European Parliamentary Research Service Blog

Written by Polona Car.

This is the seventh edition of an annual EPRS publication aimed at identifying and framing some of the key issues and policy areas that have the potential to feature prominently in public debate and on the political agenda of the European Union over the coming year.
The topics analysed encompass the 2024 European elections, budgeting in times of crises and war, lessons for public investment in the EU from the EU recovery instrument, the fiscal and monetary policy mix, climate
and socio-economic tipping points, the impact of increasing fuel prices on transport, cyber-resilience in the EU, protecting media freedom and journalists, the future of Russia, and geoeconomics in an age of empires

As cyber-attacks proliferate, 2023 is expected to see progress on several EU legislative and non-legislative proposals aimed at protecting infrastructure, connected devices, and the whole information and communications technology (ICT) supply chain to counter the wave of cyber-attacks.

A changing cybersecurity threat landscape

Russia’s war against Ukraine has put cyber-resilience in the spotlight. Russia’s aggression includes massive cyber-attacks on Ukraine but also on Ukraine’s partners in the EU. Even before the war, cyber-attacks were a great concern for the European private and public sectors (such as the cyber-attack against the German Bundestag in 2021). A ransomware attack occurred every 11 seconds in 2021, expected to accelerate to every 2 seconds by 2031, costing US$10.5 trillion annually by 2025. Cybercrime is the fastest-growing wealth transfer worldwide, inflicting increasing costs on the world economy with malicious actors becoming increasingly sophisticated. Rapid digital transformation, accelerated by the COVID-19 pandemic and geopolitical tensions, has increased the playing-field for cybercriminals. The 2022 ENISA report on the threat landscape in the EU revealed that 10 terabytes of data are stolen every month. Ransomware, which scores highest on the list of cyber-attacks in the EU, is followed closely by distributed denial of service (DDOS) attacks, with the largest ever DDoS attack in Europe recorded in July 2022. The Cisco annual internet report estimates that DDoS attacks will double from 7.9 million in 2018 to 15.4 million globally by 2023. Health service providers, pipelines, airports, ministries, hotel chains, banks and digital service providers are just a few examples of entities that have suffered from cyber-attacks over the past few years. Russia’s aggression against Ukraine is also provoking the rise of hacktivism and a surge in disinformation. Of particular concern are the growing capabilities of malicious actors, now using attacks against complete supply-chains.

Protecting the critical infrastructure

Especially disturbing are attacks against critical infrastructure such as energy, health and finance, which increasingly rely on IT, becoming extensively vulnerable to cyber-attacks. Russia’s hybrid approach, merging physical and cyber-attacks, has demonstrated that disruption of essential services is a realistic threat to the EU. For example, the attack on the satellite communication provider just one hour before Russia’s attack on Ukraine affected internet services and wind farms across Europe. The Directive on the Resilience of Critical Entities (CER), together with the revised Directive on the Security of Network and Information Systems (NIS2), respond directly to this challenge. However, the fast-evolving threat landscape, and incidents such as the cyber-attack against the Danish railway network in November 2022, demand accelerated implementation of the new legal framework. Hence, the Council adopted a recommendation in December 2022, to step up efforts aimed at protecting critical infrastructure, and foster inter- and intra-EU cooperation. In particular, it would urge Member States to implement measures under the 5G cybersecurity toolbox, considering the high dependency of essential services on 5G and its importance for the development of digital services. The subsequent EU policy on cyberdefence aims to increase the EU’s cyberdefence capabilities and synergies between military and civilian cyber communities. The connectivity of critical infrastructure will be provided by the infrastructure for resilience, interconnectivity and security by satellite (Iris²), a sovereign space-based secure connectivity system, to be functioning in orbit by 2024

Advancing operational capacity

NIS2 formally establishes the EU cyber-crises liaison organisation network (CyCLONe), rapid crisis-management coordination in case of large-scale cross-border cyber-incidents while the Joint Cyber Unit (JCU) ensures a coordinated response between civilian, law enforcement, diplomatic and cyberdefence communities, and should be fully implemented by 30 June 2023. EU cybersecurity capacity-building will be done in the framework of the European cybersecurity competence centre (ECCC), which is to become operational by March 2023. The centre aims to improve technological sovereignty through strategic cybersecurity investments. Together with the network of national coordination centres (NCCs), it will form the cybersecurity shield for the EU, powered by artificial intelligence (AI) and complemented by EU supercomputing infrastructure developed by the European high-performance computing joint undertaking. The first six quantum computers are expected to be available by the second half of 2023.

Protecting connected devices

Connected devices, such as home security applications, toys connected to the internet and smart cameras, expected to amount to three times in number the global population by 2023, have the potential to open the door to malicious actors and impact the whole supply chain, if hacked. To address this threat, the cyber resilience act (CRA) proposal would impose cybersecurity obligations on a very wide range of digital products before they are placed on the market. The proposal would impose high fines for non-compliance and ban products that do not abide by the rules. This could have an impact beyond EU borders, becoming an international reference for the cybersecurity of digital products. Intensive negotiations are expected on this proposal in 2023.

Protecting the supply chain

The October 2022 Council conclusions on ICT supply chain security should be materialised in the creation of the ICT supply chain security toolbox, to complement the coordinated supply chain risk assessment for ICT products under NIS2. The 5G security toolbox criteria could serve as an example when defining high-risk vendors – such as Huawei – for the security of ICT supply chains.

Progress is expected too on domain name systems (DNS) resolver (converting domain names such as www.name.eu into computer friendly IP-addresses, e.g. 192.168.2.1). A public European DNS resolver service (DNS4EU) should develop in 2023 as an alternative to public (non-EU) resolvers prevailing on the market, which would enhance the EU’s cybersecurity abilities and contribute to its digital sovereignty. We can also expect the finalisation of the EU certification schemes for cybersecurity of ICT products (EUCC) and for cloud services (EUCS), where it remains to be seen if disputed sovereignty requirements will be comprised in the scope of the latter.

Bridging the cybersecurity skills gap

The EU response to cyber-threats will depend immensely on having a sufficient and sufficiently trained cybersecurity workforce. The European cybersecurity skills framework (ECSF) will play an important role in defining the cybersecurity profession. The cybersecurity skills academy, which the European Commission has announced for the third quarter of 2023, could address the cybersecurity gap.

Read the complete in-depth analysis on ‘Ten issues to watch in 2023‘ in the Think Tank pages of the European Parliament.

Written by Monika Kiss.

This is the seventh edition of an annual EPRS publication aimed at identifying and framing some of the key issues and policy areas that have the potential to feature prominently in public debate and on the political agenda of the European Union over the coming year.
The topics analysed encompass the 2024 European elections, budgeting in times of crises and war, lessons for public investment in the EU from the EU recovery instrument, the fiscal and monetary policy mix, climate
and socio-economic tipping points, the impact of increasing fuel prices on transport, cyber-resilience in the EU, protecting media freedom and journalists, the future of Russia, and geoeconomics in an age of empires Increasing fuel prices Figure 5 – Price without taxes – EU weighted average

The war on Ukraine and the subsequent uncertainties and sanctions have caused shortages and disruption in supply of resources, including for petroleum products. Furthermore, the sixth EU sanctions package of 3 June 2022 introduced a partial ban on the import of oil and petroleum products from Russia. Russian oil imports into the EU fell from 2.5 million barrels per day (bpd) in January 2022 to 1.4 million bpd in October 2022. An EU ban on Russian crude oil imports became effective on 5 December 2022, and one on refined petroleum products will do so on 5 February 2023. As a consequence, the increase in prices of diesel, petrol (Euro-super 95), as well as liquefied petroleum gas (LPG) has been exceptionally fast. After the decreasing prices during the pandemic, the contrast was strong.

Transport, a sector already in transformation

Europe’s transport sector is transforming due to the decreasing use of fossil fuels and the increasing use of greener transport modes, encouraged through financial incentives in Member States, and EU initiatives and legislation with binding targets and deadlines. Most transport modes (road, air, sea) are reliant on petroleum products, Only rail has been electrified to a large degree in the EU. In road transport, around 40 % of cars depend on petrol, and about 20 % on diesel, while more than 95 % of trucks still rely on diesel. The share of energy from renewable sources used for transport in the EU increased from under 2 % in 2005 to 10.2 % in 2020. Meanwhile, policymakers are increasingly focussing on greening transportation. As outlined in the European Green Deal and enshrined in the European Climate Law, the EU aims to achieve climate neutrality by 2050, and the transport sector has an important role to play in this. The sustainable and smart mobility strategy, presented in December 2020, outlines how the EU transport system can achieve a green and digital transformation and become more resilient to future crises. It aims to reduce dependence on fossil fuels by 2030 and encourage alternative choices, such as the use of high speed railway and inland waterways. The fit for 55 package is a set of proposals on climate, energy, transport and taxation policies aimed at reducing net greenhouse gas emissions to at least 55 % by 2030, compared to 1990 levels. It also promotes the growth of the market for zero- and low-emission vehicles and aims for zero emissions from new cars by 2035. Furthermore, it proposes to extend carbon pricing to the aviation and maritime sectors.

The multifaceted impact of rising fossil fuel prices on transport

As most transport modes rely on the use of petroleum products, a rise in fossil fuel prices impacts several dimensions of the transport system.

Possible structural impacts are, for instance, changes in usage levels – users limiting or rationalising their usage, for example by abandoning, postponing or combining their trips. Operators might also reduce service frequency. Modal shifts can occur – part of the traffic can shift to a more energy efficient mode that suffers less from increasing petrol fuel prices, for instance road freight transport to rail or inland waterways. Air transport might also be significantly impaired after the increase by 70 % of jet fuel prices during the first 6 months of 2022 and the already low profit margins. This might lead to a shift towards rail or maritime. New network configurations in terms of gateways, hubs, routing, and corridors are also among the consequences. Rising fuel prices will also impact different parts of supply chains – procurement, manufacturing, distribution) and a reconfiguration of the whole chain might become necessary.

The impact also has a temporal dimension: while at first passengers (or companies) could simply absorb the higher costs by reducing usage, trimming their profits or cutting their spending in other areas, in a subsequent phase, there would be changes in commuting patterns (like ridesharing or carpooling), attempts to use public transport, rapid adoption of vehicles with high fuel efficiency, and a search for other transport alternatives. Concerning the transport of persons, increasing fuel prices can lead to higher transport prices, causing an additional burden to households and possibly transport poverty, unless this is compensated at regional or national level. Low-income households that own a car, and rural households spending a higher share of their income on transport fuels, are particularly impacted.

In the domain of freight transport, companies have the choice to work at a loss or to increase their prices to compensate. Price increases will also have an impact on transport services and the prices of the goods transported, which can lead to further inflation. In both passenger and freight transport, there is an increasing number of strikes of transport providers and workers in all transport modes and this tendency will most probably continue, leading to further disruptions.

Increasing fossil fuel prices can also have important side effects., for example shortages in the production of AdBlue, a liquid used in diesel vehicles to neutralise nitric-oxide emissions. Because its production is not profitable due to high gas prices, some manufacturers have already stopped producing it, which could lead to the standstill of a huge number of trucks, and consequently job losses and logistical problems.

Another question is whether the increase in fossil fuel prices will have a favourable impact on the speed of transition towards greener transport modes or the use of more renewable energy, and if it will lead to a reduction in greenhouse gas emissions. As the majority of greenhouse gas emissions from transport are carbon dioxide (CO2) emissions from the combustion of petroleum-based fuels, reduced consumption of fossil fuels as a result of increasing prices could in fact lead to lower emissions of greenhouse gases. This could have the result that emissions targets can be reached more quickly. Emissions can also be reduced through the use of higher shares of advanced biofuels and a more ambitious quota for renewable fuels of non-biological origin such as hydrogen. This is encouraged at EU level in the proposed revision of the Renewable Energy Directive and the REPowerEU plan, aiming for a higher renewable energy target.

The use of fuels produced using renewable sources of energy (such as electricity produced from solar or wind energy), and the use of biofuels is less costly and leads to lower emissions. Nevertheless, this can be a solution only in the long or medium term, as it requires technical adaptation, or even the construction of new types of engines. Recent research also shows that the use of e-fuels – fuels in gas or liquid form that are produced from renewable (solar or wind power, for example) or decarbonised electricity – such as e‑methane, e‑kerosene and e‑methanol, costs 47 % more than battery-electric vehicles. In the long run, however, technological developments will make it possible to reverse this tendency and to advance on the road to greener transport.

Read the complete in-depth analysis on ‘Ten issues to watch in 2023‘ in the Think Tank pages of the European Parliament.

Written by Gregor Erbach.

