Welcome to Better Europe’s weekly update on EU Affairs.
EUROPE’S STRUGGLE FOR RELEVANCE IN A FRACTURED G20
The G20 summit in Rio laid bare Europe’s struggle to remain relevant in a fractured global arena. With U.S. President-elect Donald Trump casting a long shadow, European leaders scrambled to defend their climate and geopolitical priorities against growing resistance. French President Emmanuel Macron didn’t mince his words, calling the G20 “a forum that doesn’t work” and lambasting its failure to act on climate change or the conflicts in Ukraine and Gaza. Commission President Ursula von der Leyen pushed for progress on climate finance, but Argentina’s provocative new leader Javier Milei – channelling Trump’s anti-multilateralism – stalled talks on the final communique. Ukraine, once a G20 focus, fell by the wayside, while German Chancellor Olaf Scholz’s surprise phone call to Vladimir Putin raised eyebrows, signalling a possible softening of Europe’s united front as Trump’s bilateralism looms. Meanwhile, Macron continued to push von der Leyen to scrap the EU-Mercosur trade deal, citing environmental concerns, to regain some leverage. With the G20 fractured and Trump’s return threatening to derail multilateral cooperation, Europe faces a critical question: Can it forge new coalitions to drive global action on climate and conflict, or do we risk fading into irrelevance at COP29?
APPROVED VON DER LEYEN SPILLS BEANS ON REPORTING DEREGULATION
White smoke in Brussels for the von der Leyen 2.0 Commission, after the EPP and S&D climbed down from their trees earlier this week in a series of high-level meetings and under pressure from key government leaders such as Donald Tusk and Pedro Sanchez. Both big groups had to step back from their high horse, with the S&D accepting ECR-Commissioner Raffaele Fitto despite earlier promises to maintain a “cordon sanitaire” and the EPP pushing back their Spanish member Partido Popular to give up the national attack against Teresa Ribera. Nevertheless, the agreement marks a new era in EU politics and confirms the EPP’s kingmaker role with a semi-permanent arrangement with S&D and Renew but an alternative majority possible with the extreme right. In any case, VDL2.0 is expected to move fast on the “administrative simplification” agenda, with a stronger focus on the competitiveness principle in the Commission’s internal Better Regulation rules, and news breaking of a forthcoming “omnibus” revision to slow down or dilute the EU’s recently adopted rules on corporate reporting, due diligence, and the sustainable finance taxonomy. Perhaps big European companies now need to stop asking the Commission to open this can of worms, because regulatory arbitrage is not going to create the regulatory certainty and investment climate that Europe needs
ROMANIA AND BULGARIA’S SCHENGEN VICTORY: WHAT’S NEXT FOR ENLARGEMENT?
Romania and Bulgaria are set to join the Schengen area in January 2025, marking a major milestone after years of delays. The two countries will finally have full access to the EU’s open borders, which is expected to boost their economies and facilitate smoother travel. This breakthrough follows a partial border control-free entry by air and sea arrangement earlier this year. Romania alone estimates it loses €10 billion a year by not being in Schengen – now the promise of full membership could add half a percentage point to its GDP. But while Bucharest and Sofia are celebrating, the The Western Balkans Six (WB6) are still waiting in the wings. Kosovo and North Macedonia, for example, seem to be locked out of the EU’s inner circles as neighbouring countries start accession negotiations. Meanwhile, countries like Ukraine and Moldova are being offered promises of eventual membership. But their path is far more complex, especially in the case of Ukraine, which would have massive implications for the EU’s agricultural policy and budget. Integrating Ukraine’s vast agricultural sector alone would require significant changes to the EU’s Common Agricultural Policy – a challenge that will take years of internal debate to resolve. The Schengen victory of Romania and Bulgaria is a reminder of the EU’s potential to deliver on its promises, but it also highlights the slow and often cumbersome process of enlargement. For the Western Balkans, and Ukraine in particular, the road ahead remains full of hurdles, as both geopolitical and economic considerations will determine how quickly the EU can open its doors.