Over the last month, we have brought together our team of experts and prominent policymakers to discuss and debate the key challenges for the EU’s policy agenda for the next three years. It is hard to capture the breadth and range of issues and ideas we covered across the four events, and you will find links to all of them below if you would like to watch them. We are incredibly grateful to Commissioner McGuinness and Minister Santos Silva for their candid and insightful contributions, as well as to our partners Elcano in Madrid, LJ Comms in Paris, Berlin Global Advisors and the Instituto Affari Internazionali in Rome.
Our main conclusion was that, two years into the 2019-2024 EU policy cycle, the Commission and the key players in the Council see momentum as critical, and take a pragmatic perspective that the strategies set out in 2020 manage rather than resolve tensions between member states and between different political interest groups.
We should therefore not expect all files to move at the same pace, but rather for Presidencies and the Commission to be opportunistic in locking down agreements where possible. This is true for the main legislative components of the digital and green transitions, as well as for establishing common European interests with third countries, most notably China and the US. Meanwhile, the likely period of introspection in Berlin after the September election is both a risk and an opportunity for other countries seeking to set the agenda.
Alongside the conference, the GC team have examined different policy areas through two main trends: the digital and climate transitions. You can read the team's insights on the green transition here, the digital transition here and on the effect of the German elections on the balance of power in Brussels here.
You can watch all of the events in full below.
Was Portugal’s push for a social recovery a success?
In conversation with Augusto Santos Silva, Portuguese Foreign Minister and current chair of the general affairs council to review his country’s EU presidency and the EU’s international relationships.
- The biggest achievement of the Portuguese presidency was its emphasis on the EU’s social dimension. While national responsibilities should be preserved with regards to social policies, the need for more coordination at the EU level was stressed. The need to go beyond political commitments and have legally binding commitments was underlined with regards to climate action. Obtaining legally binding targets within the EU’s climate law was seen as a second main achievement of the Portuguese presidency. Despite different starting points and different resources at the disposal of each member state, the EU was able to find consensus.
- Silva pointed to the potential that the current ongoing economic transformation brings to prevent potential public backlash if the costs of the climate transition are not fairly shared. For these green and digital transitions to be successful, they have to create employment, wealth, and wealth redistribution in an inclusive fashion. This social transformation has to go hand in hand with a reindustrialisation of Europe which protects the EU’s autonomy.
- According to Silva, one of the primary purposes of the recovery fund was to reinforce the factors that enable European competition on an open global market, also stressing the importance of a level playing field. Within the EU, it’s essential to invest more in industry, infrastructure, technology and ecosystems which enable innovation and growth. The logic of the recovery fund, which allows national governments and parliaments to put forward their own plans, subject to certain criteria, was seen as an improvement over the last financial crisis when austerity was imposed on Portugal and others.
- While international trade agreements must address all elements of a level playing field, even if these are politically sensitive issues such as forced labour, they cannot turn into all-encompassing bilateral treaties. There is a difficult but necessary balance to be struck between social and environmental objectives, geopolitical concerns, and Europe’s openness. Portuguese advocacy for MERCOSUR has a large geopolitical dimension, as it sees a geopolitical need to engage with the region. If the EU wants to reach its climate objectives, it will need to engage with China, Russia and others, but the EU has to be firm and precise: freedom and human rights cannot be called into question or be ignored.
Europe's post-covid recovery plans
Our team of policy experts explore where the commission, council and parliament have chosen to focus their efforts and the political choices of the next few months in the areas of trade policy and the “twin transitions” of the green and digital agendas.
The future of EU financial services
In conversation with EU financial services commissioner Mairead McGuinness to assess the progress and challenges of delivering Banking Union, Capital Markets Union and a globally-competitive EU financial services sector.
- Developments in financial services are vast and moving quickly, necessitating us to ask the right questions about how financial services will look like in the future. McGuinness has stressed that her mandate puts financial stability first, which means she must ensure there is effective regulation in place which avoids things going wrong in the future. Firms want and need predictability, certainty, and regulation to ensure there is a rulebook and that the reputation of Fintech is not harmed by bad apples.
- On sustainable finance, McGuinness noted that given the EU's high ambition on climate, the EU will need private investments to ensure it can reach its targets. The EU taxonomy is a living document that can be adapted based on new information, and it will be key to invest not only in what is green now but also in the future. As the EU has set ambitious targets, the EU cannot lower its standards for a global agreement. Still, McGuinness hoped that international partners would emulate aspects of the EU approach as a global push for sustainable finance is essential.
- The Capital Markets Union (CMU) remains a work in progress, backed by a general wish to work on it from across the EU. McGuinness expressed hope that the recent pandemic might accelerate developments and stressed that work must go beyond finance ministers if real progress is to be made. For example, one barrier to the CMU remains that insolvency is not dealt with harmoniously across the member states, which requires EU justice ministers to agree on reform.
- Recent developments, such as Brexit and the pandemic, have made looking at the implications of "open strategic autonomy" on financial services even more important. Especially the resiliency of financial services infrastructure deserves close attention, as financial centres will likely be spread across the EU in the future. McGuinness stressed that an inward-looking Europe does not fit with where the EU sees itself in the future and that the key lies in being open to the rest of the world, but not naïve.
National politics and EU priorities
Panel discussion with Nicoletta Pirozzi, Head of Programme on the EU at the Istituto Affari Internazionali; Charles Powell, Director of the Elcano Royal Institute; Guillaume Albert, Director of International Coordination at LJ Com; Martin Kobler, Senior Advisor at Berlin Global Advisors; moderated by Ana Martínez, to discuss key events and priorities in Germany, France, Spain and Italy and how these can influence the EU’s agenda