This is the seventh edition of an annual EPRS publication aimed at identifying and framing some of the key issues and policy areas that have the potential to feature prominently in public debate and on the political agenda of the European Union over the coming year.
The topics analysed encompass the 2024 European elections, budgeting in times of crises and war, lessons for public investment in the EU from the EU recovery instrument, the fiscal and monetary policy mix, climate
and socio-economic tipping points, the impact of increasing fuel prices on transport, cyber-resilience in the EU, protecting media freedom and journalists, the future of Russia, and geoeconomics in an age of empires Climate tipping points

Climate tipping points have received growing attention, in the wake of an international conference dedicated to the issue, and new research results on the likelihood of tipping points being reached under current trends.

A tipping point is the critical point in a situation, process, or system beyond which a significant and often unstoppable, but not necessarily abrupt, effect or change takes place. Climate tipping points were first identified by the Intergovernmental Panel on Climate Change (IPCC) in 2001 and further analysed in a 2008 research paper. The latest IPCC assessment report identified 15 potential tipping points, among them global monsoon, tropical and boreal forests, permafrost carbon and the Greenland and Antarctic ice sheets. The Greenland ice sheet is an element in the climate system with a tipping point: its stability depends on its height, which reaches up to 3 200 metres and helps maintain eternal snow on top. As soon as it loses height, it may enter an irreversible decline.

Figure 4 – Tipping points and global warming

Late 2022 research estimates the temperature rise needed to trigger these tipping points (see Figure 4), and concludes that seven tipping points are likely at global warming of 1.5 °C, of which five might already be reached at current levels of global warming. The presence of climate tipping points increases the economic costs that result from emitting a tonne of CO2 by around 25 %.

Tipping points are often associated with cascading impacts, where one impact leads to another. An example is the melting of the Arctic ice sheets leading to sea level rise, which in turn triggers population movements and economic disruption. Crossing a tipping point may also lead to reinforcing feedbacks, for example the melting of permafrost leading to the release of methane, a powerful greenhouse gas that reinforces global warming and causes further permafrost melting.

Socio-economic tipping points

Research on socio-economic tipping points finds that even gradual climate change may alter and disrupt socio-economic systems, leading to major economic costs, especially at a more local level. Socio-economic tipping points identified in this EU-funded research include climate induced agriculture and food shocks, migration from coastal areas due to extreme sea level rise or major climate impacts, energy supply shocks, transport disruption, large macroeconomic and financial market impacts, and the potential collapse of insurance markets from extreme weather risks. The World Meteorological Organization warns that higher temperatures and humidity during hot spells could lead to physiological tipping points that make outdoor human labour impossible without technical assistance in some regions.

Policy implications

To avoid the crossing of tipping points, efforts to contain global warming must be reinforced. Every fraction of a degree may be decisive, even if the lower 1.5 °C target of the Paris Agreement is likely to be breached. The 2022 emissions gap report projects a temperature rise of at least 2.4 °C even with full implementation of all national pledges, which would trigger multiple tipping points. The sobering outcome of the COP27 climate change conference has not changed that picture. In light of the limited effectiveness of the Paris Agreement, complementary cooperative approaches, such as climate clubs, are of increasing interest. However, certain social tipping points may make it harder to achieve consensus on climate action, namely the geopolitical crisis accelerated by the war on Ukraine, the erosion of social consensus by social and synthetic media, a shift from climate mitigation to adaptation driven by faster and larger than expected climate impacts, and the demographic crisis that increases state burdens, reduces productivity and creates intergenerational tensions.

Impacts on Europe
Europe would be directly affected by a collapse of the Greenland ice sheet, leading to sea level rise, the loss of Alpine glaciers, the loss of permafrost peatland in Svalbard and Scandinavia, a northward shift of boreal forests, and a collapse of the Atlantic meridional overturning circulation, an ocean current that transports warm water from the tropics to the North Atlantic. The latter would lead to less warming in Europe, but also to prolonged Mediterranean drying. Research indicates that European forests have already reached a tipping point around the year 2000, induced by a temperature increase as low as 0.5 degrees. This has reduced forests’ resilience to fire, windfall and pest outbreaks, potentially affecting 33.4 billion tonnes of forest biomass.

Large-scale removal of carbon from the atmosphere through nature-based and technological approaches will be critical to keeping global warming well below 2 °C, the upper target of the Paris Agreement. This requires innovative financing mechanisms, such as advance market commitments that were used successfully for the development of vaccines. Moreover, it may be prudent to initiate a research programme into controversial solar radiation management techniques, in order to understand their potential and their risks relative to the risks of reaching certain climate tipping points, and to address the associated governance issues.

Although knowledge on tipping points has improved, more research (recommended in Parliament’s 2019 resolution on the environmental action programme), with involvement of the IPCC, is needed to correctly assess the likelihood and possible impacts and create an early warning system, which the Parliament called for in its resolution on COP25. A broader knowledge base would facilitate smart decisions about potentially costly and disruptive adaptation options such as managed retreat from coastal areas. Experts on geopolitics recommend that governments and relevant institutions strengthen their risk assessment and act to prepare for and preferably prevent the worst-case scenarios. The EU supports tipping points research through Horizon Europe, and the Bezos Earth Fund awarded a £1 million (€1.15 million) grant for research into ‘positive tipping points’ in socio-economic systems that would help accelerate the transition to a climate-neutral economy.

Positive tipping points are already happening, for example the switch to electric vehicles enabled by lighter and cheaper batteries, public opinion and policy support. Positive tipping points in the energy system may be triggered by the ever-falling cost of renewable energy together with advances in energy storage. Researchers apply system analysis to identify effective policy interventions by various agents that would enable a cascade of positive changes to rapidly and profoundly transform technology, economy and society, instead of improving incrementally.

Read the complete in-depth analysis on ‘Ten issues to watch in 2023‘ in the Think Tank pages of the European Parliament.

Written by Martin Höflmayr.

This is the seventh edition of an annual EPRS publication aimed at identifying and framing some of the key issues and policy areas that have the potential to feature prominently in public debate and on the political agenda of the European Union over the coming year.
The topics analysed encompass the 2024 European elections, budgeting in times of crises and war, lessons for public investment in the EU from the EU recovery instrument, the fiscal and monetary policy mix, climate
and socio-economic tipping points, the impact of increasing fuel prices on transport, cyber-resilience in the EU, protecting media freedom and journalists, the future of Russia, and geoeconomics in an age of empires

The Russian war of aggression against Ukraine has drastically reversed the dynamics of the unexpectedly strong economic recovery from the COVID-19 pandemic in Europe. Supported by decisive fiscal and monetary policies, the EU economy was already back to its pre-crisis output levels in the third quarter of 2021, though with large differences across Member States. The economic growth dynamic extended to the second quarter of 2022, firmly entrenched in a monetary and fiscal policy mix aligned in their goal to support the recovery. In 2023, the policy objectives of fiscal and monetary policy, like a Janus face with sharply contrasting characteristics, face significant trade-offs between taming inflation and mitigating the impact of high energy prices.

Why did we get two opposing faces? Figure 2 – Gross domestic product (GDP) growth in the EU Figure 3 – Change in annual inflation by item in the ECB inflation product basket

Alongside the humanitarian impact of the war, the EU has been hit by a substantial shock in import prices, in particular energy prices, which has severely dented the economic outlook since early 2022, prompting concerns about more persistent inflation, a cost-of-living crisis and public debt sustainability. As a result, since early 2022, economic forecasts have seen significant downward revisions (Figure 2). Analysis by the IMF serves as a stark illustration of the EU’s severe economic losses from the war. In 2023, Europe’s output will be nearly half a trillion euros lower than pre-war forecasts. According to the latest Commission forecast, the EU is expected to experience a ‘technical recession‘, i.e. two consecutive quarters of shrinking output. This forecast crucially hinges on the assumption that the EU can avoid crippling gas shortages, thus significantly tilted to the downside. Moreover, inflation has increased to record high levels worldwide so that central banks across the globe entered a synchronised monetary policy tightening cycle. In the EU, energy prices have been the main contributor to inflation, especially gas and electricity tariffs. However, price pressures are starting to translate into broader price dynamics as the share of items in the product basket above 2 % – the central banks’ inflation target – has increased significantly (Figure 3). At the same time, the current economic environment is underpinned by the strongest labour market in decades. Unemployment rates are at record low levels, while participation and employment rates are at record highs. Despite the looming recession, unemployment is expected to increase only marginally due to high vacancy rates and labour shortages.

How to synchronise contradictory voices

Against this backdrop of trend reversals, there is an increasing wedge between fiscal and monetary policy objectives. During the pandemic, both fiscal and monetary policies worked in tandem and complemented each other. In an environment of slowing growth, high inflation, elevated post-pandemic debt levels and eroding real incomes, fiscal and monetary objectives are diverging.

On the back of rising energy bills, eroding the purchasing power of households and companies, governments are trying to cushion the impact on real incomes and investment activity. The resulting expansionary fiscal policies, maintaining demand through measures that mitigate the impact of high energy prices, could undermine the disinflationary policy currently being conducted by central banks to bring down inflation through reducing support for demand. Monetary authorities could therefore be forced to increase policy rates even further at the cost of larger output and employment losses. According to the autumn forecast of the European Commission, Member States’ fiscal policy measures to mitigate the social and economic impact of high energy prices will amount to 1.2 % of gross domestic product (GDP) in 2022, and 1 % in 2023. So far, such measures have been implemented in a timely manner, however more than 70 % of them were untargeted. Resilient labour market conditions allow governments to focus on targeted cost-of-living policy interventions, as compensating for higher inflation is supporting wage growth while risks of a wage-price spiral have been contained so far. Furthermore, reducing energy dependence on imported fossil fuels can be expected to exert upward pressure on prices of a broad range of products during the transition period. Therefore, fiscal restraint can help to tackle inflation, and, as argued by the ECB, fiscal measures need to be temporary and tailored to the most vulnerable households and businesses, in order for fiscal policy not to stoke inflation.

The monetary side in the policy mix centres around price stability. To bring inflation back from record high levels to the 2 % target, the ECB has so far followed the synchronised tightening cycle of central banks around the world. On the one hand, it tackled inflation by front-loading four consecutive policy rate increases by a cumulative 2.5 percentage points; and on the other hand, the ECB countered fragmentation concerns by creating a new policy tool, the Transmission Protection Instrument. However, evidence suggests that simultaneous central bank measures change the trade-off between the growth and inflation impact of monetary policy tightening, as the negative impact on GDP is larger but the impact on inflation is smaller, due to the muted foreign exchange rate channel. Forceful monetary policy tightening would also have an effect on financial conditions. Rising borrowing costs could amplify existing financial vulnerabilities in the corporate sector. Increasing risk premia of sovereign debt and debt spreads across EU countries could raise the risk of financial fragmentation that has given rise to concerns about fiscal dominance. The policy dichotomy is further complicated by the fact that it is, as yet, unclear whether the supply shocks have durably depressed potential output. Evidence suggests that destroying demand also affects supply through scarring effects. Therefore, excessive monetary tightening could result in a permanent loss of output as productive capacity adjusts to persistently lower demand. To preserve productive capacity in a contractionary economic environment is the balancing act of targeted energy and fiscal policies on one side and a sufficiently large withdrawal of monetary policy accommodation on the other side. Thus, monetary authorities must tread a narrow path between taming inflation and averting an excessive decline in demand.

The economic outlook is heavily influenced by the evolution of the geopolitical situation and its reverberations in commodity markets. The impacts on growth and inflation are in opposite directions, which significantly complicates policy coordination. The challenges from COVID and the war on Ukraine pose formidable challenges to reconciling fiscal and monetary policy trade-offs.

Read the complete in-depth analysis on ‘Ten issues to watch in 2023‘ in the Think Tank pages of the European Parliament.

Written by Marin Mileusnic.

This is the seventh edition of an annual EPRS publication aimed at identifying and framing some of the key issues and policy areas that have the potential to feature prominently in public debate and on the political agenda of the European Union over the coming year.
The topics analysed encompass the 2024 European elections, budgeting in times of crises and war, lessons for public investment in the EU from the EU recovery instrument, the fiscal and monetary policy mix, climate
and socio-economic tipping points, the impact of increasing fuel prices on transport, cyber-resilience in the EU, protecting media freedom and journalists, the future of Russia, and geoeconomics in an age of empires

The swift execution of the Recovery and Resilience Facility (RRF) will remain vital in 2023, while the constant geopolitical and economic challenges will require new resources. These efforts will be supported by the revision of the EU fiscal framework, which is one of the major policy initiatives scheduled for 2023.

Lessons learned

With over 19 % of its resources disbursed, the implementation of the RRF is well under way, and the Member States are utilising the available funds to make their economies more resilient and future-proof by executing reforms and investments in key areas of European and national interest. The focus on the twin transitions has been particularly important, and the cumulative expenditure planning in all national recovery and resilience plans (NRRPs) exceeds the minimum thresholds for green and digital measures of 37 % and 20 % respectively. With regard to performance, 7 % of all milestones and targets embedded in the plans have been fulfilled thus far. Direct management of the facility by the European Commission in the implementation phase could reduce administrative burden and bureaucracy linked to the disbursement of funds, and thus improve overall effectiveness. Nevertheless, the audit of the only RRF payment in 2021 revealed weaknesses in the Commission’s assessment of milestones and targets linked to it. This was possibly due to the first-time application of the performance-based approach to such vast spending. The ongoing discharge procedure for the 2021 EU budget is examining the initial implementation of the RRF.

