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Are we running towards a Brexit cliff-edge?

At the time of writing this article, it is a little less than 402 days until the United Kingdom is set to leave the European Union on 29 March 2019. While negotiators from both sides remain committed to find an amicable and orderly end to the UK’s 42-year relationship with the European Union, recent statements from Chief EU negotiator Michel Barnier raise the possibility of Prime Minister Theresa May’s government steering towards a Brexit cliff.

Barnier: Brexit transition period ‘not a given’

In November 2017, in a race to have EU Heads of State and Government agree that ‘sufficient progress’ on the three Brexit key issues had been reached, the UK’s Brexit Secretary David Davis agreed to far-reaching provisions on citizens’ rights, the Good-Friday Agreement and the Irish border as well as a Brexit divorce bill of up to €65bn. EU diplomats are now working with their UK counterparts to legally enshrine the sometimes ambiguous EU-UK Joint Report on Brexit into a Withdrawal Agreement before the next European Council Summit on 22-23 March.  

While all parties have, by now, accepted the need for a transition period to smoothen impact on both UK and EU businesses and citizens post 29 March 2019, the negotiations on its scope will depend on two crucial steps: reaching agreement on legally enshrining the Joint Report and endorsement by the EU Heads of State and Government on the Commission’s renewed negotiating mandate.

New phase, old conflicts

While there are no objections expected on the latter step, it is feared that no legal agreement will be ready in time for EU leaders to decide on. According to an update provided by Mr. Barnier in early February, progress on the translation of the Joint Report into a legal agreement continues to be held up. As Mr. Barnier voiced his surprise at the UK government’s unwillingness to legally enshrine what it agreed to late last year, he warned Theresa May’s government that a Brexit transition period was ‘not a given’.

However, as it was anticipated following the largely unambiguous wording of December’s Joint Report, any translation into a legal Withdrawal Agreement faces the enormous obstacles of Northern Ireland Good Friday Agreement, the overall question of the Irish border, citizens’ rights and the governance provisions of the transition period.

Moreover, according to the EU’s draft negotiating guidelines, any transition period would require the UK to commit to a whole range of obligations while losing its decision-making powers. These requirements prove, yet again, to test the red lines set out by Theresa May in her Lancaster House and Florence speeches.

Are we steering towards a Brexit cliff-edge?

To ensure a smooth progression to Phase 2, which will include the discussions on the UK’s future relationship with the EU, a finalized legal Withdrawal Agreement has to be ready latest by 20 March for the European Council to approve the revised negotiating mandate at its March Council Summit. Failure to agree on the legal terms would be a near catastrophe; it would inevitably delay any leaders’ endorsement until the next European Council on 28-29 June, thus giving Michel Barnier and David Davis a mere four months to set out a post-Brexit relationship and avert a potential Brexit cliff-edge before the European Council and European Parliament will want to see and assess the final Withdrawal Agreement on October. 

EU elections at a glance

While the European Parliament elections are still more than a year away, the elections, scheduled for 23-26 May 2019, are about to bring yet another challenge for the EU institutions.

Pan-European lists: off the table for 2019

Following the United Kingdom’s departure from the European Union, the UK will no longer be represented in any decision-making body of the Union. While this directly applies to its position in the European Council, Council of the EU and the Commission, it arguably will have the greatest impact on the composition of the European Parliament. Currently, 79 of its 751 seats are held by UK MEPs from different political families.

Some MEPs proposed that, following Brexit, 46 of the 79 seats should be re-allocated to so-called pan-European lists, which would have enabled European citizens to directly vote for their preferred lead candidate, irrespective of nationalities.

The concept of the pan-European lists is not new; however, it has been heavily attacked by MEPs who feared that these seats would be filled by super-politicians without a clear constituency. As such pan-European MEPs would often represent millions of citizens, they could not be regarded as offering any real value for citizens.

In a contested vote in the European Parliament in early February, the proposal was eventually defeated, and as a result, the European Parliament will shrink from 751 to 705 members in the new term.

