European Union officials voiced their shock after Australia’s top negotiator pushed back from a potential trade deal with the 27-nation bloc for the second time in a matter of months, Bloomberg News reported. Despite optimism ahead of planned discussions in Osaka, Japan, the two sides were never actually able to sit down to make a final breakthrough over the weekend.

European Union lawmakers agreed on a critical part of new rules on artificial intelligence in a meeting late on Tuesday, as they inched closer to a broader agreement on the landmark AI Act, Reuters reported. After two years of negotiations, the bill was approved by the European parliament in May. The draft AI rules now need to be agreed through meetings between the parliament and EU states to thrash out the final versions of laws in a process known as the trilogue.

European lawmakers are yet to agree on several issues related to new artificial intelligence rules ahead of a crucial meeting on Tuesday, leaving any deal off the table until December, Reuters reported. The draft AI rules have to be agreed by the European Parliament and European Union member states. They have so far been discussed three times in trilogues, which are meetings between parliament and EU states to thrash out the final versions of laws.

The European Union is considering unlocking billions of euros for Hungary that were frozen over rule-of-law concerns as it seeks to win Budapest's approval for aid to Ukraine including a start to membership talks for Kyiv, senior officials said, Reuters reported. Hungary cultivates closer ties with Russia than other EU states, and is seen as the key potential opponent to a decision due in December on whether to open accession talks with Kyiv, which would require unanimous backing of the union's 27 members.

Consumer prices in the eurozone rose 5.3 percent in August compared with a year earlier, sticking at the same pace as the previous month and defying economists’ expectations for a slowdown, according to an initial estimate by the statistics agency of the European Union, the New York Times reported. While inflation has slowed materially from its peak of above 10 percent in October, there are signs that some inflationary pressures are persistent, even as the bloc’s economy weakens.

The European Union is unlikely to agree on new fiscal rules by the end of this year as planned, Italian Economy Minister Giancarlo Giorgetti said yesterday, Reuters reported. The EU rules, called the Stability and Growth Pact, have been suspended since 2020 to help governments deal with the COVID-19 pandemic and then the February 2022 Russian invasion of Ukraine and the resulting increase in energy and food prices.

Interest rates in the European Union will need to stay high “as long as necessary” to slow still-high inflation, Christine Lagarde, president of the European Central Bank, said Friday, the Associated Press reported. “While progress is being made," she said, “the fight against inflation is not yet won.” Lagarde’s remarks, at an annual conference of central bankers in Jackson Hole, Wyoming, came against the backdrop of the ECB's efforts to manage a stagnating economy with still-high inflation.

European Union banks' plans for surviving a major crisis without having to tap central bank money will undergo intense scrutiny next year, the bloc's banking watchdog said, Reuters reported. The need for credible options was reinforced after the Swiss central bank stepped in with a liquidity backstop for Credit Suisse in March, before it was taken over by rival UBS.

South American trade bloc Mercosur officials met on Tuesday to agree on their counterproposal to a European Union addendum on a long-awaited trade deal before meeting with EU negotiators in August in the hopes of closing the accord by year-end, Brazilian diplomats told Reuters. The four-nation Mercosur will seek to unify its positions on Wednesday and Thursday to respond to the EU on environmental additions the European body made to the trade deal, said Brazil's foreign ministry, where the talks are being held.

The European Union and Australia have failed to conclude talks on a planned free trade agreement, a European Commission spokesperson said on Tuesday, Reuters reported. The EU and Australia opened negotiations in 2018 and had hoped to conclude talks this week. However, differences remained, particularly over the degree to which the EU will open its markets to Australian farm products, notably beef. "We regret it was not possible to conclude our talks with Australia this week. We made progress but more work is required to address key outstanding issues," the spokesperson said.