Good morning. Slovenia’s liberal prime minister Robert Golob won a narrow victory over his pro-Trump populist rival, and the French far right won control of Nice but failed to take other major targets.

Laura sat down with EU migration commissioner Magnus Brunner who had one answer on what is the single biggest factor driving people to flee their countries for the safety of Europe: “It’s always Vladimir Putin.”

Today, our trade correspondent reports on the Australia trade deal about to be inked, and one of the EU’s top shipping tycoons warns our correspondent that sanctions on Russia risk “unintended consequences” for the continent.

Setting aside the beef

The EU and Australia intend to clinch a trade deal today to demonstrate commitment to a rules-based order in the face of US President Donald Trump’s tariff threats, writes Andy Bounds.

Context: The EU and Australia have been negotiating a trade deal for eight years. Talks broke down in 2023 after Brussels refused to agree to Canberra’s demand for a low-tariff quota of more than 40,000 tonnes of beef per year. Since then, both have suffered from US tariffs, prompting a sense of compromise.

EU trade commissioner Maroš Šefčovič told the FT that the two sides were “very close” to an agreement. He will arrive in Canberra today for final talks with Australian trade minister Don Farrell.

European Commission president Ursula von der Leyen will join him tomorrow, and is expected to shake on the deal with Anthony Albanese, the Australian prime minister.  

Von der Leyen told EU leaders last week that a deal would “strengthen Europe’s presence in one of the world’s most dynamic economic regions” and improve EU access “to critical raw materials — such as lithium, cobalt, rare earth elements, and hydrogen,” all vital to the green transition. 

A big hurdle remains beef and sheep meat exports. Australian farmers want them, European farmers do not. 

Australia is expected to accept the EU offer of 30,000 tonnes of beef, after the EU reduced its own demands, according to two EU officials. It has abandoned efforts to get Australia to abolish its 33 per cent luxury car tax on expensive models such as BMWs and Mercedeses. However, the officials said there would be more lenient treatment for electric cars.

The EU has secured one key demand, however: that its companies can buy minerals at the same price as those in Australia.

A similar trade deal with the Mercosur bloc in South America caused EU-wide protests by farmers and was notably opposed by France. French President Emmanuel Macron could be forced to oppose the Australia deal as he did Mercosur, though he would certainly be outvoted again.

Chart du jour: Connections

Companies linked to Hungarian Prime Minister Viktor Orbán’s allies have captured a rising share of public contracts since his 2010 return to power, according to an FT analysis of almost 350,000 public procurement contracts.

Staying afloat

One of Greece’s biggest shipowners has warned EU sanctions on Russia risk “unintended consequences” for the continent, as soaring gas prices due to the Middle East war pile pressure on the bloc’s energy strategy, writes Alice Hancock.

Context: The EU’s benchmark gas price has roughly doubled since the US and Israel first struck Iran last month, adding strain to already struggling European industries. Further attacks last week hit Qatar’s main gasfield, which provides a fifth of the world’s liquefied natural gas.

Evangelos Marinakis, who owns Capital Tankers Corp, told the FT that the crisis exposed weaknesses in Europe’s energy system, as the bloc had “underinvested in domestic production” and would need to rely more on alternative imports, including LNG.

But Marinakis, whose ships have engaged in trading Russian oil after the full-scale invasion of Ukraine in 2022, also questioned whether the EU’s sanctions regime on Russia was sustainable, warning it was adding pressure on the bloc’s economy.

“What we see today is that Russian oil continues to flow to other markets at discounted prices, while Europe imports refined products at significantly higher costs, said Marinakis. “This creates distortions that ultimately disadvantage European economies and place additional pressure on consumers.”

He added that he had warned early on that the sanctions “did not fully reflect market realities and risked unintended consequences for European economies”.

His comments come after Belgium’s Prime Minister Bart De Wever last week called for the EU to normalise its relations with Russia to access cheap energy.

Capital Tankers Corp, which operates a fleet of more than 70 vessels, floated last week on the Oslo Stock Exchange. Shares however sank around 12 per cent when they started trading, underlining the pressure on the shipping industry as a result of Iran’s strikes.

What to watch today

1. EU trade commissioner Maroš Šefčovič meets Australia’s trade minister Don Farrell in Canberra.

2. European defence commissioner Andrius Kubilius meets Ukraine’s deputy prime minister for restoration Oleksiy Kuleba in Brussels.

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