French President Emmanuel Macron, who was one of the main advocates of the pan-Euorpean lists, views them as “contributing to strengthening European democracy by creating debates on European challenges and not strictly national ones during EU elections”. Macron and other European political groups, including the liberal ALDE and the Greens in the European Parliament, say pan-European lists would help face down Eurosceptic parties that have seen strong support in recent years.

On the other hand, smaller Member States, fearing that pan-European lists would be dominated by Germany, France or Italy, are strongly opposing the idea.

The Spitzenkandidat

While European citizens will directly elect Members of the European Parliament in May 2019, they will also, indirectly, vote on a new President of the European Commission. The process, nicknamed as the ‘Spitzenkandidaten process’ was first introduced in the 2014 EU elections in a push for increased transparency and democratic accountability in the EU institutions.

Through the Spitzenkandidat – or lead candidate process – European political parties designate one candidate each for the post of president. The candidate of the political group that will have the most elected members in the next European Parliament will also have the right to nominate the next president of the European Commission.

While several heads of EU Member States – including Mr. Macron -voiced their concerns against this process, MEPs overwhelmingly supported it in a recent Resolution on the issue.  

The EP vs. Council

Both the issue of the pan-European lists and the Spitzenkadidat process are crucial debates which sparks conflict not only among the Member States as well as among the Members of the European Parliament but also between the Council and the European Parliament.

The EU is progressing toward a more direct, transparent and simple election procedure. The elections in 2019 promise interesting developments and the race for the new European Commission President position will certainly be a tough one.

2018 will be crunch time for Brexit negotiations

The chessboard is being set for round two of Brexit negotiations. 2018 will be make-or-break time for the United Kingdom’s (UK) post-Brexit relationship with the European Union (EU).

Following European leaders’ decision at December’s European Council Summit that ‘sufficient progress’ had been reached on the three cornerstones of any future relationship with the UK – financial commitments, citizens’ rights and on Northern Ireland – EU diplomats have been working to formalize the Phase 1 withdrawal agreement. For the EU-side, the aim is to legally bind the UK to the commitments it promised to reach for ‘sufficient progress’ and prevent any backsliding by the UK on key issues such as workers’ rights or its commitment to pay its share of the EU’s multiannual budget. UK negotiators, meanwhile, are looking to begin the formal negotiations on a transition period and future trade relations with the bloc.

Negotiating directives to set out Phase 2

EU27 Ministers for European Affairs are expected to adopt a new set of negotiating directives for the Phase 2 of Brexit negotiations at their next meeting, which will in particular set out the bloc’s position on a potential transition period. According to statements made by EU Chief negotiator Michel Barnier, such a transition period could last until 31 December 2020 in order to correspond to the end of the EU’s current budget.

Specifically, in order for Mr. Barnier to agree to any transition period, the directives should require that:

  • the transition period will cover the EU’s acquis
  • the UK will no longer participate in the decision-making procedures of the EU institutions
  • the transitional arrangements must be clearly defined and precisely limited in time
  • all existing EU regulatory, budgetary, supervisory, judiciary and enforcement instruments and structures will also apply, including the competence of the Court of Justice of the European Union

In short, for the EU to agree to any transition period following the Brexit deadline on 29 March 2019, the UK will have to commit to continue accepting all existing legislation, transpose new legislation into UK law and accept the supremacy of the European Court of Justice; all without having a say in the drafting of the rules.

Norway-style agreement or Canada-style Free Trade Agreement

A key factor for the upcoming Phase 2 negotiations will be the eventual trade and partnership relationship the UK will be seeking with the EU. As the UK’s position on its post-Brexit global trade ambitions are somewhat contradictory, it remains one of the key unknowns for 2018. The UK continues to stress its plans to continue a trading relationship as close to the status quo as possible, especially one which ensures full access rights to the EU’s Single Market by London-based financial firms. However, according to an analysis by the European Commission, the UK’s red lines such as restrictions on the EU’s four freedoms and an independent trade policy, are incompatible with existing non-EU Single Market access schemes such as a Norway-style agreement.