By combining the significant financial support with the implementation of measures established in the NRRPs, the RRF has the potential to effectively address key European as well as country-specific challenges and, as some analyses find, reduce the public investment gap. While a number of Member States had already witnessed under-investment trends even before 2008, the financial and economic crisis affected the EU as a whole and further amplified the investment lacuna. The average share of RRF grants in the overall investment by Member States is 14 %, which makes the significant additional growth projections realistic. Investments to address the challenges of the pandemic have been further facilitated through additional RRF loans, as well as the Stability and Growth Pact (SGP), namely the temporary departure from the usual budgetary requirements. Contrary to the low investment outcomes after the financial crisis, Member States managed to sustain public investment, without significant-pressures from breaching EU fiscal rules and having to endure the corrective procedures and market discipline.

Ongoing and new challenges

The RRF continues to be pertinent as there are outstanding structural challenges in the Member States that still need to be addressed, and substantial resources to be disbursed. Swift implementation of the planned measures enshrined in the individual NRRPs in the course of 2023 therefore remains vital. Notwithstanding the well-timed RRF funding to recover from the pandemic, a full economic recovery is already being hindered by new challenges, thus reaching a state of, what some analysts have dubbed as, ‘permacrisis‘. In particular, the energy crisis, caused by Russia’s war on Ukraine, exposed the EU’s considerable dependence on Russian fossil fuels. To differentiate the energy mix of the Member States, deal with high-energy prices and accelerate the green transition, the Commission proposed the REPowerEU plan under which part of the RRF is to be repurposed and its grant allocation increased by €20 billion. However, the energy challenges are expected to remain acute in the medium to long run and therefore surpass both the financing potential and the life span of the Facility, set to expire in 2026. The proposed grant envelope under REPowerEU, in addition to almost 18 % of the existing national allocations devoted to energy measures in all NRRPs, remains a relatively small source of funding compared to the private and public investment needs of the EU energy sector, which are estimated at €390 billion per year. The short horizon for investment and reform is also posing challenges both for the implementation of projects of strategic weight, which may need longer time, and for national authorities to run them properly.

Moreover, with the amassed €600 billion devoted to Green Deal actions, NGEU and the 2021-2027 multiannual financial framework (MFF) are an important source of funding, but still represent only a fraction of what is needed to fulfil all the climate goals for carbon neutrality of the EU by 2050. The RFF may also only partly deliver on the ambitious digital transformation set for 2030, due to the above-noted size and lifetime limitations. Besides this, there has been a relatively slow uptake of the RRF loans (around €165 billion out of €386 billion). One reason is that loan-based investment increases national public debt and can make countries non-compliant with the EU fiscal rules, especially after the deactivation of the general escape clause at the end of 2023. Another reason is reflected in better borrowing conditions for some countries compared to those linked to the RRF loans. Nonetheless, repayable RRF support can still be requested until the end of August 2023, while REPowerEU will put the allocations still available for loans at the disposal of those Member States that wish to pursue additional investment in energy measures.

Keeping investment in the EU alive

In the years to come, the investment needs in the EU will remain huge, predominantly in relation to the twin transitions, but also in the areas of common defence, security and other fields of interest for EU sovereignty and strategic autonomy. To address these long-term challenges, the EU economic governance framework will face revision in 2023. The revamped fiscal rules are to draw from the RRF model, particularly the positive interplay between investments and reforms and financing, to enable the Member States to stay on higher investment and growth paths while remaining fiscally prudent. The review should also support countercyclical fiscal policies for countries to build capital buffers during good times and utilise them during times of recession. In addition to this, a possible revision of the MFF will be discussed in 2023. In a December 2022 resolution, the European Parliament deemed the multiannual budget overstretched in financing various initiatives, and underlined that it should be made bigger and more flexible in order to ensure appropriate investment levels in the EU and to endure future crises. Such a budget should shy away from the juste retour principle. The Parliament is also advocating the introduction of new own resources needed to repay the recovery instrument and to finance common priorities.

Providing strategic sector-specific common public goods will require considerable resources and time for implementation. Some analyses stress that the RRF model, underpinned by common debt, could be continued to achieve these objectives. Still, the future instrument should be made larger and permanent, and continue to strengthen national ownership based on common EU priorities (as is the case with the current RRF). According to the International Monetary Fund, the size of such a fiscal capacity should range between 0.5 % and 1 % of EU gross domestic product (GDP) on a yearly basis. The investment capacity at EU level should be additional to national funding, as it would address challenges of a cross-border nature, thus being more effective and value adding. Any future fiscal instrument should also be fully integrated into the existing budget to provide a high level of public accountability and auditing. Further political debate is expected due to differing views on such an instrument.

Read the complete in-depth analysis on ‘Ten issues to watch in 2023‘ in the Think Tank pages of the European Parliament.

Written by Alina Dobreva.

This is the seventh edition of an annual EPRS publication aimed at identifying and framing some of the key issues and policy areas that have the potential to feature prominently in public debate and on the political agenda of the European Union over the coming year.
The topics analysed encompass the 2024 European elections, budgeting in times of crises and war, lessons for public investment in the EU from the EU recovery instrument, the fiscal and monetary policy mix, climate
and socio-economic tipping points, the impact of increasing fuel prices on transport, cyber-resilience in the EU, protecting media freedom and journalists, the future of Russia, and geoeconomics in an age of empires

Just as Next Generation EU (NGEU, see issue 3) launched, the EU budget has had to respond to the multiple new crises created by Russia’s invasion of Ukraine: security, humanitarian and energy crises, and high inflation. In 2023, attention will focus on how the EU employs various budgetary and off-budget financial instruments to address these crises while dealing with two major challenges: available revenue and flexibility in spending.

Budgeting designed for times of peace and stability

An investment budget, the EU budget is designed to implement long-term policies, to provide continuity and stability rather than flexibility. The long-term policy priorities and their scope of implementation (i.e. financial allocation ceilings on expenditure) are determined by the multiannual financial framework (MFF). This leaves limited possibility for flexibility, responsiveness and dynamism in the face of unforeseen circumstances, despite Parliament’s long-standing position in favour of strengthening flexibility. With the MFF’s seven-year duration, plus the time from the Commission’s initial draft to its final adoption, the expenditure framework at the disposal of policymakers might have been conceived as long as ten years before a crisis hits the Union.

According to Article 311 of the Treaty on the Functioning of the EU (TFEU), the EU shall provide itself with the means necessary to attain its objectives, i.e. to deliver on its policy commitments as well as to address emerging challenges. The reform of own resources in 1988 was the first, and only, major reform to date. However, the competences and therefore policies covered by the EU budget have grown significantly over that period. Even without crises, the sufficiency of EU budget revenue can become an issue of concern. In its 2017 resolution on the reflection paper on the future of EU finances, the European Parliament stressed that additional political priorities should be supported with additional financial means and not be financed to the detriment of existing EU policies.

Budgeting when crises comes

Although the EU budget is not designed to respond to crises and has only limited possibilities to respond to unforeseen events, it does do so, and citizens’ expectations are growing. On the one hand, regardless of the latter, EU policymakers and leaders can act only within the limitations of the EU Treaties and the competences they provide to EU institutions, which can be far below the challenges the crises create. On the other hand, when crises have global impact, responses are more efficient when executed at EU rather than national or regional level. Under the subsidiarity and proportionality principles, the EU budget provides European added value by supporting actions that can be more efficient, effective or synergetic than actions taken at national or lower level.

For slightly more than a decade, the EU budget had to provide financial means for policy responses to several major crises – the European debt crisis, the migration crisis, the COVID-19 pandemic and its economic consequences, as well as to act in the conditions of a worsening humanitarian situation across the world and changes related to Brexit.

Flexibility in spending

The agreed MFF provides tight expenditure ceilings under which annual budgets and their amendments are adopted. A more significant amendment to the MFF could be done in a mid-term review, but the mid-term review/revision of the 2014-2020 MFF did not provide adequate response to the crises back then. The President of the European Commission confirmed in her September 2022 letter of Intent that an MFF review will be done in 2023, as called for by some Members of Parliament. It remains to be seen how and to what extent it will provide a response to current crises.

Over the years, the flexibility instruments of the EU budget have developed after the insistence of the European Parliament, and have been used frequently due to the multiple crises facing the Union. They constitute a minimal share of the EU budget, which Commissioner Johannes Hahn, responsible for the budget, estimates to be around 1 % of the overall EU budget (not linked to pre-allocations), and experience has shown their insufficiency. Flexibility has been much debated but the views of the Commission, the Parliament and the Council vary significantly, with the Parliament repeatedly calling for more flexibility of the EU budget. Future needs might see incorporation of more flexibility instruments in the EU budget rather than, as currently, using a galaxy of off-budget instruments, which are not subject to democratic parliamentary scrutiny. 

Sufficient revenues

In its resolution on the 2021-2027 MFF and own resources, the European Parliament states that the 2014-2020 MFF had proven inadequate to finance the EU’s pressing needs and political priorities. Experts also doubt if the EU budget has been sufficiently expanded and reformed to reflect the deepening Union and its expanding competences. The currently pressing needs related to the Russian invasion of Ukraine and its consequences are expected to be even more significant than those resulting from previous crises. Unlike national budgets, the EU budget cannot run a deficit or fund expenditure through borrowing. It can increase expenditure only through an increase of its revenue, knowns as own resources. Borrowing, however, is a funding mechanism for off-budget instruments such as NGEU (although repayment of the debt it generates will come from the EU budget). The future €18 billion fund to support the reconstruction of Ukraine is again funded by borrowing – loans that will be guaranteed (but not repaid) by the EU budget.

An own-resource reform found interinstitutional agreement (IIA) as part of the package on the 2021‑2027 MFF and NGEU. One aim was securing resources to cover new budgetary expenditure such as on NGEU debt repayment. The first step was the Own Resources Decision (ORD), which entered into force in June 2021, introducing a new own resource based on non-recycled plastics. In December 2021, six months later than initially scheduled in the IIA roadmap, the Commission proposed a new own resources package, comprising part of the revenues deriving from an extended emissions trading scheme (ETS), a carbon border adjustment mechanism (CBAM), and a share of the reallocated profits of very large multinational companies (based on Pillar 1 of the OECD/G20 agreement). The proposal is to introduce the new own resources gradually as of 1 January 2023, but at the time of publishing, the proposal had still not been adopted by the Council. Over the 2026-2030 period, revenue for the EU budget then have the potential to reach up to €17 billion a year (in constant 2018 prices). The Commission committed to making a proposal with a further package of new own resources in 2023 (earlier than the deadline of June 2024 set in the IIA).

The progress of own resources reform will be a key issue to watch during 2023, because any delay to the already lengthy adoption and implementation might put in jeopardy the future stability, reliability and continuity of the EU budget. Even if the IIA is fulfilled as planned, there are still concerns whether the amounts generated will be sufficient due to the increased interest rates on NGEU repayments (the principal is due only at the end of the current MFF) and the additional funds needed to address the consequences of the Russian invasion of Ukraine. Insufficiency of resources might lead to a need to increase the own resource based on gross national income (GNI) and/or limiting the funding of existing programmes and MFF commitments.

Read the complete in-depth analysis on ‘Ten issues to watch in 2023‘ in the Think Tank pages of the European Parliament.

Written by Silvia Kotanidis.

This is the seventh edition of an annual EPRS publication aimed at identifying and framing some of the key issues and policy areas that have the potential to feature prominently in public debate and on the political agenda of the European Union over the coming year.
The topics analysed encompass the 2024 European elections, budgeting in times of crises and war, lessons for public investment in the EU from the EU recovery instrument, the fiscal and monetary policy mix, climate
and socio-economic tipping points, the impact of increasing fuel prices on transport, cyber-resilience in the EU, protecting media freedom and journalists, the future of Russia, and geoeconomics in an age of empires

The year 2023 will be a crucial one in the run-up to the 2024 European elections, with Parliament facing several major political challenges. Some of these are linked to the nature of European elections and to long-standing efforts to involve the electorate more and to ‘Europeanise’ the elections. Other challenges are linked to recent events that have exposed the need for internal reflection within Parliament and for reforms on transparency and ethics.

As announced promptly by President Roberta Metsola on 12 December 2022 following the wave of investigations into illicit lobbying activities, and reiterated by Members in a resolution the same week, Parliament supports a reform process that touches, inter alia, upon the transparency register, an interinstitutional ethics body and a special inquiry committee. How these and other matters are handled by Parliament and the other EU institutions in 2023 will play an important role in the tone of the electoral campaign, in citizens’ trust in the EU and ultimately in their participation in the 2024 European elections.

