Vulcan View: The latest EU developments 3 November – 7 November

European Parliament prepares to push back on EU-U.S. tariff deal

The European Parliament’s trade committee plans to toughen its stance on the EU-U.S. Trade and Tariffs Deal, setting the stage for a potential political fight over how far Brussels should go in accommodating Washington.

Meeting on 4 November, the International Trade (INTA) Committee debated its draft report on the July 2025 deal struck between European Commission President Ursula von der Leyen and Donald Trump in Turnberry, Scotland. The agreement caps most U.S. tariffs on EU exports at 15%, with lower rates for key sectors such as aircraft parts and pharmaceuticals.

Bernd Lange, the chair of the committee and part of the centre-left Socialists & Democrats (S&D) group, said the Parliament wants to “rebalance” the arrangement, calling the July deal a “starting point.” His proposed changes, dubbed “the five S’s” — steel, standstill, suspension, safeguards, and sunset — will define Parliament’s stance in negotiations with the Council.

The Five S’s

On steel, the Members of European Parliament (MEPs) are demanding reciprocity after Washington raised tariffs on 407 steel products to 50%, in breach of the Turnberry understanding. The committee proposes that the EU lift its retaliatory tariffs only once the United States restores its own rates to 15%.

Lawmakers also want a binding standstill clause ensuring that Washington will not impose new tariffs above 15% or reclassify goods to achieve the same effect. Any further EU tariff reductions would have to depend on such a guarantee, Parliament says.

On suspension, the committee supports a tougher mechanism that would replace the current implementing act with a delegated act, allowing the Commission to respond immediately if the U.S. breaches the deal. The proposed system would be linked to the EU’s new Anti-Coercion Instrument, enabling automatic suspension if Washington applies coercive trade measures against the bloc.

The draft report further introduces a safeguard clause allowing the EU to reimpose tariffs if imports from the United States surge by more than 10%, a move aimed at shielding vulnerable European farmers and manufacturers. The sunset provision would make the deal expire automatically after 18 months unless renewed following an impact assessment by the Commission and parliamentary review.

Political lines

The debate exposed deep divisions across the Parliament. The S&D and liberal Renew groups broadly backed Mr Lange’s approach, framing it as a necessary correction to an “imbalanced” deal. The Christian-conservative European People’s Party (EPP) expressed cautious support, welcoming the stability the agreement could bring but urging transparency and attention to the steel and aluminium sectors.

On the right, the far-right Patriots for Europe criticised what she called the “asymmetry” of the deal, warning it would harm European agriculture. The Greens and the Left called the agreement “problematic” and “unacceptable” for the EU industry. Both groups demanded stronger anti-coercion measures and greater parliamentary oversight.

From the centre, Renew’s Barry Cowen said the deal was imperfect but preferable to a renewed trade war, while S&D’s Kathleen Van Brempt (Belgium) urged a “pro-European coalition” to secure better terms.

Next Steps

A Commission trade official defended the deal as stabilising transatlantic trade but said Brussels was open to amendments and would monitor U.S. compliance closely.

The deadline for parliamentary amendments is 7 November. A committee vote is expected in January 2026, with a final plenary vote likely in March or April. The Council, representing member states, has begun its own technical discussions in parallel.

Ireland’s “Future Forty” forecast warns of a tight decade for fiscal reform

Ireland’s long-term fiscal outlook, published in the Department of Finance’s Future Forty: A Fiscal and Economic Outlook to 2065, offers one of the most comprehensive projections of the State’s economic trajectory in decades, and a clear warning that the next ten years will be decisive for long-term stability.

The report projects that under its Central Scenario, Ireland’s modified gross national income (GNI*) will reach roughly €537 billion by 2065, but annual growth will slow significantly after the 2040s, dropping to about 0.5 per cent per capita. Fiscal pressures will intensify, driven by ageing demographics, rising healthcare demand, and the cost of climate adaptation. By 2065, voted expenditure could rise from 33 per cent to nearly 39 per cent of GNI*, while national debt could approach 150 per cent of GNI* if current trends persist.

Demographic and Structural Headwinds

Demographic change represents Ireland’s most substantial long-term fiscal risk. The population aged 65 and over is expected to double to about 24 per cent by 2055, increasing spending on pensions, long-term care, and health services. The Irish Fiscal Advisory Council (IFAC) has repeatedly cautioned that age-related spending will “dominate the fiscal outlook” unless pension and eligibility structures are reformed. Meanwhile, labour-force participation could stagnate as migration slows and the dependency ratio rises, shrinking the tax base.

At the same time, productivity growth, the foundation of Ireland’s economic resilience, is projected to decline as the economy matures and globalisation becomes more regionalised. The Future Forty report notes that small variations in productivity (for example, 0.54 per cent versus 0.59 per cent) could produce a €100 billion difference in GNI* by 2065. This aligns with findings from the OECD’s 2024 Economic Survey of Ireland, which highlighted the country’s heavy reliance on multinational investment and tax-sensitive sectors.

