Good morning from Brussels,

Italian former prime minister Enrico Letta's final report, obtained by Euractiv and expected to be presented to EU leaders on Thursday morning, contains proposals that are set to spark some serious discussions. 

On defence, the report goes against member states’ protectorship: Letta says the EU’s defence market must be more integrated, create champions, get access to cash and give the European Commission overseeing powers. Aurélie Pugnet has more.

Regarding enlargement, the report explores solutions to potential imbalances created for some member states and says a new fund to balance future EU enlargement impact is needed. Alexandra Brzozowski digs deeper.

Letta will also tell EU leaders that the European Markets and Security Authority (ESMA) should start supervising the bloc’s largest financial sector firms and oversee the creation of a pan-European IPO venue for small and medium businesses. Some, however, have reservations. Read Anna Brunetti’s story. 

Last but not least, Letta will recommend creating an EU stock exchange tailored for deep tech startups. Read the full story by Euractiv’s Eliza Gkritsi and Théophane Hartmann.

Meanwhile, take a look at Thomas Moller-Nielsen’s story on the former president of the European Central Bank, Mario Draghi, who said on Tuesday that Europe must undergo “radical change” to remain competitive in the face of China and the United States’ refusal to “play by the rules” of international trade.

European citizens have a growing interest in EU elections, a more positive outlook on the European Parliament than ever before, and speak favourably of enhanced EU defence policy, Eurobarometer’s latest figures, released on Wednesday, reveal. Read the results of the survey here.

Reporting from Strasbourg, Euractiv’s Alice Taylor wrote that the Council of Europe unanimously voted to use seized Russian assets to fund Ukraine reconstruction. 

She also reported on how Kosovo moved a step closer towards joining the pan-European human rights body amid Serbian attacks against a Greek delegate.  

Last but not least, Belgian Prime Minister Alexander De Croo condemned the local mayor’s decision to shut down an event gathering European hard right leaders in Brussels on Tuesday, alongside counterparts from Italy and the UK, leaving the door open for the event to continue. Listen to our podcast delving into the matter.

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BERLIN

FDP Lindner defends Germany’s debt ceiling as ‘inflation brake’. Germany’s Finance Minister Christian Lindner has defended the country’s constitutional ‘debt brake’ against criticism from his coalition partners, arguing the ceiling also works as an inflation-control tool. Read more.

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PARIS

‘Sorbonne II’: Is Macron preparing a new speech on Europe? Making the rounds are rumours that France’s Emmanuel Macron may be preparing a new speech on the future of the EU, to be delivered in Strasbourg on the same week as the European Parliament’s last plenary, akin to his 2017 ‘Sorbonne speech’ – but no one knows for certain what it will contain. Read more.

STOCKHOLM

Sweden’s Eurosceptics want EU-wide prisoner redistribution. The new Swedish Eurosceptic list for the European elections, Folklistan, led by MEP Sara Skyttedal (EPP), intends to push for an EU directive to ease sending convicts to serve their sentences in other EU countries’ prisons. Read more.

LONDON

UK’s radical  bill on Tobacco and Vapes likely to become law. The UK parliament is expected to vote in favour of the Tobacco and Vapes Bill on Tuesday, which sets the ambitious target of the UK achieving smoke-free status by 2030, a decade ahead of the EU target. Read more.

ROME 

Italy is considering deploying its peacekeeping forces as part of its strategies to de-escalate the situation in Gaza and if a Palestinian state is created with the support of other nations, Italian Foreign Minister Antonio Tajani (Forza Italia/EPP) said on Tuesday. Read more. 

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MADRID

Spain to oblige regions accept a ‘fair distribution’ of migrant children. Spain will soon implement a mandatory distribution of immigrant minors to all the country’s regions to relieve the great migratory pressure on the Canary Islands, with hundreds of people arriving every year from the coasts of West Africa. Read more.

Madrid outraged at Basque far-left refusal to call ETA group ‘terrorist’. The far-left separatist party EH-Bildu, favourite to win the Basque elections next Sunday, and the ruling socialist party PSOE (S&D) clashed on Tuesday after the former refused to describe the now defunct Basque group ETA as “terrorist”. Read more.

WARSAW

As many as 578 people, including opposition politicians and possibly prominent figures from the then-ruling camp were being monitored via the Pegasus spyware under the previous conservative government’s rule, Polish Justice Minister and Attorney General Adam Bodnar said on Tuesday. Read more.

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PRAGUE

Czech Social Democrats bank on EU elections for party revival. Long below the electoral threshold and currently without seats in the national parliament, the Czech Social Democracy Party (SOCDEM) hopes the European elections in June will lead to a revival. Read more.

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BRATISLAVA

EU’s Jourová and team ‘amused’ by Fico’s goat analogy, decline to escalate. EU Commissioner for Values and Transparency Vera Jourová and her team “were amused” by Slovak Prime Minister Robert Fico’s comments saying she “loves” his government “like a goat loves a knife”, the press office of Jourová who took over the Slovak rule of law file from EU Justice Commissioner Didier Reynders temporarily, said on Tuesday. Read more.

PRISTINA | STRASBOURG

Kosovo took another step towards becoming a member of the Council of Europe (CoE), a pan-European human rights body, on Tuesday as its parliamentary assembly overwhelmingly passed a report recommending membership, with even representatives from non-recognising states voting in support. Read more.

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SOFIA

Foreign minister switch exposes Borissov’s influence over interim government. In another lightning reshuffle, caretaker Prime Minister Dimitar Glavchev appointed GERB MP Daniel Mitov as foreign minister, replacing the week-long incumbent Stefan Dimitrov, after this was proposed by GERB leader and former prime minister Boyko Borissov. Read more.

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BUCHAREST

Russian espionage efforts in 2023 posed huge threat to region: Romanian defence report. Russia was the “principal political and military actor” involved in all security matters in the region bordering Ukraine, with attempts by Russian espionage to gather information from defence and security institutions, infiltrate critical communication and information infrastructures, and weaken trust in international and national institutions in Romania, a report by the Supreme Council for National Defence for 2023 reads. Read more.

• EU: Special European Council convenes to discuss economy and competitiveness issues, Ukraine, relations with Türkiye, the Middle East, and more;
• Commission President Ursula von der Leyen chairs the College of Commissioners meeting; Delivers keynote speech at European Defence and Security Summit;
• High Representative of the Union for Foreign Affairs and Security Policy Josep Borrell participates in G7 Foreign Ministers’ Meeting, in Capri, Italy;
• Commission Vice President Margrethe Vestager meets with European Competitive Telecommunications Association (ECTA) CEO Council;
• Vice President Maroš Šefčovič delivers keynote speech at panel on “From Resources to Resilience: Unpacking the role of Raw Materials for Security, Sustainability and Prosperity”;
• Energy Commissioner Kadri Simson attends Assembly of the International Renewable Energy Agency (IRENA) 14th session, in United Arab Emirates;
• Home Affairs Commissioner Ylva Johansson gives online address at European Crime Prevention Conference;
• Jobs and Social Rights Commissioner Nicolas Schmit participates in Just Transition Platform Conference;

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[Edited by Sarantis Michalopoulos, Daniel Eck, Liene Lūsīte, Alice Taylor]