Welcome to Better Europe’s weekly update on EU Affairs.
HUNGARY PREPARES FOR PRESIDENCY AMID CONCERNS OVER NATIONALIST AGENDA
As we are moving towards the end of the Belgian Presidency of the Council of the European Union, which will wrap up on 30 June, Hungary is getting ready to take over. Although the rotating presidency of the Council is meant to position the presiding Member State as an honest broker, there are doubts in Brussels on whether Hungary will be able to ignore its national interests and not push for its populist and nationalist agenda. While Hungarian representatives have repeated that they would not deviate from customary practices, certain signs point at a different story – particularly last week’s reveal of the Presidency’s official slogan: “Make Europe Great Again”, which makes a clear reference to former U.S. President Donald Trump. Fortunately, the Hungarian presidency does not arrive at a key point in the legislative cycle, and will mostly have to coordinate the start-up of a new European leadership. Aside from setting up a few public shows, Prime Minister Viktor Orbán is not expected to have much room to impact the EU’s policies and tilt the bloc in his direction. Any damage should therefore be limited in the short-term – but Orbán’s influence could very well be reinforced in the years to come, in case extreme right forces continue to rise and seize power in additional EU Member States.
MEPS ELECT GROUP PRESIDENTS, REFLECTING INFLUENCE OF NATIONAL DELEGATIONS
For the past two weeks, newly elected MEPs have come to Brussels in order to meet their counterparts and start with the composition of European political groups. This has notably included the election of parliamentary group leaders, which tends to act as a demonstration of (new) power dynamics within the group. Generally, elected group leaders come from the biggest national delegation within their political group. The logic is applied this year as well – Germany’s Manfred Weber (EPP), Spain’s Iratxe García Pérez (S&D) and France’s Valérie Hayer (Renew) were re-elected presidents of their respective group. Due to poor results in the elections, Hayer’s leadership was challenged, although she eventually retained her position. In the Greens/EFA Group, which is traditionally headed by two co-presidents, Terry Reintke was re-elected, even if the German Greens underperformed in elections, and was joined by Bas Eickhout, who has led a successful joint campaign with the socialists in the Netherlands. ECR, which is now the third largest group in Parliament, is delaying the appointment process and has no president yet, just as ID and LEFT. This comes as a reminder that while parliamentary political groups are an efficient framework to map potential majorities, close attention should be payed to their composition – the largest national delegations will heavily influence the group’s overall political direction of travel.
MEMBER STATES AND ECB MAKE PROGRESS ON DIGITAL EURO
Offline digital euro, privacy, and holding limits – these are the key topics on which a progress report has been published by the Belgian Presidency, and the European Central Bank in its own preparation phase of the digital euro project. The ECB wants to ensure that the digital euro is not only operational in an offline mode, but that the offline functionality provides a cash-like privacy level, while the member states in the progress report indicate potential agreement on privacy features and support the simultaneous launch of online and offline versions. Holding limits are a different type of story. The ECG puts forward the idea that the business users may have zero holding limits, while the methodology of calculation of limits for individual users is to be developed. Member States seem to support the holding limits, stating that a limit across multiple accounts cannot exceed the overall legal holding limit set out in the Regulation. More broadly, holding limits have been the bone of contention among different stakeholders, with civil society making sure that such a limit does not impact the usability of digital euro, and banks, on the other hand, arguing that a limit is a must to protect financial stability.