A Narrow Fiscal Window

The Department of Finance identifies the 2030s as a critical window for fiscal reform, during which Ireland can redirect resources toward long-term investment before demographic costs accelerate. Strong corporate tax receipts, averaging €24 billion annually since 2022, offer temporary fiscal space, but both the Central Bank of Ireland and IFAC warn that these receipts are highly concentrated: fewer than ten multinationals account for more than half of total payments.

In that context, Future Forty urges converting today’s windfalls into sustainable capital through instruments like the Future Ireland Fund and increased investment in digital, energy, and housing infrastructure. The Central Bank’s Quarterly Bulletin, Q3 2025, similarly warned that investing fiscal surpluses in productivity-enhancing assets rather than recurrent expenditure is “essential to insulate Ireland from long-run fiscal drift.”

Climate, Technology and Fiscal Resilience

The report’s “Deep Dive” sections highlight several cross-cutting risks, particularly in climate and technology. Climate transition costs could reach 1.2 per cent of GNI* annually by 2065 under the Central Scenario, increasing if action is delayed. The fiscal implications span renewable energy infrastructure, flood prevention, and agricultural transition. Meanwhile, advances in artificial intelligence and automation may boost productivity but also displace parts of the workforce, placing further strain on retraining and social-protection systems.

External analysis reinforces these concerns. The European Commission’s 2024 Ageing Report estimates that Ireland’s age-related public expenditure will increase by around five percentage points of GDP between 2022 and 2070, among the largest projected increases in the EU. The National Economic and Social Council (NESC) has also argued that climate and digital transitions must be framed as long-term investment opportunities rather than short-term costs, with coordinated public-private initiatives to ensure equitable growth.

Outlook

Across all scenarios, Future Forty delivers a consistent message: the next decade will define Ireland’s ability to manage structural pressures, maintain competitiveness, and safeguard fiscal sustainability. The Department’s conclusion is clear: choices made by the mid-2030s will determine whether Ireland remains a flexible, high-income economy or faces a return to chronic deficits and constrained investment.

European Commission adopts 2025 Enlargement Package

On Tuesday (4 November), the European Commission presented its annual assessment of candidate countries, those seeking to join the EU. The text reports solid progress of several candidate countries while cautioning that reforms in democracy, rule of law and fundamental rights remain essential. It confirms that accession for some countries is increasingly within reach, provided they maintain momentum on critical reforms.

The best positioned: Montenegro and Albania

Montenegro has emerged as the front-runner, having closed four negotiation chapters over the past year and setting an ambitious target to conclude accession negotiations by the end of 2026. The Commission believes this goal is achievable if the country maintains its reform pace and builds a broad political consensus.

Similarly, Albania has opened four negotiating clusters in twelve months, with preparations underway to open the final cluster this year. Albania aims to wrap up negotiations by 2027, a deadline the Commission considers realistic to continue progress on justice reform and the fight against organised crime and corruption.

Acceleration: Ukraine and Moldova

Despite Russia’s invasion, Ukraine has completed the screening process—a detailed examination of how closely its laws align with EU standards—and adopted roadmaps on the rule of law, public administration and democratic institutions. The Commission expects Ukraine to meet the conditions to open all negotiating clusters before the end of the year. Kyiv has signalled its ambition to provisionally close accession negotiations by the end of 2028, though the Commission stresses that an acceleration of reforms, particularly on the rule of law, will be necessary to meet this objective.

Moldova has also advanced under difficult circumstances including continuous hybrid threats aimed at destabilising the country. Following the first EU–Moldova summit in July 2025, Chișinău completed its screening process and adopted reform roadmaps which were positively assessed by the Commission. Moldova has set an early 2028 target for provisional closure of negotiations—an ambitious but achievable goal, according to Brussels, provided reform momentum accelerates. Finally, parliamentary elections in September 2025 have reinforced strong public support for Moldova’s European path.

Stalled progress: Serbia, Bosnia and Herzegovina, North Macedonia, Türkiye and Georgia

Serbia faces deepening political polarisation following mass protests since November 2024 over corruption, accountability and alleged excessive force against demonstrators. The Commission notes that reforms have significantly slowed and warns of backsliding on freedom of expression and academic freedom. Whilst acknowledging some recent positive steps, including progress on media regulation and voter registration, the Commission has called on Belgrade to urgently reverse course on the polarisation path.

North Macedonia continues work on key roadmaps but must intensify efforts on judicial independence, the fight against corruption and constitutional changes related to minority recognition.

In Bosnia and Herzegovina, a political crisis in the Republika Srpska entity has undermined progress, though the submission of a Reform Agenda in September 2025 offers renewed hope.

Kosovo, which saw reform momentum slow after the February general elections, must forge cross-party cooperation and sustain de-escalation in the north to get back on track.

Türkiye remains a candidate country and key partner, yet accession negotiations have been at a standstill since 2018. Increasing legal actions against opposition figures raise serious concerns about adherence to democratic values, and the Commission stresses that dialogue on the rule of law remains central to the relationship.

Georgia’s situation has sharply deteriorated: following a 2024 European Council conclusion that its accession process was de facto halted, the Commission now considers Georgia “a candidate country in name only” due to severe democratic backsliding, restrictive legislation on civic space and violations of fundamental rights.

 

Compliments of Vulcan Consulting – a member of the EACCNY