The European Union presidency has now been passed on from Ireland to Lithuania. A six-month EU presidency can only achieve so much, especially in view of the changes brought about by the Lisbon Treaty, but a number of important decisions were taken and significant agreements were reached under the Irish presidency.
Deals were reached on the EU’s budget for the period 2014 to 2020, a banking union, ‘Two Pack’ economic governance measures aimed at strengthening the European Commission’s surveillance of national budgets and an €8 billion Youth Guarantee scheme. Also, EU-Japan trade negotiations got underway and a negotiating mandate was agreed to for a historic EU-US trade agreement.
The last six months were not particularly successful for EU diplomacy, and Brussels seemed to be at a loss at how to deal with the Syrian crisis (it eventually lifted its arms embargo) and the turmoil in Egypt.
Furthermore, the EU was largely absent from trying to revive the Middle East peace process, leaving the Americans to do the bulk of the work.
Lithuania, which took over from Ireland on July 1, has declared the main objectives of its EU presidency to be building a true economic and monetary union; returning economic growth and fighting unemployment; opening up the common services market; fighting climate change; and opening up energy markets.
The focus of this EU presidency is therefore very much oriented towards Europe’s economies, as well as energy and climate change. Given the economic situation, this is certainly understandable, and the three policy areas are very much connected.
Lithuania is not expected to make irregular immigration a priority over the next six months (much to Malta’s obvious dismay), and the 45 page ‘Programme of the Lithuanian Presidency of the Council of the European Union’ contains one short paragraph (about 150 words) on the subject.
It says that in the field of illegal migration Lithuania “will continue to work with the EU action plan regarding the pressure of migration and plans to initiate discussions with the Council”. There is no mention at all of burden-sharing, which never really took off within the EU.
Lithuania is also to focus somewhat on the closer integration of the EU and its eastern partners, and will host the Eastern Partnership Summit in November 2013. The promotion of free trade between the EU and a number of its strategic partners, namely the US, Japan and Canada, is also a priority of the Lithuanian presidency.
In fact, the first major event of the Lithuania’s EU presidency was the launching of the first round of the EU-US trade talks two weeks ago in Washington DC. Such a trade deal, if concluded, is expected to significantly boost economic growth on both sides of the Atlantic, help create hundreds of thousands of jobs and pump billions of euros into the economies of the EU and US.
Trade and services between the two sides is already worth €2 billion every day, but this deal would create further growth and opportunities by eliminating red tape and tariffs.
Talks on an EU-Japan free trade agreement are to take place in October; Japan is the EU’s second biggest trading partner in Asia after China and such an agreement could increase EU GDP by 0.6 per cent and boost EU exports to Japan by a third. 400,000 additional jobs are expected in the EU alone as a result of this deal.
Negotiations for an EU-Canada free trade deal have almost been concluded; Canada is the EU’s 11th most important trading partner while the EU is Canada’s second-largest trading partner, after the US. The value of trade between the two sides is worth €61.7 billion and it is estimated that a comprehensive trade agreement could increase trade by another €25.7 billion.
A six-month EU presidency can only achieve so much
The Lithuanian presidency is also expected to try and broker some sort of deal over the admission of Bulgaria and Romania to the Schengen Agreement. Their admission was rejected by the European Council last March after Germany threatened to veto the deal.
However, it is doubtful any progress will be made in this regard as Germany and a number of other member states believe that Bulgaria and Romania do not meet the criteria to join the 26-member, visa-free Schengen zone.
“There are some areas of weakness, such as in the functionality of the judicial system, that prevents us from saying: ‘abolish the borders’. We have to look at the whole picture in the country as it regards organised crime, the functionality of the judicial system and corruption,” German Interior Minister Hans-Peter Friedrich had told his EU counterparts last March.
The EU now consists of 28 member states after Croatia joined the bloc on July 1, a very welcome sign that Europe’s founding principles are as relevant and appealing today as they were when they were first established. Despite Europe’s problems, therefore, the EU’s attractiveness remains high.
Croatia’s EU entry (it is the second former Yugoslav Republic to join the EU, after Slovenia) will contribute towards regional stability, help consolidate Croatia’s democracy and act as a catalyst for economic reform and sound public finances. Croatia, however, is not yet joining the euro, and will only do so when it adheres to the convergence criteria for the single currency.
Croatia’s membership of the EU should also encourage other new hopefuls waiting in the wings, such as Serbia, Montenegro and Bosnia to focus on carrying out the necessary economic and political reforms that will make them eligible to join the bloc.
The EU has also officially approved Latvia as the 18th member of the eurozone and the Baltic state will adopt the euro on January 1, 2014.
This also shows that despite all the problems associated with the euro, membership of the single currency is still sought after by many European countries.
Latvia is also an example of a country, an EU member state, which managed to pull its socks up and introduce economic reforms after it was engulfed by the world financial crisis in 2008.
When its real estate bubble burst it faced massive economic problems leading to a €7.5 billion bailout by the EU and the IMF. Today, after introducing austerity measures, Latvia boasts the EU’s highest economic growth rate and its deficit and debt levels are among the lowest in the bloc.
Besides focusing on economic good governance it is also important for the EU to continue to play a leading role in internatioal affairs.
One hopes that over the next six months the EU – both the presidency as well as the High Representative for Foreign Affairs and Security Policy – will make more of an effort to contribute to peace, stability and democracy in the Middle East, particularly in Syria and Egypt and the Palestinian-Israeli peace process. That region,as well as Iran’s nuclear aspirations, require high level EU diplomacy.