Enlargement, Ukraine and the Green Deal: The EU faces a decisive moment

The European Union heads into the new political year viewing it as a turning point for the future of the institution. The new term, the last before the next elections to the European Parliament in June 2024, arrives amid a process of political, budgetary, and geographical transformation of the EU with wide-ranging consequences. At a convulsive time, marked by Russia’s war in Ukraine, to which no swift end appears in sight, the EU must decide how to set its course for its next enlargement while addressing the challenge of maintaining the cohesion of a diverse bloc, implementing the European Green Deal and continuing to forge its position as a major geopolitical actor — above all in terms of security and defense — as Ursula von der Leyen’s European Commission (EC) has been attempting to do in the wake of the Covid-19 pandemic and the Russian invasion.

These issues will be the main items on the agenda for the next EU administration. Von Der Leyen, who will deliver her long-awaited annual State of the Union address in Strasbourg on Wednesday, has skillfully avoided clarifying whether she intends to stand for re-election. For now, the German politician has chosen to kept her counsel on the matter, although on Wednesday she will highlight the EC’s progress by underlining that 90% of the political guidelines launched by the commission have been achieved, according to an EU source. Von der Leyen’s will be an “ambitious agenda,” the source added.

On the table are major issues to be resolved, such as the migration and stability pact, the relaxation of fiscal rules, and social regulations. In total, some 200 items are on the agenda — some of them very sensitive politically — that are earmarked to move forward this semester, during the Spanish presidency of the Council of the EU, which will be marked in turn by the attempts to form a government following the early general elections of July 23.

This is not a usual political term, says Arancha González Laya, dean of the Sciences Po Paris School of International Affairs. “We are facing a new European foundational moment, because in some way the foundational tectonic plates are moving and if the EU wants to be that great geopolitical actor it must make profound changes,” she points out. Laya, who served as Spanish Minister of Foreign Affairs between 2020 and 2021, highlights three major areas where the EU must play its cards well: enlargement, economic strength, and security and defense.

“Enlargement must be addressed not only because it was promised [to the candidate countries], but also because if it is not carried out, a zone of insecurity is created around the EU,” González-Laya adds. “The management of enlargement requires political will and the vision of what we want to do and how. Enlargement has to go hand-in-hand with internal reforms and rules that allow the EU to continue to be effective.”

In August, President of the European Council Charles Michel ventured a date for the expansion of the EU: by 2030, the bloc must be ready to welcome new members. Michel was the first EU leader to put a date on enlargement and emphasis was placed on the fact that the debate is no longer about whether this will happen, but when.

Strategic change

The war in Ukraine launched by Russia has brought about a strategic change in EU policy on enlargement, but the member states are also aware that in order to absorb new partners — the Balkan nations have been in the queue for many years and Ukraine and Moldova are also awaiting the opening of talks — not only must candidates follow their own path of reforms to assimilate into the EU, the Union must also implement its own, says a senior European diplomat.

A long process of debate is now open to address how budgets can be designed to admit new members who will be beneficiaries and not contributors, and how to manage the decision-making process in a bloc enlarged to 35 members that now requires unanimous agreements in political areas.

The EC is scheduled to issue an extensive report for member states on Ukraine’s progress in the fulfillment of the measures laid out to start accession negotiations, ranging from the reform of the justice system to the drafting of a law to protect minorities and tough regulations to combat corruption. The issue will be one of the main topics not only at the Third European Political Community Summit in Granada, Spain, next month, but also at the subsequent European Council meeting. The decision on whether to open negotiations will probably be taken at the summit of EU heads of state and government in December, says an EU source, who adds that the process for Ukraine and other applicants is based on merit and that there will be no shortcuts.

“The main challenges facing the EU in the face of the upcoming elections are both internal and external,” says Alberto Alemanno, Jean Monnet Professor of European Union Law and Policy at HEC Paris. “The external ones range from how to maintain EU unity around Ukraine after the Russian invasion: Hungary is pressuring Russia to make concessions and is not in favor of enlargement. The internal ones are serious challenges, albeit less visible, and include finalizing the EU’s Green Deal and ensuring respect for the rule of law throughout the Union.”

Hungary and Poland are contentious over the issue, which has resulted in €63.2 billion ($67.6 billion) of cohesion and recovery plan funds being blocked for their failures to deliver. “As the EU policy space shrinks to the sum of the 27 national electoral systems, the conversation around all these issues remains very much a national affair,” notes Alemanno.

There are also substantial economic challenges. Russia’s war in Ukraine, the Kremlin’s handling of energy as a weapon against the EU over sanctions and its support for Kyiv, and rising interest rates have combined to drain EU budgets. As the bloc tackles the review of the multiannual financial framework — from 2021 to 2027 — the EC has demanded more funds for the common coffers from the member states. An additional €66 billion ($70.8 billion) is required, with major outlays dedicated to Ukraine and migration issues. And the issue, which is now being addressed, is facing resistance on the part of the more frugal partners.

Within the equation of “economic solidity” highlighted by González-Laya lies the question of European competitiveness, of how the Energy Union will be completed, its capacity to invest and how and what its fiscal capacity will be. “It’s not just an ideological question: that the EU has that fiscal capacity to make collective investments in its digital and energy transition are crucial for economic soundness,” says the expert.

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