‘Keep calm and carry on’

You’re reading Rapporteur on Tuesday 5 May. This is Nicoletta Ionta in Brussels.

Need-to-knows:

🟢 Brussels keeps its head down after fresh US trade threats
🟢 US envoy bashes European tech sovereignty plans
🟢 Two interviews with the same Hungarian 38 years apart

On the roundabout: Who skipped Armenia

---

Today’s edition is powered by VivaTech

Buy 1 pass = Get 1 pass free 

VivaΤech, Europe’s biggest startup and tech event returns to Paris from June 17-20! Over 180,000 visitors, more than 30 sectors represented. Innovation never stops, buy one pass, get one free until May 13. Book your pass now!

---

From the capital

---

Even if Donald Trump backs down on his threat to raise tariffs on European cars even higher, the result will be the same: more uncertainty.

On Monday, the Commission meekly insisted it remains “fully committed to a predictable, mutually beneficial transatlantic relationship” even after Trump threatened to impose 25% tariffs on European cars last Friday.

The Commission cannot seem to even accept there has been an escalation. Asked whether the EU would retaliate, a Commission spokesperson dodged, refusing to say which trade weapons – if any – it could deploy.

EU finance ministers stuck to a cautious mantra. “We do not want escalation,” Germany’s Lars Klingbeil said in Brussels on Monday. “The message to the Americans is clear: tariffs harm both sides,” he added. “That is why we want to achieve a joint solution.” Other eurozone finance ministers also called for cool heads to prevail, Thomas Møller-Nielsen reported.

“Keep calm and carry on,” one EU diplomat told me, which may be less reassuring than intended given that it was a slogan to keep up British spirits in World War Two, not a 21st century trade spat with the EU’s best ally.

The mainstream position in Brussels is there’s little point responding to speculative threats that are yet to materialise. Trump has announced fresh tariffs on the EU only to retreat.

On Wednesday, MEPs and national diplomats will meet for more negotiations on the final shape of the EU-US agreement. The deal would scrap tariffs on hundreds of American industrial and agricultural products.

While national governments want only minimal changes – so as not to irk Washington – MEPs are pushing for safeguards to shield the EU from Trump’s unpredictability. Their asks include a two-year expiry clause and conditions tied to US tariff commitments, especially on steel and aluminium, my colleague Sofia Sanchez Manzanaro told me.

Carmakers and businesses want predictability to invest – and there’s been little sign of that since the Turnberry deal last summer. Threats are integral to Trump’s negotiating strategy. Even if tariffs never materialise, the uncertainty certainly does.

EU says nein to windfall tax

The Commission shot down Germany’s call for an EU-wide tax on energy companies’ profits.

“We are currently not foreseeing recommending any European initiative,” Valdis Dombrovskis, the EU economy commissioner, said. “But if member states are interested to implement them [at the] national level, certainly there is a possibility there to do so.”

Kyriakos Pierrakakis, the Eurogroup president, said he “fully” agreed with the EU executive’s position. “It’s a national decision-making process to tax windfall profits,” he added.

The comments came after Lars Klingbeil expressed dismay at the “unjust” nature of oil companies’ extra revenue since the start of the Iran war. “They must contribute to crisis costs,” he said.

US ambassador bashes EU ‘tech sovereignty’

Andrew Puzder, US ambassador to the EU, has warned the bloc against introducing “protectionist” tech rules, suggesting that a planned tech sovereignty package could threaten the EU-US trade agreement.

The Commission is set to unveil a bundle of laws later this month to ring-fence subsidies and public procurement for EU companies. It’s Brussels’ bid to foster local infrastructure and cut dependence on foreign tech.

Speaking to my colleague Théophane Hartmann, Puzder said the planned approach doesn’t sound very consistent with the EU-US trade framework agreement. Read the full interview.

Balkan countries want carbon carve-out

Western Balkan countries are pushing to be exempted from a billion-euro carbon levy on their electricity exports to the bloc beyond 2030, my colleague Nikolaus J. Kurmayer reports.

On 1 January this year, the EU’s carbon levy on commodities like cement and electricity, known as the Carbon Border Adjustment Mechanism, entered into force. Western Balkan countries, including Serbia and Bosnia & Herzegovina, have seen the levy eat into their lucrative business model of exporting power to the bloc.

Now they’re pushing back, hoping to seize on an ongoing EU review of CBAM. Read Nikolaus’s full piece.

Trump unfazed by EU defence talk

Fears that beefing up the EU’s mutual assistance clause will unsettle Donald Trump are misplaced, the US ambassador to the EU under Joe Biden told Euractiv. Washington doesn’t take the hype about strengthening Article 42.7 seriously, Anthony Gardner said.

With Trump pulling 5,000 troops from Germany, Gardner said Europe should focus on practical steps like joint procurement and spending. On Monday the EU began testing its mutual assistance clause in a bureaucratic simulation, a war game that froze out NATO. Kaja Kallas will discuss the simulation with Mark Rutte on Wednesday.

