EU Summit Splits Over Energy Costs and Budget Cuts

European Union leaders are meeting in Brussels to address two contentious issues: energy costs and the EU budget, with clear divisions emerging between northern "frugal" countries and a 17-member "friends of cohesion" group including Greece. The meeting occurs amid rising energy prices that have fueled a new surge in European inflation. Greek Prime Minister Kyriakos Mitsotakis is pushing for greater flexibility within existing fiscal rules to allow targeted, temporary support measures for households and businesses, funded by inflation-driven revenue increases. He also urged reconsideration of the Emissions Trading System, while Germany and Sweden demand deeper budget cuts, with the Irish presidency's proposal already reducing €141 billion from the Commission's original plan. The "friends of cohesion" group, including Greece, Italy, Spain, and Poland, firmly opposes cuts to Cohesion Policy and the Common Agricultural Policy, arguing new priorities like defense and innovation cannot be funded at the expense of these core pillars. A compromise formula may allow temporary fiscal space transfers without reopening broader budget rule revisions.