Outcome of the meetings of EU leaders, 26-27 October 2023

Written by Ralf Drachenberg and Rebecca Torpey.

At the European Council meeting of 26-27 October 2023, EU leaders sought to show unity on challenging issues on which consensual positions have proven difficult to find in the past, in particular on the Middle East. On that topic, the European Council reiterated its condemnation of Hamas for its brutal and indiscriminate terrorist attacks, emphasising Israel’s right to defend itself in line with international law and international humanitarian law. At the same time, it called for ‘pauses for humanitarian needs’ and for an international conference to revive the peace process on the basis of a two-state solution. On Ukraine, EU leaders adopted deliberately long conclusions, reiterating their condemnation of Russia’s war of aggression and their continued unwavering ‘financial, economic, humanitarian, military and diplomatic support to Ukraine and its people for as long as it takes’. The discussion on the multiannual financial framework highlighted increasing unwillingness among Member States to agree to the current Commission proposal for an increase in the EU’s long term budget. In the absence of detailed conclusions on migration, European Council President Charles Michel pointed to the growing consensus among EU leaders on stronger cooperation with third countries. The European Council was followed by a Euro Summit, to discuss the EU’s economic and financial situation, banking union, coordination of fiscal policies and the digital euro project.

1.     General aspects

The EU leaders’ meeting began with the customary address by the President of the European Parliament, Roberta Metsola. This meeting was the last European Council for Xavier Bettel as Prime Minister of Luxembourg, a position he has held for 10 years.

2.     European Council meeting

Ukraine

Amid growing concern that the Middle East crisis could distract the international community’s attention from Ukraine, a number of EU leaders urged their colleagues not to forget the country. Lengthy conclusions were adopted, reiterating the EU’s unwavering support. Ukraine’s President Volodymyr Zelenskyy addressed the European Council virtually, emphasising the current efforts being made by Ukraine to meet the criteria for opening accession negotiations. EU leaders also reiterated their support for Moldova, and restated Ukraine, Moldova and Georgia’s European paths.

With a new aid package for Ukraine currently stalled in the US Congress, funding for Ukraine and its war efforts was one of the main topics of discussion. EU leaders for instance considered the proposal for a €50 billion top up to the multiannual financial framework (MFF), for Ukraine. However, the lack of unity was apparent: while Lithuania’s President Gitanas Nausėda argued €50 billion was not enough, Hungary’s Prime Minister Viktor Orbán and Slovakia’s newly elected Prime Minister Robert Fico expressed doubts about the proposal. Fico, who has pledged to stop any Slovakian military aid to Ukraine, insisted that Ukraine was ‘one of the most corrupt countries in the world’. A new €20 billion segment of the European Peace Facility (EPF), the off-budget mechanism used by Member States to provide military supplies for Ukraine, is also due to be discussed at the December meeting. However, the eighth package of assistance measures, a €500 million package under the EPF, mentioned ahead of the meeting as one possible outcome, could not be adopted owing to Hungary’s veto. Orbán stressed, however, that he was ready to ‘make a deal’ if a Ukrainian delegation came to Budapest.

Once again, Orbán’s position on the war in Ukraine diverged from that of most EU leaders; this, in a context of widespread criticism following his handshake with Russian President Vladimir Putin during his recent trip to China. With Fico’s return to the European Council, a second leader now openly opposes military support for Ukraine and the EU’s overall approach on the war. While unity in condemning Russia’s invasion of Ukraine is still largely shared by EU leaders, the adoption of a new package of sanctions or other initiatives to support Ukraine may prove difficult.

As regards the use of frozen Russian assets, EU leaders made some progress, and asked the Commission to come forward with proposals. With €211 billion frozen on EU soil, it is suggested that windfall profits generated by these assets should be redistributed to Ukraine. The Commission is expected to present the first step of the mechanism in December 2023.

Migration

As flagged up in the EPRS outlook, the only conclusion on migration stated that EU leaders had held a strategic debate. Dutch Prime Minister Mark Rutte stated that the European Council had been unable to adopt written conclusions, requiring consensus, as Poland and Hungary were in opposition. As indicated by Charles Michel, however, consensus is growing among EU leaders towards strengthened cooperation with third countries, including through comprehensive agreements. European Commission President Ursula von der Leyen meanwhile reported that there had been strong support from EU leaders for her letter and a twin-track approach: i) the legislative track (i.e. finalising the migration and asylum pact), and ii) the operational track (i.e. acting immediately along the various migratory routes). She said that the Commission would propose legislation to combat smuggling and trafficking by the end of November.

Main message of the President of the European Parliament: Roberta Metsola stressed the importance of making returns more effective, and reminded EU leaders of the need to progress on all components of the migration pact, to ensure it is finalised by the end of the legislative term.

Economy

EU leaders highlighted five crucial areas where action was required to strengthen the EU economic base: i) ensuring EU competitiveness on digital and clean technologies, ii) guaranteeing the supply of affordable clean energy, iii) diversifying supply chains and reducing dependencies, iv) moving to a more circular economy, and iv) reducing the regulatory burden. The need to attract investment was also prominently reiterated.

With the legislative term ending soon, EU leaders are very keen to see three critical files completed to improve EU economic resilience: i) the critical raw materials act, ii) the net-zero industry act, and iii) the reform of electricity market design. Furthermore, as supply chain problems and raw materials shortages have caused medicine scarcity in the EU, EU leaders want to ensure that this problem is taken care of, and asked the Commission to act swiftly on the basis of its recent communication.

As EU-US trade issues were not resolved at the recent EU-US summit, leaders invited the Commission to ‘work intensively on mitigating the discriminatory elements of the US inflation reduction act (IRA)’ and to make sure the EU is granted status equivalent to a free trade association partner. The IRA was also a central topic – alongside labour shortages, and industrial and energy policies – discussed at the tripartite social summit, attended by the presidents of the EU institutions ahead of the summit.

