EU leaders ended two days of European Council talks in Brussels on Friday, 16 October 2026. The agenda covered competitiveness with China, the 2028–2034 seven-year budget and support for Ukraine. Deutsche Welle had previewed the meeting before it opened; the Council’s published conclusions show what was decided and what was left open.

The EU’s trade deficit with China was about €360 billion last year and, DW reported, is on course to exceed that in 2026. A week earlier the Commission and Beijing announced a deal to curb imports of Chinese hybrid cars. Leaders still asked for new trade-defence tools against imbalances they attribute to state subsidies. A hybrid-car deal therefore does not close the argument: chemicals and machinery remain, in Euronews’s account, among the sectors capitals want shielded next.

The long-term budget was not settled. The Irish presidency had put an updated negotiating box, with figures, on the table. German chancellor Friedrich Merz said on arrival that the Commission’s proposal was too large and that no member state could afford it. Swedish prime minister Ulf Kristersson called the texts “simply not acceptable”. Italy, through Giorgia Meloni, defended cohesion funds. Council president António Costa was asked to take the talks forward, with a deal targeted by the end of the year so that 2027 legislation would not leave a funding gap in January 2028.

Euronews reports that a special budget summit is set for 26 November. Costa is to propose a compromise before then. Unanimity still governs the file: one capital can block the package.

Volodymyr Zelenskyy joined the table on Friday. Leaders reaffirmed support for Ukraine and welcomed disbursements from the €90 billion support loan for 2026–2027. They asked the Commission for an updated needs assessment, with the IMF, and a proposal for extra 2027 financing. On arrival Zelenskyy wrote that Europe wants the war to end and that this requires real pressure on Russia and more defence support.

This article is not investment advice and does not treat an unsigned trade arrangement as law. ETS2, also discussed at this Council, is a separate story already reported.

Image: JLogan, Justus Lipsius, EU Council, Brussels, CC BY-SA 3.0, Wikimedia Commons; archive, not the 16 October 2026 press room.

Sources consulted: EU summit to focus on China, Ukraine and bloc budget - Deutsche Welle; European Council, 15-16 October 2026 - Consilium.