In addition, at least three elements – less linked to current events, but more to the nature of European elections and to ongoing institutional work to make them more prominent – are expected to be at the heart of discussions in 2023. The first such element is whether the lead candidate, or Spitzenkandidaten, process will be repeated at the 2024 European elections. This process was intended to build a more democratic link between the only EU institution directly elected by citizens – the European Parliament – and the EU executive – the European Commission. In doing so, the hope was also to increase voter turnout, which had been steadily decreasing over the years (see Figure 1). To achieve this, inspiration was derived from the explicit link that the Lisbon Treaty reform establishes between the European elections and the election of the President of the Commission, whereby ‘Taking into account the elections to the European Parliament’ the European Council, acting by a qualified majority, proposes to the European Parliament a candidate for President of the Commission, who shall be elected by the Parliament by a majority of its component members (Article 17(7) TEU). Under this non-formalised process, European political parties agreed to propose candidates for the position of President of the Commission, with the party that wins the most votes in the European elections, or that is capable of marshalling a parliamentary majority around a candidate, rewarded with the power to nominate their candidate to the Commission presidency.

Under the motto ‘this time is different‘, the lead candidate process was run in the campaign for the 2014 European elections, with a rather successful outcome as Jean-Claude Juncker, the EPP lead candidate, was agreed upon – not without resistance – as the European Council candidate, and then proposed to Parliament which ultimately voted him into office on 15 July 2014. That successful experiment was less successful at the 2019 elections when Ursula von der Leyen, an outsider in terms of the lead candidate process, was elected Commission President on 16 July 2019 by a slim absolute majority (383 votes in favour, 327 against, and 22 abstentions).

The Spitzenkandidaten process is based on the crucial role of European political parties, which each select a person to run as their lead candidate. Each political party runs a selection process for its lead candidate, according to its own internal rules and political strategy. From the Parliament’s perspective, it is a process that enhances Parliament’s role in the choice of the most important EU executive position, an influential role that it would not wish to give up. The year 2023 will therefore be crucial for the European parties in deciding whether, in the absence of any formalisation of the process, to repeat the experiment a third time. With the 2024 elections approaching (the precise dates have yet to be decided) the political will of European parties would have to crystallise by spring/summer 2023, i.e. in good time to select the lead candidates in autumn 2023. It is said that the chances of success of the Spitzenkandidaten process, whose automaticity the European Council has explicitly rejected, would be higher if the outgoing President of the Commission were to run as a lead candidate. European political parties being the protagonists in this process, some positive impact could also derive from the enhancement of their access to EU funds, should the proposal on funding of European political parties and foundations be adopted by the co-legislators in 2023.

The second element is the pending electoral reform contained in the draft legislative act adopted by Parliament on 3 May 2022. That too is very much linked to the lead candidate process. This reform, one of the many attempted over recent decades to ‘Europeanise’ the European elections, would innovate in two respects. First, by addressing the current fragmentation into 27 different electoral systems, it would make electoral rules more uniform within the EU (e.g. uniform minimum common voting age, right to vote in third countries, 9 May as fixed election day). Next, by seeking to emancipate European elections from national-focused debates and to bring citizens closer to European affairs, it would introduce a Union-wide constituency in which 28 Members of Parliament would be elected through transnational lists, with geographical balance ensured between small, medium and large countries through a set alternation of candidates coming from these three groups. The proposal would also provide for the new Union-wide constituency – a major step towards the Europeanisation of European elections – to be accompanied by the formal introduction of a lead candidate process, with a political agreement between the European political entities and with an interinstitutional agreement between Parliament and European Council.

The political will to engage in a path where European transnational lists are combined with a lead candidate process was endorsed by the EPP, S&D and Renew Europe groups in a January 2022 political agreement, Our priorities for Europeans. It is unlikely, however, that the draft legislative act containing the electoral reform described above will be unanimously adopted by the Council, receive the consent of an absolute majority in Parliament and then be ratified by all Member States according to Article 223 TFEU in time for the 2024 European elections. Account should also be taken of the safeguard enunciated by the Venice Commission: that electoral reforms should enter into force at least one year prior to elections. Discussions on the proposal will however likely take place during 2023, giving an indication of the political appetite of Member States to truly make the long-awaited leap to make European elections more European.

A third element is the effect of the Conference on the Future of Europe, and in particular that of the involvement of citizens in what was considered a true exercise of participatory democracy. This engagement might not only have raised the interest of citizens on European affairs, hence possibly also having a positive effect on electoral turnout in the next elections, but has also produced concrete results as far as the role of European elections is concerned. Recommendation 16 of the citizens’ panels suggests harmonising electoral conditions, while proposal 38(4) of the Conference on the Future of Europe calls for citizens to have a greater say on who is elected President of the Commission, either by a direct election or through the lead candidate process. While such forward-looking and innovative suggestions must be considered for implementation by the three institutions in the coming months, they represent a clear indication of the desire to make European elections a truly salient moment in European democratic life.

Figure 1 – Turnout in European elections across all Member States (%) since 1979

Read the complete in-depth analysis on ‘Ten issues to watch in 2023‘ in the Think Tank pages of the European Parliament.

Written by Luisa Antunes.

The European Commission plans to launch its revised EU pharmaceutical package in the first quarter of 2023. Ahead of its release, two recent STOA studies offer insight to inform upcoming Parliamentary discussions. Fragmentation of EU health research and development, lack of transparency and a translation gap between public investment and clinical output are among the weaknesses identified. Possible solutions include the creation of large-scale European biomedical infrastructure, and a series of targeted strategies to improve EU health research coordination and reprioritise areas of unmet therapeutic need.

Background

Health is a fundamental human right, and equitable access to healthcare a cornerstone of EU and Member States’ policies. The COVID-19 pandemic evidenced weaknesses in the organisation of EU health research and development (R&D). Among the issues identified are access to and affordability of medicines, treatment options for rare diseases, antimicrobial resistance and environmental and economic sustainability.

In 2021, the European Parliament adopted a resolution on a pharmaceutical strategy for Europe. It recognises the existence of inequities between Member States in access to healthcare services; antimicrobial resistance as a serious health threat requiring a coordinated response; an unfit-for-purpose system of incentives for R&D on medicines for unmet diagnostics and therapeutic needs; shortages and lack of industry transparency on the pricing and costs of medicines; and an ineffective intellectual property system.

The upcoming EU pharmaceutical strategy package, planned for adoption by the Commission in the first quarter of 2023, aims to tackle this issue. Members of the European Parliament will be asked to vote on the revision of the EU’s general pharmaceuticals legislation and on the revision of the legislation on medicines for rare diseases and children. Topics to be discussed include how to ensure access to affordable vaccines, diagnostics and treatments, how to foster innovation in areas of unmet therapeutic needs, how to improve supply chains, and how to adapt to new scientific developments. The proposals are a stepping stone towards building a stronger European health union

STOA contribution to the debate Figure 1 – Options for biomedicines infrastructure

Ahead of the release of the Commission proposals, the European Parliament’s Panel for the Future of Science and Technology (STOA) has released two reports that analyse the current EU health R&D model. The studies offer policy options to address the overarching issue of unmet therapeutic needs caused by a fragmented EU health research system and the misalignment between public health priorities and industry outputs.

The first study, written by the Department of Economics of the University of Milan and led by Prof. Massimo Florio, proposes the creation of a public European biomedicines infrastructure to tackle market failures and ensure a proper return on investment, while addressing the pricing of medicines and intellectual property rights. This proposal follows from an analysis of over 250 literature reports and consultations with around 50 experts from academia, industry, and governmental and non-governmental organisations in the EU. Such infrastructure would ensure a portfolio of new medicines and related biomedical technologies, from research to the delivery stage, in partnership with third-party research centres at Member State, European and international level. With a proper R&D capacity, 80 to 150 innovative projects could be delivered over the course of 20 years, for an estimated yearly budget of €7 billion. Four possible policy options are presented (see Figure 1), with differing levels of R&D capacity and mission scope. Such an initiative could answer the identified issues of shortages and high costs and prices of pharmaceuticals, lack of transparency, and unmet therapeutic needs, by taking back public ownership rights to innovations that are exclusively in the public interest. It would also centralise public investment in public interest areas of low economic return, such as rare medicines and antimicrobials.

The second study, requested from the Department of Cardiovascular Sciences of KU Leuven and led by Prof. Karin Sipido, analyses the structure and organisation of public funding for EU health research, through literature review and consultations with experts. The study identifies several systemic weaknesses. Funding instruments have increased in diversity and complexity over the last decade, with a shift in priority towards more application and implementation. However, clinical therapeutic studies lack continuity, and there are stark inequalities in infrastructure and workforce investment between Member States. The EU lags behind global leaders, due to a lack of coherent investment, long-term strategy, competitiveness and leadership in biomedical innovation.

The report proposes a set of seven policy options to achieve increased coherence and translational throughput, from basic research to implementation, while considering environmental and economic challenges. These include strengthening cross-border collaboration, increasing programme synergies, and building stronger EU leadership, among other things through the appointment of an EU health adviser. Similarly to Prof. Florio’s study, Prof. Sipido’s study proposes the creation of an EU health institute for research coordination.

Potential impacts and developments

Both STOA studies identify a translational gap between public health needs and production outputs, diagnosing current public funding policies as inadequate in terms of return on investment. Such analyses are in line with the aforementioned Parliament resolution on a pharmaceutical strategy, and feed into the discussion on revising EU pharmaceutical legislation, including that on medicines for rare diseases and children (the ‘orphan and paediatric regulations’) and on market incentives for innovative antimicrobials.

The two studies propose the creation of an EU body as a policy option in order to coordinate EU health research and innovation and address structural weaknesses in the current R&D system. Such a priority was first recognised by a 2020 Parliament resolution on the shortage of medicines, which called on the Commission and Member States to ‘examine the possibility of creating one or more European non-profit pharmaceutical undertakings which operate in the public interest to manufacture medicinal products of health’ and, subsequently, in the December 2021 European Council conclusions, which noted the importance of Parliament’s resolution to ensure the supply of medicinal products affected by market failures.

Another piece of legislation implicated in this process is the proposed regulation on the European Health Data Space (EHDS), as far as it affects access to data and harmonisation between Member States, where a further STOA study on genome editing could be of added value.

Read this ‘at a glance’ note on ‘Towards a new EU pharmaceutical strategy‘ in the Think Tank pages of the European Parliament.

Written by Ralf Drachenberg.

‘This is Europe’ – an initiative proposed by the President of the European Parliament, Roberta Metsola – consists of a series of debates with EU leaders to discuss their visions for the future of the European Union. On 13 December, the Prime Minister of Slovenia, Robert Golob, envisaged a European Union that believes in the power of integration, the power of cooperation and the power of unity. His main message was the importance of the energy transition. In the context of current high energy prices, he stressed the responsibility of the European Council to be more decisive.

Only when we come together on the basis of our strengths and virtues, and when we each contribute what we are best at, then we can form a community that will be the most successful.

Robert Golob

Background

Roberta Metsola launched the ‘This is Europe’ initiative soon after her election as President of the European Parliament in January 2022. Robert Golob is the sixth EU leader to have addressed the Parliament since its Conference of Presidents endorsed the initiative on 28 April 2022. These debates will continue during subsequent sessions. The next confirmed leader to participate is the Luxembourg Prime Minister, Xavier Bettel, during the April 2023 plenary session, although other debates may take place before then.

Figure 1 – Time devoted by Robert Golob to various topics in his speech

A similar initiative by the Parliament between January 2018 and April 2019, ahead of the 2019 European elections, saw a number of EU leaders speak in the Parliament’s plenary sessions about their views on the future of Europe. An EPRS analysis of the Future of Europe debates identified the similarities and differences between the views expressed by EU leaders.

The initiative is particularly relevant in the context of the Conference on the Future of Europe (CoFoE), a bottom-up exercise allowing EU citizens to express their opinions on the Union’s future policies and functioning. On 30 April 2022, the CoFoE plenary adopted 49 proposals (see the recent EPRS analysis), including more than 300 measures by which they might be achieved. As a follow-up to the CoFoE, Parliament adopted a resolution, by a large majority, calling for a convention in accordance with Article 48 of the Treaty on European Union. This call was backed by the President of the European Commission, Ursula von der Leyen, in her State of the Union speech on 14 September 2022.

At the June 2022 European Council meeting, the Heads of State or Government ‘took note’ of the CoFoE proposals. While calling for ‘an effective follow-up’, they did not provide specific guidelines in this respect, but just stated that each EU institution should do this ‘within their own sphere of competences’, rather than jointly among the EU institutions. EPRS research has shown that there is significant convergence between the results of the CoFoE and the priorities of the European Council as expressed in its Strategic Agenda for 2019‑2024 and in its conclusions over the past 3 years.