"Brexit

Should the UK stick to its red lines, EU diplomats warn that the only remaining solution lies in a Canada style free trade agreement. The comprehensive and economic trade agreement (CETA) is, so far, the most comprehensive and ambitious agreement the EU has reached with any third country. However, it, in no way, is comparable with full market access.

Potential Brexit lifelines? From Article 49 to a new referendum

While the UK government continues to stress that “Brexit means Brexit” and that the UK was to leave the EU’s Single Market and Customs Union, in recent weeks several political heavyweights offered the potential for Brexit lifelines. While former UKIP leader Nigel Farage, in an interview on UK television, floated the potential for a second referendum on 11 January, European Council President Donald Tusk reiterated that it was not too late for the UK to reverse its decision. At January’s European Parliament Plenary in Strasbourg, European Commission President Jean-Claude Junker even went as far as suggesting that the UK could rejoin the Union under Article 49 of the Treaty of Lisbon.

In any case, should the UK continue on its path to Brexit, EU and UK negotiators have to maximize the limited time at hand. Negotiators expect that, in order to prevent a cliff edge and massive disruption to businesses and citizens, a final, or near-final, deal has to be ready by the autumn of 2018 in order to give sufficient scrutiny time to the European Parliament and Council. 

2018: Busy, but crucial for European policymakers

Only a few days young, 2018 is set to be a crucial year in European politics. In 2018, European businesses and citizens will see some of the most revolutionary pieces of legislation coming into place. Moreover, with Brussels facing a changing international and environmental landscape, 2018 will see European policymakers hash out core pieces of legislation shaping the European Union for years and decades to come. In view of the European Parliament elections in June 2019, Members of the European Parliament will also be looking to finalize key legislation before election campaigns kick off towards the end of the year.

New EU-legislation: significant changes for businesses

With 2018 marking a number of key EU legislations entering into force, the year will see significant changes to how businesses and different sectors of the European economy operate.

Effective 3 January, the revised Markets in Financial Instruments Directive, short MiFID2, aims to strengthen investor protections and improve how functioning of financial markets operate. The new Directive is a direct response to the 2007 financial crisis and will affect everyone engaged in the dealing and processing of financial instruments, from business and operating models, systems and data, to data, people and processes. From mid-January onwards, the revised Payment Services Directive, PSD2, will enter into force, aiming to better integrate, increase competition and lower costs of electronic payments in the internal market.

Member States and businesses also have until 25 May to transpose the EU’s new comprehensive General Data Protection Regulation, GDPR, before it enters into force. Businesses that won’t comply correctly with customer information will face heavy fines. The GDPR will also provide European citizens with the legal right to data portability, transmitting data from one digital service provider to another.

Brexit phase-2 negotiations to deal with future trade relationship

Formal negotiations on the Phase-2 Brexit negotiations on the future relationship between the EU and Britain are expected to start following the next European Council meeting in March 2018. Major stumbling blocks during Phase-2 will, among others, include negotiations on the future trading relationship, a proposed transition period, intelligence and security relationship as well as air, road and water transport. Recently, the EU’s chief Brexit negotiator Michel Barnier argued that the UK’s transition period should last no longer than the end of 2020, to coincide with the EU’s multi-annual budget. Both parties need to reach an agreement on a Brexit deal by October 2018 to allow the European Council and Parliament to scrutinize and vote on the agreement before the March 2019 exit deadline.

Sustainability and Circular Economy

2018 will see European legislators continue to deliver on their objectives under the Paris climate agreement. As such, a continued emphasis will lie on delivering the EU’s Energy Union in an effort to contribute to a clean energy transition in 2030. The Clean Energy Package, currently under discussion, includes new regulations for energy efficiency and the re-design of the electricity market.

As such, transforming Europe’s economy into a circular economy will also remain a priority for legislators. While co-legislators will approve the Union’s new waste management policies in early 2018, the European Commission will launch a set of legislative proposals on plastics in the circular economy in January.

