Juncker to propose breaking dollar’s dominance in global markets

Commission President Jean-Claude Juncker during the State of the Union address last year. [European Parliament]

European Commission President Jean-Claude Juncker is expected to propose today (12 September) a bigger role for the euro in international markets and more efficient decision-making in EU foreign policy in his state of the union speech, European diplomats said.

According to officials, Juncker would like to achieve three goals before the European elections next May: the ratification of the EU-Japan trade deal; a political agreement among member states on the multi-annual financial framework (the EU´s long-term budget); and to start breaking the dollar’s dominance in global markets.

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The EU leaders need to send a message to the rest of the world that Europe will look after “its own economic interests”, an EU official told EURACTIV.com ahead of an informal EU summit in Sofia, overshadowed by the US threat to hit EU companies operating in Iran with sanctions.

“The moment you start to be aware of it you can change it”, the sources commented.

As an example, officials noted that despite only 2% of our energy imports come from the US, around 80% of them are paid in dollars. Europe only uses euros with Norway.

In order to correct this situation, the EU executive would like to act on various fronts, from completing the capital markets union to deepen the euro-denominated financial markets, to using euros with its energy exporters. 

The first country to discuss a change of currencies could be Russia. 

“The bigger, the better”, the European diplomats explained.

The new role seen for the common currency comes against the backdrop of the difficulties to progress on strengthening the monetary union. 

Member states disagree on key pillars of the banking union and a roadmap to progress towards a fiscal union.

For officials, the existing international situation made the case for eurozone reform.

“Sometimes a crisis is needed, others geopolitics are needed”, they added.

International pressure

The global context will shape Juncker’s address to the European Parliament’s plenary this year.

In his view, a series of international events, including the US withdrawal from the Paris Agreement and the Iran Nuclear deal, or President Donald Trump’s disagreement with G7 partners in Charlevoix (Canada) represented a “strong call” for Europe to put its house in order and “punch above its weight”, and not below it as it has been usually the case, the sources added.

The intense international agenda before the summer break also helped to shift Juncker’s interest to world affairs. 

EU-China summit boosts negotiations towards an investment agreement

The European Union and China agreed to enhance market access and investment and to speed up negotiations over geographical indications during a leaders’ summit in Beijing on Monday (16 July). But EU leaders indicated they wanted to see China’s promises translated into action.

During the second half of July, China expressed its interest in becoming a close ally of Europe to respond to Trump’s attacks against multilateralism, a trade agreement was signed with Japan, and the trade talks began with Trump.

In order to increase Europe’s influence beyond its borders, Juncker will propose bolstering “European sovereignty”. 

“It does not mean Europe first or alone”, a European diplomat said, but an EU as an important part of an interconnected world.

In addition to euro’s bigger role in global markets, Juncker will also propose breaking the unanimity required on foreign affairs on three cases: human rights issues, sanctions policy and civilian Common Foreign and Security Policy missions. 

Migration and clock change

These proposals will be part of 18 proposals that Juncker will put forward today, according to documents seen by EURACTIV. 

They include five new proposals on migration, a continent-to-continent trade agreement with Africa, and the proposal to end the clock change.

Juncker will also propose changes for strengthening the Union’s supervision of money launderers.

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Migration will take a central stage again in Juncker’s speech.

As expected, he will present the details to ‘federalise’ the European Border and Coast Guard and to bolster the EU Agency for Asylum.

The core of Juncker’s State of the Union speech: A federal border police

Establishing a genuine European border police and turning the control of irregular migration into a community competence will be the core of Commission President’s Jean-Claude Juncker State of the Union speech on Wednesday (12 September), according to Spanish daily El País.

He will also put forward common standards for the return of undocumented economic migrants. And he would explore how to improve the legal ways for migrants to arrive for the bloc.

EU will spend more on border and migration control than on Africa

The European Commission’s proposal to bolster Europe’s borders would mean that for the first time the EU will spend more on migration control than on developing Africa, as the determination to ‘fortify’ the Continent prevails among national governments and institutions.

In order to address the root causes of the massive influx of migrants, he will propose an Africa Package under a new Africa-Europe Alliance for Sustainable Investment and Jobs.

It will focus on investment and job creation, education, economic integration and trade and improving business environment.

Protecting the elections

Today’s state of the union will be the last one before the Parliament dissolves next April ahead of the European vote in May. 

In light of the Russian interference in the electoral processes, Juncker will also make various proposals to secure “free and fair European elections”. 

The Commission will issue guidance on how to apply the new EU Data Protection Regulation on electoral proceses to avoid mishandling of personal data. 

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It will also tighten the rules on European political party funding, and bolster the cooperation of national electoral bodies on issues such as cybersecurity incidents and fighting disinformation campaign.

Brexit will take up only a small part in his speech, sources said. In view of the global situation, he would recall the importance not only of having an orderly divorce and a future relationship that diplomats admitted that it would not be like with “an ordinary third country”.

Brexit absent from Commissioners’ input for state of the EU speech

Negotiations about the UK’s orderly exit and future relations with the EU did not feature in the discussions the European Commission’s top echelons held in preparation for President Jean-Claude Juncker’s last state of the union speech before next year’s European elections.


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