Northern Course of Europe

Aarhus, July 3. A Tense Start

On the first day of its presidency of the Council of the European Union, Denmark assumed not only the rotating banner but also the political turbulence with which the Union enters the summer of 2025. At the ceremony in Aarhus, where the programmatic document was presented under the motto “A Strong Europe in a Changing World”, Copenhagen clearly outlined its priorities: defense, energy and economic independence, migration, climate, and budget (AP, July 3, 2025).

On the same day, Ukrainian President Volodymyr Zelensky arrived in Denmark to discuss not only continued military assistance but also the main political challenge — Hungary’s resistance to the plan for Ukraine’s accelerated EU accession. Zelensky’s presence was more than a symbol of solidarity: it was a diplomatic signal directed at both Brussels and Budapest (The Washington Post).

Danish Foreign Minister Lars Løkke Rasmussen explicitly stated his readiness to exert “maximum pressure” on Hungary to lift its veto:

“We respect that the EU Council operates on the basis of consensus. But consensus does not mean that one country can block the entire future of Europe.” — (Euronews).

Thus, the presidency began not with protocol handshakes, but with a direct diplomatic confrontation. Denmark demonstrates that it is ready to take an active stance, even if it means internal conflict within the Union.

Enlargement Under Veto: Ukraine as a Test for the Union

With the autumn 2025 EU enlargement summit approaching, Ukraine’s accession once again becomes a test not only of solidarity but of the institutional capacity of the Union. Despite consistent support from most member states, Hungary maintains its veto, blocking the start of the negotiation process for accelerated accession.

Denmark, starting its presidency, is betting on removing this obstacle. Volodymyr Zelensky’s visit to Aarhus on July 3 is no coincidence: Kyiv is clearly counting on Copenhagen to organize political pressure on Budapest and diplomatically align positions within the EU Council. As noted by The Washington Post (July 3, 2025), the Ukrainian leader held a series of meetings with EU leaders to discuss accession priorities and political support from member states.

However, Hungarian resistance remains firm. Budapest accuses Ukraine of violating minority rights and demands “legal guarantees” before any further steps are taken. In response, Denmark points to the urgency and risks for the EU’s common foreign policy.

As Euronews highlights, calls are increasingly heard in Brussels to reconsider the unanimity rule in critical foreign policy matters so that a single country cannot paralyze the entire mechanism. But for now, these discussions remain theoretical, decisions are made slowly — and the war moves fast.

Trade and Tariffs: Accelerate or Fall Behind

While the political core of the European Union grapples with vetoes and borders, the economy demands its own pace. On July 3, Germany — traditionally the EU’s economic engine — issued a call for the swift conclusion of tariff negotiations with the United States, with the deadline set for mid-July.

Friedrich Merz, leader of the CDU parliamentary group in the Bundestag, stated that “a quick result is essential. Better fast and simple than slow and complicated,” adding that the consequences of failure would be felt in the automotive, metallurgy, and pharmaceutical industries — three of Germany’s key export sectors (Reuters, July 3, 2025).

In light of these statements, European stock markets reacted positively: the STOXX 600 index rose by 0.3% — a signal that the markets still believe a compromise is possible. As Reuters reports, the key driver of this optimism was not only the EU–US dialogue but also the U.S. signing of a trade agreement with Vietnam, which boosted global risk appetite.

Nevertheless, if a deal with the U.S. is not reached within the next two weeks, the EU risks triggering a chain of retaliatory measures and losing competitiveness in external markets. This would add yet another pressure point to Denmark’s presidency, already burdened with questions of security, climate, and democracy.

The Budget of the Future: Borrow or Save?

Amidst military, trade, and climate challenges, on July 3 the European Commission unveiled one of the most ambitious and controversial elements of its agenda: a proposal to create a permanent joint borrowing mechanism to finance the EU budget for the 2028–2034 period. For the first time since the pandemic, Brussels has officially expressed its intention to make joint debt a lasting instrument of pan-European economic policy.

