Today the European Council, economy and Ukraine on the table of leaders

Migration update

The European Council which will meet today and tomorrow in Brussels, will have on the table first of all the economy, and secondly foreign affairs. The heads of state and government will also talk about migrationsbut no one expects big news, also because the strategy to follow on this matter has already been extensively discussed, and put in black and white in the conclusions, in the extraordinary Council of 9 February last.

As a senior EU official explains, “what matters is that we have set a course of action; now we need to implement it”. He does not mean that it is put on the back burner: “Let’s keep the pressure”, in the sense that the president of the Commission, Ursula von der Leyen, and the Swedish presidency will update the leaders on what has been done from February 9 to today. Von der Leyen has already explained it in a very detailed letter released on Monday evening. “The same thing will happen in the European Council in June – continues the source – the intention is not to reopen the discussion every time, but to implement what has already been decided”.

For Italy, in the updates provided by von der Leyen, there are various aspects which are noted with satisfaction, starting from the fact that on 26 and 27 March the European Commissioner for the Economy Paolo Gentiloni will be in Tunis, a sign that even at The EU has finally understood the urgency of stabilizing Tunisia. By the way, Prime Minister Giorgia Meloni is likely to underline the need to unblock the loan from the International Monetary Fund in Tunis, which is still pending.

Today’s European Council will be the first ordinary of 2023 and will be followed by the Eurosummit in an enlarged format, at 27 the following day. The summit will start earlier than usual, at 11.30 (the pre-summits of the major European parties will take place in the early morning: Pd secretary Elly Schlein is also expected) for a working lunch with the secretary general of the United Nations, Antonio Guterres, with the which there will be an exchange “on the main geopolitical issues and global challenges”, as explained by the president of the European Council Charles Michel.

After the usual speech by the president of the European Parliament, Roberta Metsola, the first topic on the agenda is the war in Ukraine. At the beginning of the meeting, President Volodymyr Zelenskyy will be connected by video conference. “As always – confirmed Michel – we will reaffirm our firm commitment to assist” Kievan effort that includes work on “accountability” for war crimes, the use of Russian assets frozen by sanctions and support for the rules-based international order, what Americans call the American-led order.

Since the Extraordinary Council meeting on February 9, the EU has been working to “urgently increase the production and delivery of ammunition to Ukraine”, notes Michel. The problem is that few in Europe expected a long war of attrition, with a huge expenditure of ammunition on both sides. And the European military-industrial apparatus, fragmented into many small national fiefdoms, is having difficulties (even the USA, in truth, has production problems): “Our goal is to supply Ukraine with 1 million ammunition within the next 12 months and ensure adequate funding,” says Michel.

The scheme adopted on the proposal of Josep Borrell, with joint purchases through the European Defense Agency, entails long lead times: the first orders for 155 mm ammunition, whatever happens, will be placed by the end of May. The EU industry’s average delivery times for these half-tonne projectiles are 12 months. In the meantime, the European Peace Facility will be refinanced to reimburse states that choose to divert munitions from stocks or orders already in progress to Kiev.

Even if stockpiles are “classified information”, as a senior EU official says, the state of European arsenals is far from optimal, after years and years of austerity and defense spending cuts: as they explained recently Max Bergmann and Sophia Besch in Foreign Affairs, the German armed forces have stocks of ammunition sufficient for a war of “a few hours”, at most “a few days”. Despite these limitations, Elysee sources welcome the agreement, which the leaders will ‘endorse’ in the conclusions, also because it limits joint purchases of ammunition “to European industry, plus Norway”.

Now, in the face of Russia which has shouted “halt” with cannon fire at the expansion of the EU, the need to increase the production of weapons in Europe: “We will have to take measures to boost the production capacity of the European defense industry,” writes Michel. It will be seen how rapid the expansion of the armaments production base will be, but no one thinks that it can be achieved in a few weeks. The EU experienced a similar problem with anti-Covid vaccines, whose mass production, which allowed the EU to tame the pandemic, took place exclusively thanks to the Big Pharma giant made in the USA Pfizer.

“We will do everything possible” to help Ukraine, explains a senior EU official, who however does not go so far as to say he is “optimistic” about the fact that existing ammunition stocks and orders could be sufficient to supply Ukraine sufficiently to arrive when EU industry will be able to produce sufficient armaments. However, there are also the United States and Great Britain, which support Ukraine conspicuously.

In addition to Ukraine, leaders will discuss the “long-term competitiveness of the EU and thefurther study of the single market“. For Michel, “it is time to make full use of our strengths and address our shortcomings”. The Council conclusions on the matter are lengthy and concern, Michel summarizes, “examining ways to enhance the innovation capacity and strengthen our Capital Markets Union”, to “stimulate investment to strengthen our technological base and deliver on our green and digital transitions”. Leaders will also have an “in-depth exchange of views” on trade policy, in the light of the geopolitical context.

