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POLITICO’s must-read briefing on what's driving the day in Brussels, by Suzanne Lynch and Jakob Hanke Vela.

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By JAKOB HANKE VELA and SUZANNE LYNCH

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EUCO COMING: The leaders of the EU’s 27 member countries gather in Brussels today for a historic European Council summit, at which they are set to grant Ukraine (and Moldova) EU candidate status (more on that below). Here’s Council President Charles Michel’s invitation letter. Follow all the action with POLITICO’s customary live blog.

KALININGRAD SIMMERS: But as the leaders head to the EU capital, there’s trouble brewing in Kaliningrad, the Russian exclave wedged between Lithuania and Poland. Tensions are running high over freight transport from the Russian mainland to the exclave — with Moscow threatening “practical” retaliatory action if the EU doesn’t unblock metal goods stuck in transit. Senior EU diplomats on Wednesday warned the situation was serious and could escalate quickly. 

Sleepless in Brussels: The European Commission was overnight working on defusing the time-bomb, which officials and diplomats insisted was an unintended consequence of the EU’s fourth sanctions package, under which the bloc banned imports from Russia of steel and ferrous materials. But because the train line supplying goods from Russia to Kaliningrad passes through Lithuania — EU territory — customs agents have from Saturday been stopping freight trains for checks.

Following orders: Both Lithuania and the Commission have made clear this was not Vilnius’ unilateral decision, but that Lithuania was acting based on guidance on how to implement sanctions, issued by Brussels.

**A message from Equinor: To achieve climate neutrality by 2050, action is called for today. We have presented our first Energy Transition Plan; a concrete plan of defined actions to ensure we are delivering on our net-zero ambition. The set targets, now to be accompanied by action.**

Solution in sight? The Commission, officials said, is now updating that information. “We are in close touch with the Lithuanian authorities and will provide additional guidance,” Commission spokesman Eric Mamer tweeted. He added that Lithuania “has to apply additional checks on road and rail transit” through EU territory, but “these checks are focused, proportionate and effective. They will be based on smart risk management, to avoid sanctions evasion while allowing free transit.”

Metals can pass: Two officials told Playbook the new guidance makes clear that Lithuanian customs authorities have to check the goods to avoid sanctions evasion, but can allow onward transport of metals if they are destined for Russia’s internal market — meaning Kaliningrad.

… or can they? But Lithuanian Prime Minister Ingrida Šimonytė insists the transit ban on steel and ferrous metal through the EU is part of the bloc’s sanctions, as agreed by all 27 members. “As foreseen in the fourth package of EU sanctions, which was adopted on 15 March 2022, the EU’s restrictive measures on imports into and transit through the EU of Russian steel and other ferrous metal products definitively entered into force on 17 June 2022,” she said. “Lithuania applies the EU restrictive measures in accordance with the EU law and in consultations with the European Commission.”

No, you’re not crazy. There is indeed a thinly veiled but pretty solid contradiction between Lithuania’s statement, which claims the EU’s sanctions include a ban on transit of metals and therefore Lithuania must block such transit to Kaliningrad, and the Commission spokesman, who said Lithuania merely has to perform “proportionate” checks “while allowing free transit.”

Is Brussels caving and ordering Lithuania to back off? Officials insist that isn’t the case, because the sanctions were never meant to blockade Kaliningrad, but were designed to allow the EU to implement additional checks. “The overall feeling in the Commission is that this is strategic communications from the Russian side,” one senior official told Playbook, “and that certain Balts profited to ramp up the pressure.”

EU ENLARGEMENT will be the big topic at today’s European Council, which kicks off at 3 p.m., after an EU-Western Balkans leaders’ meeting (which the leaders of Serbia, Albania and North Macedonia won’t boycott after all). While EU leaders will grant Ukraine and Moldova candidate status today, they’ll insist the Copenhagen criteria, including the EU’s ability to absorb new members, must be met before they can accede to the bloc.

First, read this: What does EU candidate status actually mean for Ukraine? ICYMI last week, POLITICO’s Andrew Gray explains.

ANALYSIS: But enlargement has become an increasingly hypocritical exercise. While most EU members want to bind the Western Balkans, Ukraine, Moldova and other potential joiners to the EU’s economy and its values, many senior diplomats admit they are also aware that the EU, in its current form, will not be able to absorb new members.

Risk: As more skeptical officials point out to Playbook, the EU is not just an economic and ideological union, but it’s a body that creates new laws, often de-facto via unanimity and tedious negotiations. As it is, the compromise texts that come out at the end of that process look less like laws and more like Frankenstein’s monster. What will happen when the EU adds more cooks to the Brussels kitchen?

