EU Leaders Fail To Agree on Top Jobs
But also — Excessive Deficits, Nature Restoration Law, NATO
Hi! Today is 24 June, and here is your EU news summary for the week. Feel free to share this newsletter with friends and colleagues, and follow us on Twitter and LinkedIn.
It happened last week:
Apple decided to delay the launch of some of its new AI features on the iPhone in Europe due to uncertainties related to the DMA.
Member State ambassadors adopted a 14th package of sanctions against Russia, targeting Russian liquefied natural gas for the first time.
The logo of Hungary's presidency of the Council of the EU is a Rubik’s cube, a game invented in Hungary in 1974. The slogan? Make Europe Great Again. The tone is set.
Accession negotiations for Ukraine and Moldova to the EU start on 25 June.
German Manfred Weber was re-elected as head of the European People’s Party (EPP, center-right). On the Greens’ side, Dutchman Bas Eickhout was elected vice-president, alongside Terry Reintke (who was re-elected).
The Briefing
For some, it was already a done deal. Yet during their dinner on 17 June, EU heads of state and government failed to agree on the allocation of the most important roles (“top jobs”) within the European institutions.
INDIGESTION • Last Monday, the European Council — which brings together all EU heads of state and government — attempted to agree on the distribution of top jobs during an informal dinner.
In the days before this dinner, a consensus seemed to have emerged within the majority coalition of the European People’s Party (EPP, center-right), the Social Democrats (S&D), and the Liberals (Renew): Ursula von der Leyen (EPP) as European Commission president, former Prime Minister António Costa (S&D) as president of the European Council, Maltese Roberta Metsola (EPP) as president of the European Parliament, and Estonian Kaja Kallas (Renew) for the EU’s top diplomat job.
Two factors prevented an agreement:
The EPP, emboldened by its good election results, demanded an even larger share of top jobs.
Giorgia Meloni was frustrated: her political group (the European Conservatives and Reformists, “ECR”, to the right of the EPP) performed well in the European elections, but was excluded from pre-dinner negotiations.
NO-CHOICE RESTAURANT • The expression on Giorgia Meloni’s face after the dinner says it all: the Italian Prime Minister was not satisfied with how discussions unfolded.
The most influential leaders of the majority coalition in the European Parliament — including Emmanuel Macron (Renew), German Chancellor Olaf Scholz (S&D), and Polish Prime Minister Donald Tusk (EPP) — met separately, before presenting their counterparts with a list of top jobs (see above) as a fait accompli.
Beyond her exclusion from these talks, Giorgia Meloni did not appreciate that her political group's performance in the elections was not taken into account in the allocation of top jobs.
The ECR performed well, but the EPP-S&D-Renew coalition retained its majority after the elections. This considerably limits the influence of the Italian Prime Minister’s group in these discussions.
EXTRAS • The negotiations also derailed due to the EPP’s demands, deemed excessive by some.
The European elections strengthened the EPP's position as the largest political group in the European Parliament: the group gained 13 seats, totaling 189.
The rise of the ECR and ID groups, both to the right of the EPP, makes the center-right group a central political force (both literally and figuratively) in the upcoming term.
The elections were less favorable to the other two members of the pro-European coalition: S&D lost 3 seats, totaling 136, and Renew lost 28 seats, dropping to 74.
As a result, the EPP demands an even larger share of the pie: in addition to the presidency of the European Commission and the European Parliament, the political group allegedly demanded half of the presidency of the European Council.
The president of the European Council is elected for two and a half years. In practice, the mandate has always been renewed once, meaning former presidents have served five-year terms. EPP leaders question this convention and suggest halving the European Council presidency, which will be attributed to the socialists.
Needless to say, German Chancellor Olaf Scholz (S&D) did not like this.
THE BILL • Bottom line: nothing was decided during this informal meeting, and negotiations risk becoming tenser.
In theory, the pro-European majority leaders could proceed without Meloni’s support thanks to the voting method: the president of the European Commission is proposed by the European Council by qualified majority, and the president of the European Council is elected through the same method. However, completely ignoring Giorgia Meloni’s demands could backfire in at least two ways:
Ursula von der Leyen needs the support of the majority in the European Parliament to be approved, and the EPP-S&D-Renew majority is fragile. Not negotiating with Meloni means losing potential support from ECR MEPs.
