What has become an increasingly touchy EU-Russia trade relationship took another tit-for-tat turn on Thursday when Brussels escalated a WTO case against Moscow over vehicle recycling fees.

The EU believes a recycling fee Russia charges on imported cars is less about good environmental policy and more a way to squelch foreign competition. The fee does not apply to cars built in Russia or its closest trading partners,Kazakhstan and Belarus.

Brussels complained to the WTO about the levy in July, marking the first case against Russia since it joined the global trade body with much fanfare in 2012 – 19 years after its initial application. On Thursday, the EU asked for a panel to rule on the matter after – to little surprise – settlement talks with Moscow proved fruitless. A result could take months.

“We’ve used all the possible avenues to find with Russia a mutually acceptable solution,” said Karel De Gucht, the EU trade commissioner. “As the fee continues to severely hamper exports of a sector that is key for Europe’s economy, we are left with no choice but to ask for a WTO ruling.” Read more

My big fat Greek presidency it will not be. When Athens takes the reins of the EU’s rotating presidency in January, the government will manage the event like a family throwing a frugal wedding.

That is only to be expected since Greece’s crisis-hit economy is now enduring its sixth year of recession, the public coffers are bare and unemployment is nearing 30 per cent. Dishing out huge amounts of cash to impress visiting diplomats would likely provoke outrage from a citizenry that is increasingly unhappy with the EU, as it is.

So how frugal is Greece planning to be? The government has set a €50m budget for the six-month affair, down from the €60m to €80m spent by predecessors like Ireland,Cyprus,Denmark and Lithuania. Officials say they are hoping that the final bill comes to even less.

The Greeks have found a few simple ways to cut costs. They will limit the number of ministerial meetings that will be held in their country to just 13 – keeping as much of the work in the EU’s Brussels headquarters as possible. All of the Greek meetings will be hosted in Athens. Read more

Brussels and Beijing appear to be nearing a settlement in a trade fight over solar panels that is the EU’s biggest ever anti-dumping case – based on the more than €20bn in Chinese-made solar products shipped to the bloc in 2011. Sometime on Friday afternoon, EU officials are expecting to learn whether or not their counterparts in Beijing have taken their latest offer.

In theory, the two sides have until August 6th to haggle over a deal. After that date, provisional duties imposed by the EU will jump from about 11 per cent to an average of 47 per cent. The reality is that they have probably already missed that deadline, according to diplomats, given the amount of legwork that Brussels must do to translate an agreement and circulate it among national governments. Hence, the next few days are crucial. Read more

Günther Oettinger, EU energy commissioner, proposed tweaking the biofuels policy last year

Among the EU’s less successful policies, the one governing biofuels looms as a particular case study in unintended consequences.

Five years ago, member states agreed to binding targets requiring each country to derive 10 per cent of all transport fuel from renewables by 2020. Those targets were meant to speed the adoption of environmentally-friendly biofuels and were part of a broader campaign by Brusselsto claim the lead in the fight against global warming.

These days, that policy is a mess. The increased demand for crop-based biofuels – made from corn, rape and soya, for example – has been blamed for a surge in world food prices. It also appears to contribute to deforestation as farmers in far corners of the world chop down rainforests to plant biofuel crops.

The EU is now seeking to correct that. The European Commission, the EU’s executive arm, made a new proposal last year that aims to phase out crop-based biofuels in favour of cleaner ones derived from waste products and algae, among other substances. The European parliament’s environment committee last week voted through its own version of the draft legislation.

But it seems even the revised biofuels policy may have its own unintended consequences, including a brewing fight between Europe’s oleochemicals industry – the folks who use processed animal fats to produce everything from lubricants to lipstick – and their suppliers. Read more

A few weeks ago, the EU agreed an historic overhaul of its troubled common fisheries policy, setting binding deadlines to end decades of over-fishing that have depleted stocks from the Mediterranean to the North Sea.

But just when it seemed safe to go back in the water, the European parliament’s fisheries committee threatened to take a bite out of the reform on Wednesday. By a 12 to 11 margin, the committee approved an amendment allowing the use of up to €1.6bn in EU funds to help build new fishing boats.

The subsidies fly in the face of the conventional wisdom that the EU’s 83,000-vessel fleet is already far too large, and in need of a drastic cut – some say by half – in order to allow stocks to recover.

