Monday

21st Jun 2021

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.

EU leaders discuss Turkey, Russia, migration This WEEK

EU foreign affairs ministers will try to sort out a new round of sanctions on Belarus, and EU affairs ministers will hold intergovernmental conferences with two candidate countries, Serbia and Montenegro.

Biden in Brussels, recovery package underway This WEEK

The EU Commission is expected to approve the first recovery plans submitted by national capitals on how they will use funds available from the EU's €800bn recovery fund. Spain, Portugal, Greece, Denmark, Luxembourg seem to be first crossing the line.

First return to Strasbourg for EU Parliament This WEEK

There will be still a very limited number of people traveling to Strasbourg. Many think it is an early return: those travelling will have to respect the French curfew and will need to quarantine upon their return to Belgium.

Tax avoidance and AI in focus This WEEK

The European Parliament's special committee on artificial intelligence and the internal market committee will discuss the commission's AI proposals with vice-president Margrethe Vestager.

Summit on climate and Russia This WEEK

Italian prime minister Mario Draghi said he would raise the issue of the onward redistribution of migrants landing on the southern shores of Europe at the summit.

NGOs: Leaked EU biomass reform 'denial of science'

Green groups called on the European Commission to remove forest biomass from the Renewable Energy Directive, arguing that the proposal leaked this week shows a "clear denial of science" and "dangerous greenwashing".

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