Furthermore, legislators will also begin their work on the European Commission’s recent Clean Mobility Package, which strive to reduce vehicle CO2 emissions and speed up the uptake of e-mobility across Europe.

Digital Single Market

On the Digital Single Market, Bulgaria and Austria, the 2018 rotating Council of the EU presidencies, will aim to deliver on the yet outstanding legislative proposals. Both Council presidencies are expected to lead discussions on key legislative proposals such as the upcoming e-Privacy Regulation, the free flow of data, audiovisual and broadcasting services, copyright, and VAT rules for cross-border trade. 

Habemus ‘sufficient progress’?

When in the morning of 8 December, the news broke that a deal had been brokered between the governments of the Republic of Ireland and the United Kingdom on the Northern Irish border, it ended a week of tense negotiations which threatened to unravel the negotiating goodwill built up over months. How did we get here, and what does the agreement mean for the remainder of Brexit divorce negotiations?

Sufficient progress

Following UK Prime Minister Theresa May’s notification of Article 50 to the European Council on 29 March 2017, EU Heads of State and Government, on 29 April, approved strict negotiating guidelines for the European Commission and its Chief negotiator Michel Barnier. In their negotiating guidelines, leaders committed to a two-phased approach: negotiations on the UK’s future relationship with the EU (including on trade, single market access, aviation rules) could only commence once the European Council had determined that ‘sufficient progress’ had been made during Mr. Barnier’s negotiations with UK Brexit Secretary David Davis on settling the UK’s remaining financial obligations to the EU budget and agencies, ensuring EU and UK citizens’ rights after the UK’s withdrawal and on ensuring the continued support for the Northern Irish peace process and Good Friday Agreement. On the latter, specifically, that means avoiding a hard border on the island of Ireland.

Contentious Irish border

Following ‘sufficient progress’ agreements reached on citizens’ rights and the ‘Brexit bill’ by late November, the UK’s only future land border with the European Union turned out to be the most contentious of the negotiating topics. While neither party is seeking a hard border on the island of Ireland, the UK’s decision to leave the EU’s single market and customs union, in most opinions cannot be compatible with a border- and frictionless arrangement. Considering Northern Ireland’s contentious political set-up, an agreement would have to comply with both, the Good Friday Agreement and receive the backing of Northern Irish political parties; namely the DUP, which props up Theresa May’s government.

Full regulatory alignment

As such, negotiators had to find a special solution for Northern Ireland. Following a draft agreement on 4 December, which failed to receive the DUP’s endorsement, the revised final agreement was extended to include provisions that, in the absence of agreed solutions, Northern Ireland will maintain ‘full regulatory alignment’ with the rules of the single market and customs union (Art.49) while equally maintaining ‘unfettered access’ to the UK’s internal market without regulatory divergence.

Habemus ‘sufficient progress’?

At their last European Council of the year on 14-15 December, EU Heads of State and Government are expected to adopt conclusions that sufficient progress had been made in order to progress to the discussions on the future relationship between the partners.

However, following UK Brexit Secretary David Davis’ comments following the agreement, that the deal was not legally binding but rather aspirational, EU Ministers included specific wording that progress on future Brexit talks would be suspended if the UK did not stand by its commitments and include all provisions of the Brexit deal in its (EU) Withdrawal Bill.

With the European Council summit certain to confirm sufficient progress, negotiations on post-Brexit transitional period and future relationship are set to begin by March 2019 at the earliest.  

State of the Union 2017 – Towards ‘a Union of states and a Union of citizens’

On Wednesday 13 September, Jean-Claude Juncker, President of the European Commission, gave his annual State of the Union address to Members of the European Parliament in Strasbourg. In his speech, Mr. Junker set the stage for his vision for deeper European cooperation and of EU institutional change without the messy and long-wielding need for Treaty change. Dr2 Consultants broke down the key points for you:

A single European institutional President

A key aspect of Juncker’s speech focused on his vision of using the UK’s departure in 2019 to make the EU more democratic, streamlined and easier to understand for its citizens. In his remarkable proposal, he advocated to reduce the five different EU Presidencies to only three by placing responsibility for the eurozone with a Commission vice-president, effectively acting as an EU economics and finance minister, and merging the Presidencies of the European Commission and of the Council. According to the plan, the new President would be elected in a democratic manner with a full election campaign. While many pro-EU listeners welcomed Juncker’s proposals, the proposal hit immidiate restistance from a number of Member States considering it a powergrab and attempt of undermining their role by the Commission.