“For anyone with a brain this is completely outrageous and very difficult to understand,” said Markus Knigge, a fisheries advisor to the Pew Charitable Trust, citing estimates that the money could result in 19,000 new boats. Read more

A report in Der Spiegel about US snooping on the EU has thrown a very big spanner into trans-Atlantic relations. As we reported in today’s FT, some EU officials – and members of the European parliament – are already warning it could have grave implications for a pending EU-US trade agreement.

But to those committed to the European project, the news is not all bad. As Martin Schulz, the parliament president, noted in an interview on Sunday, the revelations – if proven true – offered an unintended measure of validation for the EU on the international stage. Read more

Someone may well have been drinking absinthe when they decided it would be a good idea to pack up an entire parliament once a month and shuttle its members and their assorted aides and documents to a second home 400 kilometers away.

On Wednesday, members of the European parliament, meeting in their Strasbourg quarters, will have the opportunity to acquaint themselves with absinthe, the spirit renowned for its green tint and supposedly psychedelic properties. Specifically, they will be voting to determine just what absinthe is.

Their decision could escalate a brewing fight between northern and southern European makers of the spirit, which gained fame in the late 19th and early 20th centuries as a favoured drink for bohemians and artists including Rimbaud, Degas, Hemingway and Toulouse-LautrecRead more

A missing piece in the eurozone’s newly strengthened fiscal defence is poised to fall into place after a compromise was struck between national governments, members of the European Parliament and the European Commission over new budget rules.

At the heart of the agreement is a commitment by the commission, the EU’s executive arm, to set up a high-level working group to study the feasibility of creating a debt redemption fund for eurozone countries – an idea that some view as a step towards mutually guaranteed eurozone bonds.

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Hamburger anyone? Getty Images

There is never a good time for a food chain scandal in which people across a continent are suddenly informed that what they thought was beef lasagne was actually horsemeat of unknown provenance.

But there is an added wrinkle of awkwardness to the EU’s horsemeat scandal, since it coincides with the launch of free-trade negotiations with the US in which food safety standards will be central.

The EU-US effort to forge a trans-Atlantic free-trade agreement was announced with great fanfare on Wednesday afternoon in Brussels by José Manuel Barroso, the European commission president, and Karel De Gucht, the bloc’s trade commissioner. The press conference was the culmination of more than a year of diplomatic spadework between the two sides and decades of dreaming by free-traders, business groups and Atlanticists. Read more

The politics and rituals surrounding the selection of a new pope are even more opaque and mysterious than the back-room negotiations over a long-term EU budget (a recent source of obsession at the Brussels Blog).

Herman Van Rompuy, the European council president, has added to the sense of papal mystery surrounding the resignation announced on Monday by Benedict XVI with the release of a terse, two-line statement. Read more

It’s hard enough to get 27 member states to agree unanimously on a seven-year, €1,000bn budget – as anyone following the latest EU summit wrestling match can attest. But completing an EU budget deal requires one more thing: the consent of the European parliament.

Martin Schulz, the German social democrat and parliament president, reminded EU leaders and the Brussels press pack of this fact on Thursday evening. In a mildly foreboding press conference, Schulz re-stated his threat that leaders should be prepared for MEPs to block any budget proposal that strays too far from the €1,033bn proposal submitted more than a year ago by the European commission, the EU’s executive arm.

“Yes, we are prepared to make savings, but we are not prepared to have the European Union budget simply amputated,” he said.

Schulz declined to say whether the latest €960bn proposal being considered by Herman Van Rompuy, the European council president, crossed the line from extreme weight loss to amputation. But he was clearly displeased. Read more

There have not been too many Greek success stories in Brussels the last few years. But one of them may have emerged on Wednesday after a landmark vote in the European parliament to overhaul Europe’s troubled common fisheries policy.

Many hands deserve the credit – from MEPs to environmental campaigners and fishermen, themselves. But near the top of the list must be Greece’s Maria Damanaki, the fisheries commissioner.

Damanaki got the ball rolling when she introduced her own proposal curb overfishing in 2011, and has worked tirelessly since then to keep the momentum going.

