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This article is an on-site version of our Europe Express newsletter. Premium subscribers can sign up here to get the newsletter delivered every weekday and fortnightly on Saturday morning. Standard subscribers can upgrade to Premium here, or explore all FT newsletters<\/p>\n
Good morning. Can the EU really claim to have a single market? Our correspondents question if Brussels has what it takes to fix the bloc\u2019s biggest asset.<\/p>\n
Germany will today announce it wants to spend 3.5 per cent of GDP on defence by 2029. Here, I explain why today\u2019s Nato leaders\u2019 summit could be derailed by other allies not showing the same ambition. And the outgoing head of the EU\u2019s fraud buster tells Laura that a sister agency set up to help him is in fact getting in the way.<\/p>\n
Nato secretary-general Mark Rutte was known as \u201cTeflon Mark\u201d during his time as Dutch prime minister for his ability to shrug off crises. He\u2019ll need that magic today back in The Hague, where he is charged with shepherding the 32-member alliance through its first summit featuring Donald Trump 2.0.<\/p>\n
Context: US President Trump, a longtime Nato sceptic, has demanded allies raise defence spending to 5 per cent of GDP to \u201cequalise\u201d the cost of Europe\u2019s security between the US and the rest.<\/p>\n
Rutte is well aware such an increase is tough, if not impossible, for many of Nato\u2019s deeply indebted European members. He has spent the past five months carefully choreographing a scheme to both satisfy Trump and allow other leaders to sign up to a vaguely realistic pledge (possibly with fingers crossed behind their back).<\/p>\n
But that delicate compromise \u2014 3.5 per cent on core defence spending and 1.5 per cent on capabilities such as cyber and infrastructure \u2014 is now looking shaky. <\/p>\n
Spanish Prime Minister Pedro S\u00e1nchez\u2019s refusal to agree to those numbers, and Rutte\u2019s acquiescence, has prompted some to request similar treatment and sparked the fury of others who see it as a breach of unity.<\/p>\n
S\u00e1nchez has said he will sign up to Nato\u2019s shared shopping list on what needs to be purchased, \u201cregardless of the share of GDP that it entails\u201d \u2014 in essence claiming that Spain can do it for less than 5 per cent.<\/p>\n
Deploying some creative ambiguity, Rutte yesterday insisted that wasn\u2019t an opt-out: \u201cWe are in an alliance where we fight together and, if necessary, where we also suffer and die together\u2009.\u2009.\u2009.\u2009Spain has also agreed with the targets.\u201d<\/p>\n
Inherent in all this last-minute wordplay is the risk that Trump smells a rat. That will increase if more leaders demand what Rutte described as Spanish \u201cflexibility\u201d.<\/p>\n
Robert Fico, Slovakia\u2019s prime minister, did just that last night, declaring that \u201csimilarly to Spain\u201d Bratislava would meet the capability targets, but not 5 per cent spending.<\/p>\n
That made diplomats arriving in The Hague last night nervous. Nato veterans still flinch at the memory of the 2018 summit, when first-term Trump threatened to leave the alliance altogether.<\/p>\n
Trump, as one senior Nato official quipped to the FT, likes big round numbers and has little time for details. Rutte sure hopes so.<\/p>\n
EU guidelines for climate-related investment have seen funds change their names and increase their fossil fuel exposure, according to think-tank Influence Map.<\/p>\n
EU agencies set up to fight fraud and corruption have instead been busy fighting each other, writes <\/strong><\/em>Laura Dubois<\/strong><\/em>.<\/strong><\/em><\/p>\n Context: EU watchdog Olaf has since 1999 been tasked with investigating corruption and fraud. But it only has the power to make recommendations and cannot start criminal proceedings, which is why the European Public Prosecutor\u2019s Office (EPPO) was set up in 2021 to take suspects to court.<\/p>\n This was supposed to streamline anti-fraud operations, but the two agencies have not always worked well together, sometimes disagreeing on when to open an investigation.<\/p>\n Ville It\u00e4l\u00e4, Olaf\u2019s outgoing chief, told the FT that his agency should be involved in more investigations handed over to the European prosecutor, saying that \u201chuge\u201d amounts of additional money could be recovered in this way.<\/p>\n He described the arrival of EPPO in 2021 as a \u201ctrip through the jungle\u201d and said that Olaf shed dozens of staffers for EPPO. \u201cWe paid quite a huge amount of our resources to EPPO \u2014 45 posts,\u201d he said.<\/p>\n It\u00e4l\u00e4 said that EPPO now took on about a third of Olaf\u2019s cases, when criminal proceedings were probably warranted. But he criticised the lack of joint investigations, which he said would allow the EU to recover funds more quickly, and before a court had ruled.<\/p>\n \u201cWe can recover the money much quicker than what they ever can do,\u201d he said, pointing to Olaf\u2019s administrative powers. \u201cThese complementary investigations, that is what we need much, much more [of] to defend [the] EU budget and taxpayers\u2019 money.\u201d<\/p>\n Last year, Olaf recommended that \u20ac871.5mn should be returned to the EU\u2019s coffers, of which some \u20ac300mn has been clawed back so far.<\/p>\n An EPPO spokesperson declined to comment.<\/p>\n Nato leaders\u2019 summit begins with informal dinner hosted by the king and queen of the Netherlands.<\/p>\n<\/li>\n German finance minister Lars Klingbeil presents Germany\u2019s 2025 draft budget.<\/p>\n<\/li>\n<\/ol>\n Macron and Merz:<\/strong> Europe must arm itself in an unstable world, the French President and German Chancellor write in a joint piece for the FT.<\/p>\n<\/li>\n Summer offensive:<\/strong> Russia\u2019s advances have been aided by a novel type of attack drone that cannot be jammed.<\/p>\n<\/li>\n Bidding wars:<\/strong> Brussels is examining the Italian government\u2019s controversial sale of shares in Monte dei Paschi di Siena last year.<\/p>\n<\/li>\n<\/ul>\n Free Lunch<\/strong> \u2014 Your guide to the global economic policy debate. Sign up here<\/p>\n The State of Britain<\/strong> \u2014 Peter Foster\u2019s guide to the UK\u2019s economy, trade and investment in a changing world. Sign up here<\/p>\n Are you enjoying Europe Express? <\/em>Sign up here<\/em> to have it delivered straight to your inbox every workday at 7am CET and on Saturdays at noon CET. Do tell us what you think, we love to hear from you: <\/em>europe.express@ft.com<\/em>. Keep up with the latest European stories <\/em>@FT Europe<\/em><\/a><\/p>\nWhat to watch today <\/h2>\n
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