Outcome of the European Council meeting of 29-30 June 2023

Written by Ralf Drachenberg with José René Ernault.

EU leaders had a very full agenda for their June meeting. The war in Ukraine was again one of the focal points of the European Council, with EU leaders for the first time expressing readiness to contribute to a future ‘security guarantee’ to Ukraine. They also took stock of the Union’s efforts to bolster joint defence procurement, and acknowledged that ‘defence preparedness’ was key in the current security context. With the adoption of conclusions on China, the European Council chose to display unity and stress its political will to forge a common approach based on the concept of ‘de‑risking – not de-coupling from China’. As anticipated, migration became a very divisive point, with two countries, Hungary and Poland refusing to endorse joint conclusions, which were replaced by conclusions of the European Council President. In addition, EU leaders addressed a range of external relations topics, including the Western Balkans accession process, the situation in Kosovo, the Cyprus settlement and relations with Turkey following the re-election of President Erdogan, with the High Representative/VP and the Commission invited to report on the state of play. EU leaders also discussed relations with the Southern Neighbourhood, welcoming the partnership package with Tunisia, and prepared for the July 2023 EU-CELAC Summit aimed at renewing the EU partnership with Latin America, a priority for the incoming Spanish Council Presidency.

1.     General remarks

The meetings of EU Heads of State or Government started with an exchange of views with the NATO Secretary-General, Jens Stoltenberg, on EU-NATO cooperation and Euro-Atlantic security. That was followed by the address of the European Parliament’s President, Roberta Metsola, and a discussion with EU leaders focused on Ukraine, the MFF revision and migration. President Metsola also stressed that the EU needed to prepare for the next enlargement, which required reform. She also asked EU leaders to reflect on their position on the proposed changes for Parliamentary elections.

Worth noting is the breakfast meeting of a cross political party group of EU leaders (De Croo, Costa, Iohannis, Kristersson, Rutte, Sanchez, Scholz, Macron, Meloni, Morawiecki) that took place on the margins of the European Council, and discussed the ‘absorption capacity of the EU for new Member States and the EU’s necessary internal reforms in this regard.

2.     European Council meeting

Ukraine

Once again, EU leaders underlined their unity and determination in support of Ukraine, with a particular focus on military support. The stark contrast between the unity at EU-level and the ‘cracks in the Putin system’ was underlined strongly in the discussions. While no conclusions were adopted on the recent Wagner mutiny, EU leaders discussed the situation in Russia, with some describing the country as weakened, but treated the episode as an internal Russian matter. That notwithstanding the Baltic leaders called for increased surveillance on the EU’s eastern borders with Belarus, where Wagner fighters are supposed to be relocated. Highlighting his distinct views, Hungarian Prime Minister Viktor Orban described the situation as being of ‘no major importance’.

Overall, four topics dominated the discussions. Ahead of NATO’s Vilnius summit, the question of security guarantees for Ukraine was a central issue in the discussion on Ukraine. EU leaders indicated their readiness ‘to contribute, together with partners, to future security commitments to Ukraine’. The views of the different EU leaders were however quite divergent in this respect, with some pushing for swift accession of Ukraine to NATO once the war is over, while others argued that Ukraine’s accession is something unrealistic or that other measures should be prioritised. As EU Member States have different security arrangements – most being NATO members but some being neutral, the respect for specific national security considerations was reiterated in the conclusions.

Financing the reconstruction, and the use of Russian frozen assets to that end, was the second element of the discussion. Some EU leaders urged speeding up work on identifying possible solutions for using these assets, stressing that the funds needed for the reconstruction of Ukraine should not be the burden of European taxpayers. The ECB and EU countries such as Germany have shown more reluctance towards that approach, fearing that such a decision could lower the trust of foreign states wishing to store assets in Europe. Belgium Prime Minister Alexander De Croo also stated that the method used should not undermine financial security in the EU.

Russia’s accountability was the third issue discussed, with EU leaders welcoming the start of the support operations of the International Centre for the Prosecution of the Crime of Aggression. The fourth aspect was the condemnation of the military support provided by Belarus to Russia, notably allowing Russian armed forces to use its territory (as well as the support from Iran).