“Europe would function better if we were to merge the presidents of the European Commission and the European Council,” Juncker said, adding: “Europe would be easier to understand if one captain was steering the ship. Having a single president would better reflect the true nature of our European Union as both a union of states and a union of citizens.”

The 6th scenario on the Future of Europe

Following the Commission’s presentation of 5 scenarios on the future of the European Union in light of the United Kingdom’s exit decision, Jean-Claude Juncker used the State of the Union speech to the European Parliament to present his vision of a 6th scenario in which Europe would be a union of equality and equality of opportunity, between its members, big and small, east or west in which individual citizens would not be treated as second-class citizens based on their nationality or residency. In this Union, he reiterated, there could not be second class workers who do the same work in the same place, but do not receive the same remuneration – a clear reference to the stalled negotiations for the revision of the Posted Workers Directive. To ensure the above, Juncker proposed a new European supervisory and implementation authority on social rules to make sure that the single market was based on equality and EU social rules were enforced.

Furthermore, Juncker stressed that in a single market there could not be second class consumers either and that he could not accept that citizens from Eastern and central-European countries were buying products under the same packaging as Western Europeans which had less fish in fish fingers, less meat in meat products, or less cocoa in chocolate.

Reinforcing Europe’s trade relationships

While Europe is open to trade, Juncker, in his speech, insisted there had to be reciprocity with the EU’s trade relations providing jobs, new opportunities for large and small businesses in the European economy. He insisted that Europe is an attractive economy, which this year concluded its trade agreement with Canada and, last month, a political agreement on trade with Japan. Looking ahead to 2018, the Commission President hoped to conclude the agreement with Mexico and South America’s Mercosur, together with starting negotiations with Australia and New Zealand. In light of critics of free trade and the EU’s trade strategy, Juncker insisted that the EU was not naïve supporter of free trade, but supported its strategic interests and our collective security.

Chinese investment: EU divided once again

The EU is slowly but steadily climbing out of economic crisis: economic growth in Europe is expected to continue at a moderate pace in the coming period. In order to sustain this, the EU needs, amongst other things, free trade agreements (FTA) with various countries and more foreign direct investment (FDI). However, the EU seems to be divided on the issue of investment from China. What position should the EU take?

Two sides of the same coin

With its many solid brands and well known manufacturing technologies, Germany is a top European destination for Chinese investors. About 17% of China’s foreign investments since 2010 targeted German industries. Earlier this year, the acquisition of Kuka, an innovative robot manufacturer, by Midea, a Chinese appliance maker firm for $5 billion provoked controversial reactions in Germany. The workforce of Kuka, along with some government and European representatives (including Günther Oettinger, a close political ally of Chancellor Angela Merkel and the EU’s digital commissioner), expressed their objections to the rapid Chinese expansion in the industry. More recently, Germany, in an unexpected move, withdrew approval for the acquisition of the chip equipment maker Aixtron by a group of Chinese investors. In general, the Germans feel they are being taken advantage of despite reaping certain benefits from China’s investments in German jobs and R&D funding. State-sponsored Chinese company takeovers of German companies and others often provide unfair financing advantages that make it difficult for European or American counterparts to come up with better or even similar offers. Moreover, the Chinese government has strict foreign investment regulations that prevent foreign companies from taking over Chinese companies, or require they form joint ventures with Chinese companies. Chinese Premier Li Keqiang reassured German Chancellor Angela Merkel at a press conference in Beijing last June that China had no intention of starting a trade war that would not benefit anyone.