In the future, the Italian Prime Minister could become uncooperative on other issues.
ECR IS COOKING • Giorgia Meloni may have a new argument to influence these negotiations.
On June 19th, two days after the European Council’s informal meeting, the ECR announced it had become the third-largest political group in the Parliament after a second wave of admissions.
This means Renew, Emmanuel Macron’s group, temporarily falls to fourth place. Last week, the Liberals faced other setbacks: five MEPs from the Volt party — previously split between the Liberals and the Greens — chose to join the Greens, and former Czech Prime Minister Andrej Babiš announced his party’s (ANO) MEPs were leaving the group.
Nonetheless, ECR being bigger than Renew is more symbolic than anything else, and should not affect the allocation of top jobs (the pro-European coalition retains the majority). What is not symbolic is Renew’s weakening at the European level.
DIGESTIVE • Negotiations are tense, but remain less complex than in 2019. It is likely that the current top jobs list will be the one retained by the European Council.
EU heads of state and government will meet on 27 June and 28 June. If they reach an agreement, the Parliament could vote to approve or reject Ursula von der Leyen in mid-July.
In Case You Missed It
EXCESSIVE DEFICITS • On 19 June, the European Commission unveiled its policy guidance as part of the Spring Package of the European Semester.
The Commission considers that “opening of a deficit-based excessive deficit procedure is warranted” for 7 countries: France, Italy, Belgium, Hungary, Malta, Poland, and Slovakia — which do not comply with debt (60%) and public deficit (3%) rules.
The excessive deficit procedure includes recommendations along with financial sanctions to push Member States to put their public finances in order.
The procedure has not yet been formally triggered. The Commission intends to propose to the Council of the EU to formally open the procedure in July. The Council will then adopt (by qualified majority) recommendations to the member states to end excessive deficits. If you’re lost on the procedure, take a look at this diagram.
Note — in February 2024 the European Parliament and the Council reached an agreement on the reform of EU fiscal rules, after the double shock of Covid-19 and the war in Ukraine.
The new version of the Pact, which applies from 2025, introduces more flexibility in debt and deficit reduction paths, better accounting for structural reforms undertaken by Member States.
ENVIRONMENT • On 17 June, the environment ministers of the EU 27 gave their final green light to the Nature Restoration Law, a regulation which aims to restore 20% of the EU’s land and sea areas by 2030.
The adoption was made possible by Austria and Slovakia, which decided to vote in favor of the text at the last minute (without either country, the text would not have been adopted).
But there’s a catch: Austrian Chancellor Karl Nehammer accuses his Minister Leonore Gewessler (Austrian Green Party) of voting without the governing coalition’s agreement (the coalition between the Greens and the Austrian People’s Party, ÖVP). He wrote a letter to Belgium — which holds the rotating presidency of the Council of the EU — requesting the vote’s annulment.
The Belgian Environment Minister stated that the vote was final. “Internal controversy in Austria is not my problem,” he clarified.
The ÖVP’s Secretary-General, Christian Stocker, announced in a statement that the party has filed criminal charges against the minister for abuse of power.
NATO • Dutch Prime Minister Mark Rutte has secured the support of all 32 NATO members to replace Norwegian Jens Stoltenberg as Secretary General of the military alliance. After seven months of campaigning, Rutte was still missing support from Hungary, Slovakia, and Romania.
During last Monday’s informal meeting of the European Council, Mark Rutte reportedly convinced Viktor Orbán by suggesting that Budapest not participate in the organization’s activities in support of Ukraine.
The day after the agreement between Mark Rutte and Viktor Orbán, Slovak President Peter Pellegrini also announced he was supporting Rutte.
On Thursday, Romanian President Klaus Iohannis withdrew his candidacy — he was also a candidate for the role — in favor of Mark Rutte, and pledged to support him.
The organization celebrates its 75th anniversary next month in Washington. Mark Rutte will take office on 2 October, a month before the US elections.
What We’ve Been Reading
For Bruegel, Zsolt Darvas, Lennard Welslau and Jeromin Zettelmeyer offer a critical summary of the EU’s revamped fiscal framework.
Jacob Funk Kirkegaard of the Peterson Institute assesses the EU’s decision to impose provisional duties on electric vehicles produced in China.
This edition was prepared by the What’s up EU team, including Maxence de La Rochère and Thomas Blanda. See you next week!