All Eyes on EU Summit this week. Predictions and Expectations.

Today’s special European Council meeting could potentially be one of the most consequential in recent years. This will be the first time Europe's leaders meet face-to-face since the outbreak of the COVID-19 pandemic. They face the difficult task of not only negotiating the Multiannual Framework Agreement or so-called EU budget but also to agree on the Commission's ambitious NextGenerationEU recovery plan. While most leaders have emphasized the need for a quick, decisive agreement that will show solidarity, unity and a common vision for tackling the severe economic consequences posed by the pandemic, the divergence of views and political stance might hinder the sense of urgency and the ability to make progress. GLOBSEC Brussels Office asked friends from around Europe for their predictions and expectations for this negotiation.  

“With the initiation by the French and the Germans, there is sufficient political capital to forge an agreement. The ‘Frugals’ will certainly do some ‘dancing around’ on their core points and will be granted several tweaks, but nothing deviating too starkly on substance (from the current version), or too distorting in terms of political messaging, will be admissible. The fact that the meeting will take place physically and will stretch over two days is good news and increases the likelihood of reaching an agreement,” Soňa Muzikárová, Chief Economist, GLOBSEC 

“The effectiveness of the recovery package will depend in large part on how quickly it is deployed. Financial markets have already anticipated a deal on the Recovery Plan. If we don’t have a deal by month’s end, financial markets may start doubting the relevance of a delayed recovery package, shaking confidence in Europe’s ability to adequately address the economic challenge. The summit should produce a compromise agreement that should see the proposed MFF & recovery package NextGenEU be adopted, even if the grant to loan ratio may be revised and some guarantees as to the use of the funds and their oversight be included,”  Philippe Maze-Sencier, Chair, Global Public Affairs, H+K Strategies  

“The stakes are high, but hopes are low for an EU budget & recovery deal at the EU summit. Nothing to seriously worry about, however. EU agreements on money are always tough and leaders love a show of tough brinkmanship and posturing for the domestic audience. Agreement is unlikely this week, more likely in the autumn, as German Chancellor Angela Merkel ups the pressure for a compromise,” Shada Islam, Managing Director, New Horizons Project 

 "Europe must overcome its divisions and demonstrate a capacity for action. Now is the time. A deal is essential, in order to build a long-term strategy for a low carbon economy and a more resilient Union, able to face the crisis to come,"  Alexandre Robinet-Borgomano, Head of Europe Program, Institut Montaigne  

“Aspirations exceed expectations for the upcoming European Council on 17-18 July. The menu of issues to be tackled is rich, and the positions of member states remain distant, with the Frugal Four and Hungary putting their foot down particularly on governance and conditionality, despite Chancellor Merkel’s mediation. A downward compromise on the basis of the negotiating box presented by EU Council President Charles Michel will not make negotiations between the Parliament and the Council easy,”  Nicoletta Pirozzi, Head of EU Programme, Istituto Affari Internazionali (IAI) 

“I think these negotiations will be tougher than many expected only four weeks ago. On the one hand, it’s good that we don’t just have North and South tearing into each other, as we did 10 years ago in the Euro crisis. Here, we have the Frugal Four in the North, the Friends of Cohesion in the South, the Visegrad countries in the East and a lot of shades of grey in between. Plus, a basic consensus between France and Germany. On the other hand, this also complicates the picture and makes negotiations more difficult. I expect more summits will be necessary to achieve a final breakthrough,” Roland Freudenstein, Policy Director, Martens Centre (WMCES) 

“The EU’s response to the COVID-19 crisis has revealed the full scale of the benefits of EU solidarity. This needs to continue now with a solidly-funded long-term European recovery plan that caters fairly to both southern and northern members; with the Green Deal as the sustainable backbone of competitiveness, and restored emphasis on rule of law. It’s the only agenda we can afford at this time when the crucial goal is to preserve the European project and hopefully design a new global leadership role for the EU. This can really be the “a-ha” moment for the EU!” Oana Popescu Zamfir, Director, Global Focus Centre