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This is Eddy Wax, with Nicoletta Ionta in Brussels. We welcome feedback and tips here. You can sign up here.

In today's edition:

- The ongoing culture war over NGO funding
- 9 EU states' push to end trade with Israeli settlements in the occupied territories
- Greece gets a noise complaint from Brussels

Markus Pieper’s 20-year career in the European Parliament ended in ignominy last year, when 382 MEPs voted against his appointment as the EU’s SME envoy. It was an embarrassment for him and his political ally Ursula von der Leyen.

Pieper, though, is having the last laugh. On Thursday, his EPP colleagues pushed through a six-month investigative body into the funding of NGOs that will breathe fresh life into a sprawling Brussels culture war. The EPP, aided by far-right groups, says NGOs should not be receiving Commission funding to lobby the Parliament, notably on green topics. NGOs say they are scapegoats and that EU funding helps them survive and remain objective.

Though other lawmakers have now taken up the fight, the magnifying glass being placed on NGOs – particularly environmental groups critical of the Commission’s free trade agenda on TTIP and Mercosur – is something Pieper spent at least a decade lobbying for.

He filed report after report pointing the finger at NGOs, all the while acting as the powerful CDU party’s point person on small and medium sized businesses in Brussels – a role that exposed him to no shortage of lobbying himself, albeit from the corporate side of the spectrum.

Greens, socialists, liberals, and civil society groups hate the new “scrutiny working group”, which will demand to see more contracts the Commission signed with NGOs. “It's basically a permanent slander platform,” said Ariel Brunner, BirdLife Europe’s regional director.

Pieper hasn’t disappeared. He told Die Welt this month that the Commission’s activities represented “a clear violation of the principle of separation of powers”. He did not reply to request for comment on Thursday.

“In the last parliament we had a progressive majority and voted [Pieper’s] nonsense down,” said Daniel Freund, a German Green who worked for Transparency International before his first term as MEP in 2019. But now EPP chief Manfred Weber “has a majority with the fascists and uses it”.

A recent Court of Auditors report, which Freund says “found no rule violations”, does however criticise the Commission for lacking transparency when it comes to its relationship with NGOs.

“The Commission did not clearly disclose to the public the information it held on NGOs’ advocacy activities that were financed through this type of grants,” the auditors wrote.

The true impact of the brouhaha on NGOs remains to be seen. But on the eve of the Commission’s 2028-2034 budget proposal, and with the planet getting warmer and the EU Green Deal getting weaker, it is already proving a major distraction.

Now read this: My colleague Niko J. Kurmayer’s take on the saga.

BELGIUM TAKES THE LEAD: Belgium is leading a push, backed by eight other EU countries – Finland, Ireland, Luxembourg, Poland, Portugal, Slovenia, Spain, and Sweden – to pressure the EU to end trade with Israeli settlements in the occupied Palestinian territories, according to a letter seen by Euractiv.

The EU is Israel’s biggest trading partner, with €42.6 billion in trade last year, though it's still unclear how much of that involves products from settlements.

Mark our calendars: The timing is no coincidence. EU foreign ministers meet Monday to review the EU-Israel association agreement, based on a review produced by EU’s top diplomat Kaja Kallas. Another option on the table: potential sanctions on Israeli ministers and violent settlers.

Coming up next: According to EU diplomats, the expected timeline is that after EU foreign ministers and leaders discuss the review next week they could ask the EU’s diplomatic service to come up with policy options by mid-July, Alexandra Brzozowski reports.

Rome’s new migration concerns: After long championing the EU’s return rules as a migration win, Italy is now sounding the alarm over the Commission’s proposed returns regulation.

Rome is pushing back particularly hard against the introduction of a European return order, which would mandate mutual recognition of return decisions among member states. The Italian Senate is warning that such a move could “obstruct enforcement” and limit national discretion – especially over key elements such as the length of re-entry bans. Read more.

On infringement procedures day, Greece got the loudest slap: Brussels is sending Athens to the Court of Justice for failing to adopt noise action plans.

