EU Insight, 28 June 2024

Brussels, 28 June 2024

EU LEADERS ENDORSE URSULA VON DER LEYEN FOR A SECOND TERM

In the first formal European Council since the EU elections in the beginning of June, EU leaders signed off on the EU’s top jobs package for the new legislative cycle. The package, which puts forth Ursula von der Leyen (EPP) for a second term as Commission President, António Costa (S&D) as the new European Council President, and Kaja Kallas (Renew) as the EU’s High Representative (i.e. Foreign Affairs chief), had been pre-arranged earlier in the week in an informal meeting of six EU leaders. To their disappointment Giorgia Meloni and her ECR group, where sidelined during the negotiations despite their strong performance during the EU elections. While Mr Costa’s job is already secured, Ms von der Leyen and Ms Kallas still need to be approved by a majority in the European Parliament.

EU LEADERS SET POLICY PRIORITIES FOR NEXT FIVE YEARS

In addition to the top jobs package, the European Council endorsed the EU’s Strategic Agenda 2024-2029, a broad set of priorities that should dictate and steer the EU’s policymaking for the next five years. The laid out priorities are anchored on three key pillars, (1) a free and democratic Europe, (2) a strong and secure Europe, and (3) a prosperous and competitive Europe. The document lays great emphasis on securing the EU’s economic competitiveness by fostering increased sovereignty in strategic sectors, increasing investments for the green and digital transitions as well as the EU’s defence industry, further developing the Capital Markets Union and completing the Banking Union.

LOOKING AHEAD TO THE HUNGARIAN PRESIDENCY

This week marks the end of the Belgian Presidency of the Council, paving the way for next week’s takeover of the Presidency by Hungary. Hungary’s tenure, which will run from 1 July until the end of the year will be guided by the somewhat familiar motto “Make Europe Great Again”. As the first presidency of the new institutional five-year cycle, the Hungarian Presidency’s policy work will be limited to finalising leftover legislation, although it may guide discussions in Council on the implementation of the EU’s Strategic Agenda. Overall, the Presidency has committed to prioritise the competitiveness of the EU, reinforcing European defence policy, addressing the demographic transition, and tackling illegal migration.

ACCESSION NEGOTIATIONS WITH UKRAINE AND MOLDOVA KICK OFF

The EU officially kickstarted accession negotiations with Ukraine and Moldova holding the first Intergovernmental Conference at ministerial level with each of the two candidate countries. The meeting follows the European Council’s decision in December 2023 to open accession negotiations with both countries, and as such marks an important milestone in the accession process. While negotiations have begun, and the Commission has deemed Ukraine and Moldova meet the necessary criteria to begin the accession talks, the path to become a full-fledged member of the EU is likely to still be long for both countries. Most notably, in the immediate future it is unclear how much willingness there will be by the Hungarian Presidency to continue negotiations during its tenure.

COMMISSION DELIVERS 2024 EURO CONVERGENCE REPORT

The European Commission published its biennial Convergence Report. The report assesses the progress of non-euro area Member States towards adopting the Euro as their official currency. Notably, the report delivered bad news for both Bulgaria and Romania who respectively aim to become the 21^nd and 22^rd members of the euro area. In fact, while Bulgaria had hoped to meet the accession criteria by 1 January 2025, it failed to decrease inflation to the required levels. While this means Bulgaria could only join the eurozone in 2026, Romania is even further away with an objective of accession in 2029. While the report also assess four further Member States, namely Czechia, Hungary, Poland and Sweden, none of them is currently interested in joining the Eurozone.

COMING UP NEXT WEEK

• 3 July: College of Commissioners. On the Agenda: presentation of EFB Assessment of the fiscal stance for the euro area in 2025

Karl Isaksson, Managing Partner Brussels, Kreab

_________________________________________________________

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