Overstretch: Already, the EU is facing enormous tension because its existing members have different views on everything from liberal values, the role of independent courts and free media to the supremacy of EU law. These divisions go to the core of what the Union is about and recent history has shown that the EU has not managed to bridge the divides, instead merely plastering over them with money.

Scholz’s poison pill: In a speech to the Bundestag on Wednesday, German Chancellor Olaf Scholz said the EU must reform its voting rules in key areas such as foreign policy before it can admit new member countries such as Ukraine, as our colleague Hans von der Burchard reports. Bit it’s unlikely that small countries — or even big ones such as France — will ever agree to give up their veto on foreign policy. Which is why some diplomats speak of that proposal as a “poison pill,” which will in the end prevent Ukraine’s accession.

TIME TO THINK: The current solution — pretending the door is open when it actually isn’t — isn’t working for either side. Perhaps French President Emmanuel Macron is right when he says the EU needs to think about an alternative to full membership, which brings benefits to EU neighbors while maintaining its ability to act.

POINTING THE FINGER: Manfred Weber pulled no punches about the enlargement issue, laying the blame at the door of one country — and it’s not Bulgaria. Speaking ahead of the EU summit, the EPP chief said there had been “already a moment” to give North Macedonia the green light, but “it was not Bulgaria — it was France who stopped it.” He added: “We have to be clear now, we have to be decisive, we have to show leadership,” and deliver a “clear timeline” for the Western Balkans.

Hold on. Is it really just France and Bulgaria who are standing in the way? Scholz has warned Serbia that it wouldn’t become a member of the EU unless it recognized Kosovo’s independence, and asked Belgrade to decide between backing the EU and siding with Russian President Vladimir Putin.

Remember: Serbia’s President Aleksandar Vučić has not joined the EU’s sanctions against Russia, and earlier this month compared Russia’s attack on Ukraine to NATO’s attack on Serbia (to prevent a genocide in 1999). 

EU’S WHATEVER-IT-TAKES MOMENT: European Parliament President Roberta Metsola and Estonian Prime Minister Kaja Kallas have a joint opinion piece in POLITICO today, arguing that it’s time for the EU to go all-in in response to Russia’s war. “Granting candidate status to Ukraine and Moldova, and providing a clear perspective to Georgia will give hope,” they argue. “And it will say, loud and clear, that free choice, the prospect of peace, and freedom are possible.”

WHAT WON’T BE ON TODAY’S AGENDA: The Conference on the Future of Europe. Following Macron’s bruising performance in last Sunday’s legislative elections in France, there is zero appetite for substantive discussion about possible treaty change and how this might align with recommendations from the year-long CoFoE process, multiple officials said.

NOW READ THIS 1: POLITICO’s Clea Caulcutt writes that Macron’s poor performance in the election won’t spell the end of the French president himself — but it may mean the end of Macronism.

NOW READ THIS 2: The resurgent political forces on the left and right of French politics disagree on most things, but on one core issue they are united: Brussels should cancel its plan to strike more free-trade deals, report POLITICO’s Giorgio Leali and Barbara Moens.

**On June 21st, at the initiative of the Women's Forum for the Economy and Society, Anne-Gabrielle Heilbronner, President of the Women's Forum, submitted to Lisa Paus, Federal Minister for Family Affairs, Senior Citizens, Women and Youth, and to Dr. Jutta Allmendinger, President of the G7 Gender Advisory Council, 10 concrete proposals that promote gender equality in all sectors of society. Read the Women’s Forum’s call to action to the G7 leaders.**

PETKOV LOSES CONFIDENCE VOTE AS MAFIA STRIKES BACK: Bulgaria is heading for fresh turmoil, after the government of new anti-corruption PM Kiril Petkov lost a confidence vote on Wednesday. Petkov planted the blame squarely on Russia and his own country’s powerful mafia, as our colleague Christian Oliver reports.

Background: Bulgaria has been struggling to liberate itself from the influence of a web of oligarch mafiosi with deep ties in the parliament and judiciary. Petkov, who only came to power six months ago, was voted in on a pledge to fight the rampant corruption and has pushed Sofia to take an unusually strong line against Russia since its invasion of Ukraine.

Borissov angle: Former Bulgarian Prime Minister Boyko Borissov is primed to perform well if fresh elections are called — he’s had a boost in the polls following his detention earlier this year. Promising to save the day on the North Macedonia question, Borissov is presenting himself as a magnanimous statesman, distracting from the whiff of corruption accusations around him — a handy campaign tactic.

