EU Insight, 15 July 2022

Brussels, 15 July 2022

SUMMER 2022 ECONOMIC FORECAST: WAR IN UKRAINE WORSENS THE OUTLOOK

The European Commission revealed its 2022 Summer Economic Forecast. The report highlights that the eurozone is not yet entering a recession, although circumstances remain challenging and uncertain as a result of increasing inflation and the negative impact on the EU economy of Russia’s invasion of Ukraine. Overall, the economic growth in the first six months of 2022 was stronger than forecasted given the recovery of the tourism sector, especially in the Southern EU Member States. Nevertheless, the war in Ukraine has put additional pressure on the energy and food commodity supply, and higher prices are trimming the purchasing power of households.

EU CONTINUES BUILDING THE HEALTH UNION

The Health Emergency Preparedness and Response Authority (HERA) presented a list of the three most urgent health threats in the EU. The list includes (i) pathogens with high pandemic potential, (ii) chemical, biological, radiological, and nuclear threats, and (iii) antimicrobial resistance threats. HERA, which was established as a result of the COVID-19 pandemic, seeks to improve cross-border cooperation in the health sector between the Member States. Separately, the European Commission proposed new rules in the area of the safety and quality of substances of human origin. The new Regulation aims to achieve efficient transborder exchange of blood, tissues, cells, and breast milk.

RULE OF LAW REPORT 2022: COMMISSION ISSUES COUNTRY SPECIFIC RECOMMENDATIONS

The European Commission published its third annual Rule of Law report, providing an overview of the situation with human rights and democratic values across the 27 Member States. For the first time, the report contains specific country recommendations that seek to encourage reforms at national level. Overall, the findings indicate the advancement of rule of law reforms, although concerns remain regarding the situation in some Member States. The report covers development in areas such as justice systems, the anti-corruption framework, media pluralism and freedom, and institutions. In addition, the report examines public service media, the use of spyware, and the implementation of judgments by the European Court of Human Rights.

PARLIAMENT PUSHES FOR MORE ENERGY EFFICIENCY

The European Parliament Committee on Industry, Research and Energy voted on the review of the Renewable Energy Directive (RED) and the Energy Efficiency Directive (EED). The committee agreed on the necessity for RED to seek to increase the share of renewable energy in the EU and to boost innovation in renewable energy technology. On EED, the committee backed the revision of the Directive but seek to further reduce the EU’s final and primary energy consumption. Both legislations are part of the EU’s Fit for 55 package which comprises several revisions of the EU’s climate, energy and transport-related legislation and will be put to a plenary vote in September.

COMMISSION CLARIFIES RULES ON ROAD AND RAIL TRANSIT UNDER SANCTIONS REGIME

The Commission published guidance to the Member States on the transit of goods from Russia in the context of Lithuania/Russia transit dispute. The document confirms that while the transit of sanctioned goods by road with Russian operators is prohibited, transport by rail is not. Separately, the Council agreed to provide Ukraine with an additional €1 billion of macro-financial assistance in the form of a long-term loan. With this new funding, total financial support to Ukraine will amount to €2.2 billion. This money aims to support Ukraine in the most immediate and urgent funding needs.

COMING UP NEXT WEEK

• 18 July: Agriculture and Fisheries Council. On the agenda: Czech presidency programme, Plant protection products, Agricultural markets, Aquaculture, Deforestation, Drought.
• 18 July: Foreign Affairs Council. On the agenda: Russian aggression against Ukraine, relations between EU and Latin America and the Caribbean.
• 19 July: EU-Azerbaijan Cooperation Council. On the agenda: bilateral relations and political matters, including regional issues, democracy, rule of law and human rights.
• 19-20 July: Informal meeting of competitiveness ministers. On the agenda: internal market, dual transition, and resilience in the context of the war in Ukraine.
• 20 July: College of Commissioners meeting. On the agenda: Energy – winter preparedness.
• 21-22 July: Informal meeting of competitiveness ministers. On the agenda: Synergies in the use of budgets for research, development, and innovation.

WE WISH YOU A SUNNY AND RELAXING SUMMER! THE EU INSIGHT WILL BE BACK AT THE END OF AUGUST.

Karl Isaksson, Managing Partner Brussels, Kreab

____________________________________________________________________

Kreab • Tel: +32 2 737 6900 • karl.isaksson@kreab.com • www.kreab.com/brussels • Twitter: @KreabEU.