In addition, EU leaders condemned the destruction of the Kakhova dam, welcomed the 11th sanctions package, underlined their active diplomatic efforts in support of Ukraine’s Peace Formula and for the organisation of the Copenhagen peace conference in July, and discussed the EU path of Ukraine and Moldova. As expected, Volodymyr Zelenskyy addressed EU leaders by video-link, updating them on the situation on the battlefield and stressing Ukraine’s readiness to start accession negotiations.

Finally, in a context of strong criticism of the deal reached between the Commission and five Member States affected by the import of Ukrainian agriculture products , the European Council did address food security, expressing concern at the slowdown of the Black Sea Grain Initiative.

Main message of the President of the European Parliament: President Metsola expressed the European Parliament’s desire that the accession negotiations with Ukraine should be opened by the end of the year. Georgia’s European path was also mentioned in the conclusions.

Security and defence

President Michel stressed that ‘strong allies make strong Alliances’. He underlined that the efforts undertaken in the EU to develop EU defence capabilities and bolster joint defence procurement also contributed to strengthening NATO, putting emphasis on the complementarity between the two institutions. As for Jens Stoltenberg, he stressed the importance of the EU-NATO strategic partnership in the current context of war in Europe, recalling the work undertaken on resilience and critical infrastructure. The Estonian Prime Minister, Kaja Kallas, insisted that Europeans needed to further bolster defence investments, and warned that lack of political will could prove dangerous, recalling that, between 1999 and 2021, European defence investments had increased by 19.7 %, whilst the increase had reached 65.7 % in the US, 292 % in Russia and 595 % in China in the same period. The Swedish Prime Minister, Ulf Kristersson, whose country is still waiting to join the Alliance, stressed that the ‘Vilnius Summit is a very good occasion for decision-making’.

The European Peace Facility envelope was increased by €3.5 billion to meet ‘the global geographical scope’ of the instrument, reaching a total of €12 billion. Besides welcoming this development, EU leaders took stock of the implementation of the Strategic Compass. They also welcomed the new Civilian CSDP Compact and praised efforts to strengthen cyber-defence.

Main message of the President of the European Parliament: President Metsola stressed that a new security architecture was required, underlining that the EU and NATO needed to ‘complement each other’, and avoid duplication and competition. She underlined the importance of continuing to boost joint defence procurement, urging the adoption of EDIRPA and ASAP.

Migration

Discussions on migration were difficult and lengthy. As expected, Poland and Hungary expressed their disagreement with both the content and the procedure for the adoption of the Council common position on two key pieces of legislation regulating the internal dimension of migration. Although the use of use of qualified majority voting (QMV) fully complied with the Treaty, the two countries consider that consensus should apply to migration issues. They even attempted to have a joint statement adopted providing for decision-making by consensus on migration issues in future. Dutch Prime Minister, Mark Rutte, indicated that, due to their ‘anger’ on the matter, Poland and Hungary had opposed the adoption of European Council conclusions on migration – even on the external dimension aspect on which they actually agree with the EU position. The views of the other EU leaders were summed up by Xavier Bettel, Luxembourg’s Prime Minister, who stated that ‘I prefer to have no conclusions than bad conclusions. If it is to have a breach of Treaties, it is not acceptable’. In the end, there were only conclusions by the President of the European Council on the external dimension of migration, which largely reflect the draft conclusions with the addition of a reference to the position of Poland and Hungary.

Another highly debated aspect was the use of ‘innovative measures‘, referring notably to the use of disembarkation centres (i.e. centres outside the EU where a first screening of asylum applications would be carried out), a proposal supported by Denmark and Austria, but strongly rejected by other Member States such as Belgium, Luxembourg and the Netherlands.

Charles Michel underlined the significant progress achieved on migration measures since the European Council’s February 2023 meeting, pointing in particular to closer EU-Tunisia cooperation. Migration has clearly returned to being a ‘rolling agenda’ topic at European Council meetings, and Michel confirmed that the topic would be on the agenda of the next and subsequent meetings.