Nevertheless, conflict has been growing in the background and is expected to linger for some time to come. Contrary to the German reservations, a number of Central and Eastern EU countries see Chinese investment as a silver bullet for their staggering economies. Especially after the economic crisis in 2009, Chinese enterprises have headed towards this area to invest. The UK sees FDI from China as an opportunity as well. After the Brexit vote earlier this year, it is trying to woo Chinese investors. Prime Minister May said: “I am determined that as we leave the European Union, we build a truly global Britain that is open for business. As we take the next step in this golden era of relations between the UK and China, I am excited about the opportunities for expanding trade and investment between our two countries.”

Pragmatic Approach?

Although Germany withdrew approval for the acquisition of German company Aixtron recently, the ability to definitely block the merger is limited. Under Germany’s Foreign Trade Act, the government may only intervene if an investment threatens national security. Any proposal to change the definition of threat will have to be implemented at the European level. Given that the EU is composed of countries with different economic situations and motivations, EU Member States do not have a common approach toward Chinese investment expansion. Hence, the European Commission is not expected to support any change to the definition.  The European Commission has other good reasons to take this approach. With Euroscepticism on the rise, the EU will have to deliver. It has to show it is able to improve the livelihoods off all citizens and voters residing in the EU. Moreover, the Chinese could invest their money elsewhere. There is a severe competition over FDI going on between trade blocs worldwide. According to the Global Enabling Trade Report 2016 the Association of Southeast Asian Nations (ASEAN) is currently a more accessible market for trading goods than either the EU or United States. In short, the EU simply needs the money. Hence, it would be best off being pragmatic on the Chinese investment issue.

US Election Analysis- Changes ahead for the US and Global Political System

Last night, after almost two years of campaigning, the US finally voted to elect its next president. By voting for Trump for the office of President, while returning Republican majorities in both the House and the Senate, the American electorate has handed control of all three key US decision-making bodies to the Republican Party, leaving the party of incumbent President Barack Obama at the margins of power.

Trump’s Path to Victory

Trump had trailed in the pre-election polls, and was widely considered an underdog in terms of the all-important US electoral college system, which awards electoral votes on a winner-take-all basis by state. But he stunned such expectations by sweeping many of the swing states, including the crucial state of Florida. Here, despite the Clinton campaign’s successful mobilisation of Hispanic voters, Trump was able to narrowly triumph thanks to impressive turnout in the more conservative pan-handle region of the state.

However, he went further still, eating into Clinton’s so-called ‘firewall’ of blue-leaning states, which had been expected to insulate her against underperformance in the swing states. Trump was able to build up huge margins amongst white blue collar workers in traditionally Democratic states in the industrial mid-west, such as Wisconsin and Pennsylvania, and thereby add them to his column. It was these victories that propelled Trump over the finish line of 270 electoral votes. At the time of writing, Trump also had a lead in a further traditionally Democratic state, Michigan, although the final result was not clear.

Consequences for Europe

For Europe, two particular issues present themselves in Trump’s electoral platform. Firstly, the issue of trade, which Trump has made a centrepiece of his campaign, promising to rip up the US’ existing trade deals. Trump’s anti-trade rhetoric appears to signal tough times ahead for the negotiation of the TTIP, the long-pursued trade deal between the US and the EU, which is already mired in difficulties.

A further issue presented by Trump’s Presidency for Europe could be the issue of security. Trump has repeatedly questioned the validity of NATO in the course of the campaign, while also refusing to rule out the use of nuclear weapons in Europe. In the weeks to come the foreign policy priorities of Trump will be outlined in more detail. 

A whole new Trump?

In his victory speech, now President-elect Trump sought to portray himself in a unifying light, in a way that stood in contrast to his highly divisive campaign. He promised to be a President ‘for all Americans,’ which marked a contrast with his rhetoric during the campaign. He also extended kind words to Clinton, to whom he said America owed ‘a debt of gratitude.’ Whether his unifying approach will last will become apparent in the weeks to come. 

