FirstFT: Expanded EU would see farm subsidies fall and entitle Ukraine to €186bn

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Ukraine’s accession to the EU would entitle Kyiv to about €186bn over seven years, according to internal estimates of the union’s common budget, turning “many” existing member states into net payers for the first time.

The modelling, the first to emerge from Brussels on the potential accession of nine new member states, underlines the profound political and financial implications of expanding the union across the continent. Clearing a path for Ukrainian membership has been a top priority for EU leaders since Russia’s full-scale invasion last year.

EU officials this summer estimated the potential financial ramifications in a study seen by the Financial Times, which used existing rules for the union’s 2021-27 budget. These were applied to an enlarged union including Ukraine, Moldova, Georgia and six western Balkan states.

The financial tally of adding all nine members to the existing budget, known as the multiannual financial framework, would be €256.8bn, the paper estimates. The knock-on effects for existing member states would include a cut in farm subsidies of about a fifth.

Here’s more on how the new members would decisively tip the financial balance within the bloc.

• More EU: The bloc is assessing export controls in sensitive technology, including semiconductors and AI, as part of its attempt to “de-risk” its relationship with China and other authoritarian regimes.

• War in Ukraine: President Joe Biden hosted a call with western leaders yesterday to co-ordinate assistance for Kyiv after a deal to keep the US government open left out more aid for Ukraine.

Here’s what else I’m keeping tabs on today:

• UK Conservatives: Rishi Sunak is expected to close the party’s conference with a speech announcing plans to axe the HS2 project’s northern leg. Government insiders said Chancellor Jeremy Hunt had successfully pushed for the high-speed rail line to end in central London, even as the prime minister mulled terminating it six miles from the city centre to save money.

• Economic data: S&P Global releases its services purchasing managers’ indices for Canada, the EU, France, Germany, the UK and the US.

• Results: The UK’s largest supermarket operator Tesco announces results. Accolade and Topps Tiles also report.

Want the inside track on British politics? Sign up for our Inside Politics newsletter or listen to our weekly podcast, Political Fix.

Five more top stories

1. Kevin McCarthy has been ousted as Speaker of the US House of Representatives, becoming the first leader in the history of the lower chamber of Congress to be removed from the position. Eight Republicans voted against him and sided with 208 Democrats to seal his fate in a dramatic roll call vote yesterday. Lauren Fedor and Alex Rogers have more details from Washington.

• Go deeper: After the historic “motion to vacate” successfully fired McCarthy, one lawmaker loudly asked a question that has echoed across Capitol Hill: “Now what?”

2. Exclusive: Revolut has agreed to simplify its ownership structure with its largest investor SoftBank after months of talks, with the Japanese group demanding stiff compensation for giving up its priority class of shares. The Bank of England had made collapsing the company’s six classes of shares a condition for granting the UK’s most valuable fintech a banking licence. Here are more details on the agreement.

3. Exclusive: Airbnb is plotting a push into longer-term housing rentals and a renewed drive on experiences as part of a shake-up of the travel accommodation app, said chief executive Brian Chesky. The company would “go a little bit beyond its core business” from next year, he said. Read his full interview with the FT.

4. The Premier League is to revamp the sale of its TV rights in the UK ahead of its auction, with plans to extend the duration of the deal to four years and remove the so-called Amazon smaller tranche of games in favour of fewer, bigger packages. Here’s why the football competition is making the move.

5. Exclusive: Germany is seeking a “grand bargain” with France to resolve their stand-off over nuclear power and help unblock a sweeping reform of the EU’s electricity market. A senior German official told the FT that the “larger compromise” could cover several aspects of energy policy, not just the nuclear issue. Here’s why his comments are likely to be viewed with scepticism in Paris.

The Big Read

The world’s deadliest recent war — in which an estimated 600,000 people died — ended last November. A peace deal signed in South Africa finally stopped two years of fighting between Ethiopian forces and the Tigray People’s Liberation Front. The once-promising country now faces a long road ahead to recovery, but lingering animosity is threatening progress.

We’re also reading . . . 

Chart of the day

Yesterday, the yield on 30-year US Treasuries hit 4.95 per cent for the first time since 2007, as a sell-off in global bond markets pushed equities down and rocked currencies such as the yen and the rouble. German and Italian borrowing costs also hit their highest levels for more than a decade.

Take a break from the news 

The rich, we are told, don’t try to look rich. Real money has nothing to prove and no one left to impress. It is comfortable. It wears what it likes. “Quiet luxury” is a kabuki performance of moneyed ease and indifference, and according to Robert Armstrong and Lauren Indvik, here’s how to do it right.

Additional contributions from Benjamin Wilhelm and Gordon Smith