We have had a productive EUCO so let me jump right in. First, on Ukraine. The tide really is turning. We start with good news, António and I congratulated President Zelenskyy on the opening of the first cluster. This is a major milestone. Now our goal is to open more clusters before the summer. We also agreed on the rollover of the Russian sanctions – and importantly this time for 12 months, not 6. This sends a strong signal. And we continue our work to finalise the 21st package. Our hard biting sanctions will keep pressure on Russia. And at the same time, we have to prepare for when negotiations start.
Second, on the Middle East. The interim agreement between the United States and Iran is a breakthrough. And an important opportunity. To ensure freedom of navigation, toll free, in the Strait of Hormuz. To ensure that Iran never has nuclear weapons. To address concerns related to its ballistic programme and regional activities. And ultimately, to advance peace and security across the region. This crisis has underscored an important lesson. We must not allow the global economy to be held hostage. We need to develop other routes and corridors, like the IMEC. And for that, we will deepen our engagement with our partners in the Gulf and beyond. And this will be a topic that will be discussed the next time we meet the Gulf countries. Finally, what is happening in Lebanon is deeply concerning. A stable and peaceful Middle East also requires a stable and sovereign Lebanon. We support the Lebanese leaderships effort to achieve the disarmament of Hezbollah. At the same time, it is important that Israel respects both the sovereignty and territorial integrity of Lebanon.
Now to my third point. We had good discussions at the G7 earlier this week, and last night we had a productive discussion on structural overcapacities and the impact on global imbalances. Let me bring it back to Europe, with some figures. Over the past 5 years, imports from China into the EU have increased by 45%. Last year, the EU recorded its largest-ever trade deficit with China - EUR 360 billion. That is a deficit of EUR 1 billion per day. And for the first time, all Member States had a trade deficit. This is not just about cheap imports. We see overcapacities that erode our own manufacturing base. And this is simply not sustainable. We know that we must do our homework to boost our own competitiveness. But we also have to address the global imbalances. Our discussions showed clear support for continuing on the path of diversification and derisking our relationships. On one hand, we must avoid dependencies that can be weaponized. This means we are accelerating on de-risking, not decoupling. On the other hand, we will keep protecting our market from unfair practices. Europe has already built an extensive toolbox in recent years. Now we must use it more proactively and more strategically to defend our European interests. And the Commission will work on new tools such as a diversification instrument. I am pleased that we saw clear support for a European response based on unity among Member States and dialogue with China, which remains crucial. The Commission will take this forward. And the topic will remain high on our common agenda.
Turning to internal matters, today we also discussed the next EU budget. The Council has now reached agreement on the new MFF architecture. This is an important step forward. It shows that Member States share the Commission's ambition for a simpler and future-proof budget. A budget that equips Europe to compete, strengthens its security and defence, and its capacity to act in a more challenging world. A budget that will support our farmers, our regions and our communities across the Union. And for the first time, we have a negotiating box with figures, thanks to the Cypriot presidency. This is another major step forward. Of course, no one sees their ideal budget immediately in this box. But it is a solid basis for negotiation, for the next presidency to take forward. Now we must maintain the level of ambition. And this must be matched by the means to deliver. This is why we need a robust and stable system of new own resources. And why, by our next meeting, we should have a shared understanding of how we want to finance the next MFF.
Dear Nikos, this agreement in the Council was a real breakthrough. I want to thank you and specifically also your whole team over there for the extremely hard work, the skilful steer, the overview and the delivery. This was really fantastic. So many thanks for that. With this the Irish Presidency has a strong foundation to build on. But this is only one of your achievements. Your Presidency came at a demanding period. Cyprus has been a vital bridge with the Middle East. It really paid off that since many years you have excellent relationship to the region. Friendship, partnership built on trust, this really paid off. Your work has helped keep us closely engaged with the region when dialogue mattered most. Your Presidency also delivered on some of Europe's most important priorities. From support to Ukraine to progress on enlargement the likes of which we have not seen in years. From competitiveness and simplification, with agreements on a number of omnibuses. To a common European system on returns. I also congratulate you on the agreement reached on air passenger rights. It was the first major overhaul of these rules in two decades – and they matter so much in the daily lives of European citizens. Passengers enjoy clearer compensation rules, airlines have greater legal certainty, and everyone benefits.
You and your team can be proud of what Cyprus has achieved.
So efharisto, my friend.