Gardner warned Brussels’ attempt to talk a big game “runs ahead of reality.” “Take the repeated threats of the trade bazooka,” he said. “Well, that came to absolutely nothing.” Read Magnus Lund Nielsen’s full interview here.

Eddy’s mum, Hungary, and echoes from history

Eddy’s mother Hester was a journalist for Reuters in the late 1980s, covering the collapse of communism from Vienna. In the summer of ‘89, she did a stint in Budapest, where there was a feverish atmosphere.

Gábor Roszík, a pastor in his 30s, had shocked the world by winning a by-election on a pro-democracy ticket. He became the first opposition MP to be elected in communist Hungary. Fidel Castro even ranted about how Hungarian communists allowed this to happen.

Almost 38 years later Eddy picked up the phone to Roszík, who reflected on the parallels between 1989 and Viktor Orbán’s defeat last month. He contends that Péter Magyar’s victory was much tougher to pull off. Read the full interview here.

---

Schuman roundabout

---

ARM’S LENGTH FROM ARMENIA: Friedrich Merz did not attend the EPC meeting in Yerevan on Monday, and neither did the Netherlands’ PM Rob Jetten. Merz opted to attend a meeting of his party in an ultra-orthodox synagogue in Berlin, a move intended to signal opposition to rising antisemitism in Germany – and perhaps to tweak his image as being overly focused on foreign policy. Jetten attended his country’s national Remembrance Day.

TECH SOVEREIGNTY? Stefano Cavedagna, a Brothers of Italy deputy, emailed the entire European Parliament on Monday to say he’d lost his laptop. He asked for help retrieving it.

---

The capitals

---

🇩🇪BERLIN

Johann Wadephul, the foreign minister, went to Athens to improve the uneasy German-Greek relationship on Monday. He stressed that weapons sold to Turkey must only be used against “external enemies” – not allies. Germany has tried to tread a careful line between Greece and Turkey, pushing for Turkey’s inclusion in the EU’s SAFE loans while stressing EU allies remain its “closest family.” Read more.
– Björn Stritzel & Sarantis Michalopoulos

🇮🇹 ROME

Giorgia Meloni said she does “not agree” with the US troops drawdown in Europe floated by Donald Trump, stressing Italy has consistently upheld its NATO commitments. She will meet US Secretary of State Marco Rubio on Friday morning in Rome, as part of a visit, which also includes talks with Pope Leo XIV in a bid to ease tensions after Trump’s recent criticism of the pontiff.
– Alessia Peretti

🇸🇰 BRATISLAVA

Robert Fico said he will meet Vladimir Putin during a visit to Moscow for Victory Day commemorations. Speaking in Yerevan, Fico said he would lay flowers at the Red Army’s Tomb of the Unknown Soldier but not attend the military parade. He described the planned talks with Putin as brief and in line with previous visits.
– Natália Silenská

🇪🇸 MADRID

Former Transport Minister José Luis Ábalos denied on Monday receiving cash payments in exchange for rigging public tenders. The Supreme Court accused him, his aide Koldo García, and businessman Víctor de Aldama of leading a kickback scheme for the procurement of medical equipment during the Covid pandemic. “You won’t find anything on me,” he said, denying receiving thousands of euros in commissions over the years.
– Inés Fernández-Pontes

🇬🇷 ATHENS

Authorities in Thessaloniki are on alert amid rumours that Ryanair may shut down its operations in Greece’s second-largest city. A meeting with the Irish airline is scheduled for later today, while the government has been asked to intervene, as the potential impact on the city’s connectivity and tourism is considered to be severe.
– Sarantis Michalopoulos

🇵🇱 WARSAW

Donald Tusk will sign a defence cooperation treaty with the UK on 27 May, he said, following talks with Keir Starmer. Speaking after the European Political Community summit, Tusk said Poland would act as a “balanced advocate” for closer UK–EU ties. He also announced a visit to Canada to deepen cooperation on security, energy and intelligence.
– Charles Szumski

🇫🇷 PARIS

France will maintain “slowed but positive growth” and avoid recession through 2028, central bank chief François Villeroy de Galhau said in his annual letter to the president. Despite geopolitical risks – including the Middle East – the outlook remains stable. Inflation is set to rise after a 2026 surge before easing below 2%. He called for faster structural reforms to boost growth.
– Clara Vassent

---

Also on Euractiv

---

The United Arab Emirates wants “genuine support” and not empty words from European allies as it faces the threat of further attacks from Iran, according to the Emirates’ top diplomat in Germany.

---

Contributors: Sofia Sanchez Manzanaro, Thomas Moller-Nielsen, Magnus Lund Nielsen, Charles Cohen, Théophane Hartmann, Nikolaus J. Kurmayer

Editors: Eddy Wax, Sofia Mandilara, Charles Szumski