It’s also good news for the EPP. Remember, Weber stuck his neck out for Borissov and took his side when he was detained during investigations over corruption and the alleged misuse of EU funds. You can always count on the German conservatives to prop up shonky governments, from Slovenia and Hungary to Bulgaria.

So much for Renewal: Conversely, the developments in Bulgaria are a blow to Renew Europe, which faces losing one of its newest recruits. As reported in Playbook last month, the group’s Chair Stéphane Séjourné hailed Petkov’s arrival among its ranks, which brought the number of national leaders to eight in the EU’s liberal group, making it the first family in the Council.

Nonetheless, Renew is still feeling fighting fit, despite the blow to Macron’s authority in the legislative elections. Today, the group’s entire family of heads of government and state, commissioners and national party leaders are meeting in Brussels. They are expected to adopt a declaration calling for “the forging of Europe as a geopolitical power.”

GREEK MIGRATION LATEST: As Playbook reported last week, Greek Interior Minister Notis Mitarachi is due to attend a meeting of the European Parliament’s Committee on Civil Liberties, Justice and Home Affairs (LIBE) next Monday, following Athens’ fury over the content of a letter penned by committee Chair Juan Fernando López Aguilar to the Commission about alleged pushbacks. 

Hitting back: As our colleague Nektaria Stamouli writes in to report, Mitarachi has now written to the committee, stating that Greece does not “take your letter lightly,” and accusing the MEPs of being manipulated by “propaganda machines and smuggling networks.” Mitarachi writes: “The Greek border police carry out, on a daily basis, a herculean task under extremely harsh conditions, always in accordance with the Charter of Fundamental Rights.” He blames Turkey for provocations of Greece. 

Not for turning: But the committee is sticking to its guns, MEP Cornelia Ernst told POLITICO: “Minister Mitarachi suggests that the European Parliament is being manipulated by ‘propaganda machines’ or ‘smuggling networks.’ He needn’t worry — we always check our facts. So do the U.N. and the reputed journalists and NGOs that we work with and the evidence is stacking up. Systematic pushbacks, shrinking civil society space and stifling the work of human rights defenders. We look forward to discussing these latest reports with him.”

FIT FOR 55 GETS BOOST: MEPs voted in favor of reforming the EU’s carbon market on Wednesday, getting the EU’s landmark climate legislation back on track. It comes a few weeks after support for the file collapsed in a dramatic vote in Parliament. As POLITICO’s Zia Weise reports, MEPs approved three interlinked proposals that sit at the heart of the Commission’s Fit for 55 climate legislation package — the revision and expansion of the Emissions Trading System, the carbon border tax and the Social Climate Fund.

**Know first and save time with POLITICO Pro. Get prime and customized access to exclusive reliable scoops on the policy developments in Europe that matter to you. Learn more here.**

FAR RIGHT GATHERING IN ANTWERP: All the action may be in Brussels tonight, but north of the Belgian capital in Antwerp another gathering will be taking place. Representatives of the Identity and Democracy (ID) group in the European Parliament and leaders are meeting in Antwerp under the slogan “Our Europe.” Confirmed attendees so far: France’s Marine Le Pen, Dutch Geert Wilders, Belgium’s Tom Van Grieken and Hungary’s Judit Varga.

STOLTENBERG WANTS SWEDEN AND FINLAND IN ALLIANCE ‘SOON’: NATO Secretary-General Jens Stoltenberg “aims” to get Finland and Sweden into the military alliance “soon” despite Turkey’s objections, but told a POLITICO event on Wednesday that he “cannot guarantee” the swift timeline. Read more by our colleagues Lili Bayer and Camille Gijs.

KIRILL THE UNTOUCHABLE: Patriarch Kirill, the head of the Russian Orthodox Church and one of Putin’s most prominent supporters, has yet to be sanctioned by the United States. POLITICO’s Nahal Toosi explains why.

AFTER THE WAR — AMEURUS: The West needs to think now about ensuring Russia doesn’t form a power bloc with China in the long term, argues Mathias Döpfner, chairman and CEO of Axel Springer, POLITICO’s parent company, in this opinion piece.

AIRBUS’ LINKS TO CHINA: Top European planemaker Airbus has advanced technology sharing and manufacturing agreements with entities linked to China’s state-run military apparatus, according to a new report. POLITICO’s Stuart Lau has the details.

NOT ON THE HORIZON! Senior U.K. scientists have urged European Commission President Ursula von der Leyen not to exclude Britain from the EU’s flagship research and development program Horizon Europe because of a wider political row over Brexit, in a letter sent Thursday and seen by POLITICO’s Cristina Gallardo.

