Election in Catalonia, Brexit and Uber are next week's focus
France and Germany have pledged to back the European Commission if it triggers sanctions against Poland next week.
In a discussion about how to deepen the economic and monetary union, the German chancellor and the European Central Bank chief stressed the need for convergence between countries.
Divisions on relocating asylum seekers remain entrenched following an EU summit. The east-west divide opens up the possibility of relying on a majority vote for a key asylum in June, further exacerbating disputes among opposing capitals.
EU leaders took ten minutes to approve moving onto the second phase of Brexit talks and conditions for the transition discussions to be launched in Januray. May scored a hard-fought victory.
The European Commission adopted on Friday a legal act requiring a 'track-and-trace' system for tobacco products to tackle smuggling and tax avoidance. Tobacco control groups were worried the system would lack independence, but the commission said in a statement on Friday that control of the system will be fully "in the hands of the national authorities (and not the tobacco industry)".
Luxembourg announced on Friday it will appeal the European Commission's decision that the Grand Duchy should reclaim around €250 million in taxes from US company Amazon. The commission said in October that Luxembourg's tax deal with Amazon amounted to unfair competition, but Luxembourg disagrees. The EU member said that the appeal did not "put into question Luxembourg's strong commitment to tax transparency and the fight against harmful tax practices".
EU leaders agreed on Friday that "sufficient progress" has been made in the Brexit negotiations to "move on to the second phase", European Council president Donald Tusk tweeted during an EU summit in Brussels. Tusk added "congratulations" to UK prime minister Theresa May. Phase two focuses on transition and trade, phase one agreed on citizens' rights, the Irish border and a financial settlement.
Mateusz Morawiecki has indicated he will stay on a collision course with the EU on judicial reform, despite EU Commission threats of sanctions.
As Dutch Eurogroup president Jeroen Dijsselbloem is on his way out, another Dutchman is left as the only candidate for a powerful preparatory body.
European Commission president Jean-Claude Juncker said Friday that UK prime minister Theresa May "made big efforts and this has to be recognised." He said that the second phase of Brexit negotiations, which is set to be agreed by EU leaders meeting in Brussels, will the "hardest". He added that stopping the process "depends on the British Parliament and the British people".
Brexit will dramatically change the balance between EU members states that have the euro and those that don't. The thinking on the future of the eurozone is done at EU-27 level - but opposing camps will have to be reconciled.
German chancellor Angela Merkel took a "tough" line against lifting sanctions on Russia during summit talks in Brussels on Thursday, diplomatic sources said. She said lifting them "would send the wrong signal" to Moscow. Some leaders said sanctions "can't go on like this for ever", but others said to lift them would "would be giving a present to [Russian leader] Putin just as he's running again [for president]" in 2018.
EU leaders added a line to their formal summit conclusions reiterating their support for a two-state solution to the Arab-Israeli conflict, after the recent US decision to recognise Israel's claim to Jerusalem. The move came despite the fact that Hungary and the Czech Republic were wary of taking steps to annoy US leader Donald Trump, diplomatic sources said. The summit statement was initiated by Belgium.
EU leaders agreed on Thursday to have some twenty 'European Universities' established by 2024 in order to strengthen international competitiveness of the higher education sector. According to the conclusions students would be able to obtain a degree by combining studies in several EU countries and increase mobility with a 'European Student Card'. More language learning would enable youth to speak two European languages in addition to their mother tongue.
The Belgian justice system ended on Thursday extradition proceedings against ousted Catalan premier Carles Puigdemont and four former members of his government, after Spain had dropped a European arrest warrant against them. Puigdemont said last week they would return if they won elections in Catalonia on 21 December. Some 45,000 Catalan independence supporters rallied in Brussels last week to back Puigdemont, urging the EU to stop siding with Spain.
The French economy has grown faster than expected this year, reaching the fastest pace since 2011 at 1.8 percent, the French central bank announced on Thursday. Also the European Central Bank raised eurozone growth forecasts on Thursday and said inflation is expected to be at 1.7 percent in 2020, close to its target of almost 2 percent.
In a change of attitude, EU leaders applauded UK premier Theresa May at dinner in Brussels on Thursday night after she made a speech about Brexit. The European Commission already concluded that sufficient progress has been made to allow Britain to move on to the next stage of leaving the union, which is also expected to be the conclusion of Friday's summit debate about Brexit.
EU leaders at their summit in Brussels discussed internal EU asylum reforms in an effort to reach a consensus by next June. But the divides remain wide as the concept of 'solidarity' becomes ever more elusive.
EU leaders held a discussion on Thursday over US president Donald Trump's decision to recognise Jerusalem as Israel's capital. European Council president Donald Tusk said in a tweet that they "reiterate [their] firm commitment to the two-state solution and [that] in this context, the EU position on Jerusalem remains unchanged."