Multiannual financial framework

The rather limited conclusions on the MFF, only inviting the Council ‘to take work forward, with a view to reaching an overall agreement by the end of the year’, do not capture the intense discussions that took place at the October European Council meeting.

Von der Leyen reported that the discussion on the MFF revision did not concern figures but touched on general political views. She added that the discussion had shown broad agreement on the main MFF priorities: i) Ukraine; ii) migration; iii) natural disasters and humanitarian aid; and iv) EU competitiveness; as well as on a couple of additional areas, e.g. defence. The question however was where the additional resources should come from: additional Member State contributions or alternatively redeployment. Additional own resources will be crucial for the medium to long term, but can play no role in the short term as the necessary legislation would need to be passed.  

As indicated in a non-paper issued by the Spanish Presidency, it seems that the majority of EU leaders are not willing to contribute more to increase the EU budget. Rutte argued that he and many other leaders would provide ‘fresh money’ only for Ukraine, while additional funding should come from reprioritising – and this latter share should primarily be earmarked for migration. Likewise, German Chancellor Olaf Scholz also favoured the financing of current priorities through reprioritising and reallocation within the current budget. As reported by the French President, Emmanuel Macron, EU leaders asked the Commission to present an updated, ‘more realistic’, proposal for the MFF review, with a better mix of redeployment and additional money. Representing the Spanish Presidency of the Council of the EU, Spanish Prime Minister Pedro Sanchez stressed that the MFF revision and the EU economic governance review was seen as a package.

Finding a political agreement is expected to be difficult. While the aim is to finalise everything before the end of the year, some suggested splitting the revision into two parts (namely an agreement on the Ukraine facility by the end of the year, and postponement of other topics until 2024). Von der Leyen strongly rejected such a split, arguing it was opposed by the majority of EU leaders.

Main message of the President of the European Parliament: Metsola stressed that ‘it is the time to put the money where our mouth is’ and for the EU to have ‘a meaningful 2024 budget – one that is fit for purpose – [with] resources to back it up’. Progress on new own resources is also crucial.

External relations

Middle East

EU leaders reaffirmed the main points of their 15 October statement: i) condemnation of Hamas’s terrorist attacks; ii) Israel’s right to defend itself in line with international law; iii) release of hostages; iv) protection of civilian lives; and v) the urgent need to supply humanitarian aid to civilians. In addition, following a suggestion by Sanchez, they called for an international conference to be convened within 6 months, to revive the Middle East peace process on the basis of a two-state solution.

While EU leaders had already called for humanitarian aid to be provided for civilians in Gaza, a central point in the discussion were the conditions and modalities of the delivery, i.e. whether or not EU leaders should call for [a] humanitarian pause[s] – with a focus on the use of the singular or the plural. Taoiseach Leo Varadkar noted that a humanitarian pause could allow European citizens stuck in Gaza to leave the country. Some leaders considered that a pause (singular) in the war could be seen as a limitation to Israel’s right to defend itself. In the end, EU leaders agreed to call for ‘rapid, safe and unhindered humanitarian access and aid to reach those in need through all necessary measures including humanitarian corridors and pauses for humanitarian needs’.

Considering criticism made of the EU’s initial response to the Middle East crisis, Michel underlined that unity had been achieved at EU level with the joint European Council statement of 15 October. He emphasised this unity in both his arrival doorstep comment and his press conference statements. It was only once this united position had been expressed that a number of EU leaders, including the German Chancellor, the French President and the Italian Prime Minister, went to Israel to show solidarity in the aftermath of the Hamas attack of 7 October.

Main message of the President of the European Parliament: Metsola stressed that a strong stance on terrorism and every ‘effort to alleviate the humanitarian crisis in Gaza’ were not mutually exclusive.

South Caucasus

Little progress was made on peace talks between Armenia and Azerbaijan. EU leaders mandated the High Representative and the Commission to work on initiatives to strengthen EU-Armenia relations.

Sahel

As anticipated, the European Council expressed concern about the deterioration of the security and humanitarian situation in the Sahel and called for the release of President Bazoum and his family. EU leaders expressed support for ECOWAS and called for the Commission to present options to adapt EU action and relevant instruments for the Sahel, building upon the recent framework of restrictive measures adopted by the Council. The framework aims to support the measures taken by ECOWAS.

Serbia and Kosovo

On Kosovo and Serbia, EU leaders called for de-escalation, normalisation of relations and the implementation of existing agreements. Despite a new EU proposal and parallel meetings, the parties failed to reach an agreement to the regret of Michel and High Representative Josep Borrell.

Other items

Fighting terrorism

Michel reported that the European Council had discussed EU internal security, condemned the recent terrorist attacks in France and Belgium and called on EU institutions and Member States to mobilise all relevant instruments to enhance internal security.

Preparations for the 2023 Climate Change Conference (COP28)

The European Council called for support for the Global Renewables and Energy Efficiency Pledge, which will be launched at COP28, seeking to drive the energy transition globally. EU leaders appealed for increased ambition, despite concerns that the EU would not reach its own 2030 targets.

3.     Euro Summit meeting

This year’s second Euro Summit meeting was held in inclusive format on 27 October 2023. Discussions focused on the EU’s economic and financial situation, banking union, coordination of fiscal policies and the digital euro project. Inflation is still higher than the European Central Bank’s 2 % target, despite a reduction to 4.3 % in September. The Bank has paused the interest rate hikes for now, but EU leaders are still concerned and want to continue the disinflation process.

Read this briefing on ‘Outcome of the meetings of EU leaders, 26-27 October 2023‘ in the Think Tank pages of the European Parliament.