Main focus of Robert Golob’s speech

While Mr Golob addressed a wide range of topics in his speech to the Parliament (see Figure 1), he devoted most attention to three themes: i) energy transition; ii) geopolitics; and iii) the rule of law.

Energy transition

The main topic of Robert Golob’s address was the energy transition. The Slovenian Prime Minister put strong emphasis on the fact that over-dependence on one source for gas provision, namely Russia, has enabled the weaponisation of that energy source over the past year. He stated that three factors combined were needed to respond to this situation: i) a reduction in energy demand; ii) demonstration of solidarity; and iii) action to address energy prices. Energy transition goes beyond the current situation, as it is the only way to reduce the impact of energy on our climate, helping the planet and future generations.

Geopolitics

Addressing the theme of European geopolitics, Golob supported the enlargement process for both Ukraine and Moldova, as well as for the Western Balkans. He also praised the EU’s response to Russia’s aggression towards Ukraine, showing that when it was necessary the EU knew ‘how to stand united’.

The rule of law

Mentioning that it was the deteriorating rule of law situation in his country that had brought him into politics in the first place, Golob stressed that ‘the rule of law is not something to be negotiated about, but is something to be enforced. And that that is the responsibility of all of us that are in the political system’. He went on to call for new ways to be found to address the issue of ‘paid-for hate speech’.

Specific proposals and positions

The Slovenian prime minister used the opportunity to present his views on how the European Union should advance in specific policy areas. He also made some new proposals, summarised below.

Policy issuePriority action and proposals (quotes)Energy policy‘We will need to be more decisive in order to reduce the volatility in the markets. We will need to be more decisive to eliminate price spikes. And, we will need to be more decisive when it comes to the gas price caps’.Food‘The food system that we are utilising right now is totally unsustainable for our future, totally. Unless we change the food production and food consumption in a very thorough way, we will not be able to meet any of the climate goals’.The rule of law‘All the efforts done – especially by the Iranian women and with their inventive, non-violent ways of protesting against the brutality of the regime and for their human rights, their women’s rights – is something to be really proud of; and we need to give them support as much as possible’.Enlargement‘I welcome the decision of all the institutions to recognise both Ukraine and Moldova as candidates for membership of the European Union, and I welcome all the efforts, including by Parliament, to speed up the accession process’.EU membership‘The effect of joining the European Union is transformative. We have changed. Membership of the European Union changes the country, it changes the outlook first of all of the people, and then the people make sure that the politics also change’.Table – Specific proposals made by Robert Golob, by policy area

Read this ‘at a glance’ note on ‘‘This is Europe’ debate in the European Parliament: Speech by Robert Golob, Prime Minister of Slovenia, on 13 December 202‘ in the Think Tank pages of the European Parliament.

Written by Marcin Grajewski.

The past year has been a genuine annus horribilis, shaking Europe and the world with security, economic and geopolitical shocks. Russia’s brutal and unprovoked attack on Ukraine is the biggest military conflict on the continent since the Second World War. Apart from causing horrific death tolls, suffering and destruction, the war triggered security, political, energy and migration crises and undermined the nascent economic recovery from the COVID pandemic, fuelling record inflation and clouding growth prospects.

The assertiveness of autocratic regimes, notably in China and Russia, the rise of populism, global technology rivalry, and post-pandemic problems with supply chains accelerated global fragmentation, shifted political alliances and posed a further threat to the rules-based order in the world. Climate talks made some headway, but some analysts and politicians warn that the action so far has been insufficient and the world may be close to a point of no return on climate change.

This note gathers links to selected recent publications and commentaries from many international think tanks on the key takeaways from 2022.

Ukraine

Answering four hard questions about Russia’s war in Ukraine
International Crisis Group, December 2022

Time for the West to think about how to engage with defeated Russia
Brookings Institution, November 2022

The war against Ukraine and European defence: When will we square the circle?
Egmont, November 2022

Defend. Resist. Repeat: Ukraine’s lessons for European defence
European Council on Foreign Relations, November 2022

Russia’s war in Ukraine: Misleading doctrine, misguided strategy
Institut français des relations internationales, October 2022

Keeping a cool head: How to improve the EU migration crisis response
European Policy Centre, October 2022

How big is the storm? Assessing the impact of the Russian–Ukrainian war on the eastern neighbourhood
European Union Institute for Security Studies, October 2022

Understanding Russia’s threat to employ nuclear weapons in its war against Ukraine
Heritage Foundation, October 2022

Ukraine’s female soldiers reflect country’s strong feminist tradition
Atlantic Council, June 2022

Fiscal support and monetary vigilance: Economic policy implications of the Russia-Ukraine war for the European Union
Bruegel, May 2022

Global shifts

Deglobalisation and protectionism
Bruegel, November 2022

Democratic innovations from around the world: Lessons for the West
Carnegie Europe, November 2022

China’s growing interference in domestic politics: Globally and in the United States
Council on Foreign Relations, November 2022

The American order is over, and China is ready to dive in
Istituto per gli Studi di Politica Internazionale, October 2022

The emerging world order is post-Western and pre-plural
Institut Montaigne, September 2022

Globalization is in retreat for the first time since the Second World War
Peterson Institute for International Economics, October 2022

Megatrends: 2022
GLOBALSEC, June 2022

China and the transatlantic relationship
Chatham House, June 2022

The new world order
Council of Foreign Relations, March 2022

Putin is creating the multipolar world he (thought he) wanted
Egmont, March 2022

Climate

Can COP keep up with an evolving climate effort?
Brookings Institution, December 2022

COP27 readout: The good and the bad as COP27 concludes
Atlantic Council, November 2022

COP27 didn’t make enough progress to prevent climate catastrophe
Council for Foreign Relations, November 2022

Perspectives on designing a climate club: Alliance-building to strengthen international climate cooperation
EPICO, Konrad Adenauer Stiftung, November 2022

The portfolio of economic policies needed to fight climate change
Peterson Institute for International Economics, November 2022

In defence of borrowing for climate action
Centre for European Reform, October 2022

Climate club: The way forward
Wilfried Martens Centre for European Studies, October 2022

How can the European Union adapt to climate change?
Bruegel, September 2022

How carbon tariffs and climate clubs can slow global warming
Peterson Institute for International Economics, September 2022

Conference on the Future of Europe: What is next for EU climate policies
Ecologic, July 2022

China

China’s wish for 2023? An end to lockdown
Chatham House, December 2022

China and Russia: Are there limits to ‘no limits’ friendship?
Centre for European Reform, October 2022

Lessons for Europe from China’s quest for semiconductor self-reliance
Bruegel, November 2022

The Biden/Xi meeting in Bali: What was at stake?
Peterson Institute for International Relations, November 2022

An allied strategy for China after the 20th Party Congress
Atlantic Council, October 2022

The new U.S National Security Strategy: Battling China for technological leadership
Centre for European Reform, October 2022

How Xi will consolidate power at China’s twentieth party congress
Council on Foreign Relations, October 2022

Why China is not all-In on supporting Russia
Heritage Foundation, October 2022

China is divided on Russia: Let’s keep it that way
Clingendael, September 2022

China’s Belt and Road Initiative: Successful economic strategy or failed soft-power tool?
Finnish Institute of International Affairs, September 2022

Energy

Securing alternative gas supplies and addressing critical infrastructure gaps in Europe
Atlantic Council, December 2022

National energy policy responses to the energy crisis
Bruegel, December 2022

The European Green Deal, three years on: Acceleration, erosion or fragmentation?
Institut français des relations internationales, November 2022

A grand bargain to steer through the European Union’s energy crisis
Bruegel, September 2022

The energy market in time of war
Centre on Regulation in Europe, September 2022

Energy unity or breakup? The EU at a crossroads
Istituto Affari Internazionali, September 2022

It would be a strategic mistake for the EU to ditch the Energy Charter Treaty
Centre for European Policy Studies, August 2022

The impact of the Ukraine war on global energy markets
Centre for European Reform, July 2022

Timing is the key to the Gulf replacing Russian oil
Chatham House, July 2022

The de-globalisation of oil: Risks and implications from the politicisation of energy markets
Istituto Affari Internazionali, July 2022

Inflation

Energy prices and inflation
Centre for European Policy Studies, December 2022

The ECB’s monetary tightening: A belated start under uncertainty
Bruegel, September 2022

A return to austerity in Europe: feasible or fictional?
Real Instituto Elcano, September 2022

Dancing on the edge of stagflation
Luiss School of European Political Economy, September 2022

Uncoordinated monetary policies risk a historic global slowdown
Peterson Institute for International Economics, September 2022

The war in Ukraine and the European Central Bank
International Institute for Strategic Studies, July 2022

Fragmentation risk in the euro area: No easy way out for the European Central Bank
Bruegel, June 2022

The ECB’s normalisation path
Centre for European Policy Studies, June 2022

Our economy needs a good dose of customer-driven deflation
Mises Institute, May 2022

Today’s inflation and the Great Inflation of the 1970s: Similarities and differences
Centre for Economic Policy Research, March 2022

Read the complete briefing on ‘2022: The year that shook the world‘ in the Think Tank pages of the European Parliament.

Written by Jim Maher (European Parliament in ASEAN)

With the world’s two most integrated regional organisations – ASEAN and the EU – this year celebrating 45 years of diplomatic relations, an EPRS online roundtable on 1 December 2022 delved into the real meaning of the ‘strategic partnership’ between the two blocs. Organised jointly with the European Parliament in ASEAN, the exchange also looked towards the next steps in the EU’s engagement with Southeast Asia.

‘Rich and dynamic’ is how European Parliament Vice-President Heidi Hautala (Greens/EFA, Finland) described the current state of EU-ASEAN relations in keynote remarks at the start of the online roundtable, moderated by Elena Lazarou of EPRS. Citing green and digital projects as examples, the Vice-President noted the potential for the EU and ASEAN to ‘mutually benefit from alignment in several important policy areas’.

‘A variation in speed’

On trade, Ms Hautala remarked that the European Union is ASEAN’s third largest trading partner and the second largest source of foreign direct investment. While she noted ‘a variation in speed’ when it comes to trade relations – free trade agreements already in place with Singapore and Vietnam, negotiations with Indonesia underway, and other countries under the Everything But Arms scheme – the region as a whole is ‘moving in the same direction, and the vision for the future is an EU-ASEAN regional FTA’.

Antoine Ripoll of the European Parliament in ASEAN reflected on the substantial progress ASEAN has made in the past four and a half decades, and on the bloc’s role at the core of the Indo-Pacific. Outlining some of the challenges faced by the 10-nation body, he cited security issues (particularly in the South China Sea and the Taiwan Strait), and economic uncertainties due to existing trade tensions. Charmaine Willoughby of De La Salle University in the Philippines added Myanmar as ‘the glaring issue’, along with food security, and ‘grey-zone issues’ such as information manipulation.

On maritime security specifically, Willoughby highlighted the importance of the new Marcos administration leveraging the 2016 Permanent Court of Arbitration award on the South China Sea, which was heavily in favour of the Philippines. She noted that freedom of navigation is at stake and that ‘even if the South China Sea is half a world away from Brussels, it remains a critical issue’.

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Accept YouTube Content ‘A divergence in threat perceptions’

‘We need to fight the battle the way they are fighting it: through economics’ argued Willoughby on the wider issue of countering an increasingly assertive China. Hervé Lemahieu of the Lowy Institute spoke meanwhile of ‘a divergence in threat perceptions’ between many Southeast Asian countries and the West. While for the United States and its Quad partners, it is China’s economic and military power – and willingness to use both in coercive ways – that pose the greatest threat to regional security, in many ASEAN capitals the view is that US-China competition is the main driver of regional instability, he noted.

Mr Lemahieu, Director of Research at the Sydney-based think tank, added that a cohesive ASEAN at the centre of the Indo-Pacific would be ‘a stronger bulwark against Chinese domination than a region divided between those aligned with Washington and Beijing’. ‘A simplistic, binary choice’ between the West and China is, in any case, not one that the countries of Southeast Asia want to make, Shada Islam of the New Horizons Project added.

Another issue hanging over Southeast Asia is that of Myanmar. It has now been over 18 months since ASEAN leaders agreed on a ‘five-point consensus’ to end the chaos in the country following the February 2021 coup d’état. The junta’s commitment to implementing that consensus has been ‘inexistent’, Vice-President Heidi Hautala noted, expressing her hope that the incoming Indonesian ASEAN chairmanship will make real a commitment by ASEAN leaders in November for the bloc ‘to engage all stakeholders’. Ms Hautala stressed that this should include the National Unity Government, which is recognised by the European Parliament as the legitimate representative of the Burmese people’s democratic wishes.

Myanmar junta ‘incredibly impervious to external influence’

Also raising the issue of Myanmar was Hervé Lemahieu, who warned that ‘we need to see this as a generational process rather than something that will be resolved in two years’. The Yangon-raised policy analyst added that those who propose an alternative to the ASEAN approach on the crisis risk overestimating the sway that any external party has on the junta. ‘It seems as if the generals are incredibly impervious to external influence,’ he underlined.

