Eu Briefing – Facts and Analysis of the Week

by Ross Elwood

BRUXELLES (Public Policy Europe) – It has been a constituency week in the Parliament, meaning things have been a little quieter than usual, though policy files continue to move in the background. Two notable Council meetings took place with a discussion on the EU long term budget at the General Affairs Council on Tuesday (read for analysis below) and the Industrial Accelerator Act at the Competitiveness Council on Thursday.

The Facts

The following facts are compiled from hundreds of updates on the Public Policy Europe Newswires this week. Find out more about the newswire here.

28th Company Law Regime

Rapporteur René Repasi (S&D) will present his draft report in JURI on 26 June, with the deadline for shadow rapporteur amendments set for 17 July. The committee vote on the negotiating mandate for interinstitutional negotiations with the Council is scheduled for September, with JURI meeting on 7 and 28 September, though the exact voting date depends on negotiations between rapporteurs over the summer. This will in turn determine the date of the plenary vote on the mandate, initially planned for the first October part-session (5 to 8 October).

Market Integration Package

The E6 (Germany, France, Italy, the Netherlands, Poland and Spain) met in Berlin on Thursday, convened by the German Ministry of Finance, to draft a common declaration pushing for a political agreement on EU financial supervision in the Council by summer, in line with the single market roadmap deadlines. The move is aimed at building pressure on countries opposed to centralised supervision, including Luxembourg, Sweden, Czech Republic, Slovakia and Hungary. The group will publish a common letter to ECOFIN ministers setting out their position.

Industrial Accelerator Act

Shadow rapporteurs have been appointed for the Industrial Accelerator Act, which is shared jointly between the ITRE, IMCO and INTA committees.

In IMCO, the shadows are: Tomislav Sokol (EPP, Croatia), Klara Dostalova (Patriots, Czech Republic), David Cormand (Greens, France), Hanna Gedin (The Left, Sweden) and Mariateresa Vivaldini (ECR, FdI, Italy). In INTA: Dirk Gotink (EPP, Netherlands), Kathleen Van Brempt (S&D, Belgium), Bart Groothuis (Renew, Netherlands), Rudi Kennes (The Left, Belgium) and Daniele Polato (ECR, FdI, Italy). In ITRE: Isabella Tovaglieri (Patriots, Lega, Italy), Marina Mesure (The Left, France), Hoz Quintano (EPP, Spain), Jens Geier (S&D, Germany) and Daniel Obajtek (ECR, Poland).

The main rapporteurs had already been appointed: Christophe Grudler (Renew, France) for ITRE, Pierre Jouvet (S&D, France) for IMCO, and Anna Cavazzini (Greens, Germany) for INTA, who also serves as chair of IMCO.

Pension Funds

This week Public Policy Europe reviewed the compromise text presented by the Cypriot presidency on the proposal for the directive on the supervision of occupational retirement provision funds (IORP II). The text proposes removing the obligation to assess investment decisions based on sustainability preferences, and introduces new principles governing any decision by member states to impose additional limits on investments by pension fund managers. 

Affordable Housing Act & ETS Reform

The presentation of the Affordable Housing Act has been scheduled for 7 July, according to the latest provisional agenda for the EU College of Commissioners. An introductory debate on the revision of the ETS system is scheduled for 24 June, with the formal presentation of the ETS reform confirmed for 15 July.

Fertilizers

At Tuesday’s AgriFish Council, Commissioner Hansen announced that the Commission will mobilise the CAP reserve and propose bringing it to €400 million. The Commissioner also outlined a targeted CAP package including a new liquidity scheme, flexibility for advance payments to farmers, and support for fertilisation efficiency, with the aim of ensuring all available funds under CAP strategic plans can be utilised.

The Analysis – Despite Wide Spending Divide Cyprus Sees A Deal On MFF 

On Tuesday the General Affairs Council met to discuss a number of topics for the upcoming leaders summit on the 18/19 June. During the press conference after the council meeting, the Cypriot Minister noted that the Cypriot presidency of the Council aims to approve a partial negotiating mandate on all three pillars of the next Multiannual Financial Framework 2028–2034 (the Competitiveness Fund, Global Europe and the National Recovery and Resilience Plans) at the June summit. These are without budgetary figures (that is why they are called partial) and focus on the governance and criteria of the proposed schemes. This is separate to the MFF overall figures negotiating box which the presidency has said it will present at the beginning of June and which will then be included as an orientation debate during the summit. The conclusions from the discussion on own resources at the informal council meeting in April will also have an exchange of views.

During the General Affairs Council meeting a major discussion took place on the overall MFF figures where divergent positions became publicly very clear for the first time. The meeting was preempted by a letter from a group of 16 countries who called themselves the Friends of Cohesion, who effectively said that spending on new competitiveness and security priorities should be maintained but that there should be no cuts to CAP, cohesion or the CFP as currently proposed. During the council meeting a number of countries (Sweden, Denmark, Finland, Austria, the Netherlands, Germany) known as the frugal states balked at the idea, noting that in order to increase spending on new priorities a reduction had to come from somewhere.

There is nothing new in this divide and it has a feel of deja vu for most Brussels insiders, as during the economic crisis and its aftermath this was common positioning. However the divide and the language used by both sides seems very far apart.

What is noteworthy are the words of the Cypriot minister at the press conference after the General Affairs Council. She stated that, besides divergent positions becoming clearer, the Cypriot presidency saw landing zones and opportunities for bridging divergences, and that these landing zones will be included in the negotiating box being prepared for the upcoming summit. She hinted that the reasoning behind her position was that member states saw the bigger geopolitical and geoeconomic picture and that the EU budget needed to step up to the mark in order to secure the EU’s position in these changing times. On the specific requests of the Friends of Cohesion, she noted that cohesion and competitiveness were two sides of the same coin, meaning that the compromise line being taken is that cohesion is competitiveness. The question is whether there will be special carve outs within competitiveness funding for countries that traditionally benefited the most from cohesion funding.

Whatever the outcome, the EU and its frugal member states know that the bloc needs to increase its budget to charge its economy and strengthen its security, but there is much wrangling to be done on how. Own resources will be a key element of the budget allocation discussions for the frugals, who are wary of spending their own taxpayers money. The agreement on the pillars will be interesting to watch in terms of what technical carve outs the funding hungry Friends of Cohesion receive on eligibility. All of this is to say, as is nowadays true every time, that the upcoming leaders summit will be a very important and telling one for the EU budget and its future. (Public Policy Europe)