EU gears up for European Council showdown

 

EU gears up for European Council showdown

BY JACOPO BARIGAZZI

DECEMBER 1, 2023 7:00 AM CET

https://www.politico.eu/newsletter/brussels-playbook/eu-gears-up-for-european-council-showdown/

Brussels Playbook

By JACOPO BARIGAZZI

 

BREAKING THIS MORNING: Israel’s military announced an end to its truce with Hamas, claiming the militant organization violated the cease-fire by firing at Israeli territory. Hamas-affiliated media reported gunfire in the north of the Gaza Strip shortly before the cease-fire was due to expire Friday morning. The BBC’s liveblog also reports that air strikes have hit southern Gaza, with the Israel Defense Forces saying jets “are currently striking Hamas targets.”

 

GOOD MORNING. This is Jacopo Barigazzi, POLITICO’s senior diplomatic correspondent, bringing you today’s Playbook. In this edition: A confidential German document on the European Peace Facility triggers anxiety in the defense community on the future of military aid to Ukraine. But let’s first have a look at the looming showdown at this month’s European Council, as Hungary’s Viktor Orbán and the rise of the far right threaten to derail talks. Umberto Eco used to say that no one would buy a newspaper made of good news: with two wars, AI concerns and all the rest, lately I tend to disagree with him.

 

EUROPEAN COUNCIL

EUCO TROUBLES: The next European Council is still two weeks away, and one of the games in town is trying to predict whether it will last until Saturday or if it could be one of the shortest ever, given there is plenty for member countries to disagree on.

 

Standing in the way: The major obstacle — but by all means not the only one — is Hungarian Prime Minister Viktor Orbán’s threat to block all EU aid for Ukraine as well as the country’s accession to the Union. “We are heading toward a major crisis,” one EU official said, ahead of the mid-December meeting. One senior EU diplomat warned this could become “one of the most difficult European Councils.”

 

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High stakes game: EU leaders are set to make historic decisions at the summit in mid-December, on bringing Ukraine into the Union and on sealing a key budget deal to throw a €50 billion lifeline to Kyiv’s flailing war economy. The meeting is supposed to signal that, despite the political distraction that is the war in the Middle East, the EU is fully committed to Ukraine.

 

All about the money? Orbán’s threats are viewed by some EU diplomats as a strategy to raise pressure on the Commission, which is holding back funds for Hungary over concerns that the country is breaching EU standards on the rule of law.

 

Playing the game: But increasingly, Brussels is worried about Orbán’s long game. The Hungarian leader also feels the wind is blowing his way after the recent election results in Slovakia and the Netherlands, where he sees the winners as being on the same page as him when it comes to Ukraine and other issues. Barbara, Nick Vinocur and myself have the story on how far Budapest is really willing to go to thwart EU support for Kyiv.

 

ALIGNMENT OF STARS: Speaking of the European Council — can you imagine one where the far-right’s Geert Wilders sits at the table as Dutch prime minister chatting with Orbán? For several analysts, immigration, the Hamas-Israel war, fatigue with mainstream parties, and insecurity over the war in Ukraine are turning into an unprecedented alignment of stars for Europe’s far-right parties as many of them attempt to capture the center ground. Next year’s EU election is shaping up to be a “clash of civilizations,” write Clea Caulcutt and Nick.

 

This weekend: Leaders and representatives of Europe’s nationalist right will gather at the Medici Fortress in Florence on Sunday to launch their campaign for the European election and start writing a manifesto, Hannah Roberts writes in from Rome. However, according to media reports Wilders will not be there. Marine Le Pen will join via video link — but her party’s president and enfant prodige Jordan Bardella will attend.

 

DEFENSE FUND DEBATE 

WHEN CHAOS REIGNS: One thing is clear — those who predicted that the fall of communism meant the end of history were utterly wrong, while those who predicted instability and chaos would continue were right. Which means that investment in defense has today become a priority for all.

 

EU defense ambitions: Both Commission President Ursula von der Leyen and European Council President Charles Michel used an event organized by the European Defense Agency on Thursday to call for ideas to find money for EU defense ambitions. Von der Leyen hinted that EU countries boosting their defense spending should have that taken into account when calculating whether they are running an excessive deficit. And Michel touted the creation of European defense bonds. 

 

THE BIG EPF QUESTION: It’s against this backdrop that the debate on EU military aid to Ukraine, through the off-budget European Peace Facility, is ramping up. And not only because Hungary is blocking the eighth tranche of EPF money for Kyiv — discussions on the fund are also proving very complicated. A German confidential non-paper, seen by Playbook, has been creating much anxiety in the defense community.

 

Scholz more than Orbán: The non-paper has caused such a stir that, in the words of an EU diplomat: “Notwithstanding everything Germany did over the last 12 months it won’t be Orbán but Scholz who ends up halting EU military aid to Ukraine,” in reference to the German chancellor.

 

What’s going on? It’s no secret that Germany has had doubts about the EPF for a long time. Berlin provides a quarter of EPF funding and often sees that money used by member countries to modernize their own military equipment, sending their old stuff to Ukraine and using the EPF partial reimbursements to buy new kit for themselves — and not necessarily from German companies, diplomats say.

 

What’s in the paper? In its paper Berlin says that to make the support to Ukraine predictable and efficient the use of the EPF “must evolve” and “the Ukraine envelope” in the fund should be “taking fully into account the financial burden of Member States that take direct procurement initiatives forward.”   

