EU-Mercosur Deal Imperiled by French and Italian Agricultural Demands; UK Sets Deadline for Oligarch Fund

The long-anticipated final ratification of the landmark trade agreement between Mercosur and the European Union, scheduled for signing on Saturday, December 20, 2025, in Foz do Iguaçu, now faces significant jeopardy. This delay stems directly from formal postponement requests submitted by both France and Italy. The primary sticking point cited by both nations involves inadequate safeguards for their respective domestic agricultural sectors.

France, in particular, is adamant about incorporating stricter protective measures, such as so-called 'mirror clauses,' which govern standards related to pesticide use and animal welfare. Meanwhile, Italy is demanding the establishment of a dedicated financial safeguard package specifically tailored for its farmers. These national concerns are effectively putting the brakes on a deal that has been years in the making.

The European Commission had previously agreed upon agricultural safeguard mechanisms as recently as December 17, 2025. These provisions were designed to allow for the suspension of preferential access if imports from Mercosur countries increased by more than 8 percent annually, or if prices dropped by a comparable percentage over a three-year span. Proponents of the pact, including Germany, Spain, and the Nordic nations, view this agreement—which encompasses 722 million people and represents a quarter of global GDP—as strategically vital for diversifying trade away from China and mitigating potential fallout from United States tariffs.

French President Emmanuel Macron has made his country's position crystal clear, stating unequivocally that France will stand firm against any EU attempt to rush the ratification process. Concurrently, Italian Prime Minister Giorgia Meloni deemed any signing premature without the definitive locking-in of these protective measures. Amidst this diplomatic friction, Brazilian President Luiz Inácio Lula da Silva issued a stern warning: should the signing be postponed, Brazil will not celebrate the agreement under his tenure and will adopt a hardline stance in any future negotiations.

Running parallel to these trade tensions is a significant political development unfolding in the United Kingdom concerning the frozen assets of sanctioned Russian oligarch Roman Abramovich. On December 17, 2025, Prime Minister Keir Starmer addressed the House of Commons, imposing a strict 90-day ultimatum. He demanded that Abramovich transfer £2.5 billion, derived from the 2022 sale of Chelsea Football Club, into a designated humanitarian fund established for Ukraine.

These funds have remained held in a UK bank account since May 2022, following the imposition of sanctions due to Abramovich’s established ties with Russian President Vladimir Putin. The core of the current dispute centers on allocation: the UK government insists that the entire principal amount must be directed toward Ukrainian humanitarian needs. Abramovich, however, argues the money should support all victims of the conflict in Ukraine, a stipulation that could potentially include Russian recipients.

Chancellor of the Exchequer Rachel Stevens labeled the continued delay in resolving this matter as unacceptable. She confirmed the government’s readiness to initiate compulsory legal proceedings if the deadline is ignored. The club’s sale, finalized in May 2022 to a consortium led by American businessman Todd Boehly, concluded Abramovich’s tenure that began in 2003.

Simultaneously, German Chancellor Friedrich Merz urged the German Bundestag to adopt a decisive financial strategy against Russia, strongly backing the EU’s proposal for a ‘Reparations Loan’ utilizing approximately €210 billion in frozen Russian Central Bank assets. This critical matter is slated for a vote at the upcoming EU summit on December 18, 2025. Merz assessed the chances of the EU successfully agreeing on this loan as 'fifty-fifty.'

The objective of this loan is to finance Ukraine's defense, with repayment contingent only upon Russia actually paying reparations. This push for heightened pressure is encountering resistance from several member states, notably Belgium, Hungary, Slovakia, Italy, and Malta. Their primary concerns revolve around potential legal ramifications or retaliatory measures from Russia. German Minister for Europe, Günter Krichbaum, cautioned that failing to implement this scheme could have negative repercussions for the credit ratings of EU nations opposing the measure.