3 July 2020 13 MIN reading

Priorities of the German EU Council Presidency

On June 30 Croatian Presidency of the Council of the European Union ended its first mandate, Germany took over and will hold the position until the Portuguese Presidency kicks off on January 2021. This will be the thirteenth time the country assumes the role and the second time since the presidency trios system was established.

The previous German Presidency took place during the first mandate of Angela Merkel as Chancellor of Germany while the current Presidency will mark the end of her office as the leader of the country. When Germany assumed the Presidency in 2007 the financial crisis was in its initial stages and once again, Chancellor Merkel is faced with a global economic and political crisis.

The emergency of the Covid-19 pandemic and its repercussions demanded Germany to refocus its Presidency priorities for the next six months. Hence, the EU response to the crisis will be the main issue on the agenda with specific emphasis on the approval of the “Next Generation EU” Recovery Fund and of the EU budget, i.e. the Multiannual Financial Framework 2021-2027 (MFF). With the transition period for the Brexit ending in December, an agreement with the United Kingdom on the future relationship becomes a core priority. Furthermore, in accordance with the European Commission’s agenda, both the digital and the green transition will play important roles.

Considering the above-mentioned context the programme for the German Presidency “Together for Europe’s recovery” is divided into the following six chapters:

01 Europe’s response to the COVID-19 pandemic

02 A stronger and more innovative Europe

03 A fair Europe

04 A sustainable Europe

05 A Europe of security and common values

06 An effective European Union for a rules-based international order anchored in partnership

01 Europe’s response to the COVID-19 pandemic

The German Government maintains that a European response is needed in order to overcome the current crisis for which the “rapid establishment of a temporary recovery instrument that is embedded within the Multiannual Financial Framework (MFF) and implemented within the framework of the European Semester” represents a top priority. The Presidency will have a first attempt at achieving such result with the next face-to-face meeting of the European Council on July 17 and July 18. Based on the declarations of leaders like the French President Emmanuel Macron an agreement might be reached on those days. The most challenging issues being the unwillingness of some Member States to expand the MFF and the balance between grants and loans within the Recovery Fund.

After a decision is reached in the Council, however, the European Parliament will need to agree with the proposed MFF. This process might face difficulties: Members of the Parliament (MEPs) stated that linking the Recovery Fund to the European Semester -an instrument of the European Commission (EC)- will effectively leave the Parliament with no control over the recovery plan. Moreover, the Parliament demanded on several occasions to increase the European Union’s own resources. This petition was partly considered by the EC, which in its proposal for the Recovery Fund and the MFF contemplates new resources in the form of a digital tax, a tax on single-use plastics, a border carbon adjustment or a tax “on companies that benefit from the single market”. 

Another issue that is brought up in the programme is the “strengthening” of the single market. To assist countries in their recovery the EC approved a temporary measure allowing Member States to approve state aid measures to help companies operating in their territory. However, the difference in resources which Member States have access to affects the extent of support they can provide, creating a situation that could potentially endanger the competitiveness of some countries and the grounds for a single market. For instance, Germany accounts for 51% of the aids approved, while Italy only accounts for 15.5%. To prevent a negative trend, the German Presidency proposes to assess “on an ongoing basis” the temporary framework for state aid.

02 A stronger and more innovative Europe

Under this chapter, the German Presidency targets three issues. First, the Presidency wishes to increase the digital sovereignty of the EU by working on its digital policy. In the proposal, the following items are highlighted: the creation of a monitoring system for digital capacities, the establishment of a sovereign and resilient European digital infrastructure, the adoption of common standards for new technologies and the promotion of the use of shared data. Although these priorities were already in line with the digital transformation envisioned by the EC, it is clear that the Covid-19 crisis exposed the necessity for more autonomy of the EU’s supply chain also in the digital sphere.

Second, the enhancement of the competitiveness of the EU economy. The Presidency aims its focus on SME-friendly regulations and on concluding the trilogue negotiations on the structural funds, with the intention of using these funds to help regions develop an innovative, sustainable and resilient economy.

