Outlook for the European Council meeting of 29-30 June 2023

Written by Ralf Drachenberg and Annastiina Papunen with José René Ernault.

The last regular European Council meeting before the summer break will address a wide range of topics, from Russia’s war in Ukraine, the economic situation and a strategic debate on China, to security, defence and migration. In the context of Ukraine, EU leaders will reconfirm the EU’s multidimensional support for the country, with a specific focus on military assistance, and welcome the agreement on the 11th package of sanctions on Russia. On the economic situation, EU leaders are expected to discuss industrial policy, the EU’s long-term competitiveness – including the potential of and challenges linked with artificial intelligence – and EU resilience and economic security. The proposed targeted revision of the 2021-2027 multiannual financial framework may also come up. EU leaders will attempt to bring positions closer on the divisive topic of EU relations with China. Finally, as a result of recent developments (notably the dramatic sinking of a migrant ship and growing opposition to the asylum agreement), migration may move higher up the agenda.

1.     General aspects

While the Indicative Leaders’ Agenda 2023 had announced discussions on Ukraine, the EU economy, security and defence and preparations for the EU-CELAC summit, the meeting agenda adds a strategic discussion on China, migration and the process towards the 2024‑2029 Strategic Agenda.

The membership of the European Council will be slightly changed at the29-30 June meeting, as the new prime ministers of Finland, Petteri Orpo, Slovakia, Ľudovít Ódor, and Bulgaria, Nikolai Denkov, will be participating for the first time.

2.     European Council meeting

Ukraine

EU leaders are likely to reaffirm their unity in support of Ukraine, and their backing of the Ukrainian Peace Formula, towards a just and lasting peace respecting Ukraine’s sovereignty, independence and territorial integrity within the internationally recognised borders. Volodymyr Zelenskyy will most probably address the European Council once again, enabling EU leaders to exchange on progress made on the Ukrainian President’s 10-point peace plan, while expressing support for a peace summit that Denmark is willing to host in July 2023.

The EU’s political, humanitarian and military aid for Ukraine will again be at the centre of the debate. Through the EU civil protection mechanism, the Union has already delivered 89 000 tonnes of humanitarian assistance since the outbreak of the war. Ukraine launched its counter-offensive in early June 2023 and, given the heavy fighting on the ground and the military equipment needs of the Ukrainian armed forces, military assistance is likely to be at the centre of the debate once again.

In light of the recent destruction of the Nova Kakhova dam, European Council President Charles Michel has stressed that the issue will be raised, and more assistance provided for the flooded areas. Most EU leaders have already condemned the attack and expressed their support for Ukraine in this context.

As regards Russia’s accountability for its unjustified aggression towards Ukraine, EU leaders are expected to welcome the establishment of the Register of damage caused by the aggression of the Russian Federation against Ukraine. The EU and more than 40 countries worldwide, including all EU countries except Hungary and Bulgaria, have signed the register. EU leaders are also expected to take stock of progress made by the Council’s Ad Hoc Working Party on developing legal options allowing for the use of Russia’s frozen assets to support Ukraine’s reconstruction.

EU leaders are expected to welcome the agreement on the 11th sanctions package. It had been temporarily stalled owing to concerns on the part of Greece and Hungary regarding the inclusion of a number of Greek shipping firms and the Hungarian OTP bank among ‘international sponsors of war’ on a list drawn up by Kyiv authorities. At the same time, some countries, notably Poland and the Baltic States, had been trying to push for the deepening of the sanctions, notably by targeting Russian diamond and natural gas imports, and curbing nuclear energy cooperation. The 11th sanctions package seeks to combat the circumvention of sanctions, notably by banning goods exports to third countries suspected of circumventing sanctions. However, Polish authorities have stressed that the biggest loophole in the sanctions regime currently is linked to the lack of sanctions on Belarus.

Following the recent plea by Zelenskyy and Maia Sandu, President of Moldova, in favour of opening EU accession negotiations by the end of 2023, EU leaders may also consider the EU accession path of the two countries. In addition, they will most likely welcome the Civilian EU Partnership Mission and the support package for Moldova adopted by the Commission on 31 May 2023, following up on a request formulated by the European Council in March 2023.

Economic

The economic situation has been a recurring agenda point at recent European Council meetings owing to the high economic impact of Russia’s war on Ukraine. In that context, ensuring Europe’s long-term competitiveness, completing the single market, especially in digital and services, and ensuring a modern industrial policy, are high on the priority list. In June, EU leaders are expected to call for an independent high-level report on the future of the single market and for a first regular progress report on competitiveness, both to be presented in March 2024. They may also call for the adoption of key pieces of legislation (e.g. the net zero industry act, the critical raw materials act and the artificial intelligence (AI) act) before the 2024 European elections. As usual in June, the European Council will be called upon to endorse the country-specific recommendations and conclude this year’s European Semester cycle.

Following the publication by the European Commission of a European economic strategy on 20 June, the concept of economic security is likely to attract EU leaders’ attention. Linked with EU efforts to enhance strategic autonomy, the strategy seeks to strengthen the EU’s economic base, hedging against risks and security challenges caused by today’s complex geopolitical situation, and working with the ‘broadest possible range of countries’. Among the risks mentioned are risks to supply chains, critical infrastructure and technology security and the risk of economic coercion. Not all Member States seem, however, to agree on the risks presented, or on the need for new measures to counter them. According to some reports, the EU Member States most worried are those championing free trade.

