Ukraine and defence overshadowed the main topics on the agenda of the leaders' summit in Brussels on Thursday with Hungary once again refusing to endorse a joint text on continuing military support to the war-torn country.
Leaders were primarily meant to discuss the bloc's competitiveness issues and how to remedy them and start discussions on the next multi-annual budget but those topics were eclipsed by the latest developments in the Ukraine war and the proposals by the Commission to give member states the means to significantly boost defence spending.
The executive's plan includes the relaxation of fiscal rules to unleash up to €650 billion in additional defence spending and a novel programme of €150 billion in low-interest loans that will be financed through common borrowing.
But for some capitals, loans are not enough.
Spain, Italy, Greece, Poland and the Baltic states are among those calling for grants, as the bloc did during the COVID-19 pandemic. Unlike loans, which are re-paid individually by the governments that request them, grants would be re-paid collectively by the 27 member states, alleviating the burden on those who need the money the most.
The Netherlands, however, remains adamantly opposed to any mention of grants, insisting the €150-billion programme of loans is the maximum it would tolerate.
Meanwhile, High Representative Kaja Kallas is struggling to keep afloat her ambitious initiative to raise up to €40 billion in military support for Ukraine, a number that, if achieved, would represent a two-fold increase from the aid delivered last year.
Relive the events of the day in the live-blog below:
