Leaders pressed to tame their egos at EU summit

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A two-day EU summit opening in Brussels today (27 June) comes against the background of harsh verbal exchange between France and the European Commission over what role the EU executive should take in the new economic governance architecture that is being put in place to avert a repetition of the eurozone debt crisis.

Nevertheless, diplomats say leaders won’t overplay their differences and seek to convey a positive message to the world.

According to the latest version of draft summit conclusions obtained by EURACTIV, EU leaders do not have a heavy agenda and prepare to give their blessing to a series of decisions that have already been taken at ministerial level.

As a diplomat put it, leaders will deliver the message that the European Union is focusing on issues seen by EU citizens as the most pressing.

One of the highlights of the summit will be an agreement to fast-track a €6 billion EU fund to fight youth unemployment.

>> Read: EU leaders to agree faster spending on youth jobless fight

Another is a so-called “new investment plan for Europe” that will put in place new instruments to help SMEs get easier access to credit. And one year after having agreed a €120-billion “Compact for Growth and Jobs”, leaders are expected to put some more flesh on the initiative, which has so far failed to materialise in actual spending.

One diplomat told EURACTIV that EU national leaders will highlight positive news such as the accession of Croatia as the EU's 28th member on 1 July, the decision to welcome Latvia as the eurozone's 18th member in January, and the decision to begin accession negotiations with Serbia (although possibly in early 2014 and not this year as Belgrade had expected).

Diplomats also noted that two years ago, the Union was faced with “existential problems” and the future of the eurozone was looking uncertain.

“We are very far from that,” a diplomat said.

Paris-Brussels spat over economic reforms

One issue to watch will be the ongoing spat between France and the European Commission over the country-specific recommendations on economic policy that were presented on 29 May to all 27 states.

Regarding France, the Commission said Paris should cut labour costs, reform its pension system and open up its protected markets in exchange for a two-year respite to bring its budget deficit under 3% of GDP. French President François Hollande, who had promised in his election campaign not raise the retirement age from 62 years, replied swiftly, saying “the Commission cannot dictate what we should do”.

In Brussels today, Hollande will press EU leaders to remove any reference to pension reform or raising the retirement age from the country-specific recommendations on France.

Another verbal spat took place over the French demand to shield films and online entertainment from the might of Hollywood, as a condition to give a mandate for the EU-US free-trade talks. Commission President José Manuel Barroso had described this position as “reactionary”.

Later, French Industry Minister Arnaud Montebourg accused Barroso of fuelling far-right and populist movements in Europe as EU institutions failed to defend the interests of ordinary people. The Commission responded in unusually tough language, calling on Paris to abandon its “ambiguities” towards Europe and to refrain from “nationalism, populism, even chauvinism”.

How binding are the Commission's recommendations?

The country-specific recommendations were adopted on 21 June in a surprisingly smooth way at a meeting of economy and finance ministers in Luxembourg. However, some countries like France underline that these recommendations are not legally binding.

Hungary too has a problem with its recommendations. Its Economy Minister Mihály Varga was quoted as saying that his government could not agree with recommendations on the energy tax and on taxation in general, as well as on the judiciary system.

France and Hungary are likely to seek wording in the Council conclusions that does not give the Commission too much power of redress if the recommendations are unfulfilled.

Under the current draft wording, heads of state will endorse the recommendations, whereas last year they were “generally endorsed”.

With greater powers for the Commission to take steps to bring eurozone countries into line coming into force this year under the so-called two-pack agreement, France and other eurozone countries may seek to repeat last year’s gentler wording.

A diplomat told EURACTIV that more work at EU level was needed to make the country-specific recommendations “more binding”, but also “with a higher degree of ownership” by the member states, which would need to be more involved in their preparation.

He said that one could look critically at the economic governance reforms made so far and at their speed, but in his view this was a problem of perception. He insisted that in reality, countries were on track with the “four building blocks” proposed by Council President Herman Van Rompuy in June 2012, which he called a programme for the next 10 years.

Striking the budget deal

All major groups in the European Parliament found insufficient the package on the EU budget for 2014-2020 put forward by the Irish presidency.

>> Read: EU's heavy budget file lands on Brussels summit table

Moreover, Parliament decided that under these conditions, the vote on the EU’s long term budget should not be put on the agenda of the July session.

To prevent the budget issue eclipsing the summit agenda, Barroso hastily convened an early-morning meeting with European Parliament President Martin Schulz and Irish Prime Minister Enda Kenny.

>> Read: EURACTIV’s live coverage of the summit

Meeting on 27 and 28 June in Brussels, EU leaders will endorse:

  • The Council report of 25 June 2013 on the 2013 Country-Specific Recommendations;
  • The Conclusions adopted by the Council on 25 June 2013 on enlargement;
  • The Conclusions adopted by the Council on 28 May 2013 on the annual report on EU Official Development Assistance;
  • The Conclusions adopted by the Council on 25 June 2013 on "The Overarching Post-2015 Agenda";
  • The Action Plan for the implementation of the Maritime Strategy for the Atlantic Ocean area endorsed by the Council on 25 June 2013

Moreover, finance ministers reached agreement on 26 June on bank resolution, that is, rules to force losses on creditors in failed banks. Banking resolution is an important element in putting in place the banking union. The Parliament must approve the deal.

  • 4 July: European Parliament could vote the EU budget for 2014-2020, provided an agreement is reached today

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