EU Insight, 5 July 2024

Brussels, 5 July 2024

PARLIAMENT POLITICAL GROUPS SEEK NEW ALLIANCES

EU political groups gathered over the last weeks to take stock of the EU election results, elect their leadership, and discuss their policy priorities for the next five years. The groups had until this week to register their formations in the European Parliament. Hungary’s Prime Minister, Viktor Orbán, along with other far-right European leaders announced its plans to establish a new political group called Patriots for Europe, which is expected to replace the Identity and Democracy (ID) group. The Left group announced its decision to welcome the Italian political party Movimento 5 Stelle (M5S), which will have an initial observer status. The composition of the new European Parliament will be put for a vote in the plenary session of 16-19 July.

HUNGARY TAKES OVER FIRST COUNCIL PRESIDENCY FOLLOWING THE EU ELECTIONS

Hungary took over the Presidency of the Council of the European Union, which will run for the second half of 2024. Thematically, the Hungarian Presidency will be guided by seven priorities: (i) a New Competitiveness Deal, (ii) the reinforcement of European defence policy, (iii) a consistent and merit-based enlargement policy, (iv) finding appropriate solutions to illegal migration, (v) shaping the future of cohesion policy, (vi) promoting a farmer-centred agricultural policy and (vii) addressing demographic challenges. The new Presidency will have a rather slow start, with only a few meetings expected to take place before the summer recess. Pending negotiations with the European Parliament will likely resume in October, once the new European Parliament is fully in place.

LABOUR WINS HISTORIC UK ELECTION IN A LANDSLIDE

The UK held its first election since the country’s departure from the European Union. The Labour Party swept more than 400 seats out of the 650 seats in the House of Commons, putting an end to 14 years of Conservative rule. The Conservative Party lost more than 250 seats and now will be in the opposition while the Liberal Democrats will be the third biggest party in parliament after its best result in years. The Greens made gains while the Scottish National Party suffered a collapse, losing nearly 40 seats. Sir Keir Starmer, the leader of the Labour Party will become the new Prime Minister this Friday. Although we do not expect any changes in the EU-UK relationship in the short term, a Labour government could make the relationship more cordial.

COMMISSION IMPOSES TARIFFS ON ELECTRIC VEHICLE IMPORTS FROM CHINA

Following nine months of an ex officio anti-subsidy investigation, the European Commission has announced its decision to impose tariffs on imports of battery electric vehicles (BEV) from China into the European Union. Based on the investigation, the Commission has concluded that the BEV value chain in China benefits from unfair subsidisation, which is causing a threat of economic injury to EU BEV producers. The introduction of duties between 17.4% and 37.6% will be, for the time being, provisional, and will apply as of today for four months. According to the Commission, contacts between both sides continue at the technical level with a view to reaching a WTO compatible solution.

EU NOTIFIES EXIT FROM ENERGY CHARTER TREATY

The EU took a final step this week to exit the Energy Charter Treaty, a multilateral trade and investment agreement applicable to the energy sector, as it conflicts with the EU’s climate goals under the European Green Deal and the Paris Agreement. Formal notifications were sent by the Council and the Commission to the Government of Portugal, the official depositary of the Treaty, notifying respectively the withdrawal of the European Union and Euratom. The withdrawals will take effect in one year. The EU’s move follows the EU Energy Ministers’ agreement on the Commission’s proposals to pursue the withdrawal and Treaty modernisation.

COMING UP NEXT WEEK

• 8-9 July: Informal meeting of Competitiveness Ministers. On the agenda: Internal market and industry.
• 12 July: Informal meeting of environment ministers. On the agenda: climate and environmental issues (preparations for COP29), circular economy competitiveness, and EIB green financing.

Karl Isaksson, Managing Partner Kreab Brussels

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