Under the EU Noise Directive, countries must create action plans to reduce harmful noise and report their noise data regularly. Noise is linked to an estimated 11,000 premature deaths and 41,000 new cases of ischemic heart disease annually in Europe, the Commission said.

According to EU rules, member states had to submit noise maps by 2012 and action plans by 2013, but Greece stalled. After several formal notices, Brussels said Greece’s efforts remain “insufficient”. The case is now headed to the EU’s top court.

“There is no scandal. EPP screams scandal. Commission looks at dozens of contracts. There has not been a single violation of rules. No irregularities. Nothing.” - MEP Daniel Freund on the conservative push to scrutinise NGOs’ Commission funding.

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FRANCE
French Greens politician Pouria Amirshahi had been scheduled to travel to the east coast of the United States to meet with political leaders, intellectuals and figures from civil society. On 20 May, he launched La Digue, a collective aimed at building an international coalition of 'progressives'. Despite having the backing of Foreign Minister Jean-Noël Barrot, the US embassy in Paris refused Amirshahi's visa application without providing an explanation.

GERMANY
German Chancellor Merz told Israel to moderate its attack on Iran in a phone call with Israeli Prime Minister Benjamin Netanyahu, according to Reuters. The chancellor reportedly voiced support for Israel’s campaign against Iran's nuclear programme but stressed the importance of seeking diplomatic solutions.

SPAIN
As NATO leaders prepare to discuss raising defence spending to 5% of GDP at next week’s summit in The Hague, Spanish Prime Minister Pedro Sánchez has openly rejected the proposal in a letter sent to NATO Secretary-General Mark Rutte on Thursday. Read more.

SWEDEN
Simona Mohamsson, a relatively unknown 30-year-old party secretary, is poised to become the next leader of the weakened Swedish Liberal Party after the nominating committee unanimously backed her on Thursday. Read more.

FINLAND
Lawmakers on Thursday approved an overhaul of the Sami Parliament Act, enhancing the self-governance rights of Europe’s only recognized indigenous people. Read more.

ROMANIA
Talks on a new government in Romania ended in yet another deadlock on Thursday, preventing the expected announcement of a nominee for prime minister. Read more.

Equality Commissioner Hadja Lahbib is so far the only commissioner set to attend the Budapest Pride, defying internal advice from Ursula von der Leyen's team against it. Read more.

British businesses and farmers continue to praise the promised food trade deal with Brussels, but critics say the UK's gene-editing rules, smoky bacon flavoured crisps, and a potential ban on French foie gras could now all be at risk. Read more.

Tech giant Amazon won't send senior management to a European Parliament hearing into working conditions at its warehouses, according to an agenda seen by Euractiv. Read more.

EU social affairs ministers agreed on Thursday to combat ‘false’ traineeships, but stopped short of calling for a ban on unpaid internships and left room for EU capitals to broadly interpret the new rules. Read more.

Germany and Britain are set to sign a major bilateral friendship treaty as early as next month, according to officials briefed on the plans. Read more.

Hanneke Boerma, known to many in Brussels for her work at the Dutch perm rep handling its relations with the European Parliament, is set to be state secretary for foreign trade in the Netherlands' caretaker cabinet.

The DG ECFIN Community Choir delighted journalists and officials at the Berlaymont on Thursday afternoon with a spirited performance of “Grease: You’re the One That I Want”.

  • ECOFIN meets in Luxembourg
  • Health Council convenes in Luxembourg
  • Von der Leyen is in Rome to co-chair with PM Giorgia Meloni the summit "The Mattei Plan for Africa and the Global Gateway: A common effort with the African Continent".
  • European Parliament President Roberta Metsola visits Poland. Meets Prime Minister Donald Tusk. In Łódź, receives Honoris Causa from Lodz University of Technology and addresses the “Ode to Joy” record event.

Reporters: Nick Alipour, Alexandra Brzozowski, Charles Szumski, Catalina Mihai.

Editors: Vince Chadwick and Sofia Mandilara.

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