EU warns of deepening housing crisis as von der Leyen pledges bloc-wide action
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The European Commission has warned that Europe faces a deepening housing crisis, with EU Commission President Ursula von der Leyen pledging EU-wide action to address the issue. Speaking on Saturday, von der Leyen highlighted the urgency of the situation, noting that rising housing costs and shortages are affecting millions across the bloc.
The warning comes as the EU grapples with economic uncertainty, shifting global trade dynamics, and internal political divisions. Von der Leyen’s pledge follows a series of reforms and policy debates across member states, including Germany’s ongoing struggle to balance fiscal responsibility with economic growth.
In Germany, Finance Minister Lars Klingbeil (SPD) has defended the government’s decision to tap into a long-standing reserve fund to balance the 2027 federal budget, citing unexpected economic pressures. Klingbeil confirmed that €6.8 billion would be withdrawn from the reserve, leaving just €3.9 billion for future years. The move follows revised growth forecasts, triggered by geopolitical tensions and energy price volatility.
The budget adjustments include cuts to financial aid programs, with potential reductions in heating subsidies and social welfare allocations. Klingbeil acknowledged the political sensitivity of the decision but emphasized the need for fiscal prudence. “Stability of public finances is also a value,” he stated, adding that every sector must contribute to balancing the budget.
Meanwhile, Chancellor Friedrich Merz (CDU) has sought to rally support for the government’s reform agenda, arguing that Germany’s best years lie ahead if structural changes are implemented. Speaking at a CDU party conference in North Rhine-Westphalia, Merz dismissed criticism of the coalition’s progress, stating that the government is proving the political center can deliver solutions. “We are providing proof that the political center can find solutions, forge compromises, and reform the country,” he said.
Merz also announced plans for an action plan to combat social benefit fraud, a move aimed at addressing concerns raised by local politicians. The government is set to finalize health and pension reforms in the coming weeks, though internal disagreements over issues such as mini-jobs have yet to be resolved.
Across the EU, economic cooperation remains a priority, with European Commissioner Valdis Dombrovskis emphasizing the importance of Türkiye’s economic reforms and disinflation efforts. Speaking in Istanbul, Dombrovskis welcomed Türkiye’s application to join the Single Euro Payments Area (SEPA) and discussed ways to deepen EU-Türkiye economic ties. However, he noted that modernizing the EU-Türkiye Customs Union would require unanimous backing from member states, which is not currently in place.
The EU remains Türkiye’s largest trade partner, accounting for 42.8% of its exports and 31.7% of its imports in 2025. Total trade volume reached €218 billion, while EU foreign direct investment in Türkiye amounted to €5.34 billion, representing 66% of total inflows.
In Cyprus, Parliament has extended the operations of the Deputy Ministry for European Affairs until December 31, 2026, as part of efforts to maintain strategic expertise during ongoing EU negotiations. The decision, forwarded to Parliament for urgent review, underscores the importance of continuity in EU-related policymaking.
The EU’s diplomatic service, the European External Action Service, continues to face scrutiny over its role and structure, with France taking a leading role in redefining its mandate. The debate reflects broader divisions among member states over the EU’s future direction.
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