18.2.2009, EU Policy Centre, Belgie, Brusel
European Policy Centre
Breakfast policy briefing
2009 EU Presidency: a first Czech-up
With A. Vondra, Deputy Prime Minister for European Affairs
of the Czech Republic
18 February 2009
• When governments take office, they are usually allowed 100 days of undisturbed settling-in. The Czech Presidency didn´t even get 100 hours to take a comfortable seat behind the EU Council steering wheel – Gas + Gaza catapulted us right to the centre of events.
• Presiding the Council for the first time is like driving a new and powerful car. We´ve managed to stay on the road through the first two sharp and slippery turns. Our task now is to keep the pace throughout the race. And assure our fellows that sleeping behind the wheel does not belong to Czech driving habits. We have 6 weeks behind us, so what is the balance after the first fourth of the Czech Presidency?
• Gaza – The EU has assumed its global responsibilities and filled the vacuum at times of transition between administrations in the US, which is traditionally active in the region.
• Diplomatic mission headed by Foreign Minister Schwarzenberg, backed by Commissioner Ferrero-Waldner, Council High Representative Solana and our Trio partners visited the region immediately after the outbreak of fighting.
• Prime Minister Topolánek took part in negotiations at Sharm el Sheikh which contributed to the cease-fire.
• The Presidency sent an expert team to Gaza to evaluate the humanitarian situation, which is now our utmost priority. We continue to communicate with our partners in the region. We support Egyptian efforts to create a government of national consensus in charge of reconstruction and elections. We also welcome Egypt’s offer to host a donors’ conference at the beginning of March, which the EU will co-sponsor.
• It is crucial that the EU remains active in the region. While doing so, it is equally important that we work hand in hand with the US and the Quartet. Given the results of the Israeli elections we might have to wait a while before the government coalition is negotiated – President Obama´s support for a two-state solution is crucial for the EU and US to have enough leverage to urge the continuation of the peace process. This is one of the reasons why we would like the Middle East to be one of the topics of European meetings with President Obama.
• Gas – was an even more drastic – even if anticipated – start to the Presidency.
• More than 20 EU members were affected by gas shortages caused by the annual dispute between Russia and Ukraine. The Czech Presidency and the European Commission managed the situation side by side and finally helped to find solutions. We brought the two sides to the negotiating table and we were able to preserve the unity of the EU – not an easy task when Bulgarian citizens were freezing and Slovak enterprises on the verge of collapse. While doing so, we felt very strongly how much the word ”European Solidarity“ needs to be filled with substance.
• The Czech Presidency placed energy security among its three main political priorities (Economy, Energy, Europe in the world) long before the disruption of gas supplies once again displayed the vulnerability of the EU. The main task of the Presidency will now be twofold.
o First – to work on re-establishing confidence vis-a-vis our Eastern partners, which has been shaken due to the crisis. We must not disengage ourselves from Ukraine. It is the EU´s vital interest to contribute to the stability, transparency, better government and economic development of this country. That is why in the light of the crisis EU should step up its efforts to establish the Eastern Partnership. The Czech Presidency will launch this initiative by holding a high-level summit on 7 May 2009. We, of course, also need to develop and restore a relationship of trust with Russia.
o Second, to use the momentum and political will generated by the crisis to bring the most pressing long-, medium- and short-term measures which increase energy security into being. The energy ministers are meeting tomorrow to set priorities regarding energy security and solidarity. We believe they should include i.a.:
Diversification of energy suppliers, sources and supply routes – We need as many options as possible – including the Northern Corridor, the Southern Corridor and Nabucco
Better interconnections – Work on the six priority infrastructure actions should be carried out: The Southern gas corridor, LNG supply for Europe, interconnections in the Baltics, North-South interconnections within Central and South-East Europe, the Mediterranean Energy Ring and the North Sea Offshore Grid
Regular assessment of energy supply and demand that would facilitate identification of investments that could reduce risks to the security of supply
Enhanced external dimension of the EU energy policy – The EU should speak with one voice. We should also step up our energy relationships with third countries and regions notably via the Eastern partnership and cooperation with Russia. High-level political engagement with supplier and transit countries of the Southern Corridor or further accessions to the Energy Community Treaty are equally important.
