Good morning. A scoop to start: Brussels is set to impose minimal fines on Apple and Meta next week for breaching digital rules, as it seeks to avoid further escalating tensions with Donald Trump.

Today, in her first interview with a foreign newspaper since taking office, Italian Prime Minister Giorgia Meloni tells the Financial Times it is “childish” to believe that Italy must choose between the US and the EU, and insisted she would do whatever was necessary to defend her country’s interests.

Here, she tells us more about her idea to extend Nato’s mutual defence clause to Ukraine. And our finance correspondent hears the case against redirecting EU funds towards defence.

Have a great weekend.

The Meloni plan

Giorgia Meloni is no fan of deploying a reassurance force to Ukraine, deeming the proposal to be too difficult and risky. She has a better idea, write Ben Hall, Roula Khalaf and Amy Kazmin. 

Context: European leaders gathered in Paris yesterday to discuss the Franco-British proposal of sending troops to Ukraine to secure a ceasefire with Russia. Meloni has been sceptical of putting Italian boots on Ukrainian ground.

The Italian premier told the FT that instead, she wants to extend Nato’s mutual defence clause to Ukraine without admitting the country into the alliance.

This would be “easier and more effective than the other ideas that are on the table”, Meloni said.

The proposal has baffled European and Ukrainian officials, since collective defence under Article 5 is the essence of Nato. The risk of becoming directly embroiled in a war with Russia is why the Trump administration is dead set against Ukraine Nato’s membership. So why would Washington agree to it?

As for Ukraine, a paper guarantee of mutual defence would be unlikely to offer the commitment it is looking for.

Meloni countered that the reassurance force risked provoking Moscow. By contrast, her vision of a defence pledge to Kyiv, without the accompanying Nato structures and military bases, would be less threatening to Russia. It would only be triggered if Russia attacked Ukraine again.

“If they see it as a big threat, without Ukraine in Nato, it means we have a problem. It means we cannot trust any kind of peace signed with Russia, for if it is true that Russia doesn’t want to invade Ukraine again, why should it say no?” Meloni said.

The Trump administration also has an interest in making a deal stick, she added. While she didn’t think Putin would attack Ukraine again as long as Trump remained in office, “the problem is what happens after”. That would also be a concern for Donald Trump since his legacy would be at stake, she said.

It is far from clear that Trump or his officials would be swayed by Meloni’s arguments, which could look like more European security freeloading to them. Meloni said she needed time before presenting her plan to the White House. 

Chart du jour: Failed bailout

The US bombing of Yemeni Houthis to stop their shipping blockade won’t help global commerce but American protectionism will certainly damage it, writes Alan Beattie.

Shot in the foot

Brussels’ plan to divert billions of unspent regional development funds to boost Europe’s industrial defence production is self-harming, the president of the EU’s Committee of the Regions tells Paola Tamma.

Context: European Commission president Ursula von der Leyen has proposed tapping into so-called cohesion funds among several options for EU countries to finance re-arming the continent.

“The EU wants to divert resources to defend the EU from outside, but if you diverge resources from the inside to the outside, that can cause problems”, said Kata Tüttő, who heads the EU’s body of regional representatives. 

An upcoming proposal from commission vice-president Raffaele Fitto is set to detail how exactly countries could tap into these funds for new priorities including defence, housing and competitiveness. 

EU ministers responsible for cohesion policy are meeting today to discuss the issue.

One idea is to give countries an advance payment instead of regular reimbursements, officials said. Another is to do away with a requirement from local entities and governments to co-finance regional projects, they added.

Cohesion funds also need to be spent more rapidly. Currently, only around 6 per cent has been spent, although more than half of the latest budget cycle has passed.

But the planned cohesion review — yet to be finalised — has already caused concern among the regions and cities benefiting from the funds, who fear the effect of cuts to projects that finance areas such as education, infrastructure or small businesses. The solution isn’t shifting funds around, but finding fresh resources, they argue.

“You need more energy in the system. If you just divert blood from the brain to the arms, you will get nowhere”, said Tüttő.

What to watch today

1. EU trade commissioner Maroš Šefčovič visits China.

2. EU ministers responsible for cohesion policy meet in Brussels.

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