10 Januar 2023

What lies ahead for the EU in 2023?

Christmas tree with a star in front of the European Parliament in Strasbourg
Let’s have a bit of contemplation now – in a year’s time we’ll already be nominating leading candidates again!

Do you remember? A little more than a year ago, both Commission President Ursula von der Leyen (CDU/EPP) and European Council President Charles Michel (MR/ALDE) announced a motto for the year 2022. For the Commission, it was to be the “European Year of Youth”, for the European Council President the “Year of European Defence”. In retrospect, it seems that Michel made the better prediction: The Russian attack on Ukraine painfully moved defence issues to the centre of the EU agenda.

For 2023, the Commission has now proclaimed the “European Year of Skills”, while Michel has abstained from giving the year a motto. Perhaps it’s better that way.

War in Ukraine

It is clear that the Russian war in Ukraine will continue to challenge the EU during the coming months, and on very different levels. The most obvious is the dimension of military aid and the debate about a possible end to the war. After the EU’s initially remarkably united reaction to the outbreak of war, internal controversies quickly emerged in the course of 2022. While the “hawks” (especially in the north-east of the EU) are counting on a clear defeat of Russia in Ukraine to deter the Putin regime from new aggressions, the (mostly Western European) “doves” are more open to bringing the war to a quick end by freezing the conflict.

The longer the war drags on, the more pronounced these intra-European differences could become. In 2023, it will therefore be more important than ever to hold a transnational strategic debate – also to prevent the disputes from becoming toxic. In view of the great public interest, this is not only a task for experts and decision-makers, but also for the mass media.

Energy crisis, inflation, recession

Moreover, the EU will also have to find answers for the indirect consequences of the war. In December, the member states finally managed to agree on a joint package of measures to tackle the energy crisis, including the joint purchase of gas and a gas price cap.

But the enormous rise of energy prices is already pushing the EU towards a dangerous combination of inflation and recession. This faces the European Central Bank with the dilemma of either giving free rein to price increases – or raising interest rates, which could curb inflation, but would also stall the economy even further.

MFF review and new deficit rules

Against this backdrop, the upcoming mid-term review of the EU’s multiannual financial framework takes on special significance. The Commission intends to present a proposal for this in the first half of 2023. The European Parliament has already made clear that it sees a great need for revision: According to the MEPs, neither the size nor the structure of the current financial framework are suitable for dealing with the many current crises. Moreover, the Commission is also going to present a proposal on new own resources in the second half of the year.

But in both questions (and as always when a lot of money is at stake in the EU), the Council must decide with unanimity. Which means that we will once again experience the rituals of a vetocracy with its long, harsh, and unproductive disputes.

And not only the EU’s finances will be discussed in the coming months – the budgets and debts of its member states will be on the agenda, too. In November, the Commission presented proposals for a reform of the deficit rules. In simple terms, the idea of this reform is that member states should be given more leeway to borrow, but only within the framework of individual agreements to be concluded with the Commission. More flexibility in debt policy, but only for purposes that the EU approves of: this could transform the deficit rules from a rigid framework into an instrument of (indirect) supranational macroeconomic governance. It will be interesting to see to what extent the member states agree to this.

Debates on enlargement …

Another consequence of the war in Ukraine is the forceful return of the EU enlargement debate. After Croatia’s accession in 2013, a certain enlargement fatigue had set in in the EU. For years, political games by several member states kept the countries of the Western Balkans at arm’s length – to the growing frustration of the population there.

In 2022, however, the changed geopolitical situation brought a new dynamic to the debate. In Ukraine, the war has not only strengthened the national identity, but also the identification with Europe. Only a few days after the outbreak of the war, the Zelenskiy government submitted an application for EU membership, to which the EU responded by granting Ukraine candidate status in the summer. Moldova, Georgia, North Macedonia, Albania, Bosnia-Herzegovina and Kosovo also made progress on their way into the Union in recent months.

As a consequence, expectations in the candidate countries are now high, and the EU can hardly afford to disappoint them again as it has done in recent years. But only the coming months and years, when symbolic declarations give way to concrete negotiations, will tell how serious it really is about turning the tide on enlargement policy.

… and deepening

Perhaps the greatest obstacle to future accession does not lie with the candidate countries anyway, but with the EU itself. Even with 27 member states, its internal procedures are often barely functioning, as the “permacrisis” of the last ten years has shown.

Whether it was the eurozone bailout programme, the migration crisis, the Corona pandemic or the preservation of the rule of law in the member states: time and again, the EU has been doing too little too late, has allowed itself to be blackmailed by individual member states, has had to use legal exception clauses and ad hoc constructions, has taken important key decisions without the elected European Parliament and has generally been lacking clear accountability.

All this would only worsen if the number of national veto players increases from 27 to 30 or 35. Enlargement must therefore be preceded by institutional reform, in particular the transition from unanimity to majority voting, but also a general strengthening of supranational institutions, clearer responsibilities and a new electoral law.

From the Conference on the Future of Europe to a Convention?

And indeed, such a reform catalogue has already been available for more than half a year: On 9 May 2022, the Conference on the Future of Europe adopted its final report, whose chapter on European Democracy contains a number of far-reaching proposals that can only be implemented through treaty reform. The European Parliament therefore called for opening the necessary Convention immediately after the end of the Conference. However, the European Council did not respond to this at all.

The reason for that is the lack of unity among member states’ governments, several of which are very sceptical about the idea of treaty change. Sweden, which has taken over the Council Presidency for the first half of 2023, is not among the supporters of a Convention either. In its presidency programme, the government has already announced that it will “strive to achieve a broad consensus among the Member States” in the follow-up to the Conference – which indicates a slow approach with much consideration for those who want to drag down the process.