As for thepower, the priority, writes Michel, “continues to be to guarantee security of supply at affordable prices”. Leaders will discuss ways to “achieve this goal”. In the draft conclusions, the Commission and the Member States are invited to prepare and make contingency plans in view of the “new season” of gas stock-filling, which will be without Russian gas, or at least with much less Russian gas than the Last year. All “stakeholders” are urged to make “full use” of the EU platform for joint gas purchases “at sustainable prices”. As far as Italy is concerned, we look with satisfaction at the fact that the passage on the reform of the electricity market has been made temporally more stringent: the co-legislators are explicitly invited to advance “without delay”, so as to ensure its approval “within end of 2023”.

One is also planned trade policy discussion, which could be held either today’s night or tomorrow’s morning. The agreement with Mercosur, which poses problems for several countries including Italy, will probably be one of the focal points of the debate. A discussion on the regulation on motor vehicle emissions is not on the agenda, nor has it been prepared in Coreper (but it is not said that it is not being discussed), the final approval of which was stopped in Coreper by a blocking minority formed by Italy, Poland, Bulgaria and Germany. Parliament has no intention of reopening the text, which was closed in a trialogue: the legislative work is concluded, the difficulties are in the Council and they have to deal with them, it is the substance of the reasoning that is being done in the place du Luxembourg.

Germany is tipping the balance and the Commission, with Frans Timmermans, is negotiating synthetic fuels with Berlin, where the Liberals of the FDP, struggling in a left-wing coalition with the SPD and the Greens, are trying to influence various dossiers , to recover consensus at home. “These are dynamics of German internal politics – confirms an EU diplomatic source – we all have our own internal politics”. The negotiation, for now, is only between the Commission and Germany, as also confirmed by the MEP from FI Massimiliano Salini. On biofuels, dear to Italy, there are currently no openings. Regardless of how it will end, our country will still vote against the regulation, as the Minister of Economic Development Adolfo Urso clearly said, also to give “a signal”.

It is very probable that this “signal” will also be reiterated by the prime minister, perhaps even in today’s European Council. Giorgia Meloni is expected to underline Italy’s critical position regarding various aspects of the Green Deal which, on the other hand, was conceived on the basis of the assumption that energy prices would go down after the end of the Covid-19 pandemic. That didn’t happen, because Vladimir Putin attacked Ukraine.

From the regulation on car emissions to that on green houses, there are various legislative provisions that create difficulties for a manufacturing country, whose citizens are very inclined to invest their savings in real estate. Beyond the various nuances, which each political party declines in its own way, Italy has never had ultra-ecological governments. The founder of the Ulivo Romano Prodi himself expressed himself in very critical terms regarding the regulation on car emissions, the heart of the mechanical industry in Northern Italy. Tomorrow, however, will be the day ofEurosummit, at 27, with Christine Lagarde, president of the ECB, and Paschal Donohoe for the Eurogroup, to take stock of the economic and financial situation. It shouldn’t be a ritual Eurosummit: “We will also address the coordination of our fiscal policies, exchange views on economic governance and take stock of the financial architecture of our Economic and Monetary Union,” summarizes Michel.

Between banking crises in the USA and in Switzerland e reform of the stability pact, there is certainly no shortage of topics for discussion: a senior EU official explains that “the leaders will be eager to hear from Lagarde” explanations on what is happening. “From experience, the discussions with Lagarde and Donohoe are really challenging.” Therefore, “very detailed questions are expected on what will be done” to prevent the banking crises that exploded in the USA and then in Switzerland from spreading to the rest of Europe, with the rescue of Credit Suisse by UBS, thanks to the state coffers. The discussion between the leaders tomorrow “could be long, but not because there is a crisis”. And President Lagarde “is very good at answering detailed questions”.

On the reform of the stability pact, several delegations would like an in-depth discussion, after the Ecofin conclusions, but several sources agree in indicating that the will of the presidency is to have it, at leader level, only once it is on the table the Commission’s legislative proposal, which sources from the Elysée expect to arrive “in the second half of April, a priori”, therefore probably before the informal Eurogroup-Ecofin which will meet in Stockholm on 28-29 April. A discussion between the leaders without a legislative proposal still on the table, notes an EU diplomatic source, “would not give any added value”. Of course, nothing prevents some leaders from raising the issue, but the will of the presidency is to avoid an in-depth discussion on a topic that is still divisive. At least at this stage.