The potential contribution of AI to EU competitiveness as well as the challenges associated with it, notably illustrated by the rapid development of tools such as ChatGPT, will be at the centre of EU leaders’ attention. Tech experts as well as Members of the European Parliament preparing the AI act have been raising concerns, pointing out that AI-based new tools could greatly impact our future – possibly in adverse ways – if left unchecked. In May, the G7 meeting initiated the ‘Hiroshima AI process‘ to ‘immediately take stock of the opportunities and challenges of generative AI, which is increasingly prominent across countries and sectors’. EU leaders are therefore expected to urge rapid progress on the AI act, while ensuring that European values are featured in global AI standards. Although the AI Act file has now entered the interinstitutional negotiation phase, there are still a number of unresolved issues. These include the question of whether to fully ban facial recognition or rather allow some exceptions, for instance in the case of the search for a missing child. These sensitive topics divide both political groups in the European Parliament and Member States.

Finally, EU leaders may call for work on the economic governance review to be accelerated so as to conclude the file by the end of the year. The Commission proposals were met with general satisfaction in many Member States; Germany is however asking for stricter debt reduction targets.

Multiannual financial framework

As a result of unforeseen additional financial needs arising from multiple crises (e.g. the COVID‑19 pandemic and the war in Ukraine), on 20 June 2023, the Commission proposed a targeted revision of the 2021-2027 multiannual financial framework (MFF) – see EPRS briefing. EU leaders are not likely to discuss the proposed spending increase at their June meeting but may invite the Council to take work forward without delay. However, the discussion among Member States is expected to be particularly difficult, as a number of them, notably the budget hardliners such as Germany and the Netherlands are already indicating their opposition to an increase in the MFF ceiling. The European Parliament, meanwhile, already called for the revision and upscaling of the MFF in December 2022.

Security and defence

EU leaders will take stock of the implementation of their earlier conclusions on security and defence and, in particular, of the Versailles Declaration, in which they had called for the joint procurement of defence capabilities and for the European defence industry to be bolstered. Two short-term and complementary instruments to boost joint defence procurement are currently being examined by the co-legislators: the European defence industry reinforcement through common procurement act (EDIRPA) and the act in support of ammunition production (ASAP).The latter would allow Member States to procure ammunition together in support of Ukraine. On 1 June 2023, Parliament voted on the ASAP, opening the way for interinstitutional negotiations. These will probably focus on funding as Members of the European Parliament questioned the Commission’s choice of using funds dedicated to other defence instruments rather than identifying new funding options. EU leaders will probably call (again) on the co-legislators to adopt these instruments rapidly. They may also reiterate their call on the Commission to submit a proposal for a European defence investment programme (EDIP) to support the European defence industrial sector in the longer term.

EU leaders could also discuss EU-NATO cooperation ahead of the NATO Summit to be held in Vilnius on 11 July 2023. The focus there is very likely to be on security guarantees for Ukraine and on its accession to the Alliance. Zelenksyy has requested NATO give a strong signal.

External relations

China

The European Council will discuss EU relations with China, which remains a divisive topic among Member States. Some EU leaders, such as Dutch Prime Minister Mark Rutte advocate an EU-specific approach. He stated in October 2022 that the EU needed ‘a policy on China that is independent from other international actors, notably the US’. Similarly, French President Emmanuel Macron has called ‘for a reduction of the EU’s dependence on the US to avoid being involved in a confrontation between China and the US over Taiwan’. Conversely, other Member States favour a closer alliance with the US in confronting China, notably Polish Prime Minister Mateusz Morawiecki, who has called for a ‘strategic partnership with the US’ as opposed to ‘strategic autonomy from the US’.

The October 2022 strategic discussion on China also highlighted distinct views between the European Council’s President, Charles Michel, who stressed the need to engage with China, and the President of the European Commission, Ursula von der Leyen, who advocated reducing European dependencies on China and taking a more assertive stance on Taiwan. The recent joint communication on a European economic security strategy confirms the Commission’s approach of de-risking economic relations with China.

As underlined during a debate in Parliament, clarity and unity in EU policy on China is needed: without being confrontational, EU policy should be based on reciprocity, mutual respect and respect for international law. Members also felt that changing the status quo on Taiwan was unacceptable for the EU.

As was the case after the October 2022 strategic discussion, the adoption of European Council conclusions on China seems rather unlikely.

EU-CELAC summit

EU leaders will discuss relations with Latin America and the Caribbean in preparation for the EU-CELAC Summit in Brussels on 17 and 18 July. The summit coincides with the start of Spain’s terms as President of the Council of the EU, with stronger relations with Latin America among its priorities.

Other items

Strategic agenda for 2024 to 2029

The European Council sets the long-term priorities for the EU at the start of each institutional cycle by adopting a five-year strategic agenda for the EU. The 2019-2024 edition is organised around four headings: i) protecting citizens and freedoms; ii) developing a strong and vibrant economic base; iii) building a climate-neutral, green, fair and social Europe; and iv) promoting European interests and values on the global stage. (See the EPRS publication Origins of the 2019-24 EU Strategic Agenda).

Charles Michel will inform EU leaders of the steps towards adopting the 2024-2029 strategic agenda, due to be completed in June 2024. The political groups in the European Parliament are already outlining their various priorities for the elections and the next institutional cycle. The Spring 2023 Eurobarometer identifies EU citizens’ priorities as follows: i) the fight against poverty; ii) public health; iii) action against climate change; and iv) support for the economy and job creation.

Migration

The Swedish Council Presidency and the Commission will inform the European Council on progress in the implementation of conclusions on migration from February and March 2023. Following an agreement in the Justice and Home Affairs Council of 8-9 June 2023 on two crucial migration files, asylum and migration management regulation (AMMR) and the asylum procedure regulation (APR), Poland and Hungary, who voted against the agreement, might attempt to re-open the discussion ahead of up-coming trilogue negotiations between the co-legislators.

Read this briefing on ‘Outlook for the European Council meeting of 29-30 June 2023‘ in the Think Tank pages of the European Parliament.