EU Insight, 3 February 2023

Brussels, 3 February 2023

COLLEGE OF COMMISSIONERS TRAVELS TO KYIV FOLLOWING COUNCIL MILITARY SUPPORT

The College of Commissioners travelled to Kyiv to meet the Ukrainian Government. The meeting showed the EU’s strong support to Ukraine, including a new €450 million assistance package for 2023. The package includes €145 million in humanitarian assistance and €305 million in bilateral cooperation to support fast recovery in the country. Ahead of the meeting, the Council adopted assistance measures that provide further military assistance to the Armed Forces of Ukraine. These consist of a package worth €500 million, and a new €45 million assistance measure supporting the training efforts of the European Union Military Assistance Mission in support of Ukraine.

COMMISSION RESPONDS TO US IRA WITH GREEN DEAL INDUSTRIAL PLAN

The European Commission presented a Communication on a Green Deal Industrial Plan to enhance the competitiveness of Europe’s net-zero industry and support the fast transition to climate neutrality. The plan aims to provide a more supportive environment for the scaling up of the EU’s manufacturing capacity for the net-zero technologies and products required to meet Europe’s climate targets. It is based on four pillars: a predictable and simplified regulatory environment, speeding up access to finance, enhancing skills, and open trade for resilient supply chains. EU leaders will discuss the Communication during a special European Council summit next week.

NEW STATE AID TEMPORARY CRISIS AND TRANSITION FRAMEWORK PROPOSED

The European Commission proposed to Member States to transform the State aid temporary crisis framework to a temporary crisis and transition framework. The aim is to safeguard the Single Market competitiveness, as the Commission argues that if Member States compete with subsidies individually, it is non-beneficial for the European internal market. The update of the state aid rules would be divided in two parts: first, by making the calculation of the aid simpler and the approval faster. Second, by introducing new provisions for green investments in strategic sectors that are at risk of relocation to the US, or other third countries. The new provisions would be in place until 31 December 2025.

COUNCIL ADOPTS ITS RECOMMENDATION ON ADEQUATE MINIMUM INCOME

The Council adopted its recommendation on adequate minimum income, aiming at combating poverty and social exclusion, as well as pursuing high levels of employment. This, according to the Council, would be done by promoting adequate income support, effective access to essential services for those lacking sufficient resources, and by fostering labor market integration of those who can work. This comes as the Council noticed that, although all Member States have social safety nets in place, there is an uneven level of access and adequacy. This inadequacy has enhanced even more after the pandemic and the energy crisis, that affected lower income brackets in a more tangible way.

EU PROLONGS ECONOMIC SANCTIONS OVER RUSSIA

The Council prolonged the restrictive measures targeting specific sectors of the economy of the Russian Federation by six months, making them effective until 31 July 2023. These sanctions, first introduced in 2014 in response to Russia’s invasion of Crimea, were significantly expanded in February 2022, in light of Russia’s military aggression against Ukraine. The sanctions include restrictions on trade, finance, technology and dual-use goods, industry, transport, luxury goods, as well as a ban on the import or transfer of seaborne crude oil and certain petroleum products from Russia to the EU, and the suspension of the broadcasting activities of several Kremlin backed disinformation outlets.

COMING UP NEXT WEEK

• 6 February: General Affairs Council. On the agenda: preparation for the Special European Council, EU-UK relations, Swedish Presidency’s priorities.
• 6-8 February: Informal meeting of competitiveness ministers. On the agenda: long-term objectives regarding enhanced competitiveness, short-term measures.
• 8 February: College of Commissioners. On the agenda: Union disaster resilience goals.
• 9-10 February: Special European Council. On the agenda: the new Green Deal Industry Plan.

Karl Isaksson, Managing Partner Brussels, Kreab

____________________________________________________________________

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