Citing the wide variety of political systems in Southeast Asia, Mr Lemahieu suggested that instead of pushing its ASEAN partners to weigh in on the democratisation of Myanmar, Europe should use the narrative of the coup as a threat to stability that risks becoming ‘a proxy conflict between great powers’. Similarly, on Ukraine, he suggested that, in its dialogue with ASEAN countries, the EU should frame Russia’s aggression as ‘a direct attack on the UN charter’ rather than as something, which pits democracies against authoritarian systems.

Sharing a ‘glass half full’ view on ASEAN, Mr Lemahieu noted that while the bloc brings together ‘an unlikely medley of countries’, its member states are ‘increasingly on the same page when it comes to geopolitical rivalry’. He noted ASEAN’s potential to become ‘a distinctive third pole in the competition between the world’s superpowers’, and added that ‘the EU has come a long way in adjusting its posture and tone’ towards the bloc.

Moving on from ‘regionalism snobbery’

A number of speakers reflected on the importance of a partnership of equals. Vice-President Hautala cautioned against ‘a patronising approach’ from the EU. Shada Islam welcomed the fact that the EU appears to have moved on from ‘regionalism snobbery’, and that there is an acceptance that ASEAN does not need to be a mirror image of the EU. Charmaine Willoughby noted that while the two blocs have different origins and current circumstances, there are underlying similarities, including a shared commitment to multilateralism and adherence to the rules-based international order.

On the wider role of the EU in the region, Hervé Lemahieu cautioned against trying to emulate the United States’ policy: ‘The fact is Europe is not considered as a military heavyweight in the region. […] Where Europe does have the comparative advantage is on economics and trade’. He added that, with its withdrawal from the Trans-Pacific Partnership, the United States has ‘largely abdicated the space’.

On the issue of American involvement, Ulrich Jochheim of EPRS echoed Mr Lemahieu’s assessment of the recently announced Indo-Pacific Economic Framework as ‘very weak’, and suggested that, given domestic political constraints, it is unlikely that the Biden administration would be able to get ‘any serious trade deal’ through Congress.

‘Fight for our values but do it wisely’

Shada Islam noted the importance of ‘accompanying’ countries in making reforms rather than imposing them. Otherwise, ‘we risk losing our value as a trading partner’. Citing the carbon border adjustment mechanism as an example, she noted there is ‘a real danger that we raise our standards so high that countries just can’t meet them’. ‘We need to fight for our values through trade but do it wisely,’ she concluded.

Ms Islam, a Brussels-based commentator, also expressed hope that trade negotiations with Malaysia, the Philippines and Thailand be revived, and a free trade agreement concluded with Indonesia by 2024. She also called for intensified EU collaboration with ASEAN on issues such as connectivity and maritime security, and for sectoral agreements in the digital and green fields.

In terms of recent progress in EU-ASEAN relations, Ulrich Jochheim highlighted the ‘very pragmatic but very useful’ Comprehensive Air Transport Agreement, which replaces more than 140 bilateral agreements. He also noted there will be a breadth of cooperation in light of the new EU-ASEAN plan of action for 2023‑2027.

Antoine Ripoll spoke of the importance of ensuring the EU-ASEAN strategic partnership makes a real difference in the lives of young people, while Charmaine Willoughby mentioned the crucial role of ‘track 1.5 and track 2 discussions’. To ensure ‘a constant to and fro’, Shada Islam proposed that existing contacts between young Europeans and young Southeast Asians – such as the Young Leaders Forum – be institutionalised. Vice-President Heidi Hautala highlighted the European Parliament’s commitment to boosting parliamentary links with ASEAN and its ultimate goal of establishing an inter-parliamentary assembly.

Watch the online roundtable here, and follow the European Parliament in ASEAN on Twitter for more on the Parliament’s engagement with Southeast Asia.

Written by Issam Hallak (1st edition).

In 2020, the Commission launched a review of the Solvency II Directive, the EU’s legal prudential regulatory framework for (re-)insurance companies, which entered into force in 2016. As one output of the review, the Commission made a proposal in September 2021 for a new directive establishing a framework for recovery and resolution of insurance companies – the ‘IRRD proposal’.

The IRRD proposal would establish harmonised recovery and resolution tools and procedures, with enhanced cross-border cooperation between national authorities. The proposal adopts the ‘pre‑emptive’ approach whereby insurance companies must submit plans to the supervisory authorities, which would be given powers to implement resolutions. The proposal also sets out a range of tools for resuolutions.

Versions

• December 2022: Insurance recovery and resolution directive (1st edition)

Regulation amending Regulation (EU) No 575/2013 and Directive 2014/59/EU as regards the prudential treatment of global systemically important institution groups with a multiple point of entry resolution strategy and a methodology for the indirect subscription of instruments eligible for meeting the minimum requirement for own funds and eligible liabilities Committee responsible:Economic and Monetary Policy (ECON)COM(2021)582
22.9.2021Rapporteur:Markus Ferber (EPP, Germany)2021/0296(COD)Shadow rapporteurs:Aurore Lalucq (S&D, France),
Stéphanie Yon-Courtin (Renew, France), Henrike Hahn (Greens/EFA, Germany),
Marco Zanni (ID, Italy),
Johan van Overtveldt (ECR, Belgium),
Chris MacManus (The Left, Ireland)Ordinary legislative procedure (COD)
(Parliament and Council on equal footing
– formerly ‘co-decision’) Next steps expected: Committee vote on draft report

Written by Suzana Anghel and Ralf Drachenberg.

The last regular European Council meeting of 2022 ended with agreements on most open agenda points, notably the €18 billion of assistance to Ukraine and the ninth sanctions package. While the detailed decision on the cap for energy prices was left to the Energy Council to define, EU leaders specified in their conclusions that the proposal was to be finalised on 19 December 2022. In a long strategic discussion on EU-US relations, European Council members concurred that they want an active dialogue with the US on the latter’s Inflation Reduction Act. Regarding the economy, EU leaders invited the European Commission to put forward, by the end of January 2023, short-term measures to mobilise both EU and national investment resources to safeguard the EU’s economic base, as well as an EU strategy to boost competitiveness and productivity in the longer term. On security and defence, EU leaders focused on joint procurement, and insisted on the need to invest in defence capabilities to be able to conduct the full spectrum of EU missions and operations. As regards enlargement, the European Council endorsed the General Affairs Council conclusions on enlargement of 13 December 2022, and granted Bosnia and Herzegovina candidate country status.

1.     General aspects

The European Council, which lasted only one day, took place back-to-back with the EU-ASEAN Commemorative Summit, at which a joint statement, affirming the strategic partnership and the shared interest in peace, security and stability, was adopted. The EU leaders’ meeting began with the customary address by the President of the European Parliament, Roberta Metsola. Her intervention was followed by a particularly long exchange of views involving many EU leaders, the substance of which was largely linked to the criminal proceedings involving the Parliament, among other issues. The EU Heads of State or Government expressed their support for the Parliament’s handling of the matter. President Metsola used the opportunity to announce a wide-ranging reform package to be ready early in 2023, underlining that she would personally lead the work.

This was the first European Council meeting for the new Italian Prime Minister, Giorgia Meloni, and the last for the Irish Taoiseach, Micheál Martin, who subsequently handed over the office to Leo Varadkar.

In the context of attempts by certain Member States to block important decisions until the last moment, EU leaders defended decision-making by consensus, arguing that, ultimately, only the outcome mattered. As for the President of the European Council, Charles Michel, he once again stressed the continuing unity of the European Council.

President Michel announced that due to the rising number of irregular migrants, EU leaders would hold an in-depth debate on migration at a special European Council meeting on 9‑10 February 2023.

2. European Council meeting Russia’s war of aggression against Ukraine

EU leaders reaffirmed their ‘resolute condemnation of Russia’s war of aggression against Ukraine’, reiterated the EU’s ‘full support for Ukraine’s independence, sovereignty and territorial integrity’ and called on Russia to cease its attacks on Ukrainian civilians and infrastructure, and to stop endangering ‘the safety and security of civilian nuclear facilities’ in Ukraine. They once again reiterated the EU’s political, financial, military and humanitarian support for Ukraine. President Michel underlined the Union’s unity on Ukraine, which was demonstrated by the decisions taken at the summit on macro-financial assistance and military aid as well as the ninth package of sanctions.

EU leaders notably agreed on the €18 billion package of assistance for Ukraine in 2023. Whilst Poland had initially threatened to block the decision, along with the minimum tax on multinational enterprises and Hungary’s recovery and resilience plan, the set of measures was adopted by written procedure in the interim. EU leaders also welcomed the G7 agreement to establish a donor coordination platform, which will help coordinate aid for repair, recovery and reconstruction efforts in Ukraine.

The European Council recalled the EU’s commitment to support Ukraine militarily though the European Peace Facility (EPF) and the EU Military Assistance Mission in support of Ukraine (EUMAM Ukraine). It endorsed the political agreement reached in the Council to increase the financial envelope of the EPF by €2 billion (2018 prices) and to allow for additional financial increases at a later stage. EU leaders also reaffirmed the importance of stepping up bilateral military support, including air-defence capacities and demining aid. The Prime Minister of Latvia, Krišjānis Karinš, stressed the importance of continuing to support Ukraine militarily, including with air defence systems, and warned against talks regarding a ‘premature peace or a truce’.

EU leaders also reaffirmed the need for support for internally and externally displaced persons, calling on the Member States ‘to intensify contingency planning, with the support of the Commission’. They also confirmed the Union’s commitment to ‘urgently intensify the provision of humanitarian and civil protection assistance to Ukraine’ as well as to support the rebuilding of damaged critical infrastructure. The President of France, Emmanuel Macron, noted that, earlier in the week, Paris had hosted the international support conference for Ukraine at which €1 billion was pledged for heating stations, power generators and lighting equipment to help the Ukrainians cope with the winter.

EU leaders took stock of the options put forward by the European Commission, at their request, regarding the use of frozen Russian assets in support of Ukraine’s reconstruction, and invited the EU institutions ‘to take work forward’. They discussed war crimes accountability, ‘including ways to secure accountability for the crime of aggression’. They agreed that sanctions and the international oil price cap play a key role in maintaining pressure on Russia to end its war. EU leaders also condemned the Iranian authorities’ support for Russia’s war of aggression, and welcomed the additional sanctions agreed in the Council. The President of Lithuania, Gitanas Nausėda, stressed the importance of ‘keeping the sanctions as strong as possible’ and tweeted that ‘the Ukrainian nation is heroically withstanding Russian aggression’.

Moreover, EU leaders reiterated their commitment to food security, stressing the importance of the solidarity lanes, the UN Black Sea Grain Initiative and the ‘Grain from Ukraine’ programme, and pointed out that access to affordable agricultural products and fertilisers remains key.

The European Council also considered the impact of the war on neighbouring countries, and notably the importance of supporting Moldova in coping with the energy security challenge.

Addressing the European Council once again, the President of Ukraine, Volodymyr Zelenskyy, stressed that Ukraine and all of Europe had become stronger in recent months; he underlined the importance of unity, thanked the EU for the ‘multifaceted assistance’ offered and underlined that Ukraine needs the EU’s support to overcome the destruction of its energy system. 

Main message of the President of the European Parliament: President Metsola stressed that the EU needs to stand with Ukraine and that sanctions need to be implemented. She emphasised that the European Parliament had awarded the Sakharov Prize to the people of Ukraine.

Energy and economy

As stressed by President Michel, ‘our new energy horizon has had spill-over effects on our economy … our future growth perspectives depend on our industries’ ability to remain competitive’. The intertwined energy and economy topics were therefore at the core of discussions.

After reviewing progress made in implementing the October 2022 conclusions, the European Council reaffirmed the importance of phasing out dependency on Russian fossil fuels, whilst promoting innovation, as well as investing in renewables. It notably called for the review of the Renewable Energy, Energy Efficiency and the Energy Performance of Buildings Directives to be finalised. EU leaders also underlined the need to accelerate preparations for the 2023‑2024 winter, calling for the ‘speedy operationalisation’ of the EU energy platform for joint gas and hydrogen purchasing, for consumption reduction and for gas storage facilities to be filled efficiently. As regards the cap on the price of gas, the search for an agreement was delegated to the Energy Council, which it was expected to reach at its meeting on 19 December 2022. Both the European Commission President, Ursula von der Leyen, and the Prime Minister of the Netherlands, Mark Rutte, expressed ‘confidence’ in the Council on this matter.

EU leaders agreed that the ongoing energy crisis endangers the EU’s economic, industrial and technological base, requiring an ‘ambitious European industrial policy to make Europe’s economy fit for the green and digital transitions and reduce strategic dependencies’. They underlined that – if the single market is to be preserved – economic resilience and global competitiveness could only be achieved through coordinated European action. The European Council invited the European Commission to make, by January 2023, short-term proposals allowing mobilisation of European and national level resources to promote investment, and to present a (long-term) EU strategy to boost competitiveness and productivity.

