Brussels – After the extraordinary summit on defense and Ukraine just two weeks ago, EU heads of state and government are meeting at the European Council to focus on the actions needed to boost the Union’s competitiveness, the other side of the coin of commitments made to strengthen security and defense. As we approach tomorrow’s (March 20) confrontation, however, “events have transformed the agenda,” a diplomatic source confides: from the Trump-Putin phone call to the resumption of Israeli shelling in Gaza and the long-awaited White Paper on Defense that the European Commission presented today, which left member states perplexed.
The latest version of the conclusions leaders will approve tomorrow says the European Council “calls for accelerating work on all fronts to decisively increase Europe’s defense readiness within the next five years.” The 27 member states agree to “work urgently on relevant financing options.” A senior EU official speculated that “there will not be an in-depth discussion” just 24 hours after the presentation of the defense white paper but only “a clear mandate to move quickly on the proposals made.”
Without those additional funding instruments leaders had asked von der Leyen to put on the plate two weeks ago, “member states may present positions on new options to be developed.” Between the lines, countries are reportedly split between those with doubts about the effectiveness of the measures proposed by the EU executive and those who reserve the right to explore them further. The problem is that these are “only operations that push member states into debt,” a source confirms. The famous 800 billion over four years is a theoretical goal attainable only if all 27 member states agree to activate the safeguard clause of the Stability Pact and borrow 1.5 percent of GDP just as national debt is involved with the 150 billion in SAFE (Security Action for Europe) loans, which would add to the total 800.
Italy, France, Spain, and even Germany — the big EU countries reportedly are all “hesitant” about the possibility of “borrowing at these levels.” Meanwhile, the so-called frugal countries (the Netherlands, Denmark, and Sweden) are unlikely to ask to use such instruments. In short, the risk is that von der Leyen’s ideas will remain unexpressed when all is said and done. “Von der Leyen can make tools available, then defense is a national competence, and it is not up to her to decide,” a source confirms.
In addition, a call for “further financing options,” i.e., the possibility of the EU borrowing on the markets to provide subsidies along the lines of the NextGenerationEU, is also missing from the summit’s conclusions. As a diplomatic source reports, this is because there was reportedly an outcry from frugal countries led by the Netherlands and also Germany.
Leaders will be even more timid on the Capital Markets Union: “The issue of central supervision is still divisive among member states,” confirms one source. Indeed, in the latest draft of tomorrow’s conclusions, there is only a reference to conducting an impact assessment to identify systemic players that could benefit from unified supervision in key areas – such as clearing, securities, and crypto-assets. The usual suspects, Luxembourg, Malta, Cyprus, Ireland, and Belgium, reportedly oppose centralized supervision of financial markets: member states with financial centers or interests.
If possible, the leaders risk appearing even worse regarding Ukraine and the Middle East. Even the president of the European Council, Antonio Costa, has reportedly already given up trying to convince Budapest to support the conclusions on support for Kyiv. Hungary has publicly stated that it is in “strategic disagreement” with the bloc, and therefore – just as it did two weeks ago – to pass the message of support for Kyiv on all fronts will require a president’s statement endorsed by 26 member countries, unbundled from the rest of the conclusions.
On the breakdown of the truce in Gaza and the new massacre of Palestinian civilians by Israel – nearly 1,000 dead in less than 48 hours – the 27 member states will fail to even “condemn” Tel Aviv. The stance, which was present in the previous draft of the conclusions, disappeared. In the latest version, the European Council merely “deplores” the breakdown of the ceasefire in Gaza, condemning “Hamas’ refusal to hand over the remaining hostages.”
English version by the Translation Service of Withub