Main message of the President of the European Parliament: Roberta Metsola underlined that ‘migration cannot be instrumentalised’ and that the co-legislators needed to find agreement on the migration package before the European elections in June 2024. For her, the starting position in any debate on migration must always be that no human being should die trying to reach Europe.

China

For the first time since 2020, the European Council adopted conclusions on China, indicating political will to overcome divisions and forge a common approach to the relationship, adapted to the current strategic environment. As underlined by President von der Leyen, there was ‘broad consensus on the concept of “de-risking – not de-coupling from China” ‘, a country which is ‘simultaneously a partner, a competitor and a systemic rival’. The EU would ‘continue to engage with China … but following a European approach based on our interests and on our values’. Thus, the approach implies that the EU would carry out both ‘economic de-risking’ and ‘diplomatic de-risking’, which in terms of EU policy towards China will translate at three levels. Economically, first, the relationship with China needs to be re-balanced and based on reciprocity. Following the principle set in Versailles in 2022, the EU will seek to reduce its ‘critical dependencies’ and economic vulnerabilities whilst respecting its interests. President von der Leyen mentioned in particular the trade deficit, which had tripled over the past ten years or the unfair practices faced by EU companies in accessing the Chinese market. However, analysts warned that, in practice, ‘de-risking’ and ‘not decoupling’ were far from complementary. The Prime Minister of Latvia, Krišjānis Karinš, summed up the EU’s dilemma by stressing the need to reduce dependencies rapidly to avoid later problems.

Defending human rights, democratic values and fundamental principles constitute the second level, with EU leaders expressing support for efforts to address these issues. They welcomed the renewal of the Human Rights dialogue with China, whilst expressing concern about the situation in Tibet and Xinjiang, as well as the (lack of) respect of engagements towards Hong Kong.

Third, the European Council underlined China’s special responsibility in upholding the international order as a permanent member of the UN Security Council, and stressed the need to engage with China on global issues such as health, climate change and security. In that context, it called on China ‘to press Russia’ to end its war and to ‘unconditionally withdraw’ from Ukraine. So far, China has refrained from condemning Russia’s military aggression against Ukraine, abstaining or voting against in the various resolutions the UN has adopted on Ukraine and/or Russia since the outbreak of the war. EU leaders also recalled the global strategic importance of the East and South China Seas, expressing concern over ‘growing tensions in the Taiwan Strait’; they also stressed that the EU opposed revisionism, and confirmed its ‘One China policy’.

Economy

EU leaders only briefly discussed economic issues, underlining the need to build European competitiveness on the fundamental asset of the European internal market. For that purpose, they decided to put in place a high-level committee to identify additional steps to strengthen the EU internal market, and tasked the Commission with the preparation of two reports for their meeting in March 2024 – an independent report on the future of the single market and the first progress report on the EU’s competitiveness, productivity and growth. In that context, EU leaders called for demographic challenges – Europe is an ageing continent with a median age of 44.4 years and low fertility rates – to be addressed, with a toolbox aimed at lessening the impact on competitiveness.

EU leaders also had a first exchange of views on the economic security concept, following the publication of the strategy. The wording of the conclusions is cautious, calling for ‘proportionate, precise and targeted answers to security challenges on the basis of a risk assessment’.

Multiannual Financial Framework

EU leaders did not open discussions on the sensitive and divisive subject of the revision of the Multiannual Financial Framework – just ‘taking note’ of the Commission proposal.

Main message of the President of the European Parliament: Focusing a lot on this topic, President Metsola stressed that ‘we need to put our money where our mouth is’ and adapt the EU’s long term budget, if Europe wants to address adequately all the challenges it faces.

EU-priorities 2024-2029

In a letter sent ahead of the meeting, President Michel proposed a process for the shaping of the EU’s next strategic priorities, and suggested four (plus one ) priority areas i) the EU’s economic and social base; ii) the energy challenge; iii) security and defence capabilities; and iv) engagement worldwide. Migration would also be a core topic. Discussion would kick off under the Spanish Presidency with the aim of finalising during the Belgian one in the first half of 2024.

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