European Commission President Ursula von der Leyen has urged EU leaders to back a sweeping overhaul of the bloc’s regulatory framework and pursue new trade agreements, even as internal divisions over support for Ukraine and the future of economic policy deepen. The call came in an eight-page document circulated ahead of an informal meeting of EU heads of state on Thursday, February 19, 2026, focused on the bloc’s competitiveness.
Von der Leyen’s proposals center on simplifying European legislation and streamlining administrative processes for businesses, a move she argues is “a prerequisite for our freedom to choose our own destiny.” She specifically called for a “comprehensive regulatory deep house cleaning” to eliminate outdated provisions and inconsistencies within the EU’s rulebook. The push for simplification echoes similar sentiments expressed recently by Germany’s Friedrich Merz and Italy’s Giorgia Meloni, suggesting a growing, though perhaps uneasy, alliance focused on reducing bureaucracy.
Alongside domestic reforms, von der Leyen is advocating for the conclusion of new trade agreements globally, despite ongoing controversy surrounding the EU-Mercosur deal, which has faced significant protests from farmers concerned about economic pressures on the agricultural sector. Demonstrations against the Mercosur agreement have taken place in several member states, including Spain.
The Commission President’s agenda arrives at a particularly fraught moment for the EU, as evidenced by recent decisions regarding financial support for Ukraine. EU leaders have agreed to a €90 billion loan to Ukraine for 2026 and 2027, intended to fund its defense against Russia. This decision, reached in December 2025, represents a significant commitment, with approximately €52 billion earmarked for military support in 2026 and €33 billion in 2027. The loan is being financed through EU borrowing on capital markets, backed by the EU budget.
Though, the agreement on Ukraine funding exposed deep divisions within the bloc, particularly regarding the use of frozen Russian assets. While the EU has maintained a relatively united front on sanctions against Russia and support for Ukraine since the start of the conflict, the debate over financing highlights underlying tensions. The need for substantial financial assistance to Ukraine has been amplified by the reduced support from the United States following the return of Donald Trump to the White House in January 2025.
The EU is now Ukraine’s most essential financial partner, providing a vital stream of assistance. The estimated €136 billion in budget support needed by Ukraine for 2026 and 2027 remains a fixed figure, regardless of any potential peace initiatives. The €90 billion loan is intended to either bolster the ongoing war effort or establish a credible defense force to deter future Russian aggression.
Von der Leyen also emphasized the need to “deepen” the EU’s single market, removing internal barriers to facilitate cross-border growth for companies operating within the bloc. This initiative is presented as crucial for enhancing the EU’s overall competitiveness.
Kaja Kallas, a top EU diplomat, recently stated that the bloc should first outline the concessions it expects from Russia before engaging in peace talks, signaling a firm stance on the conditions for a resolution to the conflict. The EU has, from the outset, supported Ukraine’s right to self-defense against Russia’s aggression and has implemented unprecedented sanctions against Moscow.
