February 07, 2023
EU Heads of State or Government will gather on 9 and 10 February 2023 for a special European Council meeting. In addition to Russia’s war on Ukraine, which will notably be addressed in the context of the EU–Ukraine summit held on 3 February 2023, the main agenda points will include migration and the EU’s economy. On migration, EU leaders will consider immediate operational action to address growing migratory pressure at the EU’s borders. In particular, they will discuss measures to strengthen EU external border control, improve cooperation with countries of origin and transit, enhance return rates, fight migrant trafficking and increase availability of data on migration flows. In the context of the challenges which high energy prices and the US Inflation Reduction Act subsidy plan pose to EU business, EU leaders will discuss ways of boosting the EU’s economic competitiveness in the short term, and attempt to find a common approach on possible support for European industries and/or further adaptations to State aid rules. For the longer term, they will consider the question of whether to establish a sovereignty fund for investment.
European Council agenda
The Indicative Leaders’ Agenda 2022, which offered an overview of EU leaders’ meetings and topics for the year, expired in December 2022, and has not yet been updated. It remains to be seen whether the European Council President, Charles Michel, will use this special European Council meeting as the occasion to present a new document covering 2023.
European Council meeting
Russia’s war of aggression against Ukraine
Almost a year into Russia’s military aggression against Ukraine, EU leaders will discuss the situation in Ukraine for the ninth time. They will most probably reiterate their determination to support Ukraine’s sovereignty and territorial integrity for as long as the war takes, and confirm the EU’s commitment to continue providing political, financial, humanitarian and military support. As regards financial support, the EU has pledged €18 billion in macro-financial assistance for 2023, of which €3 billion has already been disbursed. With respect to military support, the EU has pledged €3.6 billion under the European peace facility, while individual Member States have promised different types of military equipment including, most recently, Leopard 2 tanks, for an estimated €8.4 billion. EU leaders are also likely to discuss outstanding points from the 10th sanctions package. As is now the tradition, the President of Ukraine, Volodymyr Zelenskyy, will most probably address the European Council again.
The European Council meeting was preceded by a meeting between the college of Commissioners and the Ukrainian government on 2 February in Kyiv, and then an EU–Ukraine summit the following day, attended by European Council President Charles Michel, European Commission President Ursula von der Leyen, and President Zelenskyy. The main topics discussed during both meetings were Ukraine’s EU accession, EU–Ukraine cooperation on reconstruction, energy and connectivity, the war’s impact on global food security, EU support to Ukraine in response to Russia’s war of aggression, and the 10th package of sanctions against Russia currently in preparation. The main challenge for both meetings was to manage time expectations. EU accession remains a process driven by the fulfilment of the Copenhagen criteria, hence the importance of Ukraine staying the course of reforms and meeting the conditions set in the Commission’s opinion on the membership application, a required step in view of opening pre-accession negotiations. The joint summit statement supported the Ukraine Peace Formula initiative, while President Michel stressed that ‘the future of Ukraine is with the European Union’. In preparation for the EU–Ukraine summit, the European Parliament adopted a resolution in which it expressed support for Ukraine. It noted that Ukraine has to meet the conditions set by the Commission in its opinion, and supported the efforts made to ensure war crimes perpetrated in Ukraine do not remain unpunished.
Migration
Migration had dominated the European Council agenda from the outbreak of the migration crisis in 2015 until late 2018. However, it received less attention in the following years, owing to fewer migrants arriving than during the 2015 and 2016 peaks. In 2022, debate on refugees in the European Council was linked solely to the support for people fleeing Russia’s war against Ukraine. To date, close to 8 million refugees from Ukraine have been recorded across Europe, 5 million of whom have been registered through the EU’s temporary protection or similar national protection schemes.
Considering an increase of 64 % in irregular border crossings in 2022 compared with the previous year, and the resulting pressure at the EU’s external borders, President Michel announced at the December 2022 European Council meeting that EU leaders would hold an in-depth debate on migration during a special European Council meeting on 9‑10 February 2023.
Frontex, the European Boarder and Coast Guard Agency, recorded 330 000 irregular border crossings in 2022, the highest level since 2016 (Figure 1). While the western Mediterranean route (i.e. via Spain) registered a reduction in irregular border crossings by 21 %, the central Mediterranean route (via Italy) saw an increase of 51 %, and the Western Balkans (via Serbia) and eastern Mediterranean (via Greece) routes an increase of 136 % and 108 % respectively.
In his report to Parliament on 18 January 2023, Charles Michel indicated that EU leaders would address the external dimension of migration, including partnerships with third countries, and the strengthening of the EU’s external border control. Another critical point is the Commission’s migration and asylum pact. On 7 September 2022, Parliament and the rotating presidencies of the Council of the EU agreed on a joint roadmap, committing to conclude the reform of the EU asylum system by March 2024. Italy stresses in its contribution to the forthcoming meeting that ‘mandatory relocations must be the heart of any solidarity mechanism’, which is unacceptable for others.
EU leaders will thus primarily consider immediate operational measures to improve EU external border control while increasing cooperation with countries of origin and transit, notably by calling for the development of action plans with the countries concerned. A highly debated aspect in this context is whether to finance fences or walls with EU money. While the Commission has so far positioned itself against this approach, the number of supporters is growing. At the same time, the leaders are expected to deliberate further actions to fight trafficking and migrant smuggling. As different foreign countries have instrumentalised refugees to ‘destabilise’ EU countries, EU leaders are expected to condemn this behaviour again for political purposes and call for further action. They are also likely to call for completion of the update of Frontex’s mandate.
