This article is an on-site version of our Europe Express newsletter. Premium subscribers can sign up here<\/a> to get the newsletter delivered every weekday and fortnightly on Saturday morning. Standard subscribers can upgrade to Premium here<\/a>, or explore<\/a> all FT newsletters<\/p>\n<\/div>\n<\/div>\n<\/div>\n Good morning. Last night as EU leaders mulled how to react to Donald Trump\u2019s trade war, Ursula von der Leyen floated the idea of founding a rival to the World Trade Organization: my colleagues explain her thinking. And our Budapest correspondent reports on the plans by EU politicians to defy a ban on the Hungarian capital\u2019s Pride march tomorrow.<\/p>\n Have a great weekend.<\/p>\n As Donald Trump takes a wrecking ball to the international trade system, the EU is proposing to set up its own dispute settlement body in order to salvage free commerce, write <\/strong><\/em>Laura Dubois<\/strong><\/em><\/a> and <\/strong><\/em>Andy Bounds<\/strong><\/em><\/a>.<\/strong><\/em><\/p>\n Context: EU leaders met in Brussels yesterday to discuss how to respond to US President Donald Trump\u2019s tariffs<\/a>, with a looming deadline on July 9. But they also touched upon other measures to preserve the international trade system.<\/p>\n European Commission president von der Leyen proposed that Brussels team up with the 11 other global economies of the CPTPP<\/a> to form an institution to replace the WTO<\/a>, which is struggling to contain global tensions<\/a>.<\/p>\n \u201cAsian countries want to have a structured co-operation with the EU, and the EU want the same,\u201d von der Leyen said. \u201cWe can think about this as a beginning of a redesigning the WTO\u2009.\u2009.\u2009.\u2009to show to the world that free trade with a large number of countries is possible on a rules-based foundation.\u201d<\/p>\n Von der Leyen declined to answer when asked if the US would be invited to join.<\/p>\n German Chancellor Friedrich Merz welcomed the proposal, and said he had broached a similar idea with French President Emmanuel Macron and UK Prime Minister Sir Keir Starmer.<\/p>\n \u201cThe WTO does not work anymore\u201d, said Merz. \u201cCan\u2019t we gradually establish something with our trading partners around the world that institutionally replaces what we actually already envisioned with the WTO, namely a dispute settlement mechanism through an institution like the one the WTO was supposed to be?\u201d<\/p>\n The US has been blocking the WTO\u2019s binding dispute resolution system, although 29 members, including the EU and China, have created a voluntary alternative. <\/p>\n During the meeting, the commission also presented an outline of a potential trade agreement sent by the US. Most EU countries are in favour of Brussels negotiating a quick deal<\/a>, but there are divisions over what to do if the US insists on 10 per cent blanket tariffs.<\/p>\n \u201cWe are preparing for the possibility that no satisfactory agreement is within reach,\u201d von der Leyen said. \u201cAll options remain on the table.\u201d<\/p>\n EU leaders also agreed to roll over<\/a> the bloc\u2019s sanctions on Russia in July, but its newest sanctions package still hangs in the balance. Slovakia will block the package unless it receives concessions from Brussels in its salvo against the last vestiges of Russian gas, Prime Minister Robert Fico said.<\/p>\n Turkey\u2019s economic doldrums have drained President Recep Tayyip Erdo\u011fan\u2019s popular support<\/a>, jeopardising his plans to remain in power and his geopolitical aspirations for the country.<\/p>\n The mayor of Budapest and dozens of EU politicians will defy Hungary\u2019s<\/a> ban of its capital\u2019s yearly LGBT+ Pride march tomorrow, writes <\/strong><\/em>Marton Dunai<\/strong><\/em><\/a>.<\/strong><\/em><\/p>\n Context: Hungary passed a law earlier this year enabling police to ban public gatherings deemed threatening to children\u2019s development. The authorities used these powers to ban the Pride march in Budapest, despite criticism that the law was being used to suppress the freedoms of speech and assembly.<\/p>\n Von der Leyen on Wednesday called on Prime Minister Viktor Orb\u00e1n \u201cto allow the Budapest Pride to go ahead without fear of any criminal or administrative sanctions\u201d.<\/p>\n But Orb\u00e1n, arriving in Brussels yesterday, said that \u201cchildren\u2019s rights supersede all other liberties\u201d and called on the commission \u201cto refrain from interfering in the law enforcement affairs of member states\u201d.<\/p>\n Budapest mayor Gergely Kar\u00e1csony has vowed to allow the march, and critics and allies alike are now watching whether Orb\u00e1n will actually stop it. <\/p>\n Hungarian justice minister Bence Tuzson sent a letter to embassies and the commission on Wednesday, telling them that \u201cthose who take part in an event prohibited by the authorities commit an infraction\u201d.<\/p>\n Dozens of EU lawmakers will attend the march, including the chiefs of the Liberal, Green and Socialist groups in the European parliament.<\/p>\n \u201cOur presence at Budapest Pride is an act of resistance, a duty of solidarity,\u201d said Val\u00e9rie Hayer, the chief of the liberal Renew group.<\/p>\n EU equality commissioner Hadja Lahbib will also be in Budapest and meet Kar\u00e1csony and civil society groups, though it\u2019s unclear if she will attend the march. \u201cIn view of the fluidity of the situation, she will assess her presence at the Pride on the ground,\u201d a spokesperson said.<\/p>\n German Chancellor Friedrich Merz hosts his Austrian counterpart Christian Stocker in Berlin.<\/p>\n<\/li>\n European parliament president Roberta Metsola meets Italian President Sergio Mattarella in Rome.<\/p>\n<\/li>\n<\/ol>\n Old versus new guard:<\/strong> Germany\u2019s Social Democrats are wrangling over rising defence spending<\/a> and relations with Russia. <\/p>\n<\/li>\n Missed target:<\/strong> Preliminary intelligence provided to European governments indicates that Iran\u2019s highly enriched uranium stockpile remains largely intact<\/a>.<\/p>\n<\/li>\n Surprise:<\/strong> The European Central Bank\u2019s battle against inflation has caused less damage to the wider Eurozone<\/a> than anticipated, says a veteran policymaker.<\/p>\n<\/li>\n<\/ul>\n Free Lunch<\/strong> \u2014 Your guide to the global economic policy debate. Sign up here<\/a><\/p>\n The State of Britain<\/strong> \u2014 Peter Foster\u2019s guide to the UK\u2019s economy, trade and investment in a changing world. Sign up here<\/a><\/p>\n<\/div>\n<\/div>\n<\/div>\n Are you enjoying Europe Express? <\/em>Sign up here<\/em><\/a> to have it delivered straight to your inbox every workday at 7am CET and on Saturdays at noon CET. Do tell us what you think, we love to hear from you: <\/em>europe.express@ft.com<\/em><\/a>. Keep up with the latest European stories <\/em>@FT Europe<\/em><\/a><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\nSummit wrap<\/h3>\n
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