12 September 2017

On Juncker’s “State of the Union” speech:

Selmayr provided a preview of the contents of what was apparently the 14th version of a draft of Juncker’s speech. According to the minutes, there would be “more Schengen”, “more banking union”, “more eurozone” and “a prospect for enlargement in 2025”, specifying that this would be “for the Balkans. At the meeting there was complete silence about Turkey”. Also, “democracy, participation and transparency” would be included as key themes.

Treaty change is apparently not a taboo for Juncker but Selmayr’s words were summarised as “everyone hoping for grand declarations about this will be disappointed”. Interestingly, Selmayr thinks it could be possible to use the “passerelle clauses” from the EU Treaties which allow progress to be made on certain things while avoiding Treaty change. However, unanimity in the European Council is required to use this route, as is the consent of the European Parliament. Separately, The Times has reported that Juncker may be proposing “the creation of a federal eurozone finance minister and treasury” – in line with Emmanuel Macron’s ideas – so perhaps that could be achieved using the passerelle clauses. Introducing a permanent eurogroup chairman should not be too challenging, as the eurogroup is an “informal” institution anyway.

On the EU’s future:

Back in the spring Mr Juncker proposed five scenarios for the future of the EU, and Selmayr said he was pleased with the reactions received by the Commission. Selmayr however did not disclose whether a possible “sixth scenario”, about which there has been some speculation, might be unveiled in Juncker’s State of the Union speech.

De Volkskrant meanwhile reports that Juncker has sent MEPs a confidential letter setting out that the EU would finally have “the wind in its sails” after eight years of crisis, adding “this chance may possible not be around for along”. The newspaper notes that Juncker will urge EU27 leaders to make a choice between one of the scenarios he set out.

According to Selmayr, Juncker’s main concerns are “European values”. The minutes reveal that this is “not just with regards to Turkey but also with regards to our [the EU’s] internal situation, although Selmayr didn’t name Poland or other Member States by name”. Concerns are also raised in the minutes about a possible “fatal divide” between East and West, suggesting worries that Eastern Europeans could somehow become second rate citizens within the EU. The so-called Dual Foods controversy was mentioned in this regard, which concerns how consumers in the relatively poorer eastern countries of the EU could be sold inferior products by food companies. A Summit in October is intended to help bridge the gap on this topic, as well as covering the digital single market, cyber security, and a “European industrial strategy”.

As also reported by The Telegraph, Selmayr mentioned that EU countries wishing to remain at the “core” of the European project after Brexit will probably have to join the Euro. This followed a suggestion by the Belgian representative that the Eurozone should form the core of the EU after Brexit, something which was challenged by both the Czech Republic and Hungary. The Czech deputy permanent representative pointed out that the EU should try to be more “inclusive”, and that if the eurozone was to become the “core” of the EU’s future, more incentives were needed to truly make the monetary union attractive for all Member States.

Apparently, Selmayr responded that without the UK, 85% of EU citizens are already living in the eurozone and that therefore it “probably” will become the core of “our” [the EU’s] future. He also added that “inclusion” could only be possible if there’s sufficient engagement coming from certain Member States (pointing at the Eurosceptic stance of the Visegrad countries).

Selmayr also discussed how he thinks that the pessimism resulting from Brexit and a number of recent European elections is slowly fading in favour of optimism about the European project.

On the EU Commission’s Working Programme:

Selmayr revealed how the European Commission intends to exploit the positive momentum economically and politically in the run-up to the European Parliament elections in 2019. The Commission is not planning to introduce any legislative proposals after May 2018 but instead to complete as many standing issues as possible.

At the meeting, there was discussion about a long list of technical issues that Member States consider to be priorities. These will be listed in the “Letter of Intent” to be attached to the State of the Union address. Completing the single market was just one of a somewhat unsurprising list of priorities. At the dinner, France and Germany were also pushing for “investment screening” – which they want to use to create a so-called “global level playing field”.

On the current functioning of the EU legislative process:

An interesting remark was made by the Belgian representative at the dinner, which reveals some unease with the way the EU legislative process is currently functioning, specifically within the Council of the EU, where Ministers gather to decide legislation. According to the Belgian participant, “these are not sufficiently oriented towards offering Ministers the chance to conclude a political deal. Council meetings relating to specific topics therefore have too often seemed to be a diplomatic convention, while COREPER I [where the deputy permanent representatives gather] has too often become an extension of technical working groups. The Council needs to get its political character back. Only in this way will there be an opportunity efficiently to get to agreements on these – essentially – very political issues so our politicians will also feel more involved again.”

On the EU Budget:

A number of questions were being asked by Member States regarding the future financing of the EU and the long term budget framework. Selmayr only gave very general answers to this, from which little could be deduced. It seems to be too early for greater clarity on this question, and, of course, the whole thing is linked with the sensitive negotiations with the UK over its financial “divorce settlement”.

On Brexit:

Brexit wasn’t discussed in detail, probably given the presence of a top UK diplomat. Unsurprisingly, Juncker’s priority is to maintain the unity of the remaining 27 EU Member States. Selmayr thinks this unity could be endangered if a number of crucial EU policy discussions aren’t settled, such as “social dumping” (referring to attempts to restrict posted workers in the EU, something Eastern European Member States oppose), “energy union”, “climate change” and “migration”. These topics were discussed in detail during the dinner. The Commission wants to achieve political agreement on these topics before Brexit enters a decisive or critical stage, supposedly to limit the UK’s potential to exploit these differences in Brexit negotiations.

The discussion mainly focused on the future of the Union. According to the minutes, the UK official in attendance said that negotations on that future of the EU are also of importance for the UK, given that the Union will remain the most important neighbour for the UK. Selmayr confirmed that at an upcoming Summit in Tallinn a discussion will probably be planned between heads of state and government in the margin of the informal digital summit. According to the minutes of the dinner meeting, at the time it was “not clear if this will be with [the EU] 27 or with 28”, although Theresa May has since confirmed that she will attend.