Outcome of the special European Council meeting of 30-31 May 2022

Written by Suzana Anghel and Rebecca Torpey.

Russia’s continuing war on Ukraine was central to the EU leaders’ debates at their special meeting on 30-31 May 2022. Closely linked to Ukraine, food security, security and defence, and energy were also high on the agenda. EU leaders approved €9 billion in special macro-financial assistance for Ukraine and agreed on a sixth package of sanctions against Russia, including a ban on seaborne oil (two-thirds of imports) with a temporary exemption for pipeline oil imports. On food security, the European Council strongly condemned the impact of Russia’s war on the global food supply chain and focused on ways to coordinate with international partners to ensure the global security of food supplies. In security and defence, the focus was on consolidation, rather than new strategic guidelines. EU leaders examined, but did not endorse, the ‘investment gaps’ analysis prepared, at their request, by the European Commission and the High Representative/Vice President of the Commission (HR/VP), Josep Borrell. They called on the Council to take forward work on specific items, not least developing a ‘joint EU defence strategic programming and procurement’ function. On energy, the EU leaders took stock of progress made since their Versailles meeting, on phasing out the EU’s dependence on Russian fossil fuels. After presentation of the REPowerEU plan, they agreed that work should continue on supply diversification, renewables, energy efficiency, interconnection, infrastructure and preparedness, including gas storage, price affordability and electricity market optimisation. The President of Cyprus, Nikos Anastasiades, briefed his colleagues on Turkey’s assertive behaviour in the area of Varosha.

1. Background

The European Council meeting began with the customary address by the President of the European Parliament, Roberta Metsola. She stressed that ‘Europe needs our leadership’, as the EU’s joint action ‘in the next months will define our common future’, and emphasised that the Parliament was ready to ‘constructively play its part’. The President of the European Council, Charles Michel, did not submit an updated Leaders’ Agenda, although the latest version expired in March 2022.

2. European Council meeting

Ukraine

The European Council condemned Russia’s invasion of Ukraine once again, denouncing the suffering and destruction inflicted on Ukraine and its population, and calling on Russia to allow safe passage, humanitarian assistance and the return of Ukrainians forcibly deported. EU leaders recalled Ukraine’s right to self-defence, renewed their call for an immediate and unconditional withdrawal of Russian troops and equipment from the ‘entire territory of Ukraine within its internationally recognised borders’, and praised the ‘courage and determination’ of the Ukrainians to ‘fight to defend the sovereignty, territorial integrity and freedom of their country’. They confirmed the Union’s support and cooperation with partners, with a view to building ‘a peaceful, democratic and prosperous future’ for Ukraine. Along with sanctions, the most debated items were international justice, the EU’s support for Ukraine, and the war’s impact on neighbouring countries. Addressing the European Council, the President of Ukraine, Volodymyr Zelenskyy, stressed the importance of European unity, pointed to the loss of lives, pleaded for the adoption of new sanctions and underlined that ‘there can be no compromises at the expense of (Ukraine’s) territorial integrity’.

Sanctions against Russia

EU leaders agreed on a sixth package of sanctions, expanding the list of Russian individuals and entities subject to sanctions (i.e. banks, military and religious officials, and ‘Russian state outlets‘ spreading disinformation). After a heated debate, they agreed to ban oil imports, with the exception of pipeline oil. In doing so, they stood by the principles outlined – no indirect funding of the war, phasing out of EU dependence on Russian fossil fuels, and economic isolation of Russia so that it ends the war. Charles Michel stressed that the agreement covered ‘more than two-thirds of oil imports from Russia, cutting a huge source of financing for its war machine’. European Commission President Ursula von der Leyen indicated that the aim was to progressively target 90 % of Russian oil imports by the end of 2022. EU leaders committed to return to the temporary exception of pipeline oil, mainly benefiting Hungary, at a forthcoming meeting. They also agreed that, in the event of sudden interruptions of supply, ’emergency measures will be introduced to ensure security of supply’. They called on international partners to remain united in coordinating and implementing sanctions.