“I’m a big fan,” Richard Benyon, the UK fisheries minister, said in December. “I think she has driven the reform process in a very determined way.” Read more

The big question entering Thursday’s summit is whether Herman Van Rompuy, the European council president, can find the right balance between the UK’s demands for an austere long-term budget and France and Italy’s calls for a more robust one. The more Van Rompuy stretches toward the Brits and fellow budget hawks by reducing his proposal, the more those on the other side of the debate pull back. Eventually, the whole thing could snap.

But on the eve of the big meeting, Van Rompuy may have found a clever way to give his budget more elasticity: By increasing the gap between budget commitments and payments. Read more

A plan to liberalise the EU sugar market, one of the most highly subsidised aspects of European agricultural policy, has been thrown into doubt after lawmakers rejected a proposal to end production quotas by 2015.

The European Parliament’s agriculture committee voted instead on Wednesday by a margin of 32 to 11 to extend the quotas until 2020. Some observers predicted they could last well beyond that.

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During his inaugural address on Monday, US President Barack Obama committed himself to a European priority that was shoved to the background during his first term in office: Fighting climate change.

“We will respond to the threat of climate change, knowing that failure to do so would betray our children and future generations,” Obama said. “Some may still deny the overwhelming judgment of science, but none can avoid the devastating impact of raging fires, and crippling drought, and more powerful storms.”

Those words were music to the ears of many in Brussels, who had assumed – wrongly, it turns out – that the White House was poised four years ago to join the EU’s campaign to forge an ambitious global climate treaty.

The irony of Obama’s climate pivot is that it was announced on the same day when the price of carbon in the EU’s emissions trading scheme fell to an all-time low, offering a distressing reminder about the disarray in a market that is the centrepiece of Europe’s climate policy. Read more

Europe’s top trade official accused Russia of reneging on its commitments to the World Trade Organisation just three months after it joined the group, and warned “the clock is ticking” before EU legal action.

The comments from Karel De Gucht, the EU trade commissioner, set the stage for a tense visit in two weeks when Vladimir Putin, the Russian president, is due to come to Brussels for a bilateral summit.

They also reveal how quickly the optimism that accompanied Russia’s accession to the WTO in August – after nearly 19 years of negotiations – has given way in Europe to a more familiar sense of frustration.

“Since Russia has become a member of the WTO they are doing exactly the opposite of what they are supposed to do or what they have been promising to do,” Mr De Gucht said in Brussels.

“At this moment in time, I’m rather upset about all this,” Mr De Gucht added, calling the developments “very disturbing.”

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Even before the European Court of Auditors released its annual review of EU spending on Tuesday, negotiations over the bloc’s next long-term budget had already turned tense.

A group of wealthy nations, led by theUK, are demanding more budgetary discipline and tighter controls on EU spending. Facing off against them are the poorer member states, led byPoland, which tend to benefit disproportionately from EU funding and are determined to keep the money flowing.

The auditors report is likely to give fresh ammunition to the first camp, while putting the second on the defensive. It found that there were “material errors” in 3.9 per cent of the bloc’s €129.4bn in spending last year – meaning more than €5bn was paid to those who should not have received it. The error rate was up from 3.7 per cent in 2010 and 3.3 per cent in 2009.

The worst offenders were the agriculture payments for rural development, where the error rate was 7.7 per cent, and the cohesion funds used for energy and transport projects, where the rate was 6 per cent, according to the report. Read more

A fresh draft of the EU’s long-term budget (a copy can be seen here) has shaved €50bn from the original proposal from the European Commission (which is here), in a partial concession to the UK and other member states determined to contain the bloc’s spending.

The draft, circulated late on Monday night, marked the first time that member states have specified hard figures in their EU budget proposal after more than a year of discussion. As such, it is a highly anticipated moment in the lead-up to a November 22 summit in Brussels when the EU’s 27 heads of government will try to reach a deal on one of their most contentious items of business.

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The EU’s former health commissioner has vowed to sue the European Commission in connection with his resignation over an alleged tobacco bribery scandal, escalating a messy dispute between the Maltese politician and his former boss, José Manuel Barroso, the Commission president.

John Dalli’s legal threat was issued during a one-hour press conference he staged in Brussels, the Commission’s home base, a little more than a week after his surprise resignation stunned the EU capital. Read more

Hollande arrives at the Party of European Socialists gathering ahead of the EU summit.

François Hollande, the French president, has just arrived at the socialist confab at The Square meeting centre in Brussels. Read more