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EU leaders want to talk competitiveness. Middle East tensions and Ukraine top their summit list


BRUSSELS (AP) — European leaders’ discussions at a summit in Brussels were set to focus on the bloc’s competitiveness in the face of increased competition from the United States and China.

Tensions in the Middle East and the ongoing war between Russia and Ukraine decided otherwise and the 27 leaders will dedicate Wednesday evening talks to foreign affairs.

As the unprecedented attack by Iran on Israel ratcheted up regional tensions and raised fears of a wider war, EU leaders will urge “all parties to exercise utmost restraint and refrain from any action that may increase tensions in the region,” according to a draft of their summit conclusions.

Following a video meeting of the bloc’s foreign affairs ministers on Tuesday, the EU’s top diplomat Josep Borrell said the EU will also consider further sanctioning Iran.

“This may entail expanding the scope of the existing regime targeting Iran’s military support of Russia’s war of aggression against Ukraine through drones, to include the possibility to sanction Iranian missiles as well as drone deliveries to Iranian proxies in the Middle East,” the European Council said.

Leaders from the bloc should also reiterate their call for an immediate cease-fire in Gaza and the release of hostages, “as well as increasing humanitarian aid at scale to Palestinians in need.”

Tensions in the region have ramped up since the start of the latest Israel-Hamas war on Oct. 7, when Hamas and Islamic Jihad, two militant groups backed by Iran, carried out a devastating cross-border attack that killed 1,200 people in Israel and kidnapped 250 others. Israel responded with an offensive in Gaza that has caused widespread devastation and killed over 33,800 people, according to local health officials.

Russia’s two-year war in Ukraine is also on the agenda, with Ukrainian President Volodymyr Zelenskyy expected to address the meeting remotely. He has pleaded with allies for more Patriot missile systems.

Since the full-scale invasion began in February 2022, Russia has captured nearly a quarter of Ukraine, which is outnumbered, outgunned and in desperate need of more troops and ammunition, as doubt increases about Western military aid. Zelenskyy said repeatedly Ukraine must bolster its air defenses and replenish its ammunition supplies amid Russian pushes along the front line.

EU Council president Charles Michel, who chairs the meeting, insisted in his invitation letter to leaders on “the urgency of intensifying our delivery of military assistance, notably air defense capabilities.”

Despite the heavy foreign affairs agenda, leaders will still hold talks on Thursday on how to bolster the EU’s competitiveness and improve the bloc’s single market.

They will discuss a proposal by former Italian Prime Minister Enrico Letta on an EU-wide effort to subsidize industrial companies in response to the Biden Administration’s support for investment in environmentally friendly technology through the Inflation Reduction Act, and to China’s subsidies for electric cars and solar panels.

The Commission and member countries asked Letta to draft the report last year amid widespread concern across the 27-nation bloc that the U.S. subsidies, which favor domestic production in the U.S., are drawing investment from Europe and threatening the loss of industrial jobs on the continent.

EU rules restrict member governments’ aid to companies to avoid distorting business competition across the bloc's free trade zone.

One solution, Letta proposed, is to demand countries use a chunk of such aid for EU-wide projects instead of purely national ones.

The report also calls for better integrating the bloc’s financial markets so companies can raise money for new renewable energy projects from stock, bond and venture capital investors instead of relying mostly on bank lending. That is a longstanding idea that has progressed only slowly.

Any of Letta’s ideas would be taken up only after this year’s EU parliament elections and the appointment of a new executive commission.


AP Business Writer David McHugh in Frankfurt, Germany, contributed to this report.