Good morning from Paris, 

France’s incoming government – due to be announced in the next few days - is set to face thorny negotiations on the 2025 budget amid a deeply divided National Assembly, as the country could be hit by financial penalties from the European Commission if the state of its public finances does not improve.

The current government has said a €10 billion cut in 2025 is needed. 

However, the new government may adjust the draft budget, but within a tight time frame as the finance bill will be presented to the National Assembly on 1 October.

In the event of non-compliance, experts estimate that the second-largest Eurozone economy could face a fine of up to €2.6 billion annually. 

“Obeying Brussels is dangerous from a political, social, and ecological point of view. Not to obey is to open up a European crisis that would add to the political instability in France,” Henri Sterdyniak, founder of the Économistes Atterrés Collective, told Euractiv.

Who will be the next EU economy commissioner will also play a role in the handling of the French case.  

Reporting from Paris, Laurent Geslin has all the details. 

US Vice-President and Democratic presidential candidate Kamala Harris has pledged to fight “price gouging” on grocery shelves, and the EU wants fairer pay for farmers as experts call for more transparency in the food market. Hugo Struna has the story.

Meanwhile, the EU’s agri-food sector is again the victim of trade tensions between Beijing and Brussels. China initiated an anti-subsidy probe into dairy products imported by the EU a day after Brussels announced the conclusion of its investigation on China-made electric vehicles.

But farmers also faced the resurgence of animal diseases this summer, prompting the EU and member states to take action. Euractiv’s Maria Simon Arboleas and Sofia Sanchez Manzanaro dig deeper.

BERLIN

The Ukraine war is a dominant issue for voters in two state elections scheduled for 1 September in the East German states of Thuringia and Saxony, despite having little sway in foreign policy, lead candidates of multiple parties said on Wednesday. Read more.

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VIENNA

Austria’s far-right Freedom Party sets out election programme. Austria’s far-right Freedom Party (FPÖ), which opinion polls make favourite to win the country’s general election on 29 September, presented its campaign manifesto on Wednesday, setting out measures to boost the economy and curb immigration. Read more.

LONDON

UK regulator closes app store probe, but new rules could lead to renewed scrutiny of big tech.The UK’s Competition and Markets Authority (CMA) closed its investigation into Google and Apple app stores on Wednesday, but new laws that would give it more power to control the dominance of big tech companies could ensure that scrutiny continues. Read more.

UK faces legal action over new North Sea oil and gas licences. Britain’s decision to issue dozens of new oil and gas exploration licences is being challenged in court by a marine conservation organisation, which argues ministers unlawfully failed to consider the impact on marine life. Read more.

STOCKHOLM | COPENHAGEN | OSLO

Scandinavian ministers meet to tackle spillover of Swedish gang crime. Sweden, Norway and Denmark want to step up regional cooperation to combat gang violence, the countries’ justice ministers announced at a meeting in Copenhagen on Wednesday, as a surge in the involvement of minors in Swedish gang activity has the Nordic leaders concerned. Read more.

ROME

Italian central bank chief calls for a common EU fiscal capacity.  To ensure peace and prosperity, the EU needs a so-called “common fiscal capacity”, Fabio Panetta, the president of the Bank of Italy and a former member of the European Central Bank’s executive board, told Italy’s highest-level annual Catholic summit in the city of Rimini on Wednesday. Read more. 

Key milestone reached in campaign to repeal Italy’s Regional Autonomy law. The 500,000 signatures needed to call for a referendum to repeal the Calderoli law on differentiated autonomy, which, despite giving more power to the regions, has been criticised for potentially increasing regional inequalities, have been collected, the Italian Justice Ministry has announced. Read more.

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MADRID

Spanish prosecutors step up hate crime probe after far right used child murder to falsely blame migrants. Spanish prosecutors are stepping up investigations into hate crimes on social media after the country’s two main far-right parties – SALF and VOX – stepped up their bashing of African migrants following the murder of an 11-year-old boy over the weekend, although police later identified the perpetrator as Spanish. Read more.

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LISBON

Portugal boosts capacity to stave off Madeira wildfires. Portugal’s National Emergency and Civil Protection Agency (ANEPC) is to send 60 more people to help fight the forest fire raging in the Autonomous Region of Madeira for a week, the organisation’s official source confirmed on Wednesday. Read more.

BUDAPEST 

Hungary responded to Brussels’ request for an explanation over its easing of entry requirements for Russian and Belarusian nationals on Wednesday, dismissing concerns about potential security risks to the bloc’s Schengen border-free travel zone. Read more.

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WARSAW

Polish deputy justice minister resigns after using public funds for personal expenses.Bartłomiej Ciążyński has resigned from his post as Polish deputy justice minister after it emerged that he used an official car for a private holiday in Slovenia and fuelled it with public money. Read more.

SOFIA

Bulgarians increasingly pro-NATO, EU as support for Russia wanes. In Bulgaria, support for NATO membership has soared since the start of Russia’s invasion of Ukraine, with approval rising from 28% to 40% over the past seven years, according to a recent survey, which also points to growing support for the EU and declining support for Russia. Read more.

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BUCHAREST

Romanian police raid Andrew Tate’s home amid human trafficking probe. Internet personality Andrew Tate’s home near Bucharest was raided by law enforcement on Wednesday, a Reuters witness said, as Romanian police launched four searches in an investigation into crimes including human trafficking and sex with a minor. Read more.

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[Edited by Sarantis Michalopoulos, Daniel Eck, Martina Monti, Alice Taylor]