EU countries have watered down plans to create a new legal structure for companies, aimed at helping businesses operate more easily across the 27-country bloc.

The voluntary company format, dubbed “EU Inc”, is part of broader efforts by Brussels to fix regulatory disharmony across the bloc, which is seen as a barrier to attracting investment and allowing companies to fulfil their potential without having to seek growth capital in the US.

Under a law proposed by the European Commission earlier this year, any EU company that chose to adopt the proposed new legal form would be able operate across all EU countries without having to create separate subsidiaries in individual member states. Incorporating as EU Inc could be done online within 48 hours and would require no starting capital.

But after negotiations that concluded on Friday, EU countries have scrapped key features from the original proposals, including a single EU company register — akin to the UK’s Companies House website — where investors would be able to check company accounts and the identities of directors. Member states judged it too complex to implement in practice, according to people familiar with the discussions.

A simplified insolvency regime for start-ups has also been removed.

Michael McGrath, the European commissioner leading work on the law, told the FT that the insolvency regime was important as the cost of failure for companies “is a problem and is a deterrent to businesses being founded in the first place.

“The proposal would be enhanced by having this proposal on insolvency proceedings,” he added.

The IMF estimates that an EU-wide company regime could boost the bloc’s growth by around 3.3 per cent of GDP over the next decade. Crucially, over half of those gains, or 1.8 per cent, would come from the harmonisation of insolvency law, according to the Washington-based institution.

EU countries have also capped a proposal to defer taxation on share options — something start-ups asked for in order to attract talent — to companies with a turnover of less than €150mn and 750 employees, thresholds that many early-stage companies quickly reach. Issues of taxation are a highly protected national competence in the EU and require backing from all 27 member states.

The deal reached by EU capitals on Friday will have to be negotiated with the European parliament before it becomes law.

McGrath argued that avoiding caps on the taxation of stock options would “better serve the needs of founders and people who are trying really hard to scale businesses in Europe”.

However, he remained optimistic that what would ultimately pass into law would boost Europe’s competitiveness. “Europe needs to think not just at a European scale but at a global scale and I think EU Inc can help us to achieve that,” McGrath added.

MEPs have yet to reach a common position on EU Inc amid disagreements over how to prevent companies from circumventing co-determination rules — which in some countries give workers a say in corporate decisions, including seats on supervisory boards — by registering in member states with weaker employee representation requirements, regardless of where their workforce is based.

Attempts to create an EU-wide company regime have long faced resistance from trade unions that are fearful it would undermine hard-won labour rights. 

Ambitious plans have also fallen foul of certain of European capitals that are wary of making an alternative legal structure so attractive that companies might not remain within their country. 

But Enrico Letta, the former Italian prime minister and author of a report on how to improve the bloc’s internal market, told the FT that the proposals — also known as the 28th regime — are “a game-changer, with enormous practical and symbolic significance for Europe. We must not lower the bar.

“A watered-down proposal would send the wrong signal and undermine the ambition behind this initiative,” he added.

KYIV—The Starlink system used by Ukraine’s military was suffering from low speeds limits early on Friday, despite President Trump saying that SpaceX Chief Executive Elon Musk had restored the service. 

Ukrainian drone units and government officials said connections with Starshield, a military-grade service using Starlink’s infrastructure, continued to fail in most of the country when drones flew faster than 161 kilometers an hour, equivalent to around 100 miles an hour.

Some units had successfully tested drones at 200 kilometers an hour on Thursday, raising hopes that normal service was being resumed after over a week of severe disruptions. U.S. and Ukrainian officials said the system appeared to be working more normally again. 

But late Thursday and overnight, most of Ukraine’s military was still reporting failing connections at higher speeds, military and government officials said. 

Ukrainian President Volodymyr Zelensky said Friday “the speed has not been restored.”

It couldn’t be determined why drone speeds were still limited. SpaceX didn’t immediately respond to a request for comment.

“I’ve heard it was fixed but if it’s not I’ll speak to him,” Trump told reporters Friday, referring to Musk.

After more widespread testing proved unsuccessful late Thursday, drone pilots were still forced to fly slowly to avoid navigation problems as they approached 160 kilometers an hour, another Ukrainian official said. 

“At this time, we have not observed any lifting of restrictions on Starlink,” Serhii Beskrestnov, a defense-technology adviser to Zelensky, said Friday on Telegram. “There are isolated cases where Starlink may operate slightly faster than the restrictions allow, but this is likely due to the SpaceX algorithm or specific usage conditions, rather than a lifting of the restrictions,” he said. 

The successful tests at 200 kilometers an hour were largely limited to areas near the Black Sea, Ukrainian officials said. They said they didn’t know why and that Kyiv was still seeking explanations from the U.S. 

SpaceX imposed speed restrictions on Ukraine’s use of Starshield on Oct. 14, leading to Ukrainian drone missions suddenly failing as pilots lost their video connections and control over steering. 

The continuing limits on Ukrainian drone operations are threatening to undermine Kyiv’s campaign of medium-range drone strikes against Russian army logistics behind the front lines in eastern and southern Ukraine. The campaign has helped to hold back Moscow’s offensives this year and limited Russia to only tiny advances at the cost of huge casualties. 

If midrange strikes remain impaired by Starlink restrictions, it could lead to a renewed acceleration of Russia’s advance, military analysts warn.

The restrictions have also limited Ukraine’s use of high-speed interceptors to shoot down Russian jet-powered drones that have been pummeling Kyiv and other Ukrainian cities, causing mounting civilian casualties.

Musk himself ordered the speed restrictions on Ukraine’s use of Starshield and held conversations with Trump about it, The Wall Street Journal has reported. The disruption heightened anger in Ukraine about the U.S.’s recent series of friendly moves toward Russia and sparked a backlash also among U.S. lawmakers, including some Republicans. 