The EU’s economy and its industrial base will be central topics on the agenda of the next European Council meeting, of 9‑10 February 2022. The European Commission President, Ursula von der Leyen, called the European Green Deal the EU’s ‘most existential priority’, recalling the progress made in this area under the current Czech Presidency of the Council of the EU. She stressed that she looked forward to cooperating with the incoming Swedish Presidency on competitiveness.

Main message of the President of the European Parliament: President Metsola stressed that ‘growth will also come from reforming our energy market’, underlined the importance of diversifying sources of energy, and confirmed the Parliament’s readiness to help ‘build our energy resilience together’.

Security and defence

As announced by President Michel, EU leaders took stock of progress made in implementing the security and defence commitments undertaken in Versailles. They confirmed their lasting consensus on defence cooperation and insisted on the need to increase the Union’s capacity to act autonomously. The European Council reaffirmed the importance of the ‘transatlantic bond’, which is reflected in EU and NATO strategic documents. 

As expected, EU leaders focused on joint procurement, calling on the co-legislators ‘to swiftly adopt the European Defence Industry Reinforcement through common Procurement Act (EDIRPA)’, and on the European Commission ‘to rapidly present a proposal for a European Defence Investment Programme’ – much needed to help strengthen the European defence industrial sector. They also underlined that arms stocks, which are currently diminishing as a result of military aid provided to Ukraine, need to be replenished, and invited the European Commission and the European Defence Agency ‘to identify needs and to facilitate and coordinate joint procurement’. Moreover, EU leaders reiterated their commitment to jointly invest in defence capabilities to be able to conduct the full spectrum of EU missions and operations. They also called for investment in strategic enablers, to promote a strong cyber-defence policy, to swiftly implement the EU Hybrid Toolbox, and to adopt a new Civilian CSDP Compact in 2023. Finally, the European Council recalled the global footing of the EPF and welcomed the political agreement reached in the Council on its financing.

External relations Southern Neighbourhood

The European Council discussed the Southern Neighbourhood but, contrary to December 2021, when the subject was last on the agenda, no conclusions were adopted this time. President Macron stressed the importance of joint action in and with the Southern Neighbourhood.

Transatlantic relations

EU leaders ‘held a strategic discussion on transatlantic relations’ without adopting conclusions. President Michel underlined the centrality of the transatlantic relationship, recalling the unfailing cooperation on Ukraine. President von der Leyen stressed that the US decision to invest in clean tech was positive, but underlined that the EU needed to maintain its ‘global leadership in the clean tech sectors’. She presented a plan allowing a response to the US Inflation Reduction Act.

Main message of the President of the European Parliament: President Metsola highlighted the protectionist aspect of the US Inflation Reduction Act, and stressed that climate change should be fought jointly, ‘not at the expense of each other’s industrial base’.

Iran

For the second time in a row, the European Council focused on Iran, calling on the regime to annul the ‘death penalty sentences pronounced and carried out in the context of the ongoing protests in Iran’, expressing opposition to such practices and noting the Council’s recent conclusions on Iran.

Other items Schengen

The European Council welcomed Croatia’s entry into the Schengen area as of 1 January 2023. President Michel reported on the political debate between EU leaders on Romania’s and Bulgaria’s accession to the Schengen area, and expressed optimism that a decision on that matter could be taken in the course of 2023. In that context, President Metsola spoke of a ‘broken promise’ and stressed there was ‘no justifiable reason’ to refuse admission to the Schengen area for Bulgaria and Romania.

Read this briefing on ‘Outcome of the European Council meeting of 15 December 2022‘ in the Think Tank pages of the European Parliament.

Written by Issam Hallak (1st edition).

On 27 October 2021, the Commission tabled a regulation amending the Capital Requirements Regulation (CRR) and the Banking Resolution and Recovery Directive (BRRD) with a view to resolving inconsistencies regarding the internal minimum requirements for own funds and eligible liabilities (iMREL). The iMREL are indirectly channelled through a number of intermediate parents up to the resolution entity of the group, in a process also known as a ‘daisy chain’.

In its negotiating position adopted in February 2022, Parliament supported the proposal suggesting some changes. The provisional agreement resulting from interinstitutional negotiations adds provisions for a framed review that takes into account the different types of banking group structure. Parliament adopted the agreement on 13 September 2022, and the final act was published in the Official Journal on 25 October 2022.

Versions

• December 2022: Amendments to the Capital Requirements Regulation in the area of resolution (‘daisy chain’ proposal) (1st edition)

Regulation amending Regulation (EU) No 575/2013 and Directive 2014/59/EU as regards the prudential treatment of global systemically important institution groups with a multiple point of entry resolution strategy and a methodology for the indirect subscription of instruments eligible for meeting the minimum requirement for own funds and eligible liabilities Committee responsible:Economic and Monetary Policy (ECON)COM(2021)0665
27.10.2021Rapporteur:Jonás Fernández (S&D, Spain)2021/0343(COD)Shadow rapporteurs:Othmar Karas (EPP, Austria)
Linea Søgaard Lidell (Renew, Denmark) Ernest Urtasun (Greens/EFA, Spain)
Marco Zanni (ID, Italy)
Raffaele Fitto (ECR, Italy)
Martin Schirdewan (The Left, Germany)Ordinary legislative procedure (COD)
(Parliament and Council on equal footing
– formerly ‘co-decision’) Procedure completed. Regulation (EU) 2022/2036
OJ L 275/1, 25.10.2022, pp. 1–10

Written by Velina Lilyanova.

The Recovery and Resilience Facility (RRF) is the main element of the EU’s innovative financing instrument, Next Generation EU (NGEU), established with the aim to drive the EU’s post-pandemic economic recovery towards a resilient future. The RRF is a performance-based instrument from which Member States can receive funds once they have met prior commitments (milestones and targets). The funds help the Member States make the reforms and investments they have envisaged under their dedicated national recovery and resilience plans (NRRPs).

Digital transformation is one of the six policy areas around which the RRF is built. Given its high priority for the EU, each national plan has to allocate at least 20 % of its resources to digital targets. The funds are meant to complement financing from the EU budget and national budgets and help achieve the EU’s digital objectives by 2030. This briefing focuses on the digital measures that address one of the four cross-cutting strategic EU priorities: the digitalisation of public services (the other three being digital skills, digital infrastructure and digital transformation of businesses).

All NRRPs acknowledge that the digital transformation of government is key to the success of the single market and the most efficient way to provide faster, cheaper and better services. Therefore, they include measures on digital public services – worth roughly €46.5 billion in total (excluding the Netherlands and Hungary) – tailored to each country’s context. The COVID-19 crisis highlighted the importance of digitalising public services, but the goal here extends far beyond this crisis. It involves creating a modern, transparent and efficient public administration that applies less costly and time-consuming administrative processes and provides a supportive environment for businesses in the long run. According to the Commission, the relevant measures in the NRRPs can make a lasting impact on the Member States’ economies and societies through the structural changes they would bring to their administrations, institutions and policies.

The measures in the plans are aligned with the EU’s digital commitments under the eGovernment action plan, the 2017 Tallinn Declaration on eGovernment and the Berlin Declaration on Digital Society and Value-based Digital Government, and with the European flagship ‘Modernise’ (digitalisation of the public administration), which is included in the 2021 annual sustainable growth strategy.

Read the complete briefing on ‘Digital public services in the National Recovery and Resilience Plans‘ in the Think Tank pages of the European Parliament.

Written by Karin Smit Jacobs with Jonas Winkel.

Ukraine, an EU candidate country and one of the world’s largest producers of grains and oilseeds, is heavily dependent on maritime transport and its maritime ports for the export of those products. Due to Russia’s war on Ukraine, exports have been blocked and food prices have risen worldwide. Prior to the war, more than 90 % of these products, around 6 million tonnes, were exported via the Black Sea. Through the Black Sea Grain (BSG) Initiative and the EU Solidarity Lanes, these goods are being exported again, thereby improving maritime connectivity and logistics.

Background

The blockade of Ukrainian ports in the Black Sea has had a major impact on food security worldwide. Russia and Ukraine exported about 34 % of the world’s wheat before the war, and 95 % of that was shipped by sea. Maritime transport almost came to a standstill from February until August 2022, causing food prices to rise globally and making it impossible to ensure security of supply in many countries in Africa, Asia and Europe. To relieve the strained food market, Türkiye, Russia, Ukraine and the UN launched the Black Sea Grain Initiative (BSG) on 22 July 2022, involving, inter alia,the International Maritime Organization (IMO) regarding maritime safety and security and ship inspections. The IMO can also undertake search and rescue operations in armed conflicts, as well as evacuations of stranded ships and seafarers.

The BSG Initiative allows exports from several Black Sea ports, including Odesa (see map below). The implementation of this Initiative is facilitated by the Joint Coordination Centre (JCC) in Istanbul, which guides cargo ships from the Black Sea ports into international waters, avoiding mined areas, through a safe maritime corridor. Since the Initiative was signed, the total tonnage of grain and other foodstuffs exported from Ukrainian ports is over 11 million tonnes, through a total of 941 voyages (470 inbound and 471 outbound), as of 17 November 2022. A quarter of these shipments are going to lower income countries.

The BSG Initiative was initially agreed for 120 days, until 19 November 2022, with an option for extension. However, the Russian government suspended the Initiative, claiming that Ukraine had attacked the port of Sevastopol in late October 2022. With Türkiye’s mediation, President Vladimir Putin agreed to resume the agreement on 2 November 2022, but reserved the right to end it at any time. Russia subsequently agreed, on 17 November, to an extension of the Initiative for another 120 days. The Initiative, combined with the existing EU Solidarity Lanes, has already made it possible to export more than 25 million tonnes of grain.

EU action

The European Union condemned Russia’s suspension of the BSG Initiative and urged Russia to reverse its decision immediately. Meanwhile, the G20 urged the extension of the BSG agreement as well. Following EU action and the latest sanctions packages in relation to maritime transport, EU ports are, at this moment, closed to Russian vessels. There is also a prohibition in place on exports to Russia of goods and technologies, including maritime ones. These sanctions have been welcomed by the European Parliament and are in place until 31 January 2023. They could be extended by the EU, depending on developments in the war.

The EU Maritime Safety Agency (EMSA) is continuing flights over the Black Sea to enhance maritime surveillance, for which they have made use of drones and satellites. In addition, Russia remains suspended from the Paris Memorandum of Understanding (MoU) on Port State Control. On 10 November 2022, the European Parliament questioned the Commission on the role of Türkiye regarding Cypriot-flagged vessels or vessels operated by Cyprus, or another EU Member State, that are being prevented by Türkiye from engaging in the transport of grain and other goods under the BSG Initiative. In its plenary session of November 2022, during question time with the EU High Representative for Foreign and Security Policy, Parliament addressed the issue of the BSG Initiative in relation to third countries, including maritime aspects; it underlined that both the Initiative and the Solidarity Lanes are essential for food security worldwide.

Maritime shipping facts and figures – BSG Initiative
– The first shipment departed on 3 August 2022 with 26 000 tonnes of Ukrainian food to Lebanon.
– Since August 2022, the JCC has enabled the safe movement of 122 voyages to Ukraine (up to mid-September 2022).
– In total, over 11 million tonnes of cargo has been shipped (up to 16 November 2022).Source: CCAMLR website.

In addition to the BSG Initiative, the EU remains committed to the continuation of the Solidarity Lanes, comprising not only land corridors, but also transport by water. To develop the necessary infrastructure, the Commission announced, on 11 November 2022, the provision of €1 billion extra for Solidarity Lanes, to fight the global food crisis. The Commission made available €250 million in grants to boost the Solidarity Lanes in the short term and achieve quick improvements, using, in particular, mobile equipment to reduce waiting times and improve movement through border crossing points and their access routes.

For the medium term, the TEN-T Connecting Europe Facility (CEF) has mobilised €50 million to support infrastructure projects, and the latest CEF call covers the Solidarity Lanes. The European Investment Bank (EIB) is now, besides other support, investing up to €300 million in projects that respond to the Solidarity Lanes, until the end of 2023. The TEN-T revision aims for broader connectivity and the extension of European transport corridors, including with Ukraine and Moldova. The River Danube, which is connected to the Black Sea and the Black Sea Canal, has the potential to be used for the export and import of goods between Ukraine and Europe. However, current non-interoperability affects not only complementarity between transport modes, but also access to (maritime) ports.