 

The ‘in kind contributions’: Military support to Ukraine could be provided, the paper says, “either through financial contributions to the Ukraine envelope in the EPF or as direct deliveries of military equipment to Ukraine (‘in kind contributions’).” Many countries are still studying the implications of this line and the possible definition of “in kind.” But three diplomats say that Berlin’s idea means discounting from the EPF what has been provided bilaterally by member countries.

 

Liquidity issues: The major problem with the idea, noted by two senior diplomats, is the possible liquidity issues that the proposal would create. Imagine that a superpower like Germany discounts from the EPF all the bilateral help that it provides, instead of putting its share of money into the fund. If other big EU defense players, like France or Italy, do the same, the EPF will be left with a liquidity issue — only the countries that have no defense companies producing material to supply, or those that are neutral, will be putting money into the EPF.

 

Opening salvo: For some diplomats it’s just an opening salvo and the German line will, possibly, evolve. One diplomat also argued that if the EU as an entity is left with a very small role in providing weapons, because military aid becomes mainly an affair of bilateral relations, those in the U.S. who want to halt aid to Ukraine could say: “You see, the EU is doing very little, why should we bother?”

 

OTHER LINES: Another non-paper on the EPF, circulated by France and also seen by Playbook, stresses the need to ramp up European defense industry capacity as “critical” and sees the “primary role” of the EPF “transitioning” from “a destocking to an acquisition instrument directly from the European industry.” However a person close to the dossier dismissed it, saying it was “an internal draft that has never been diffused, totally outdated and has no value.” 

 

Voluntary contributions: Finally, Hungary has proposed “voluntary contributions” to the EPF, three diplomats say. But it’s unclear what that means. Voluntary contributions are already possible, but come on top of a member country’s contributions based on their wealth, stressed one of the diplomats. But if funds only come from voluntary contributions, then the EPF “will hardly function anymore” said a second diplomat. 

 

ROAD TO 2024 ELECTION 

GREENS TO CHOOSE LEAD CANDIDATES: Delegates of various green factions from across the Union are about to decide which top political figures among their ranks will lead the European Green Party’s campaign in next year’s EU election, writes in Louise Guillot.

 

Details: Candidates to lead the Greens’ EU campaign — usually a man and a woman to ensure gender balance — will try to convince party members they’re the best fit to score a win in the June election and present their ideas during an online congress on Saturday. The co-leaders of the campaign will then be chosen during the European Greens congress in Lyon in February. The party will also discuss its priorities for the EU election campaign.

 

Who’s in the race: Four candidates have entered the race, according to a European Green Party official who Louise spoke to. These are: Dutch MEP Bas Eickhout, Latvia’s Elīna Pinto who works in the European Commission’s representation in Luxembourg, German MEP and current leader of the Greens’ group in the European Parliament Terry Reintke as well as Italy’s Benedetta Scuderi, a spokesperson for the Young European Greens.

 

MEANWHILE, IN PARLIAMENT 

SPANISH FAR-RIGHT GOES OFF RAILS OVER MISSING TROLLEY: Parliamentary assistants exchanged desperate pleas, memes and reprimands on Thursday in an incident over a missing luggage trolley, Eddy Wax writes in to report, having seen the email chain.

 

Wheels come off: An aide to VOX lawmaker Mazaly Aguilar sent an email titled “STOLEN TROLLEY!!!!!” to all 2,000 parliamentary assistants, informing them in red capital letters that a trolley painted in “ECR blue” was either stolen or taken from them, demanding it be urgently returned and saying that Parliament security was checking CCTV footage.

 

‘Trolleygate’: Cue a stream of mockery from other assistants who replied with images of the trolley photoshopped onto Place du Luxembourg or beaches, weak puns on “trolling” and even a fake (but plausible!) POLITICO article with the headline: “Trolleygate: Brutal theft shocks European Parliament.” One assistant asked for a phone number because “the biggest newspaper in Estonia, ‘The Daily Trolley’” wanted an interview.

 

Off their trolley: The VOX assistant who sent the original email didn’t see the funny side, and accused the pranksters of having “too much free time,” to which one retorted: “Don’t take everything too seriously.” The email thread then lost its levity, with another ECR aide jumping in to accuse the meme-sters of harassment, and others urging assistants to tread the “fine line between a good joke and bullying” and suggesting people take a training course.

 

IT WAS NOTHING, WHEELY: The trolley was ultimately found two hours later …

 

ISRAEL-HAMAS WAR

ISRAEL-SPAIN ROW: Israel recalled its ambassador to Madrid and said it would reprimand Spain’s ambassador in Tel Aviv after Spanish Prime Minister Pedro Sánchez said he had “serious doubts that Israel is complying with international humanitarian law.” It’s the second major diplomatic spat between the two countries in just over a week, following comments Sánchez made about Israel’s actions in Gaza while on a trip to Israel and the West Bank. The Guardian has more.

 

SEA CORRIDOR TO GAZA UPDATE: The first batch of humanitarian aid destined for Gaza via the Cyprus-backed sea corridor has arrived in the Cypriot port city of Larnaca, reports Nektaria Stamouli. The shipment, which arrived from the U.K., consists of 80 tons of humanitarian aid. However, several logistical challenges remain in setting up the seaborne aid route.

 

JOE BIDEN AND THE ISRAEL-HAMAS WAR: U.S. President Joe Biden has been inconsistent on the war between Israel and Hamas, trying to have it all ways, POLITICO’s Jamie Dettmer writes. The U.S. leader tends to go by his gut instincts when making decisions, and as a result, the quip doing the rounds in Tel Aviv is that “Biden is your best friend, until he isn’t.”