Before beginning their two-day summit on Thursday and Friday (29-30 June), EU heads of state and government will meet for lunch with Nato chief Jens Stoltenberg, in light of Ukraine’s desire to join the alliance and further cooperation between the bloc and Nato.
Ukraine president Volodymyr Zelensky is expected to join EU leaders via video conference. In their conclusions, EU leaders are expected to reassert their commitment to providing financial and military support to Ukraine.
The internal military crisis seen in Russia the last weekend will be “the elephant in the room” when EU leaders discuss the ongoing war in Ukraine and how to use Russian assets for its reconstruction, an EU official said.
How to use frozen Russian assets is a sensitive and controversial topic full of technicalities, which have raised legal concerns and also worries from the European Central Bank over knock-on effects on international investors.
One of the options currently being discussed is taxing windfall profits from so-called immobilised assets of Russia’s Central Bank. The EU’s goal is to make Russia foot the bill for Ukraine’s losses with the Russian Central Bank assets it keeps in the EU.
Some of those assets, cash and bonds, generate some profits, which would come under these windfall taxes, but the issue raises legal and financial concerns. “We are treading on uncharted territory,” an EU diplomat said on the issue, where the leaders are only expected to give political direction.
On Tuesday, the EU Commission president Ursula von der Leyen announced that the EU would provide Ukraine with €50bn in financial support from the EU budget for the period 2024-27.
But leaders will not discuss the topic due to technicalities which first need to be discussed by EU diplomats and EU ministers, an official said.
Earlier this week, Hungary’s Viktor Orbán said the commission’s proposal for the EU budget is “frivolous” and “unfit for debate”.
“It’s not acceptable that Brussels wants to give €50bn additional aid to Ukraine, while we do not know anything about the use of EU funds sent since the beginning of the war,” he said.
Following the latest tragedy in the Mediterranean where over 600 people drown in Greece, EU leaders are set to discuss migration over dinner, which is expected to run into late Thursday night.
A senior EU official said the leaders will focus on how to “prevent departures” from outside the EU, “tackle root causes of migration” and “avoid having smugglers benefiting from the misery” — but aren’t expected to focus on new search and rescue solutions.
“EU leaders have comfortably been able to all but ignore the tragedy. No EU government wants to have to deal with the thorny question of migration, especially not in the run-up to the European elections next year,” Camino Mortera-Martinez from the Centre for European Reform (CER), a think tank, said.
She added that the recently agreed deal on parts of the EU’s migration and asylum rules “will not stop people from dying in the Mediterranean”, and called it a “face-saving exercise.”
Poland and Hungary have objected to the new agreement, which had been approved by a majority of EU home affairs ministers earlier this month. The deal will require countries to either take in migrants or make a payment for each such relocation they refuse.
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Poland’s prime minister Mateusz Morawiecki said earlier this week that “we [Warsaw] do not agree to any quotas, to any quotas, to any allocations of migrants.”
However, it is not clear if Morawiecki and Orbán would want to raise the issue and object at the summit too. The two leaders have been known for forcing political showdowns at the EU.
“We don’t know how far they will go, try to influence the discussion or try to block us from moving forward,” a senior EU official said on Wednesday.
The political agreement on asylum reforms among EU interior ministers paves the way to start negotiations on the pact with the European Parliament. An EU official suggested Warsaw and Budapest can challenge the decision at the EU’s top court if they were unhappy with it.
The memorandum of understanding between the EU and Tunisia which is currently in the pipeline will also be part of the discussion of EU leaders, especially regarding financial subsidies for Tunisian authorities and concerns over human rights.
China and EU competitiveness
Discussions on China and the EU’s competitiveness in the international arena will kick off talks on Friday.
In draft conclusions, seen by EUobserver, EU leaders refer to China as “simultaneously a partner, a competitor and a systemic rival,” arguing that it is key to achieving a balanced and mutually beneficial trade relationship.
They also call on Beijing to uphold the UN Charter of international law.
“The European Council calls on China to press Russia to stop its war of aggression, and immediately, completely and unconditionally withdraw its troops from Ukraine,” read the draft conclusions.
There will also be an exchange about EU industrial policy and EU countries are set to call on the commission to assess the impact of the US’s Inflation Reduction Act (IRA) on investment conditions in the EU.
This comes amid concerns about regulatory fatigue regarding EU green policies raised by business groups and several member states.