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What's next after summit reaches budget deal?

December 10, 2020

Germany's EU Council presidency is ending with a summit that will leave unanswered questions. Consensus on a budget was an early success, though.

From left to right: Emmanuel Macron, Ursula von der Leyen, Mateusz Morawiecki and Viktor Orban
(L to R) Macron speaks to von der Leyen and Polish and Hungarian prime ministers talkImage: Olivier Matthys/Pool/REUTERS

Germany's July-to-December turn at the rotating presidency of the Council of the European Union did not unfold as planned. The most resounding success so far is the passing of an EU budget that includes a coronavirus recovery fund.

"A lot could not be done," German Chancellor Angela Merkel said Wednesday, the day before the summit began, "and that is a shame." 

This was Merkel's second time leading the German presidency of the Council of the European Union. The final EU summit of 2020 was meant to bring a glittering conclusion as her time as chancellor comes to an end, as well'.But it was not meant to be: The coronavirus pandemic, Brexit, and tensions with Turkey and the EU member states Poland and Hungary determined that. The unresolved problems have piled up, and the leaders of the bloc's 27 member states will discuss those. 

European Commission President Ursula von der Leyen is expected to brief EU leaders on the state of talks with the United Kingdom, but Brexit is not on the summit's agenda. "When it comes to relations with the UK, negotiations are ongoing based on our common mandate," European Council President Charles Michel wrote in his invitation letter for the summit. "It is not the intention to plan a discussion on the matter."

Belgien I EU-Gipfel in Brüssel
Orban (far right) and Macron speak in a huddle of EU leadersImage: picture alliance/dpa/Pool AP

Hungary, Poland veto 

Until Thursday, Hungary and Poland had held up the EU budget. The European Commission and European Parliament have both expressed concern that rule of law is under threat in the countries. The governments had vetoed the 2021-2027 Multiannual Financial Framework, worth €1.1 trillion ($1.3 trillion), because they disagree with tying funding to the European Union's new Rule of Law Mechanism.  

Prime Minister Viktor Orban had said the mechanism would infringe on Hungary's sovereignty and likened the EU to the Soviet Union, which had stationed troops in the country during the Cold War and even intervened in domestic affairs. But all the other member states, aside from Poland, support the mechanism, which was agreed to during a budget summit at the beginning of July. 

What was particularly irksome to Merkel is that with their vetoes the countries were also blocking the €750 billion coronavirus recovery fund, which is crucial for giving a boost to the economy in view of the pandemic. Michael Clauss, Germany's ambassador to the European Union, negotiated a supplementary declaration with regard to the Rule of Law Mechanism that takes the concerns of Poland and Hungary into account. It provides for additional steps and the intervention of the European Court of Justice before action can be taken against a member state. 

The proposal was reviewed Wednesday and approved on Thursday. This would allow for the budget to enter into force as planned on January 1. In Brussels, former European Council President Donald Tusk said he was glad the attempted "blackmail" by Poland and Hungary had not been successful. 

But Möritz Körner, a German member of the European Parliament for the laissez-faire Free Democrats, said the supplementary declaration was "half-baked" and had only postponed the Rule of Law Mechanism — not eliminated it. He said it was important that the Rule of Law Mechanism not be altered. 

Erdogan 'not ready'

There seems to be no solution for another conflict: the tense relationship between the EU and Turkey. "President Erdogan is not ready for dialogue," German Deputy Foreign Minister for Europe Michael Roth said. 

Merkel was disappointed that Turkish President Recep Tayyip Erdogan had not shown any willingness to discuss access to gas reserves in the eastern Mediterranean Sea with the EU members Greece and Cyprus. On the contrary, Erdogan allowed a vessel involved in an exploration mission to remain in disputed waters until shortly before the summit began. 

As the president of the Council of the European Union, Germany has suggested imposing sanctions on Turkish citizens and companies involved in gas exploration. However, the governments of Greece and Cyprus have called for harsher measures, and Erdogan has said he does not fear EU sanctions. 

Some EU member states, including Austria, have suggested suspending Turkey's pre-accession to the European Union. Negotiations are currently stalled, but, officially at least, Turkey's government still intends to join the bloc. 

Climate goals

Another topic on the agenda is the endorsement of a 2030 target to reduce carbon emissions by at least 55% over 1990 levels. The goal is to achieve climate neutrality by 2050.  

The government of Poland, which is very dependent on coal, has expressed skepticism. It is not clear whether Poland's prime minister will endorse the target at the summit. According to certain people in the know, the governments of some member states have sought more clarity about what this climate goal would mean in financial terms. In other words, they are seeking increased aid in the EU budget to restructure their domestic energy sectors.

According to the Paris Agreement, the European Union should have declared its climate goals by February 2020. Environmental associations are already warning that the 55% goal will not suffice to stem global warming.  

Migration, EU-US  relations

The European Union has not advanced changes to the bloc's migration policy in the past six months. The European Commission did propose changes to asylum procedure and how displace people could be distributed across member states, but these have not been discussed by member states, despite the requests of German Interior Minister Horst Seehofer.

Once again, the governments of Poland and Hungary have hindered the process with the help of allies in the region. The much-touted Conference on the Future of Europe, which is intended to explore changes to the EU, has not even begun. The pandemic has prevented in-person meetings, and politicians have been too busy battling the current crises to think beyond them. There has been no progress regarding the European Union's strategy toward Africa or on finding a unified approach to dealing with China. 

The EU leaders at the summit will likely be in agreement when it comes to the United States, with officalss optimistic for a rebooting of relations with the bloc's most important ally following four years of President Donald Trump. The plan is to review the partnership with regard to trade and security with Trump's successor: Joe Biden. 

The governments of EU member states disagree, however, as to how independently the European Union should operate. French President Emmanuel Macron would prefer a "sovereign Europe," whereas the governments of Germany, Poland and other member states have warned that, without the United States, it would be harder for the bloc to defend against Russia. 

EU leaders reach agreement on budget: DW's Georg Matthes from Brussels

This article has been adapted from German.

Bernd Riegert
Bernd Riegert Senior European correspondent in Brussels with a focus on people and politics in the European Union