Newsletter: Settlement trade showdown looms

Capitals set to clash on settlement trade: EU Foreign Ministers are in town today with a range of issues, from Ukraine to the Middle East, on their agenda. They will also discuss the Commission’s proposal – scooped by Euronews last week – to further restrict or fully ban EU trade with Israeli settlements, which the bloc deems illegal.

But here’s the catch: the Commission has suggested any measures should be treated as a foreign policy tool and therefore require the unanimous blessing of all EU member states — a threshold unlikely to be reached.

It’s feeding the narrative that the executive led by Ursula von der Leyen is using “delay tactics” to hold up the measures, with one diplomat speaking of “deceptive” tactics to hold up any decision.

“Some might try to muddy the waters, but what we’re talking about here is protecting the integrity of EU policy,” another senior diplomat said, lamenting the Commission’s preference for unanimity.

“Even if it’s just two euros, it’s important that our trade policy is aligned with international law.”

A group of countries is today expected to push back at the EU executive and urge the ban to be treated as a trade tool, requiring the backing of just 15 EU countries representing 65% of the EU population under the voting system known as “qualified majority”.

With big hitters like France and Sweden championing the proposal, and Italy showing more appetite to contemplate the move, a qualified majority threshold could be within reach. My colleague Jorge Liboreiro and I have the full preview.

Ukraine in the spotlight: But before that discussion, foreign ministers will attend a breakfast co-hosted by EU foreign policy chief Kaja Kallas and the Irish Foreign Minister Helen McEntee on the humanitarian situation in Ukraine, with a particular focus on Ukrainian detainees. Ministers are expected to endorse a joint statement and green-light further sanctions on Russian detention facilities.

Racing for a deal: However, an extraordinary meeting of ambassadors on Sunday failed to deliver a deal on the broader 21st package of sanctions against Russia, as multiple issues remain stubbornly unresolved, Jorge Liboreiro writes.

The clock is now ticking furiously fast. If there’s no deal by 15 July, the price cap on Russian oil will be automatically adjusted and jump from $44 to possibly $58 per barrel. Given that Urals oil is now trading at around $55 per barrel, the review would encourage Moscow to sell at higher prices. It’s an embarrassing prospect that everybody in Brussels is determined to avert.

Foreign ministers will try on Monday to paper over their differences and strike a deal of sorts, even if some elements inside the package, like an entry ban on Russian soldiers, are left with a question mark pending more discussions at a later stage.

In a surprise twist, Austria has revived its contentious request to lift sanctions on investment firm Rasperia to offset a €2.1 billion loss incurred by Raiffeisen Bank International. A similar request was widely rejected last year by member states, who were wary of setting a dangerous precedent to salvage companies that continue to do business in Russia in defiance of the Western consensus, and are unlikely to succeed this time around.

Ukraine government reshuffle: Meanwhile, Ukraine’s President Volodymyr Zelenskyy announced plans for a major government reshuffle and changes to the leadership of the country’s law enforcement agencies over the weekend, with Prime Minister Yulia Svyrydenko confirming on Sunday that she would step down, a move that still requires parliamentary approval.

Rumours suggest she could be replaced by Sergii Koretskyi, head of state-owned energy company Naftogaz, who recently accompanied Zelenskyy to the NATO summit in Ankara, our Ukraine correspondent Sasha Vakulina writes. Other possible candidates include Energy Minister Denys Shmyhal, who served as prime minister from 2020 to 2025, Defence Minister Mykhailo Fedorov and Kharkiv Mayor Ihor Terekhov.

Foreign Minister Andrii Sybiha is expected in Brussels on Monday for the Foreign Affairs Council meeting, although it is unclear whether he will remain in his position after the reshuffle.

Experts to weigh in on social media ban: Also today, a report commissioned by European Commission President Ursula von der Leyen into the dangers minors face online is due to be unveiled.

Von der Leyen said in May that she could unveil plans for an EU-wide social media ban for children and young people as early as this summer, as several member states including Spain, Greece and Denmark lead calls for measures to shield children from what they describe as addictive online platforms.

A recent EU survey found young people spend an average 4.5 hours of screen time per day on school days, and 6.1 hours on the weekends.

Today’s report will be presented by senior medical researchers Dr Maria Melchior and Prof Dr Jörg M. Fegert – who both lead a special panel established by von der Leyen – and is expected to provide a further scientific basis that will add political momentum to von der Leyen’s push for an EU-wide ban on social media for young people.

‘Coalition of the Willing’ leaders to meet in Paris ahead of Bastille Day parade

France is gearing up to host a meeting of the “Coalition of the Willing” ahead of this year’s 14 July Bastille Day celebrations, with at least 25 heads of state or government, as well as European Commission President Ursula von der Leyen and EU foreign policy chief Kaja Kallas, due to meet in Paris on Monday to discuss support for Ukraine, my colleague Alexander Kazakevich reports.

Created in Paris and jointly led with the United Kingdom, the coalition has now expanded to include 37 countries, meeting both in person and via video conference. Two new members, Moldova and North Macedonia, are scheduled to take part in Monday’s meeting for the first time.

Meeting at the Hôtel des Invalides, the allies will aim to “strengthen,” according to the French presidency, a renewed sense of unity and cooperation in support of Ukraine, which was reaffirmed at the recent G7 summit in Évian and at the NATO summit in Ankara, where allies committed to sending €70 billion in military aid to Kyiv in 2026.

The objective is to show that Western allies are continuing their support for Ukraine and that Moscow cannot rely on “war fatigue,” according to an adviser to French President Emmanuel Macron.

Alexander hasthe details.

More from our newsrooms

US launches more strikes on Iran as renewed standoff over Strait of Hormuz intensifies. Iranian state media reported US strikes targeting large areas across southern and western Iran, including Qeshm island and Bandar Abbas near the strait, and in Khuzestan province bordering Iraq. Missile alert sirens also sounded at dawn Monday in Bahrain, home to the US Navy’s 5th Fleet. Emma De Ruiter has more.

Oil prices climb as Strait of Hormuz tensions reignite supply concerns. The price of Brent crude, the international benchmark, gained 3.9% to $78.96 per barrel, while the US benchmark crude oil price rose 4% to $74.26 per barrel, as the US and Iran continued to trade strikes. Angela Barnes has the details.

Former Spanish PM’s remarks on French football team spark outrage. Mariano Rajoy said that the French team is “playing without Frenchmen”, an apparent reference to the fact that the French men’s World Cup squad includes people who either have immigrant backgrounds or hail from former French colonies. Spain’s leader Pedro Sánchez has accused Rajoy of “humiliating Spain with his xenophobia”.More.

We’re also keeping an eye on

European Commissioner Maroš Šefčovič is in Gibraltar for the signing of the EU-UK agreement which paves the way for the removal of the fence later this week.
Agriculture and Fisheries ministers gather in Brussels.
Foreign Affairs Council takes place in Brussels, followed by a meeting of the Palestine Donor Group.
The EU to designate our special representative for Cyprus in “anticipation of an intensification of our engagement”, according to a social media post overnight by Commission President Ursula von der Leyen.

That’s it for today. Jorge Liboreiro contributed to this newsletter.

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