Global Europe Brief: A blue-yellow foreign policy to-do list

A blue-yellow foreign policy to-do list

Brussels is back in full swing – after an admittedly slow start to the season – and so are we with this newsletter.

Expect wrestling over the EU’s continued response to Ukraine; pushes for increased economic resilience vis à vis China; more soul-searching on NATO and potential steps towards enlargement.

Here’s our run-down of what to expect:

EU in the world

The fallout from Russia’s war on Ukraine is expected to dominate the next few months as Kyiv moves ahead with its counter-offensive and slowly but steadily seems to be retaking ground.

The authors of this newsletter couldn’t help but notice a change in tone in some European diplomats’ comments over the summer that reflected on the previously ‘too slow’ Ukraine support pace and a failure to ‘give Ukraine the ‘stick’ it needs’.

It’s a long blue-yellow to-do-list: From expected wrangling over the €20 billion war fund proposal to provide Kyiv with long-term military support, and work on another sanctions package against Russia to curb circumvention, to the delayed and much anticipated European Commission proposal on how to grab and utilise Russian frozen assets, and the ongoing, contentious dispute over tariff-free imports of Ukrainian grain.

The hottest debate of the next few months is expected to be on the European Peace Facility (EPF) after the EU’s diplomatic service (EEAS) advised member states to pledge an extra €20 billion to continue reimbursements of European military aid to Kyiv and €3.5 billion for the rest of the world.

Enter Hungary. Budapest refuses to green-light the disbursement of the eighth €500 million tranche to Ukraine until Kyiv removes the country’s OTP bank from its blacklist of ‘war sponsors’. According to EU officials, the EU’s chief diplomat Josep Borrell had made a nearly successful push on the matter over the summer, but in the end, the Hungarians did not yield.

Speaking of, another looming battle will be the question of where the bloc still has the appetite to go for a 12th package of Russia sanctions – experts believe there is still quite a bit of room – and how long the EU will play for time on plans to use Russian frozen assets to rebuild Ukraine.

The proposal was due before summer but has been repeatedly delayed amid strong opposition by both the European Central Bank (ECB) and major member states, but there is a chance European Commission President Ursula von der Leyen could unveil some ideas as soon as next week.

After the G20 stopped short of condemning Russia’s invasion of Ukraine, in what some diplomats said could be a painful turning point, Kyiv’s Western supporters face the major challenge in the next few months of how to keep the rest of the world engaged on the matter.

Though European diplomats would not admit it publicly, fears of ‘Ukraine fatigue’ have been increasingly on their minds in the past few weeks.

All eyes will be on this year’s UN General Assembly in mid-September where Ukraine is expected to top the agenda both in public speeches and in the corridor side-line talks.

Ukrainian President Volodymyr Zelenskyy is likely to head to New York, where he is expected to make the case for his ‘Peace Formula’ plan, according to people familiar with the matter. A dedicated global summit has so far been delayed, also because some of Ukraine’s Western allies would like to first see more countries from the so-called Global South on board with the concept.

In New York, expect to see Europeans make serious attempts to get non-Europeans to rally around Ukraine’s yellow-blue flag. According to EU officials, the bloc’s foreign ministers over the past months had agreed to coordinate a joint approach towards sceptics. Also, watch out for a UN Security Council debate about peace in Ukraine.

The latest coups in Africa have exposed some uncomfortable truths: The continent is on the verge of unravelling, and the EU is not only unable or unwilling to help – it is most probably not even fully aware of the situation on the ground.

With the bloc grappling to assess the situation and find a response (to Niger or other potential problem areas) to stem the increasing instability in West Africa and the wider Sahel region, expect the issue to remain on the agenda and potentially a discussion on how to reframe the bloc’s missing Africa approach.

Expect relations with Beijing to remain high on Brussels’ agenda as the EU continues to try to chart a third way, positioning itself as a balancing power between Washington and Beijing.

Through a series of internal papers, the EU’s diplomatic service has urged member states to be less naive about China and to reduce their economic exposure in key areas. After an initial strategic debate before summer, the next discussions are planned for this autumn, before a yet-to-be-scheduled EU-China summit by the end of the year. And before that, EU’s chief diplomat Josep Borrell is expected to make his long-delayed trip to Beijing.

All this comes at a time when the EU’s diplomatic service is in search of a replacement for its departed Asia chief to steer its changing China policy.

Meanwhile, key aspects of the EU’s proposed Economic Security Strategy — including outbound investment screening and tougher export controls — are at risk of being delayed, some EU diplomats say. But expect more on tightening trade defence instruments and efforts to diversify critical supply chains away from China, especially raw materials.

Defence corner

For EU defence, the task ahead will be to turn the response to the war in Ukraine into an actual EU industrial policy.

Over the past few months, policymakers saw proposals landing one after the other on their desks, with one purpose: to buy and produce weapons as fast as possible to support Ukraine’s fight off Russia’s invasion and replenish their own depleting warehouses.

The EU says both the Defence Industry Reinforcement via Common Procurement (EDIRPA) and the Act in Support for Ammunition Production (ASAP) are on track, with Internal Market Commissioner Thierry Breton saying he is “confident” timelines can be kept as promised. Questions remain if member states will actually make use of those programmes, to structure cross-border defence cooperation and kick-start a joint procurement culture.

