(Washington Insider Magazine) – There is no year that is not busy in Brussels. Whether on their own initiative or because circumstances require it, the European institutions are advancing in an accumulation of dossiers that only follow the strategic lines drawn for the future of the community. And 2023 was not going to be less. It looks like a hectic year. With the legacy of the war in Ukraine as a catalyst for global geostrategic change and a European energy market plunged into a pressing drift. The fiscal rules postponed by the pandemic and an economic context marked by skyrocketing inflation will be another of the axes that mark the European agenda.
2023 looks intense. And with Sweden kicking off the rotating European Union presidency in the first half of the year, it remains to be seen what tirades his leadership pursues. At least until the second half of the year, when in June Spain takes the reins of the rotating presidency of the EU.
And the exercise begins with an economic context in which inflation registers historical data. And despite the renewed expectations that price levels in the Eurozone will remain below that limbo marked by 10% in November, all that remains is to sit back and wait to see if the rate hike outlined by the European Central Bank, indeed, it works.
Although the European banking authority already made, at the beginning of 2023, a call to continue with the rise in interest rates, the data from the Twenty is presented almost as an oxygen balloon. And the economic slowdown that has marked the eurozone in the last quarter of the year, without reaching a technical recession, raises hopes that the pessimistic forecasts remain mere omens.
While the famous escape clause, which de facto suspends the spending rules in the community market, has remained active since the pandemic, its extension calls for its deactivation at the end of this year. And so it is urgent to finalize the reform of the Stability and Growth Pact, which establishes that member states may not exceed debt levels over GDP of 60% and 3% in the case of deficit over GDP.
What the Twenty-seven will negotiate now is part of the Community Executive’s proposal to make the rules more flexible so that, at least, they can be complied with. And although it has proposed establishing a tailor-made suit for each Member State, non-compliance will be accompanied by tougher sanctions, with reputational effects in the markets.
Consequences of Ukraine War
Also the war in Ukraine and its consequences will be another of the points that will focus the debate. In what could be the second departure of Ukrainian President Volodimir Zelensky from the country since the war began, he will head to the EU leaders’ summit in Brussels next February.
The change in geopolitical scenery due to Russia’s military invasion of Ukraine has completely disrupted the EU energy market. It will be this year that the European Union will have to address the reform of the electricity market, whose proposal is expected at the beginning of the year, after a 2022 marked by challenges in this area.
But the change in supply routes, mainly for gas, has prompted the European Union to look beyond its neighborhood to meet demand. The question, beyond diversifying the supply, or moving forward with a mechanism for joint gas purchases in March, will be whether the bloc will be able to build ties with new trading partners.
It is in this scenario that relations with Latin America and Spain’s leading voice in this regard stand as two key players for 2023. But another key partner must not be forgotten. The relationship with the United States is articulated as key for the EU, but the Joe Biden Administration’s subsidy package will begin to be disbursed in January to deal with inflation, it will require ironing out rough edges with the other side of the Atlantic. For now, at the start of the year, the European Commission has projected a proposal to make State aid more flexible, but, in the background, there are the cries of the Member States that defend that it is a protectionist measure that promotes the purchase of American products and lowers the competition rules. So the EU will face the crossroads of providing a similar package to its industry and the risk of a trade war with the US that interests it rather little.
The Qatargate bribery and influence peddling plot seems to have more of a run. In the spotlight, the recent request by the Belgian court to lift the immunity of two MEPs: the Italian Andrea Cozzolino and the Belgian Marc Tarabella. Two other Social Democrats like the former vice president of the European Parliament, Eva Kaili. And in the background the relationship of the EU with other partner countries and involved in the plot, such as Morocco and Mauritania.
With the European elections planned for May 2024 in the background, the EU will address other issues, the asylum and migration pact, which will be the subject of a new attempt to unravel, with a focus on border issues.
This article is originally published on eleconomista.es
