In the macroeconomic sphere, the Cyprus Presidency of the Council of the European Union will be responsible for bringing to a successful conclusion the legislative process aimed at granting Ukraine further European financial aid, this time to the tune of €90 billion for 2026 and 2027, through a loan backed by the EU budget, in accordance with the December European Council decision (see EUROPE 13777/1, 13776/1).
Legislative proposals setting out the terms and conditions of the future loan and amending the Multiannual Financial Framework to allow the EU to lend to a third country are due to be adopted in the first quarter - these proposals are expected in January (see EUROPE 13779/17). Hungary, Slovakia and the Czech Republic will not be affected by the aid from a budgetary point of view.
Under the Cyprus Presidency, the Ecofin Council will hold regular discussions on the impact of Russia’s military aggression against Ukraine, continuing in particular with the implementation of the Ukraine Facility, another EU macroeconomic aid package worth €50 billion over the period 2024-2027. At this stage, €27 billion has been disbursed (see EUROPE 13778/9).
The Cypriot authorities have also indicated that they will closely monitor the financial aspects of the ‘SAFE’ instrument for lending to Member States to boost their military spending. Pre-financing of up to 15% of dedicated national plans may be paid. The European Commission is due to finalise its assessment of these plans at the end of January (see EUROPE 13763/2).
RRF. Launched to revitalise the European economy after the Covid-19 pandemic, the Next Generation EU recovery plan, and in particular the ‘RRF’ facility financing national recovery plans, will come to an end in 2026. All the measures and investments included in these plans must be completed by August, and the final payments will continue until the end of 2026 at the latest.
On Tuesday 20 January, the Ecofin Council will be asked to approve the modification of new plans, including those of Germany, Spain, Finland, Ireland, the Netherlands, Romania and Sweden.
See the revised draft plans and their Annexes: https://aeur.eu/f/k6v
Stability Pact. With regard to the European framework for economic governance, the Cyprus Presidency and the Eurogroup will coordinate the application of the Stability and Growth Pact, which has reached cruising speed following its revision in 2024.
In particular, the Ecofin Council will be asked to endorse a broadly neutral budgetary stance for the euro area (see EUROPE 13771/2).
It will take action on the excessive deficit procedures (EDP) opened against nine Member States: Austria, Belgium, Italy, France, Hungary, Malta, Poland, Romania and Slovakia. With its deficit just shy of the legal threshold of 3% of national GDP, Italy could close its procedure. France’s uncertain budgetary situation will be closely watched.
In January, the Council is expected to formalise the opening of an EDP procedure against Finland (see EUROPE 13772/4).
It should be noted that the Cyprus Presidency aims to finalise, with the European Parliament, the relatively technical legislative package aimed at adjusting the European economic governance framework to the reform of the Stability Pact (see EUROPE 13722/9).
In the financial field, the Cypriot authorities have identified six key legislative projects to drive forward the Savings and Investment Union (see EUROPE 13778/6). Other projects will also be carried out in the field of taxation and customs (see EUROPE 13780/13).
See the work programme of the Cyprus Presidency of the Council of the EU: https://aeur.eu/f/k4d ; and the provisional agenda of ministerial meetings under the Cyprus Presidency: https://aeur.eu/f/k5o (Original version in French by Mathieu Bion)