International law and justice

The European Council stressed that it ‘expects international humanitarian law, including the Geneva Convention relative to the treatment of prisoners of war, to be fully respected’. It has also expressed support for the gathering of evidence and investigation of war crimes carried out by the Prosecutor of the International Criminal Court. EU leaders praised the ‘operational support’ provided by Europol and welcomed the creation of a Joint Investigation Team coordinated by Eurojust. They reiterated that those responsible for international law breaches would ‘be held to account for their actions’.

Humanitarian, financial, military, economic and political support for Ukraine

EU leaders reiterated the EU’s multi-dimensional support for Ukraine, confirming that the EU would continue to provide Ukraine with humanitarian aid and ‘commend[ing] the results of the High-level International Donors’ Conference co-hosted by Poland and Sweden’. They highlighted the financial support offered to frontline countries for the reception of Ukrainian refugees, and invited the European Commission to present new funding proposals within the multiannual financial framework (MFF). They also mentioned the EU’s commitment to support Ukraine financially, expressed readiness ‘to grant Ukraine new exceptional macro-financial assistance of up to €9 billion in 2022’, and called for speedy examination of the European Commission’s forthcoming proposal.

On the reconstruction of Ukraine, EU leaders expressed support for a dedicated reconstruction platform bringing together the EU, Member-State governments, the Ukrainian government, international partners and financial organisations, and suggested using frozen Russian assets to fund reconstruction efforts. They also praised Member States’ efforts to enshrine provisions allowing asset confiscation in their national laws and called on the Council to move ‘swiftly’ to examine the European Commission’s proposal to add violation of EU sanctions to the serious crimes with a cross-border dimension listed in Article 83 TFEU.

Ahead of its debate on enlargement, scheduled for 23-24 June 2022, the European Council introduced a first element of conditionality by linking EU support for Ukraine’s reconstruction to its ability to stay the course of reforms and follow its European pathway. It noted the European Commission’s work on opinions on the membership applications of Ukraine, Moldova and Georgia.

With respect to military support, the European Council confirmed the EU’s commitment ‘to continue bolstering Ukraine’s ability to defend its territorial integrity and sovereignty’. It welcomed the increase up to €2 billion of the support offered to Ukraine under the European Peace Facility.

Impact on neighbouring countries

Since the war began, the European Council has been monitoring its impact on neighbourhood countries closely, including on the Western Balkans and Moldova, which need support as they face strong economic, energy and migration pressure. Addressing the European Parliament in plenary, the President of Moldova, Maia Sandu, had outlined the efforts undertaken to cope with the large number of refugees, and underlined that Moldova supported Ukraine’s territorial integrity, stressing that ‘Crimea is Ukraine. Donbas is Ukraine. Kyiv is Ukraine. And they will always be’. The EU leaders also reaffirmed their support for the Belarusian people’s right to ‘new, free and fair elections’.

Main message of the President of the European Parliament: Roberta Metsola called for leadership and for the provision of ‘hope and perspective’ to Ukraine by granting candidate status. She recalled the objective of phasing out Russian fossil fuels and supported the sixth package of sanctions.

Food security and affordability

The war in Ukraine is straining the global food supply chain. Russia and Ukraine account for about 30 % of global exports of wheat, 20 % of corn and mineral fertilisers, and 80 % of the world’s sunflower oil trade. The disruption in fertiliser manufacturing also risks putting next year’s agricultural production under stress. Charles Michel held Russia accountable for the humanitarian crisis that may occur, after witnessing ‘silos full of grain, wheat and corn ready for export … stranded because of the Russian war and blockade of Black Sea ports’. EU leaders reiterated this sentiment by emphasising the impact of Russia’s war on global food security and affordability, calling on Russia to end its blockade of food exports. The European Council went further than it had at its meetings on 24-25 March and in Versailles, at which it focused on ways for the EU and the international community to respond to food supply issues. At this meeting, EU leaders directly denounced Russia’s illegal seizure and destruction of Ukrainian agricultural produce.

