Eu Briefing – Facts and Analysis of the Week

by Ross Elwood

BRUXELLES (Public Policy Europe) – AI, in the form of Trump’s order to block access to Anthropic, and the EU budget were the big items of the week. Last night and today is an EU leaders summit, which is always exciting for EU nerds, and will include key discussions on China and the EU budget. See our analysis below.

The Facts

Tobacco: Parliament’s plenary rejected the Economic Affairs Committee’s opinion on raising the minimum tobacco tax threshold (439 against, 181 for, 38 abstentions). The committee had proposed 60%, below the Commission’s suggested 63%. MEPs instead recommended the Council reject the Commission’s proposal entirely. The Council, however, has final say and must decide unanimously, as the file follows the consultation procedure rather than ordinary legislation meaning Parliament isn’t a co-legislator here.

Car Emissions: The latest set of amendments to the EU car-emissions regulation, tabled in the European Parliament’s Environment Committee (ENVI) by Renew Europe shadow rapporteur Sigrid Friis and S&D shadow rapporteur Thomas Pellerin-Carlin, outline diverging approaches to

emissions targets, flexibility mechanisms, and incentives for zero-emission mobility. The texts reviewed by Public Policy describe proposals affecting emissions trajectories for cars

and vans, the treatment of biofuels and synthetic fuels, vehicle-manufacturing criteria for supercredits, and social measures such as electric-vehicle leasing schemes. The amendments also highlight tensions with the main rapporteur, EPP MEP Massimiliano Salini, particularly regarding the 2035 targets and the role of alternative fuels.

Minors Online: The special group on online child safety met for the third and final time on 16 June. “On 13 July, the co-chairs will present to the President of the European Commission, Ursula von der Leyen, a set of recommendations to further strengthen the protection of minors online in the European Union,” the EU executive said in a statement.

Cybersecurity/AI: On 7 July, the Commission will present an action plan on cybersecurity and artificial intelligence, according to the latest provisional agenda for the upcoming College of Commissioners. The Affordable Housing Act is expected to be presented the same day.

MFF: The EU Council agreed partial negotiating positions on three parts of the 2028–2034 EU budget (financial details still pending). National/regional partnership plans would merge several existing funding programs into one plan per Member State, with more flexibility for states. The European Competitiveness Fund would combine 14 existing instruments to support priorities like clean tech, health, digital, and defence, with stronger Member State oversight. The “Global Europe” instrument would fund external action (development, neighbourhood, foreign policy) while giving the Council greater say over strategic priorities and implementation, including on Ukraine and migration.

The analysis

Tech Policymakers Look to Financial Colleagues to Sort Out Capital Markets 

There was a lot of talk this week, once again, about AI. The US Commerce Department issued an export control directive ordering Anthropic to suspend access to its Fable 5 and Mythos 5 models for any foreign national, whether inside or outside the United States. Because Anthropic said it had no practical way to filter access by nationality, it disabled both models for all customers worldwide.

This comes after weeks of bubbling under the surface problems for the EU, following Anthropic’s release of its new Mythos model, which has dangerous new hacking capabilities. The powerful Mythos 5 was made available only to a select group of vetted partners through Anthropic’s Project Glasswing initiative.

Anthropic had given pre access to a limited number of companies of its own choosing, in order to make the product safer ahead of public release. However, the choice of those companies, which were largely American, highlighted the major geopolitical problem that has now arrived with frontier AI models. This was confirmed further by the US government’s order to close off access. The EU has been asking Anthropic for access for a number of weeks, and two weeks ago ENISA was added to Project Glasswing, shortly before this recent shutout.

The Commission itself noted on Tuesday that “we believe technology is becoming increasingly a strategic asset,” but doubled down on the recently proposed tech sovereignty strategy as the solution, building EU capacity to have its own AI companies with frontier models.

At the G7 summit, held in Evian les Bains, France, from 15 to 17 June 2026, leaders held a working lunch with AI CEOs including OpenAI’s Sam Altman, Anthropic’s Dario Amodei and Google DeepMind’s Demis Hassabis, alongside other tech leaders, to discuss frontier AI risks and the safe deployment of the technology. Leaders also began discussing common standards so that models don’t become too powerful, as well as a trusted partners scheme for sharing access to these models. The standards are due to be discussed further at a G7 ministerial in September.

During a debate on the technology and sovereignty package in Parliament on Tuesday, EVP Henna Virkkunen noted that the recent US export control directive on Anthropic’s most advanced AI models is a perfect example of technology and geopolitics now going hand in hand. She also stressed the need for a free flowing capital markets union, as did a number of MEPs.

This is an interesting new angle. It means the capital markets integration and supervision package will come under far more pressure from another interest group, namely EU technology policymakers. Interesting timing for a legislative package that’s stuck in deadlock and needs a breakthrough by year’s end. Otherwise, as with AI and many other competitiveness issues, the EU risks falling behind into lower middle power status. The issues around Anthropic and AI have simply given tangible shape to the competitiveness worries leaders had at the start of this term. Let’s hope it’s not too late.

EU Council Watch Outs 

The whole week has been geared towards the European Council meeting on 18 and 19 June, where leaders feel momentum on Ukraine after the G7 and where the big discussions will be on the EU’s approach to Chinese trade overcapacity and on the EU’s long term budget, particularly own resources. If you are a Public Policy subscriber you can read the full breakdown of the Council meeting here.

As an observer, the simple items to watch out for are whether own resources are still a goer for frugal member states (they should be, since it’s their only way out of higher spending in the EU budget), and then which own resources are in and which are out. The Commission has proposed five: a share of ETS and CBAM revenue, a duty on non-collected e-waste, a new Tobacco Excise Duty Own Resource, and the Corporate Resource for Europe, a levy on large companies. Parliament, in its negotiating position adopted in April, backed a digital services levy on major platforms, a levy on online gambling and betting, an extension of the carbon border adjustment mechanism, and a levy on crypto asset capital gains. All are on the table.

Then watch out for what’s discussed around the negotiating box, presented by the Cyprus presidency on 11 June, which proposes a 2 percent cut to the Commission’s original figure. The full numbers have been criticised from all sides, from the frugals because spending is still too high, from the Commission because it cuts the Competitiveness Fund, and from southern countries because it doesn’t have enough for cohesion and agriculture. However, it’s very early days, so this is just a sounding out at the moment. Expect a lot of eye rolling.

On China, the question is what getting tougher on the trade imbalance actually means. As Public Policy reported yesterday, it seems to mean that leaders will negotiate tougher rather than take any reactive action for now.

Also interesting to note will be the continued reduction of climate ambitions in the form of the ETS, as leaders link it to the need to bring energy prices down amid the current crisis, and also defence, where the main discussion seems to be around EU capability. (Public Policy Europe)