berlin last night. 

“I will be sometimes critical but [will] try to be more constructive than my predecessor,” he told fellow leaders in Brussels. “Maybe we will abstain or vote against, but we are still European,” he said. His comments came as Merz urged Hungary to drop its reluctance to join the next EU support scheme for Kyiv. 

He also said he was “not able” to answer Henry Kissinger’s famous question of who one should call to speak to Europe, but said the EU must nominate a representative for Ukraine-Russia peace talks, or risk being “on the table.”

MEGHAN WON’T SPEAK IN EP: Meghan Markle will not deliver a planned speech to the European Parliament on Tuesday on online child safety, following her estranged father’s arrest in the US on allegations of possessing child sexual abuse material. The Duchess of Sussex is still expected in Brussels but is reportedly “not strong enough” to speak alongside her husband, Prince Harry. The couple was planning to bring their Lost Screen Memorial to the city, honouring children who have died as a result of online harms.

🇪🇸 MADRID

The Canary Islands migration crisis is deteriorating, with over 6,000 people arriving from the West African coast on the small island of El Hierro – population 12,000 – over the past week. “Once again, the government ignored the warnings,” said the archipelago’s regional leader Fernando Clavijo on Monday – obliquely referring to July’s Ceuta crisis, in which over 80,000 migrants poured from Morocco into the Spanish city despite prior warnings issued by local authorities, security forces and intelligence services.

– Inés Fernández-Pontes

🇮🇪 DUBLIN

The government has offered public-sector workers a 10.5% pay rise over several years in a last-ditch effort to avert Thursday's nationwide strike, which threatens to disrupt Dublin's European Political Community summit. Finance Minister Simon Harris said on Monday that only a narrow window remained to reach an agreement. Unions, which rejected an earlier 7.75% offer, continued talks with mediators while preparing demonstrations across eight cities. Lower-paid workers could receive increases of up to 17.8% under the revised proposal.

– Charles Szumski

🇸🇪 STOCKHOLM

Sweden's Centre Party is reportedly leaning towards a centre-right government, potentially breaking the country's post-election deadlock. Party leader Elisabeth Thand Ringqvist favours joining Ulf Kristersson's proposed coalition, although senior party figures remain divided, Swedish media report. The shift follows the far-right Sweden Democrats' decision to drop their demand for cabinet positions. Social Democrat leader Magdalena Andersson has meanwhile proposed a rival coalition with the Centre Party and Greens. The Centre Party has asked for detailed policy proposals from both camps before choosing sides.

– Charles Szumski

🇮🇹 ROME

Two bids were submitted by yesterday’s deadline for Italy’s former Ilva steelworks, from India’s Jindal Steel International and the Italian group Arvedi. The Taranto plant, once Europe’s largest, has been shut by court order over asbestos after years of shrinking output, leaving most of its workforce facing temporary layoffs and its northern sites without steel to process. The European Commission approved a €390 million rescue loan in February to keep the operation going until a buyer was found.

– Alessia Peretti

🇵🇱 WARSAW

Defence Minister Władysław Kosiniak-Kamysz will meet US Defence Secretary Pete Hegseth in Washington on Tuesday to discuss establishing a permanent American military base in Poland. Officials say Warsaw is increasingly optimistic about securing an agreement as Washington nears completion of its strategic review of US military deployments in Europe. The final decision rests with President Donald Trump. Poland is also negotiating with Lockheed Martin to establish a maintenance centre for Patriot air-defence missiles, with an agreement expected within three months.

– Charles Szumski

🇧🇬 SOFIA

Ursula von der Leyen travels to Varna on Tuesday to meet Prime Minister Rumen Radev and visit the Nikola Vaptsarov Naval Academy, after talks in Bucharest on Monday. The Commission says around half of this year's hybrid threats, attacks and incursions into EU territory have hit Romania, Bulgaria and the Black Sea. Von der Leyen is due to announce new EU support for both countries. Talks will cover maritime surveillance, faster defence investment and crisis response.

– Konstantin Karadjov

🇷🇺 MOSCOW

The newspaper Novaya Gazeta – a pillar of Russia's independent press – held its final editorial meeting on Monday. Its press licence has been revoked since 2022 and in September it was designated a “foreign agent” – a label used to stifle dissent. The publication has covered sensitive issues such as the repression of homosexuals in Chechnya, crimes committed by the Russian army, and corruption, for which six of its journalists and contributors were murdered. 

– Clara Vassent