The core idea is simple: instead of each country borrowing money at different interest rates, the EU would centrally issue bonds and redistribute funds through budgetary mechanisms. According to the Commission’s plan, this would strengthen investment in defense, green technologies, digitalization, and Ukraine’s integration.

But as the Financial Times (July 3, 2025) reports, the proposal has already met sharp resistance from Germany, the Netherlands, and Sweden, which insist on strict adherence to the Maastricht rules and reject the idea of “debt federalization.”

Supporters of the initiative argue that Europe must secure financial autonomy in a world where the U.S. and China are massively investing in defense and industrial sectors. Opponents see it as a step toward losing national control over fiscal policy and a potential precedent for unlimited borrowing.

For Denmark, as the presiding country, this dilemma is especially sensitive: on the one hand — the need to ensure EU unity in the face of global challenges; on the other — an understanding of the concerns in northern countries, where fiscal discipline is almost part of the cultural DNA.

Artificial Intelligence and Natural Resistance

On the day Denmark began its presidency, it became clear that it’s not only Hungary’s veto or borrowing plans that are sparking disputes. A new front of tension is emerging between European regulators and the continent’s largest companies. The issue at stake is the AI Act — the EU’s flagship legislative package on artificial intelligence regulation.

On July 3, forty-six CEOs of leading European companies — from Airbus to Siemens and Renault — sent an open letter urging the EU to suspend the AI Act’s implementation and revise the rules, which they argue create disproportionate barriers to innovation and competitiveness. Among their concerns: excessive bureaucracy, high compliance costs, and the risk of losing technological sovereignty.

Politico, July 3, 2025

“While the U.S. and China are moving forward rapidly, Europe risks being left behind,” the letter states — a message Politico calls “a rare act of unity and pressure from the business community.”

The Danish side has not yet made an official statement, but within the Council of the EU, discussions are already underway on whether to temporarily suspend the law’s entry into force or propose amendments to key articles.

This conflict is a litmus test for the entire European strategy: can the EU be both a leader in ethics and a technological powerhouse, or will it have to choose between ambition and reality?

Circular Pressure: Climate as an Industrial Stake

While some EU initiatives meet resistance, others raise a different question: is the Union ambitious enough to withstand global competition in transitioning to a new industrial model? One such initiative is the European Commission’s circular economy package, presented on July 3, 2025, in Brussels.

According to Innovation News Network, the Commission announced a set of measures to accelerate the shift to closed-loop production chains, raw material recycling, resource reuse, and reduced dependency on critical imports. At the heart of the plan are green technologies, raw material alliances, and digital tracking of product life cycles.

The proposal is seen as a response to the escalating technological race: the U.S. and China are ramping up investments in decarbonization while simultaneously erecting protectionist trade barriers. The EU is attempting to offer its own model — not just regulation, but an industrial transformation where climate goals underpin competitiveness.

However, as analysts point out, without aligned budget support (see the borrowing block) and reduced regulatory burden (see the AI block), the transition to a circular economy may remain a declaration rather than a transformation. Especially since member states still differ significantly in their readiness to adopt such practices.

Denmark as a Mirror: The EU Between Speed and Balance

As it embarks on its six-month presidency, Denmark finds itself not merely as a coordinator of the EU Council’s work, but as a symbol of the contradictions the Union faces: between acceleration and consensus, ambition and caution, East and West, business and regulator.

Each topic raised in the first 24 hours of the presidency — from Hungary’s veto to digital pressure, from budget disputes to climate initiatives — illustrates a single point: the EU’s structure needs new governance tools in an age of crisis. A renewed foreign policy is impossible without internal architectural reform. Regulation cannot function without dialogue with those who must implement it. And a climate model for the future requires more than investment — it demands political maturity and coherence.

The choice facing Europe is not between left and right, nor between federal and national. It is a choice between time and opportunity. And so, Denmark’s key challenge as president is not to accelerate the Union at any cost, but to keep it on a sustainable trajectory despite friction.

The words spoken in Aarhus on July 3 — about “a strong Europe in a changing world” — do not sound like a slogan. They sound like a challenge: can the Union truly be strong when everything around — and within — is changing?