Outlook

The Black Sea Deal remains fragile, as it depends on Russia, and when Odesa is under attack this causes loading problems for ships. In this light, further investment in infrastructure and the Solidarity Lanes, including investment in maritime connectivity and logistics, would be necessary. Support from the EU and its Member States, the UN and other parties is continuing in order to enhance and safeguard connectivity for the transport of important goods from and to Ukraine. Belgium, along with other countries, recently made an (additional) pledge, through a joint bilateral statement, for grain shipments from Ukrainian ports to be open to more countries. Ukrainian President Volodymyr Zelenskyy indicated that some 60 ships would be carrying grain from Ukrainian ports to countries in the Global South by mid-2023, and the EU and around 20 countries have agreed to this Grain from Ukraine scheme.

However, prospects regarding the export of goods and related transport shipping prices, including bunker fuel prices, remain uncertain. Grain prices and shipping costs have been on the rise since 2020 and the war on Ukraine has exacerbated this global trend. The UN claimed that, between February and May 2022, the price for the transport of dry bulk goods increased by nearly 60 %. The current global surge in costs, due to the war, shows that both crude oil prices and shipping prices have increased by 4 % compared to January 2022. The current EU price cap on Russian oil creates insurance problems and transport congestion for oil tankers sailing from the Black Sea via the Bosporus to the Mediterranean.

Read this ‘at a glance’ on ‘Russia’s war on Ukraine – Maritime logistics and connectivity: State of play‘ in the Think Tank pages of the European Parliament.

Written by Clare Ferguson and Katarzyna Sochacka.

The highlight of the December 2022 plenary session was the ceremony awarding the 2022 Sakharov Prize for Freedom of Thought to the brave people of Ukraine. Also, in a ‘This is Europe’ debate, the Prime Minister of Slovenia, Robert Golob, addressed the plenary.

With Council and European Commission representatives, Members debated the preparation of the European Council meeting of 15 December 2022. A number of debates also took place: on the outcome of COP27; addressing persistent challenges in the aviation sector; and turning the Child Guarantee into reality. Debates also took place on the recent Council decision on Schengen accession; the EU response to the US Inflation Reduction Act; and defending the European Union against the abuse of national vetoes. The Commission’s reports on the situation of journalists and the implications of the rule of law; the 30th anniversary of the UN Declaration on the Rights of Persons Belonging to National or Ethnic, Religious and Linguistic Minorities; recognising the Holodomor as genocide; and the humanitarian situation in Ukraine were also debated. Members also discussed foreign affairs issues, such as prospects for a two-state solution for Israel and Palestine; Turkish airstrikes on northern Syria and the Kurdistan Region of Iraq; and EU-ASEAN relations.

In the wake of allegations of corruption in and around the Parliament, Members held a debate with the Commission on the need for transparency and accountability in the European institutions and adopted a resolution on the issue. The also voted for the early termination of the mandate of the vice-president arrested and charged in recent days.

2022 Sakharov Prize for the brave people of Ukraine

Supporting people’s basic rights and democratic values, both in the EU and the wider world, is one of Parliament’s top priorities. Parliament has awarded the Sakharov Prize for Freedom of Thought for outstanding achievements in defending human rights and fundamental freedoms every year since 1988. Having taken a courageous stand for freedom and democracy in the face of great hardship since the Russian invasion, the 2022 award goes to the brave people of Ukraine. President Roberta Metsola presented the Sakharov Prize in a ceremony during a formal sitting.

REPowerEU

Members considered and adopted a Committee on Industry, Research and Energy (ITRE) report on the European Commission’s proposal to amend EU energy legislation under the REPowerEU plan. The ITRE committee proposes to reduce the time taken to approve new renewable energy installations and upgrade existing ones. The adopted report sets Parliament’s position for forthcoming interinstitutional negotiations.

Upscaling the 2021-2027 MFF

The war in Ukraine and its consequences are having a considerable impact on the EU’s finances. The MFF was not designed to cope with emergencies with huge financial implications, such as COVID‑19 and Russia’s invasion of its neighbour. Members debated and voted on a Committee on Budgets own-initiative report calling for an urgent revision of the MFF to increase the EU budget and make it more flexible. The committee calls for the Commission to propose an upscaled 2021-2027 MFF to provide a resilient EU budget fit for new challenges – with a bigger and more flexible budget, fresh revenue streams, action on preserving the budget from fluctuations in debt repayment for the EU recovery instrument, and greater scrutiny and transparency.

A long term vision for the EU’s rural areas

Over 80 % of total EU territory is rural, supplying much of the EU’s natural resources in terms of biodiversity, agriculture and more. Those living in many rural EU areas face challenges ranging from finding employment to connecting to the internet. To remedy this, the Commission has drawn up a long-term vision for the EU’s rural areas to encourage their resilience in the face of an ageing population, poor connectivity, and lack of opportunity. Members debated and voted an own-initiative report on the proposals from Parliament’s Committee on Agriculture and Rural Development (AGRI). The report underlines the key role of rural areas in the EU, and the need for action to support the needs of their populations, underpinned by dedicated funding.

Towards equal rights for persons with disabilities

Continued discrimination and a failure to ensure equal rights for persons with disabilities to participate in social and political life are compounded by a lack of suitable accommodation, among other things. Members debated and voted on a Committee on Civil Liberties, Justice and Home Affairs (LIBE) own-initiative report on progress towards implementing the UN Convention on the Rights of Persons with Disabilities in the EU. While the report recognises the efforts made to meet the standards set out in the Convention, the committee decries a number of serious failings, particularly the use of EU funding to construct institutions, despite an EU target to end the practice of placing persons with disabilities in care.

Cultural policy in EU and external relations

Parliament debated and voted a Committee on Culture and Education (CULT) own-initiative report on the implementation of the new European agenda for culture and the EU strategy for international cultural relations. The first strategy sets social and economic objectives for EU cultural policy (for the post-pandemic recovery, employment) and touches on opportunities also identified in the second, for cooperation with non-EU countries on the role of cultural diversity and heritage in sustainable socio-economic development and driving peace. The CULT committee recommends, among other things, paying stricter attention to employment conditions for creative workers and easier access to funding for small entities. Looking to cultural relations outside the EU, the report regrets the lack of focus on sustainable development and warns against perceptions of cultural diplomacy as ‘Eurocentric’.

Question time: Protecting strategic infrastructure against China’s influence

Margrethe Vestager, Executive Vice-President of the Commission, attended the plenary to provide answers to Members’ questions on protecting EU strategic infrastructure from China’s influence during the regular question time session.

Opening of trilogue negotiations

Members confirmed, without vote, a mandate for negotiations from the Committee on Civil Liberties, Justices and Freedom (LIBE) on the proposal for a regulation on the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA).

This ‘at a glance’ note is intended to review some of the highlights of the plenary part-session, and notably to follow up on key dossiers identified by EPRS. It does not aim to be exhaustive. For more detailed information on specific files, please see other EPRS products, notably our ‘EU legislation in progress’ briefings, and the plenary minutes.

Read this ‘at a glance’ on ‘Plenary round-up – December 2022‘ in the Think Tank pages of the European Parliament.

Written by Polona Car and Stefano De Luca (1st edition).

New technologies come with new risks, and the impact of cyber-attacks through digital products has increased dramatically in recent years. Increasingly, consumers have fallen victim to security flaws linked to digital products such as baby monitors, robo-vacuum cleaners, Wi-Fi routers and alarm systems. For businesses, the importance of ensuring that digital products in the supply chain are secure has become pivotal, considering three in five vendors have already lost money owing to product security gaps.

The European Commission’s proposal for a regulation, the ‘cyber-resilience act’ therefore aims to impose cybersecurity obligations on all products with digital elements whose intended and foreseeable use includes direct or indirect data connection to a device or network. The proposal introduces cybersecurity by design and by default principles and imposes a duty of care for the life cycle of products.

In Parliament, the file has been provisionally assigned to the Committee on Industry, Research and Energy (ITRE).

Versions

• December 2022: EU cyber-resilience act (1st edition)

Horizontal cybersecurity requirements for products with digital elements Committee responsible:Committee on Industry, Research and Energy (ITRE)COM(2022)454
15.9.2022Rapporteur:Nicola Danti (Renew, Italy)2022/0272(COD)Shadow rapporteurs:Henna Virkunen (EPP, Finland)
Beatrice Covassi (S&D, Italy)
Ignazio Corrao (Greens/EFA, Italy)
Evžen Tošenovský (ECR, CzechiaOrdinary legislative procedure (COD)
(Parliament and Council on equal footing
– formerly ‘co-decision’) Next steps expected: Publication of draft report

Written by Anita Orav.

Each year, 18 December is observed as International Migrants’ Day. So designated by the United Nations General Assembly on 4 December 2000, in response to increasing migration around the world, the day aims to draw attention to the human rights of migrants and highlight their contribution to our societies.

Context

Migration and mobility are and will continue to be regular human phenomena, both globally and in the EU. On 1 January 2021, 23.7 million nationals from non-EU countries were residing in the EU, representing 5.3 % of the total population. Most migrants, approximately 2.25 million to 3 million per year, arrive in the EU using legal channels. However, wars and upheaval in neighbouring countries also trigger displacement of people and increased irregular arrivals of migrants in the EU, such as witnessed in 2015-2016, and in 2022 as a result of Russia’s war of aggression against Ukraine.

Migration management in the EU

The EU and its Member States have shared competence in migration policy. In recent years, the priority accorded to migration has been reflected in the EU budget, with €22.7 billion allocated to migration and security over the 2021-2027 period. Acknowledging that the EU has to move away from ad hoc solutions and put in place a predictable and reliable migration management system, the European Commission put forward a new pact on migration and asylum offering a comprehensive approach aimed at strengthening and integrating key EU policies on migration, asylum and border management. In addition, to enhance legal migration into the EU, the Commission proposed a new skills and talent package, which is intended to attract and retain highly skilled third-country nationals in the EU.

Ukrainians under the Temporary Protection Directive

Following Russia’s invasion of Ukraine in February 2022, over 7.8 million people have already been forced to seek refuge, mostly in neighbouring countries. In response, the European Union swiftly decided to grant EU-wide temporary protection to people arriving from Ukraine, and 4.8 million people have registered under this mechanism or similar national protection schemes. It is an emergency mechanism that can be used in case of mass arrivals of people, waiving the need for the examination of individual applications and allowing Ukrainian nationals to enjoy harmonised rights across the EU for up to two years. These rights include access to a residence permit, education, medical care, housing, the labour market and social welfare assistance. In October 2022, the EU also launched a pilot EU talent pool – an online job search tool to facilitate access to the labour market for new arrivals from Ukraine. The platform brings together jobseekers and EU employers, national public employment services and private employment agencies.

European Parliament position

The European Parliament has advocated a humane, solidarity-based and common approach to migration in its various resolutions and reports. In its resolution of 12 April 2016 on the situation in the Mediterranean and the need for a holistic EU approach to migration, the Parliament emphasised the need to develop safe and lawful routes for asylum-seekers and refugees into the EU. Furthermore, taking into consideration that total labour supply in the euro area is projected to fall by 13 % (20 million people) between 2019 and 2070, the Parliament has encouraged the development of adequate legal economic migration channels, most recently in its resolution of 25 November 2021. The Parliament is currently working on the Commission’s proposals to update the EU legal migration acquis, with draft reports being debated in the Committee for Civil Liberties, Justice and Home Affairs in December 2022.

Read this ‘at a glance’ on ‘International Migrants’ Day – 18 December 2022‘ in the Think Tank pages of the European Parliament.

Written by Marc Jütten.

On 15 and 16 November 2022, the Group of Twenty (G20) held the 17th annual summit of its leaders in Bali, Indonesia. This was the first G20 summit since Russia began its war of aggression against Ukraine and the first fully fledged physical leaders’ meeting since the COVID-19 pandemic began.

While Russian President Vladimir Putin did not attend the summit and was represented by Foreign Minister Sergey Lavrov, Ukrainian President Volodymyr Zelenskyy participated by video-conference as a guest.

Condemnation of Russia’s invasion of Ukraine, expressed in the Leaders’ Declaration, dominated the summit, taking place at a time of geopolitical tension, economic slowdown and rising food and energy prices.

The final communiqué also contains a series of economic measures and political commitments relating to the global health architecture, the sustainable energy transition, and the digital transformation – the three priorities of the Indonesian G20 presidency.

On the margins of the G20 summit, a series of meetings took place, notably that between United States (US) President Joe Biden and Chinese President Xi Jinping, and the meeting of the leaders of the G7/NATO member countries.

Another take-away of this year’s summit was that the role of the emerging countries from the Global South is growing. They were decisive in overcoming differences between the major geopolitical players. The Bali Summit was the first in a row of Global South G20 presidencies. The next G20 presidencies will be held by members of the BRICS Group: India in 2023, Brazil in 2024, and then South Africa in 2025. The EU has ‘strategic partnerships’ with all three of them.

This briefing draws on a previous one, published ahead of the 2022 G20 summit, by Angelos Delivorias.

Read the complete briefing on ‘Outcome of the 2022 G20 summit in Bali, Indonesia‘ in the Think Tank pages of the European Parliament.