But reform needs do not disappear if they are ignored, so this debate will continue during the new year. In spring, the European Parliament will present a detailed proposal on what a new EU Treaty could look like, increasing the pressure on the European Council to take a position. If the heads of state and government decide to open a Convention then, it will become easier to bundle debates. Otherwise, the EU will probably face further months or even years of protracted negotiations on many individual reform dossiers.

Electoral reform: the next blockade

These reform dossiers also include the revision of the European electoral law and the European party statute. Both made great progress last year and could, in the best case, be concluded in 2023. In the case of the electoral law reform, this would also be necessary because, according to the recommendations of the Council of Europe, during the last year before an election no major changes should be made to its legal framework – and the next European election is due in 2024.

In reality, however, the electoral law reform is currently on the brink of failure, as several member states reject the pan-European electoral lists it envisages. Still, it can hardly be expected that the European Parliament will simply resign itself to this, drop the compromise it reached after years of wrangling among the political groups, and renounce one of the most important levers for strengthening European democracy. Here, too, the blockade in the Council will probably only mean that an overdue reform debate keeps dragging on and on.

Rule of law: Hungary isolated

The struggle over the rule of law in the member states will also continue in 2023. Since the beginning of the war in Ukraine, there has been a rift between the anti-Russian PiS (ECR) government in Poland and the pro-Russian Fidesz (–) government in Hungary. The Commission tried to take advantage of this in order to also break up the alliance between the two countries on other issues and further isolate the Hungarian government.

This strategy was only partially successful. In the conflict over the rule of law, Poland and Hungary have not turned against each other. At least, however, Poland has moved closer to the EU’s demands in some points. Regarding Hungary, the Council decided in December to use the new conditionality mechanism to freeze EU funding for the first time. The new year will show whether this measure will also have a practical effect on the rule of law situation in the country.

Parliamentary elections in Poland, Spain and other countries

Beyond the frictions with Hungary, there is another reason why the Polish government is currently not interested in an escalation of the rule-of-law conflict with the EU: the next Polish parliamentary elections are going to take place in autumn 2023. According to the current polls, the PiS (ECR) would once again become the strongest party, but the right-wing government it leads could lose its majority and be replaced by a broad coalition led by the PO (EPP). It will thus be an exciting electoral campaign, after which, in the best case, a new democratic government could restore the rule of law in Poland.

Poland, however, is not the only major member state to hold elections in late 2023. There is also a national parliamentary election coming up in Spain, where current polls suggest a very close outcome between the governing coalition of PSOE (PES) and UP (close to EL) on the one hand and a possible alliance of PP (EPP) and Vox (ECR) on the other. Possibly, this could end in a stalemate (similar to 2019) and a long and difficult government formation. For the EU, this will also be relevant because Spain holds the Council Presidency in the second half of 2023.

Further parliamentary elections are due in Estonia, Finland and Greece in spring and in Luxembourg in autumn. There could also be early elections in Bulgaria – the fifth in three years. Moreover, in early February there will be a presidential election in Cyprus, the only EU member state with a presidential system of government.

In most of these elections, the current governing coalitions have a good chance of maintaining their majority in parliament. It will be close in Finland, where Kokoomus (EPP) expects to replace the SDP (PES) as the strongest party and take over the leadership of the government. In Luxembourg and Bulgaria, the EPP, currently in opposition, is also likely to end up in first place again, although it will have a hard time finding coalition partners. If things go well for the EPP, it could thus win up to five additional seats in the European Council by the end of 2023. In Cyprus, on the other hand, incumbent Nikos Anastasiadis (DISY/EPP) is not running again; the frontrunner to succeed him is Nikos Christodoulidis, who is also a DISY member but is standing in the election as an independent.

2024 European elections: the next leading candidate process

But it is not only in the member states that elections are coming up – the EU itself is also beginning to warm up for the European Parliament elections in early summer 2024. Apart from the electoral law reform already mentioned, the next edition of the leading candidate (or Spitzenkandidaten) procedure will be the focus of attention.

This procedure, according to which the European parties nominate candidates for the Commission presidency before the election, has not been very popular among the heads of state and government. But since the parties do not need the approval of the Council to nominate candidates, they will not be deterred by the reservations of the member states. Following the timetable of past elections, they will nominate their candidates by the end of 2023 or early 2024 at the latest.

In the best case, this means that we will see an increasing transnational party-political confrontation and personalisation of European political debates in the course of this year. In the worst case, on the other hand, it might just lead to a mere repeat of the eternal debate about whether the leading candidates will ultimately be relevant for the election of the next Commission President at all.

Eppur si muove?

Progress or deadlock – that will be the big question for the EU in 2023. In Year 1 after the Conference on the Future of Europe and the much-invoked Zeitenwende, it is evident that there is an institutional reform backlog in many areas. Member states are preventing progress that would be urgently needed to make the EU at the same time more democratic and more capable to act.

There is much to suggest that this will remain the case in the coming months. If, however, the governments manage to swallow their pride and address the necessary reforms, the new year could be the beginning of a relance that tackles both the deepening and widening of the European project at the same time.

For the editor of this blog, the new year will bring some personal changes, too: After a year at the University of Duisburg-Essen, I will start a new position as a senior research fellow at the Finnish Institute of International Affairs (FIIA) in Helsinki in January 2023. I will continue to work on issues of EU reform and supranational democracy here, and of course this blog will continue to accompany European policy debates.

A happy and healthy new year to all readers!

Correction note: An earlier version of this article stated that the EPP could replace an EL-led government in the national parliamentary election in Greece. In fact, the EPP has already been governing in Greece since 2019.
Translation: Yannik Uhlenkotte/Manuel Müller.
Image: Christmas tree: © European Union 2017 – European Parliament [CC BY-NC-ND 4.0], via Flickr.

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