Crisis mechanisms for oil and gas supplies
Increased energy efficiency
Needless to say, apart from the European Economic Recovery Plan, the EU will need appropriate means to achieve these goals.
Energy will belong to the main issues of the Spring European Council, along with the economy. Which brings me to the fact that major challenges are still ahead of us. The Czech Presidency is taking place at the time of the worst economic downturn since the foundation of the European Communities. The GDP of the euro-zone economy shrank by an annualised 5.9% in the fourth quarter of 2008. New Member States suffer from recession, too, since Germany and other Western Europe countries are their vital export markets. The economic slowdown is accompanied by a deterioration of the situation on the labour market – The Commission expects that 3,5 million jobs will be lost in the EU this year. Public finance is getting under pressure, too – due to lower tax revenue and increased spending for recovery measures. The Commission expects the total EU deficit to double to more than 4.4% of GDP this year. Last but not least, while the European elections are approaching, we have to explain to our increasingly angry citizens, why the public has to foot the bill for the problems of financial institutions.
These combined effects represent a serious threat not only to European prosperity, but to the very founding principles of the single market, and, in extremis, to the idea of European integration as such. In an effort to boost domestic economies and industries, governments are under pressure to bring about measures which may not be in line with state aid rules or the principle of non-discrimination, which is the very basis of the acquis communautaire. The temptation of protectionism and passing problems on to other EU countries is huge – and dangerous, as it sacrifices the long-term prosperity of all to satisfy short-term populist demand. Unless the recovery measures of the EU Member States are better coordinated, they might lead to serious infringements of free competition, spillovers and other externalities in the medium-term. The Czech Presidency has therefore decided to call an extraordinary informal meeting of the Heads of State and Government on 1 March 2009, to discuss these issues. Preliminarily, we see three main possible issues on the agenda:
1) How to reach harmony and better coordinate national recovery measures so as to increase their positive multiplication effect and avoid exacerbating the current situation by passing problems on to other Member States?
2) How to re-open credit channels stalled due to the crisis and hampering the functioning of businesses?
3) How to better implement the European Economic Recovery Plan and measures supporting employment?
The extraordinary meeting will also serve as a run-up to the Spring European Council, where we are planning to take stock of progress achieved in ensuring greater stability, supervision and transparency of financial markets. We will also assess the implementation of the EERP. We would like to use this opportunity to underline that short term fiscal measures should be followed up by long-term consolidation measures. We would like to reiterate the Member State’s commitment to return to the medium-term budgetary targets as soon as possible, since increasing public deficits represent, in the long run, a danger for the economies which is as important as recession itself (as we can see in the cases of some indebted EU countries). Since it is absolutely crucial to maintain the integrity of the European Union´s single market to tackle the recession, we would like to underline at the Spring European Council the importance of adhering to the fundamental principles of the internal market. The importance of implementing all the pillars of the Lisbon Strategy should be mentioned, too.
Not to forget other important issues on the agenda of the Spring European Council, we would like to establish the Union´s position in view of the G20 summit. Apart from the Economy, Energy and climate change will be another important chapter of the Spring European Council, the content of which I have already outlined above. The European Council will have the important task to establish the position of the EU regarding the preparation of the Copenhagen conference, including scaling up finance and investment flows for both mitigation and adaptation efforts in developing countries.
And, last but not least – external relations – we would like the Council to approve the Eastern Partnership initiative with a view to the summit to be held with the partner countries in May.
Conclusion
As you see, our agenda is pretty full. While during the first half of the Presidency energy and the economy will be the leading topics, the Lisbon Treaty, institutional issues and external relations will govern the second – at least as demanding as the first. I believe you will agree with me that, given the issues on the daily EU agenda, the choice of our priorities – Energy, the Economy and External relations – was more than appropriate. The Czech Republic is not a super-power – the main added value of our Presidency should be consensus-building and adherence to the rules of the game. We are assuming our task with full responsibility and consideration for the interests of the EU as a whole. I very much hope that we will earn your respect by our deeds.