In the following months, the EU’s executive also looks to propose a new European Defence Production Act, which could be a permanent framework to bolster defence production in crisis times. It is also planned to propose a European Defence Investment Plan (EDIP), including a VAT exemption on member states’ purchases. But as the EU’s purse runs low on cash, its future is also uncertain.

“Is the funding high enough? Absolutely not,” Breton said, pushing for the European Investment Bank (EIB) to change its anti-defence funding stance: “Defence is now an EU policy. It is normal that the EIB adapts to support EU policies.”

The bloc’s industry now needs to stand “available”, he also stressed. “People often say it’s not normal to not buy European. But if lead times last two or three years, it cannot work.”

A proposal to grant member states debt relief to incentivise defence spending will help out the money chat. Keep an eye on that one as a deal seems close.

In the other part of town, the buzzwords in the corridors of NATO’s shiny headquarters in the next months will be ‘implementation’ and ‘accession’.

Before summer, NATO members may have agreed “to extend an invitation to Ukraine to join the Alliance when allies agree and conditions are met” and billed the summit as a “success”. But the reality is that the exact same divisions remain, three NATO diplomats told EURACTIV. Looking towards NATO’s November meeting, diplomats work at defining ‘conditions’ for Ukraine’s path that foreign ministers could sign off.

It still remains to be seen when Sweden will be able to leave NATO’s waiting room. The optimism of a speedy accession in Vilnius has left NATO diplomats, EURACTIV hears in HQ – at least until Ankara can be satisfied with additional anti-terrorism measures.

And then there’s the money debate: Will NATO members be able to put money where their mouth is, as the military top men patiently await substantial investment and recruitment to implement the new defence plans?

One thing to watch will be the road to NATO’s glossy 75-year anniversary summit in Washington in July 2024, which will see the appointment of a new Secretary-General to succeed Jens Stoltenberg – for real this time, people say.

Enlargement latest

When it comes to the mother of all EU political sparring matches, expect the issue of enlargement to eclipse them all. The question of how and when to enlarge could prove to be the main battle for Europe’s soul this year.

A first substantial discussion between EU leaders, after several rounds of talks in various formats earlier this year, is expected when they meet for an informal summit under the rotating Spanish presidency in Granada in early October.

Some Western Balkans ministers voiced their frustration at moving goalposts and argued for a gradual path of ‘progressive’ integration – with access to the EU’s single market and in various policy fields like energy or transport – before actual accession to the bloc. A dedicated EU-Western Balkans ministerial later this autumn is expected to see attempts to erase their doubts about the bloc’s commitment.

With its regular annual enlargement progress reports due in October, the European Commission boldly announced it would now come up with “substantial proposals” for the way ahead to bridge the time for the EU hopefuls until they can enter through the front door.

“The question has always been: Do we want to do it? And it is the first time I hear from the European Council that they want to do it – it is a welcome development,” Enlargement Commissioner Várhelyi told EURACTIV last week.

Expect EU leaders to potentially agree to some broad parameters for intra-EU reforms needed to prepare the bloc for future accession rounds by December.

And then it’s all eyes on the last EU summit of the year (14-15 December) where several EU diplomats expect to see a decision on whether to open EU accession talks with Ukraine and, potentially, Moldova. Georgia, meanwhile, might face a tough battle.

The rift between the EU and Turkey – whose bid to join the bloc has been stalled for decades – has been relatively wide in recent years, but an unexpected thaw before summer indicated that both sides could be warming up to each other, though for different reasons.

EU’s chief diplomat Josep Borrell is expected to come up with a report on the “state of play” of EU-Turkey relations “with a view to proceeding in a strategic and forward-looking manner” in the next months, with EU leaders expected to discuss the issue either in October or December at their regular summit.

Despite everything, Ankara’s hopes for accession will likely remain slim. “The negotiations for accession are at a standstill now, and for this to be remobilized there are very clear criteria set out also by the European Council that would need to be addressed, and these criteria are related to democracy and rule of law,” Enlargement Commissioner Várhelyi said in Ankara this week.

And then there’s always more crisis to look to in the EU’s near neighbourhood.

After Kosovo and Serbia reached a deal on implementing an EU-backed deal to normalise ties earlier this year, which gave hope for a potential settlement by the end of this term, the past encounters were mostly crisis talks to end violence in predominantly Serb areas of northern Kosovo. Both countries’ leaders will come together in another round of the EU-mediated Belgrade-Pristina Dialogue in Brussels this week on Thursday (14 September).

Nagorno-Karabakh, an ethnic Armenian enclave internationally recognised as part of Azerbaijan but run by ethnic Armenian authorities, is another one on the to-do list as it remains at the centre of a rancorous standoff. A recent deal, allowing in aid shipments from Baku-held territory for the first time in decades, gives hope that tensions could be eased.

And then there’s Cyprus. Nicosia has been lobbying to appoint a special envoy for Cyprus in the hope of restarting talks with Turkey and moving toward a settlement on the divided island, using the EU accession process as an incentive.

Of course, dear readers, this is not an exclusive list. If you feel there is something that is not getting the attention it deserves, get in touch.

What we're reading

On the radar

Drop us a line at alexandra.brzozowski@euractiv.com and aurelie.pugnet@euractiv.com for leaks, tips or comments, or contact us on Twitter: @alex_owski and @PugnetAurelie