Thursday

11th Aug 2022

Agenda

This WEEK in the European Union

  • The German debate on the eurozone rescue fund is increasingly taking centre-stage (Photo: Herman)

This week sees the full return of the EU institutions in Brussels after the long summer holidays, but the eurozone crisis that blackened much of August looms larger than ever.

EU officials are returning to the fray without having had much of a let-up. Eurozone chief Jean-Claude Juncker, who has led attempts to sort out a glitch over Greek collateral for Finland, recently complained about spending more time on the phone than on the beach.

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The collateral question - which threatened to become a crisis capable of sinking the entire second Greek bailout when others EU countries also demanded guarantees - now looks to be heading toward a solution. German, Dutch and Finnish finance ministers are expected meet to discuss the matter on Tuesday.

The big issues remain the same as before the summer break - how to convince markets that eurozone leaders have the political will to save the currency and getting parliamentary approval in 17 countries to make the bailout fund more flexible.

This would potentially release the European Central Bank from what some see as an unnaturally political role, started last year, of buying troubled government bonds.

Politics in paymaster Germany will continue to play centre-stage. MPs, due to vote on the expanded bailout fund on 29 September, are debating an idea that the Bundestag should be asked for its permission eveyr time the fund is used.

This could make markets - which abhor the unpredictability of democratic process - even jumpier.

Adding to the tension, Germany's highest court will on Wednesday decide on the legality of three EU-backed bailouts to Greece, Ireland and Portugal last year. The case has been brought by five academics and a eurosceptic MP from the Bavarian wing of Chancellor Merkel's centre-right party. The court has in past EU rulings strengthened the role of the German parliament in EU decision-making.

A day later, the European Central Bank (ECB) will have its regular council meeting. Last week, ECB chief Jean-Claude Trichet hinted the bank would not be raising its benchmark interest rate, after having raised it twice this year to 1.5 percent.

Six-pack, energy

The EU commission will on Wednesday publish a paper on the security on energy supply in which it is expected to call for more co-ordination among member states in their approach to external energy supplies - including in deals with major supplying countries such as Russia or third countries over which energy is transported.

Meanwhile, the European Parliament will be preparing for what is expected to be a busy plenary week beginning 12 September.

One of the most important issues that could be on the agenda - although it might be postponed until the second plenary session - is the so-called six-pack of economic governance legislation designed to prevent future crises.

So far MEPs and member states have been locked in disagreement over the automaticity of the sanctions for breaking fiscal rules. Mindful of the disastrous message that non-agreement would send out, the Polish EU presidency and the commission have been issuing increasingly shrill warnings about the need to find a compromise.

The assembly's foreign affairs committee will next week host Kovoso's president Atifete Jahjaga, at a time when tensions between the statelet and Serbia are running high. EU-brokered talks, meant to bring about some reconciliation between the former province and Belgrade, collapsed in July after a trade row led to violence in northern Kosovo. They resumed last week.

9/11

The end of the week also marks the tenth anniversary of the 9/11 terrorist attacks in Washington and New York.

The attacks resulted in the US-led war in Afghanistan, from which European nations are now trying to extract themselves.

They also led to the ramping-up of US anti-terror measures - dubbed the "war on terror" - hated by the European left.

Global politics have moved on, with America in danger of losing grip its claim to be the sole world superpower amid the rise of China among others. Meanwhile, the EU remains fitfully anxious about its place on the world stage and its ability to speak with one voice on issues such as Palestin'es upcoming UN bid.

Rule of law and Czech presidency priorities This WEEK

The European Commission will unveil its rule-of-law audit of all EU member states this week. Meanwhile, several ministers from the Czech Republic will present to EU lawmakers the priorities of the rotating EU Council presidency for the next six months.

Czech presidency and key nuclear/gas vote This WEEK

MEPs will gather in Strasbourg for the final plenary before the summer break, with a crucial vote on the classification of gas and nuclear. The Czech Republic will present to EU lawmakers its presidency's priorities for the next six months.

G7, Nato, gas anxiety and Ukraine top This WEEK

EU energy ministers and environment ministers are expected to reach common positions on different aspects of the Fit for 55 package — as the continent is increasingly worried about energy prices and future supplies.

EU leaders talk Ukraine candidacy This WEEK

EU leaders will gather in Brussels and discuss Ukraine's candidacy status, and the impact of Russia's invasion of the country on energy and defence. European Central Bank chief Christine Lagarde will give a briefing to MEPs on inflation to MEPs.

Taxonomy and Ukraine on top This WEEK

MEPs will vote on an objection to the EU Commission's proposal to classify, temporarily, gas and nuclear energy investment as 'green', under the so-called taxonomy. Meanwhile, EU finance ministers are expected to approve Poland's recovery plan.

EU hopeful of Iran nuclear deal

A possible deal to revive the 2015 Iran nuclear pact is within reach, says the European Union. Washington backs the final proposals, but Tehran remains cautious.

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