In the Middle East, Russia and Ukraine supply around 75 % of wheat imports, a figure reaching 90 % in east Africa. The blockade poses a broader security concern in the EU’s neighbourhood, potentially leading to further humanitarian crises. In this context, the Chair of the African Union, Macky Sall, addressed the European Council, outlining the risks facing Africa as well as possible solutions. The price of food in the EU increased by 8.64 % in April 2022 compared with April 2021, affecting the purchasing power of EU citizens, who are already facing rising energy costs. EU leaders considered ways to bolster food security and affordability, by facilitating food exports from Ukraine; coordinating the international response to a looming global food crisis; and reducing disruptions to fertiliser manufacturing. They signalled their support for specific initiatives at EU and international level, such as ‘solidarity lanes‘, the Food and Agriculture Resilience Mission, the adoption of common agricultural policy strategic plans, and the establishment of the Global Alliance on Food Security. They also called on the Commission to explore the use of European Regional Development Fund (ERDF) reserves and for international partners to promote more efficient use of fertilisers or alternatives.

Main message of the European Parliament President: Roberta Metsola decried Russia’s blackmail, which threatened to plunge vulnerable countries into famine, and signalled support for the Commission’s ‘solidarity lanes’ initiative, backed by the European Council on day two of the meeting.

Security and defence

The European Council considered the joint communication on the defence investment gaps analysis, but did not endorse the document as such. Instead – as flagged up before the meeting in the EPRS outlook – they invited ‘the Council to examine’ a select number of issues, including short-term defence procurement needs allowing stocks to be renewed, ‘the development of a joint EU defence strategic programming and procurement function’, measures to bolster the EU’s defence industry, and the possibility of enhancing the role of the European Investment Bank so as to mobilise up to €6 billion for dual-use projects under its strategic European security initiative. EU leaders stressed that they were looking forward to the Commission’s presentation of the European defence investment programme, which is scheduled for autumn 2022 and expected to include a value added tax exemption.

Commission President Ursula von der Leyen noted that several Member States had announced defence spending increases, amounting cumulatively to €200 billion. She referred to the challenges of fragmentation and duplication and called for better coordinated defence spending. Defence funding, including a possible increase of the European Defence Fund envelope – an aspect considered in the defence investment gaps analysis and supported by the European Parliament – was for now kept out of the debate. As EU leaders committed to keep defence on their agendas, funding might come up for discussion, possibly by mid-2023, if not sooner, when, in accordance with the Strategic Compass, ‘new financing solutions’ for joint procurement are expected.

EU leaders pointed to ongoing shifts in the EU’s close strategic environment as a result of Russia’s war, and stressed the importance of a ‘stronger and more capable’ joint response in security and defence. Whilst reaffirming NATO’s key role in ensuring collective defence for its members, they emphasised that ‘solidarity between (EU) Member States is reflected in Article 42(7) TEU – yet not calling for clarification on the procedure to be observed in the event of a new activation.

Main message of the President of the European Parliament: Roberta Metsola stressed that European security and defence was ‘fast becoming an existential question’, underlining the complementary nature of the EU and NATO. She again called for pooling of resources and better defence spending.

Energy

In light of its earlier commitment to reduce EU dependence on Russian fossil fuels, the European Council took stock of progress made thus far and exchanged views on the REPowerEU plan. It called in particular for accelerated development of renewables and for investment in infrastructure aimed at bolstering renewable energy production. Ursula von der Leyen stressed that ‘renewable energy has the big advantage that it is not only good for the climate but it is also good for our independence and good for our security of supply and it creates jobs at home’.

Energy affordability was a central topic for discussion, leading the European Council to call for joint efforts with like-minded partners to curb energy prices, including by setting temporary price caps. EU leaders encouraged the ‘prompt use’ of the newly established EU Energy Purchase Platform, open to eastern and Western Balkan partners, whilst stressing the need to accelerate winter preparations to avoid disruption, including by completely filling gas storage facilities. They stressed the importance of putting in place coordinated European contingency measures. The reform of the electricity market, supported by several Member States at past meetings, remains a pending issue. EU leaders have invited the European Commission to work on market optimisation and price affordability, on the basis of the report by the EU Agency for the Cooperation of Energy Regulators.

Main message of the President of the European Parliament: Roberta Metsola underlined that consumers must be protected from ‘price fluctuations’ and stressed that investment in energy and in the green transition must be seen ‘as much as a security issue as it is an environmental one’.

Read this briefing on ‘Outcome of the special European Council meeting of 30-31 May 2022‘ in the Think Tank pages of the European Parliament.