With a return rate at a low of 22 %, EU leaders are expected to follow up on the EU justice and home affairs ministers’ meeting of 26 January 2023, and stress the need for an efficient and well-functioning system of returns. The Swedish EU Presidency statement stressed that ‘current return rates are not acceptable’, and that for cooperation with countries of origin in the context of returns, ‘both positive incentives and restrictive measures are required’.
Another migration point likely to require considerable discussion time is the return of the 2018 proposal for setting up disembarkation centres (i.e. centres outside the EU that would carry out a first screening of asylum applications). Originally proposed by Austria and mentioned at the June 2018 European Council meeting, the idea is currently championed by the Danish government.
Some Member States, such as Austria and the Netherlands, have been pushing to include migration on the European Council agenda, in particular as a consequence of the higher number of secondary movements of irregular migrants (i.e. moving from the country in which they first arrived to seek protection or permanent resettlement elsewhere). EU leaders are thus expected to call for improved availability of data on migration flows, including on secondary movements.
Migration policy is part of the wider area of freedom, security and justice, in which the European Council has an important strategic role, notably to define the strategic guidelines for legislative and operational planning. Although the European Council was expected to adopt the guidelines in spring 2020, nearly three years later, EU leaders have still not complied with this Treaty obligation.
Economy
In a context of high inflation, high energy prices and looming recession, boosting European competitiveness, strengthening the EU’s industrial and technological base, and providing a common EU response to the challenges posed by the United States’ Inflation Reduction Act (IRA) are expected to be at the centre of discussions at the special EU-leaders’ meeting on 9-10 February.
As shown by the Organisation for Economic Co-operation and Development (OECD), the use of subsidies has been growing worldwide, not least in the form of support for investment in green technologies. In the EU, this has given rise to fears that if Europe does not do the same – and in particular, react swiftly to the IRA’s US$369 billion dollar subsidy push to ensure a level playing field – businesses might start to relocate, damaging the EU’s economic base.
In preparation for the discussions during the EU leaders’ meeting, and building on the March 2022 Versailles declaration, President Michel published an op-ed, Going big for EU industry, in Politico. His main message: the war in Ukraine has created a new geopolitical reality in which ‘we must give Member States more leeway to provide State aid to their businesses, and look into a potential sovereignty fund for investment in important projects’. However, some of his proposals have been met with a mixed response in the Member States. There are diverging views on i) how the State aid system can be reformed to support EU industry more effectively (and respond more quickly to business needs), without creating an uneven playing field in the internal market, and ii) whether only existing funds should be repurposed and utilised, or whether additional funds are required.
France, which had called for a ‘made in Europe’ industrial strategy, has been at the forefront of pleading for a relaxation of State aid rules, supported in this by Germany – together they account for some 80 % of State aid currently. Countries such as Italy and Portugal warned against solely loosening State aid rules without further measures, underlining that not all Member States ‘have the same capacity to spend’. In these countries’ view, the relaxation of State aid rules needs to be accompanied by decisions on the level of financing, to avoid imbalances in the EU’s single market.
Several Member States oppose new subsidies and new common loans to support industry as a response to the US IRA. In a letter addressed to Commission Vice-President Dombrovskis on 26 January, seven Member States (Czechia, Denmark, Estonia, Ireland, Austria, Slovakia and Finland) rejected the possibility of EU debt-based instruments. Together with Belgium, Germany and the Netherlands, they point to the existence of unused funds under the Next Generation EU recovery instrument, which could be used to support green technology.
Despite remaining differences on the means, the European Council does agree, however, on the need to strengthen the EU’s economic and industrial basis and, in its December 2022 conclusions, invited the Commission to ‘present a strategy in early 2023 to boost EU competitiveness and productivity’.
Building on the Commission’s communication on a ‘Green Deal Industrial Plan‘, published on 1 February 2023, and aiming to ‘make Europe the home of clean tech and industrial innovation on the road to net zero’, the European Council is expected to call for urgent action in five areas: i) adapting State aid policy to make procedures simpler and predictable while allowing targeted temporary support in strategic sectors for the green transition; ii) redeploying EU-funding to enable full mobilisation of existing funding and targeted support for strategic sectors; iii) improving the regulatory environment; iv) developing skills to meet needs, in particular for the green and digital transition; and v) closing the investment gap with both public and private investment. In that context, the European Council will most likely also take note of the Commission President’s intention to put forward a European sovereignty fund by summer 2023, to support strategic investment.
Based on the feedback received from EU leaders, the Commission will develop amended proposals before the European Council’s March meeting, and submit linked legislative proposals: the net-zero industry act, the critical raw materials act, and a reform of the design of electricity markets. In the longer term, President von der Leyen intends to work on the European sovereignty fund
Moreover, as the European single market turns 30 this year, EU leaders are expected to mark the occasion by underlining the need to use the full potential of the single market as a means to strengthen EU competitiveness and productivity. As access to finance is crucial for business to be able to innovate and invest, EU leaders will most likely also call for quicker implementation of the European capital markets action plan. Finally, the European Council is likely to underline the importance of pursuing an ambitious and robust trade agenda to ensure a level playing field and fair competition. In both the strategic agenda and the Versailles declaration, trade is closely linked to efforts meant to boost EU competitiveness. Therefore, in the current geopolitical context, the European Council may also reiterate calls seeking to i) defend the internal market and safeguard EU interests from unfair trade practices through the use of trade defences tools; and to ii) step up effort to diversify supply chains, particularly of critical raw materials. EU leaders will have a more thorough debate on Europe’s long-term competitiveness, trade and internal market policy at the March 2023 European Council meeting.
Read this briefing on ‘Outlook for the special European Council meeting of 9-10 February 2023‘ in the Think Tank pages of the European Parliament.