Employment statistics remain positive, but growth in GDP has turned out contrary to predictions: 0.7% this year. The energy crisis has been halted; however, prices for gas, electricity and fuel remain out of reach of many households. Purchasing power is stagnating and the policy of the ECB, while having the merit, through successive increases of the headline rates (see EUROPE 13250/1), of stalling inflation and making saving slightly more worthwhile, has produced a high interest rate for mortgages and other loans. Housing remains a problem in Europe, even for those unlikely to become homeowners. Poverty has not diminished and the number of homeless remains high (see EUROPE 13243/18). All hopes of specific taxation on the super-profits of energy companies and banks are long gone.
Categorical concerns are being expressed by farmers, industrial companies and, in particular, SMEs. Security in cities vacillates before increased numbers of shootings, largely thanks to the egregious methods of drug dealers. Climate deregulation is being imposed on the masses in the most undeniable way and, over the weekend, thousands of people took to the streets of several cities to demonstrate against their governments’ lack of action.
The migration question is nowhere near being resolved. Over the course of last week, more than 8000 migrants arrived in Lampedusa. The Italian authorities are overwhelmed and feel let down by Europe, particularly after the German refusal to host any of the refugees. The legislative package of the migration pact, on the table since September 2020, is still a long way from being completely approved (see EUROPE 13249/6). The agreement at the Council of 8 June on solidarity with the countries of first entry and asylum procedures on the borders is being challenged by Hungary and Poland. In the latter country, the general elections of 13 October will also coincide with a referendum that will ask the following question, among others: “Do you support the admission of thousands of illegal immigrants from the Middle East and Africa, in accordance with the forced relocation mechanism imposed by the European bureaucracy?” (See EUROPE 13234/34).
As regards solidarity with Ukraine, central Europe is starting to show its limits. On Saturday, import restrictions on Ukrainian cereals to the five countries in question were lifted by decision of the Commission, whilst obliging Kyiv to carry out controls. However, Poland, Hungary and Slovakia are unilaterally continuing their embargo (see EUROPE 13251/1). Hungary, moreover, is still blocking additional financial aid from the EU to Ukraine (nearly 500 million euros under the ‘European Peace Facility’) while it may have adopted the sanctions against Russia formally, it attacks them verbally. To complete the picture, Budapest and Warsaw have still not met the requirements under the rule of law criterion to receive payouts under the European recovery plan (see EUROPE 13241/2).
So much for the state of the Union in all its harsh reality.
What do people think about this? The state of public opinion can be measured, for instance by surveys commissioned by the European Parliament on voting intentions in the forthcoming European elections. According to data collected in August, and taking account of the decision to increase the number of MEPs to 720 (see EUROPE 13249/24), seats will be won mainly by the Eurosceptic and radical right wing: the European Conservatives and Reform (ECR) (+17) and ‘Identity and Democracy’ (+13). Within the centre coalition, the EPP is expected to lose 13 seats, Renew Europe 11, but the Social Democrats stand to gain six. The biggest loser is expected to be the Greens, likely to fall from 72 currently to 53, a paradoxical situation given that climate is a major concern to 77% of citizens (Eurobarometer survey of June 2023). The radical Left will see few changes. Even the weakened centre coalition will continue to hold a majority in the new EP, but a lot can happen between now and June 2024.
This outlook clearly inspired the state of the union speech made by the President of the European Commission, Ursula von der Leyen, before the European Parliament on 13 September (see EUROPE 13249/1). A well-structured speech, not without emotion nor oratory effect and very well received, it was the final speech of this type in the framework of this Commission’s term in office. Rereading it, it looks less like a strict description of the current state of the Union than an enthusiastic recap of its achievements, together with announcements of future actions. Factual observations gave way to calls to arms. The emphasis was laid on women’s rights, the European Green Pact, the economy, international aspects (migration, trade, Africa, Ukraine) and future waves of enlargement.
The speech was tailored to certain target audiences that could be described as ‘to be reconquered. Tribute was paid to worried farmers, with the promise of strategic dialogue on the future of agriculture (see EUROPE 13249/5). For the wind energy industry, a package of measures was announced (see EUROPE 13249/3). For the automotive industry, an anti-subsidy investigation into Chinese electric vehicles has been immediately launched (see EUROPE 13249/1). For SMEs, a high-level representative has been pledged before the end of the year. The gift to the unions was a new summit of social partners to take place under the Belgian Presidency of the Council of the EU (see EUROPE 13249/8). Bulgaria and Romania can expect to be welcomed into the Schengen zone very soon.
The argument for artificial intelligence was mixed, but unquestionably too optimistic, given the numbers of redundancies it has caused to date. The question of the proper functioning of the single market was not raised; nor was the continued existence of tax competition between member states. The role of consumers in the green transition went unmentioned. The challenge of European defence was barely raised and the ‘strategic compass’ was once again ignored. The text was also weak on the future of the EU budget and new own resources. There were no announcements in favour of animal welfare, to the great disappointment of its proponents. (To be continued)
Renaud Denuit