AFGHANISTAN EARTHQUAKE: More than 1,000 people have been killed and at least 1,500 injured in a 6.1 magnitude earthquake that has hit Afghanistan. The Taliban, the hardline Islamist group that swept back into power after U.S. other Western troops pulled out of Afghanistan after two decades last year, is calling for international support. Paktika in the south-east of the country is the worst affected province, with heavy rain hampering rescue efforts. The BBC has the latest.

EU stands with ‘Afghan people’: In a statement released overnight, the EU’s High Representative Josep Borrell and Commissioner for Crisis Management Janez Lenarčič said that “international assistance” will be needed, adding that the bloc “stands in full solidarity with the Afghan people and will provide assistance to those in need.”

— EU-Western Balkans summit (from 9:30 a.m.); followed by European Council (from 3 p.m.). Keep on top of the action with POLITICO’s live blog.

— NATO chief Jens Stoltenberg meets Czech Prime Minister Petr Fiala at NATO headquarters. Press conference expected at 1:30 p.m. Watch.

— European Parliament plenary session continues in Brussels. Highlights: Debate on Russian government’s relations with European parties on the extreme right and left, 10 a.m. … Address by President of the Republic of Zambia Hakainde Hichilema 11 a.m. … Voting session, including vote on prolonging the EU Digital COVID Certificate scheme, 11.30 a.m.

— By-elections in U.K. in Wakefield and in Tiverton and Honiton.

— Commissioner Stella Kyriakides receives the members of the EU Scientific Advice Platform on COVID-19.

— Commissioner Mairead McGuinness delivers speech on banking union at ECB/Single Resolution Board conference.

— Commissioner Janusz Wojciechowski participates in EU-Africa Business Summit in Brussels.

— Commissioner Nicolas Schmit delivers speech at meeting of the European network of Public Employment Services in Lille.

— Commissioners Ylva Johansson, Margaritis Schinas and Didier Reynders participate in EU-U.S. ministerial justice and home affairs council.

— Commissioner Jutta Urpilainen receives HM King Letsie II of Lesotho.

STRIKE ACTION: Following Monday’s national strike, passengers due to fly through Brussels Airport will face more chaos today, as Brussels Airlines staff go on strike. The industrial action is set to last until Saturday. Give yourself plenty of time to get to the airport, and check for updates before you go.

CHANGING OF THE GUARD: Portugal has a new sherpa: David Oppenheimer, previously antici, has become adviser on European affairs to Prime Minister António Costa. The new antici is Filipe Ramalheira.

CONGRATULATIONS … to the winners of the Lorenzo Natali Media Prize, an annual European award that honors journalists who have shone a spotlight on common challenges facing our planet and people. Ritwika Mitra, Vânia Maia, and Rémi Carton and Paul Boyer were honored for their work.

MOVIE NIGHTS: Following a two-year COVID-induced hiatus, the Brussels International Film Festival returns in a full, in-person format. The festival opens today and runs until July 2. Check out the program here.

EU LAUGHS: Brussels’ favorite bubble-bursting comedy show is back: The Schuman Show returns on June 30 for the final show before the summer break. Tickets here.

FANCY A DAY TRIP … that’s a feast for both the eyes and the nose? An endangered Giant Arum (aka a Penis Plant aka a Corpse Plant) is set to bloom in all its stinky glory in the greenhouses of the Botanical Garden of Ghent. More info here. You can also keep an eye on progress via this livestream.

BIRTHDAYS:​​ POLITICO’s Kate Day, Ali Walker and Etienne Bauvir; Former MEP Isabella De Monte; Tesco’s Layla Bakker; European Commission’s Paulina Dejmek Hack; Former Finnish President and Nobel Peace Prize winner Martti Ahtisaari; Former Greek PM Costas Simitis; OPP co-founder Luisa Frumenzi. 

THANKS TO: Barbara Moens, Jacopo Barigazzi, Aitor Hernández-Morales and our producer Max Fahler.

**A message from Equinor: We aim to be a net-zero energy company by 2050 and to achieve that we have adopted a transition plan with medium-term ambitions based on concrete actions. But delivering on each pillar of our strategy will require the necessary frame conditions and the support of policy makers. For instance, by 2030 we expect to direct more than 50% of our gross investments towards renewables and low carbon solutions like CCS and consequently we promote with governments the necessary permitting and fiscal regimes and making acreage available for both offshore wind and carbon storage.**

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