EU Insight 03 June, 2022

Brussels, 03 June 2022

LEADERS AGREE ON THE SIXTH SANCTIONS PACKAGE DURING EUROPEAN COUNCIL SUMMIT

During the first day of the summit, EU leaders agreed to adopt the sixth sanctions package which was then adopted formally in the Council. Most importantly, the EU will prohibit purchase, import and transfer of oil and petroleum from Russia with a wind down period of six months, and eight months for crude oil and refined petroleum products, respectively. Additionally, three Russian credit institutions, including Sberbank, and one Belarusian bank will be banned from the SWIFT financial system. The package also includes additional export restrictions, a ban on consulting services, as well as sanctions on three Russian media outlets and several individuals and entities.

COUNCIL AGREES ON SUSTAINABLE TRANSPORT AND DIGITAL DATA INTEROPERABILITY RULES

The Council agreed on a common position on the three transport related legislative proposals of the Fit-for-55 package. While Transport Ministers agreed to keep the main elements of the proposed rules on the deployment of alternative fuels infrastructure, they introduced some additional requirements for on-shore power supply to the proposal to promote the use of renewable and low-carbon fuels in maritime transport. Moreover, Ministers agreed on a gradual implementation of rules for fuel suppliers in the context of the initiative for sustainable air transport sector. Lastly, a common position was reached on the interoperability of digital data, where Ministers also introduced a gradual implementation of the rules.

COMMISSION’S CONVERGENCE REPORT GIVES GREEN LIGHT TO CROATIA’S ADOPTION OF EURO

The European Commission published its 2022 Convergence Report addressing the progress of Bulgaria, Czechia, Croatia, Hungary, Poland, Romania, and Sweden toward joining the euro area. Most importantly, the report concludes that Croatia fulfils all required criterions such as price stability, public finances, exchange rate and long-term interest rate, and its legislation is fully compatible with the requirements to adopt euro as soon as on 1 January 2023. The European Central Bank’s report, published in parallel to the Commission’s report, has similar conclusions. The final decision on Croatia’s euro adoption will belong to the Council which is expected to vote on the matter in the first half of July.

DENMARK VOTES TO END EU DEFENCE OPT OUT IN HISTORIC REFERENDUM

Danish citizens chose to abandon their country’s 30-year policy of opting out of the EU’s Common Security and Defence Policy (CSDP). Final results showed that almost 67% of voters were in favour of removing the country‘s opt-out to the CSDP. Despite being one of the founding members of NATO, Denmark has not participated in the EU’s efforts to build the CSDP. Denmark’s referendum result means that the country will participate in the EU’s discussions on defence policy, its development and acquisition of military capabilities, and participate in EU joint military operations.

COUNCIL APPROVES CONCLUSIONS ON THE COMMISSION’S COHESION REPORT

The Council approved its conclusions on the Commission’s 8^th report on European cohesion policy which was published in February and analyses the evolution of the economic, social and territorial cohesion over last ten years. The Council stressed the local dimension of cohesion policy and noted that more attention should be given to middle-income regions which are stagnating or in recession. The conclusions also acknowledge the specific situation of the regions bordering Russia and Belarus due to the ongoing war. Finally, the Council concluded that while cohesion policy aims at supporting strategies for long-term development, it also played an important role in mitigating the effects of recent crises.

COMING UP NEXT WEEK

• 6-10 June: European Parliament’s Plenary. On the agenda: Debates on Fit for 55 package, European Council and Commission statements on the EUCO meeting
• 7 June: College of Commissioners meeting. On the agenda: Joint Communication on international ocean governance, Maritime Safety Framework
• 9-10 June: Competitiveness Council. On the agenda: Strategic industrial ecosystems, EU Chips Act, Consumer Credit Directive, Research and Space
• 9-10 June: Justice and Home Affairs Council. On the agenda: Judicial cooperation, Fight against impunity in Ukraine, Environmental crime, Fundamental rights, Schengen area
• 12-15 June: Foreign Affairs Council. On the agenda: reform of the WTO, response to the unprecedented disruption to the world economy and global trade

Karl Isaksson, Managing Partner Brussels, Kreab

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