Is this the long awaited advent of sustainable living?

According to reports in German magazine “Der Spiegel” last month, Germany plans to ban the sale of internal combustion engines by 2030. In addition, the country’s Bundesrat, in a resolution, calls on the European Commission to pass directives assuring that only emission-free vehicles will be approved across the EU from 2030 and to “review the current practices of taxation and dues” aimed at stimulating the purchase of zero-emission vehicles. The German proposal comes on close heels to similar proposals in the Netherlands, Norway and Switzerland.

The move to carbon neutrality comes along a global push by governments and, businesses and society towards sustainable mobility and the reduction of the emission of greenhouse gases to tackle the growing climate and health concerns.

In the quest to fight global CO2 emission, 2016 may have marked a significant change for moving towards sustainability goals with the ratification of the Paris Climate Deal by the European Union in October and continued investment in renewable energy. With the public becoming increasingly aware of climate friendly alternatives and combined with falling prices and better value-for-money deals, a shift can also be observed in the behavior of European industry.

For instance, according to studies, in the year following the publication of Volkswagen’s diesel scandal, sales of diesel cars in Europe dropped below 50% due to 5 – 12 percent slumps in key European markets such as Germany, France and the Netherlands. The industry’s aim to lose its carbon emitting stigma could best be observed at the esteemed Paris Auto Show where every major car brand presented Electric Vehicles. In addition, due to their rapidly falling production costs, availability and substantial state subsidies, the solar industry is enjoying an, at least, equally high success.

After years of doubting the success of engaging the average consumer into investing into carbon-neutral goods, affordable alternative energy and transport methods are finally becoming increasingly available to the end-consumer. This, paired with legislation encouraging the reduction of carbon emissions by Industry and civil society, may finally bring the long awaited advent of sustainable living. 

Battles emerge over top EU jobs

Disagreements about who should occupy the key positions at the top of the EU institutions risk undermining the stability of the EU political system. The key issue of that of the presidency of the European Parliament. The current president, Martin Schulz’s term comes to an end in January, and it had previously been agreed that he would stand down at this point, in order to allow a candidate from the centre-right European People’s Party (EPP) to emerge. However, now Schulz’s centre-left Socialists and Democrats (S&D) group are indicating that they will seek to secure his re-election. The conflict is grounded in the agreement made between the two groups after the last European Parliament elections in 2014, and embraces a further disagreement about who should lead another EU institution, the European Council.

The Battle

In the aftermath of the European elections of 2014, the EPP and S&D made an agreement that made Jean-Claude Juncker, then the EPP candidate, President of the European Commission. In return, Schulz, who had been the S&D candidate for the Commission Presidency, was made President of the European Parliament, for the first two and a half years of the 2014-9 term. Meanwhile, Donald Tusk, also from the EPP, was made President of the European Council. According to Gianni Pittella, the leader of the S&D in the European Parliament, a component of the deal was that Tusk would be replaced by a socialist at the same time as Schulz’s term came to an end. However, others have questioned whether this was included. Nonetheless, as there is no sign of Tusk being replaced, the S&D group is refusing to concede the Parliamentary Presidency, arguing that this would give the EPP control of all three permanent institutional presidencies. Thus there is a very real possibility of a contested vote on the issue in January.

A Precarious Stability

The battle has underlined the extent to which political stability in the EU is dependent on a consensus amongst political groups, given that no single group has anything approaching a majority in the European Parliament. The growth of Eurosceptic groups in recent European Parliament elections has made the alliance between the largest pro-European groups more important than ever. A breakdown of goodwill could thus be damaging to the effectiveness of the European Parliament, and thus of the EU political system as a whole. However, the disruption of the consensus in EU politics may not be an exclusively bad thing; EU leaders are often criticised for being too cosy, as have been evidenced by the closeness of the relationship between Schulz and his former opponent Juncker. 

It remains to be seen who will prevail in January, or whether an amicable solution to the question will emerge. However, the battle itself exposes the relative fragility of the EU’s consensus-based system.