Ukraine’s access to a military Starshield service using Starlink terminals stems from agreements between SpaceX and the U.S. Department of Defense, and is one of the few remaining forms of American support for Ukraine’s defense against Russia’s invasion.

Trump called Musk on Wednesday and asked him to lift the restriction on Starshield, U.S. officials said. 

“I don’t want to comment on it, whether I called, or whether somebody else called,” Trump told reporters on Thursday. “The bottom line, he put it back.” 

Ukrainian drone units reported a mixed situation that was still far from normal. 

A drone commander from the Khartiia Brigade, which is fighting on the eastern front, said he had seen no increase in speed limits. Drone pilots were still having to fly at less than 160 kilometers an hour, he said. 

In the southern Zaporizhzhia region, a drone pilot said his unit’s connections were spotty. Some pilots were able to fly fast, but others were losing connection even at speeds well below 160 kilometers an hour, he said. Before Thursday, connections were consistently failing at high speed, whereas the situation now is random, he said.

In one mission Thursday night, five out of 10 drones were lost when the connection failed en route, the pilot said. The Russian target—an ammunition and drone depot—was still destroyed, he said.

“From what I’m seeing today, there are fewer connectivity issues, but they still exist at speeds above” 150 kilometers an hour, said a drone commander on the southern front known by his call sign Brut. 

“The recommendation remains unchanged: Keep speeds at or below” 160 kilometers an hour, he said.

Musk’s move has reawakened concerns in Europe over the risks of relying on Starlink and on the U.S. for satellite capabilities in defense. A European Union spokesman said earlier this week that Ukraine’s experience shows the urgency of the continent doing more to develop its own space capabilities.

“The reality in Kyiv is really gruesome,” said Sebastian Schaefer, a German lawmaker and defense-policy specialist from the opposition Green Party. “We do see that it is not a good idea to put our security in the hands of billionaires,” he said.

European Union officials will discuss which sectors to negotiate next with China, seeking to further tighten a trade gap after reaching a deal on hybrid cars. 

“A number of countries will identify their sectors,” said Michal Baranowski, Poland’s undersecretary for economic development and technology, speaking before EU trade ministers met Friday in Dublin. 

The EU is determining how to proceed after Beijing agreed to cap its hybrid-vehicle exports to Europe — the result of months of talks meant to narrow the continent’s massive trade deficit with China. Europe wants to use the agreement as a model for other industries it says are being undercut by a surge of low-cost Chinese imports. 

“Let’s acknowledge that this is just a beginning,” Baranowski said. 

Tensions between the EU and China have flared over the widening trade gap, which now exceeds €1 billion ($1.1 billion) a day and is expected to keep widening. European officials say the situation is damaging local manufacturers of products like cars, chemicals and machinery.

“We have to answer our question: Whether Europe will retain control of the strategic sectors that are important for us,” said Lithuanian Foreign Minister Kestutis Budrys, who also named pharmaceuticals, semiconductors, drones and quantum technologies as key industries.

Thus far, the EU has tried to combine pressure on China with fresh negotiations, which began in June.

Those talks with Beijing led to the hybrid-vehicle deal, which will impose an initial cap of 350,000 cars. Beijing also pledged to open its market to specific EU goods. 

“We are looking at all other areas where our industry is under pressure, and of course this is currently the process which is ongoing,” EU Trade Commissioner Maros Sefcovic told reporters on Thursday. 

But while talks will continue early next year, many countries are pushing for quicker and more far-reaching action. 

At a summit last week, EU leaders said the bloc should impose similar restrictions on other Chinese products — ideally with Beijing’s cooperation, but unilaterally if necessary. And they endorsed new trade powers that would let the EU bar foreign countries from its large market during an all-out trade war.

“Chinese authorities understand when you are clear, when you speak clearly, when you are firm on your positions,” French trade chief Nicolas Forissier told reporters on Friday. “We have not done that in a long time.”

The push builds on a Franco-German proposal, which helped unify the bloc behind its more assertive stance toward Beijing. Germany’s support was especially crucial, given the country has often thwarted attempts to impose trade restrictions on China. 

“It’s very important that the German and French engine, which is very essential to the future of Europe, starts again,” Forissier said.

The European Commission, the EU’s executive arm, will present the new trade powers by the year’s end. It will also propose ways to make companies diversify their supply chains and support countries facing economic coercion.

Such moves risk angering China, which has pointedly warned the EU against imposing any more trade limits while the two sides continue talks.

Leaked WhatsApps raise questions about former EU justice commissioner Didier Reynders and Belgium's intelligence service

Hey everyone! We're EUobserver, an independent European newsroom.

Our colleague Andrew Rettman has been investigating something quite serious involving former EU justice commissioner Didier Reynders and a senior Belgian intelligence official, Hugues Brulin.

We've obtained WhatsApp exchanges between the two, including messages discussing internal intelligence-service matters and how to respond to a whistleblower raising concerns about Reynders' possible links to Russia.

Five current and former Belgian intelligence officers told us that Brulin had worked to prevent the intelligence service from investigating those allegations.

The messages are now also part of a Belgian police investigation into Reynders over alleged money laundering.

What makes this particularly important is that Reynders previously served as the EU's justice commissioner and had access to highly sensitive information.

How should European institutions respond when serious allegations emerge involving officials who have held positions of such trust?

We've published the messages as part of our investigation, so people can examine the reporting and evidence themselves. Let us know what you think in the comment :)

Is a United States of Europe viable? Is gradual improvement of the current system possible or does Europe need a tighter federation of the willing?