The third element in the German programme related to the digital sector is centred on financial measures such as a digital tax and a financial transition act. Concerning the first, the OECD is currently discussing a proposal for a global tax, but the EU has committed to creating an EU level tax even if negotiations fail. Recently the United States (US) withdrew from the negotiations at the OECD and warns the EU Members it will retaliate against the adoption of a unilateral tax. Hence, the challenge will not only be the approval of a European digital tax but also managing arising tensions with the US. 

03 A fair Europe

The third group of priorities is envisioned to increase social cohesion and solidarity. The key initiatives, which were unveiled before the programme, consist of the development of an EU minimum wage level and of an EU minimum income framework. Aside from these projects, the Presidency wishes to contribute to gender equality and intergenerational justice. Furthermore, the programme considers the drafting and discussion of Europe’s Beating Cancer Plan as essential for a more just Europe. 

Finally, the chapter also includes the Conference on the Future of Europe. The Conference regained importance as it could be used to channel a narrative of reform and reconstruction of the Union after the current crisis. As proposed, the Conference will gather the opinions of EU citizens for a period of two years, which would mean it could start during the German Presidency and end during the 2022 French Presidency, involving the most politically relevant Member States in a process of identification of key EU issues.

04 A sustainable Europe

The Presidency reaffirms its commitment to the European Green Deal and wishes to contribute to related legislation such as the 8th Environmental Action Programme and the European Climate Law, which will make European climate neutrality legally binding by 2050. The United Nations 2030 Agenda for Sustainable Development and the Paris Agreement are mentioned as sources of inspiration for the programme.

The programme contemplates actions in specific sectors such as transport, energy and agriculture. Related to the last sector, the negotiations on the Common Agricultural Policy (CAP) post-2020 will play a central role. As an answer to the EC’s “Farm to Fork Strategy”, the Presidency intends to present conclusions on animal welfare and food labelling. Furthermore, the programme envisions that the Council be involved in the drafting of the new Consumer Agenda, which will be presented by the EC in the second half of 2020.

05 A Europe of security and common values

With a Council level discussion on rule of law, the German Presidency aims at reaffirming the European values. Moreover, the programme wants to fight hate crime and racism, while pursuing the “democratisation” of the Internet. In terms of security affairs, “right-wing terrorism” and “violent right-wing extremism” are added as priorities alongside “Islamist terrorism”. Finally, the Presidency also aims at reforming the Common European Asylum System and at improving the protection of the external borders against irregular migration through the new Frontex mandate.

06 An effective European Union for a rules-based international order anchored in partnership

The priorities for the external action of the EU are mostly dictated by the current international context: negotiations with the United Kingdom on the future relationship and managing the tensions with China. On the first topic, the Presidency commits itself to the jointly agreed Political Declaration -a Declaration which the EU chief negotiator, Michel Barnier, accused the UK of disregarding- as the basis for the agreement. On China, tensions have raised recently over the management of the Covid-19 crisis and the accusations of cyber attack and misinformation campaigns. Although the EU-China summit took place a couple of weeks ago, the programme plans another top-level meeting between the two blocs “as soon as possible”.

Other topics at the international sphere are the cooperation with Africa -specifically the African Continental Free Trade Area (AfCFTA)-, Syria, the accession talks with the Western Balkans and the strengthening and modernisation of the World Trade Organisation (WTO). 

In conclusion, once again Germany leads the Presidency of the EU Council during a time of crisis. This circumstance might affect the original priorities Chancellor Merkel and her team had in mind, such as digital and green transition and the establishment of EU level minimum income and wage frameworks. Most of the effort will need to be put in achieving successful agreements for the MFF and the future relationship with the United Kingdom. Both have the end of this year as a deadline, but in the case of the MFF, the matter becomes more urgent because it involves a Recovery Fund that the EU economy and society will need to alleviate and confront the consequences of the Covid-19 crisis.

Miguel Ángel Zhan Dai  / Consultant

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