European Union

The final hurdle has been cleared for Theresa May's minority government. Her Tories on Monday signed an agreement with the Northern Irish DUP, which in future will support key bills presented by the government. In exchange Northern Ireland will receive roughly 1.7 billion euros for economic and infrastructural projects. Do the risks of this arrangement outweigh the advantages?

Great things are expected of the German-French duo: after the EU's summer summit Europe's commentators once again voice optimism that Merkel and Macron can reform the Union and save it from collapse. These hopes, initially expressed after Macron's inaugural visit to Berlin, are now reinforced by the two politicians' clear demonstration of partnership.

Romania has a new prime minister after President Klaus Iohannis on Monday tasked Mihai Tudose, the outgoing economy minister, with forming a government. Tudose succeeds Sorin Grindeanu, who was toppled by his own party in a no-confidence vote. Many commentators see PSD leader Liviu Dragnea pulling the strings behind the coup to serve his own interests.

The government in Rome is rescuing two regional banks at a cost of 17 billion euros. The EU Commission gave the green light for the move because creditors will cover some of the costs. The fact that billions of euros in taxpayers' money will nonetheless go into saving the banks prompts commentators to question whether the EU's banking union works at all.

Under the blazing summer sun rubbish is piling up all over Greece. For more than a week public sector workers who collect rubbish have been on strike. They want thousands of municipal workers on short-term contracts to be given permanent contracts. Politicians are discussing whether rubbish collection shouldn't be privatised nationwide, as has already been done in some cities. Commentators also say this wouldn't be the worst option.

Cecilia Malmström has fired a loud warning shot in the direction of Washington, saying Brussels will retaliate if Donald Trump slaps tariffs on European steel as part of his threatened crackdown on imports on national security grounds.

These are tense days indeed in transatlantic relations. The trade commissioner’s intervention came on the eve of an EU antitrust ruling that will hit Google today with a fine of more than €1bn (quite possibly significantly more than €1bn). This is small change for Google but it is bound to trigger a sharp response from American business, which still bristles at a ruling last year that handed a €13bn bill for Irish back taxes to Apple.

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On 28 June, EU ambassadors endorsed the compromise reached between the Presidency and the European Parliament on the proposal for a regulation on the establishment of the European fund for sustainable development (EFSD).

''Thanks to today's agreement, we will be able to implement a new fund to support sustainable investment projects in developing countries", said Marlene Bonnici, Permanent Representative of Malta to the EU and President of the Permanent Representatives Committee. ''Together with the new European consensus on development adopted earlier this month, the establishment of the EFSD will contribute to giving a new impetus to the EU's development policy, while addressing the root causes of migration in the long term.''

Marlene Bonnici, Permanent Representative of Malta to the EU and President of the Permanent Representatives Committee

The EFSD is the main instrument for the implementation of the European external investment plan (EIP) to support investment in African and neighbourhood countries. The plan aims primarily at creating jobs and addressing root causes of migration. It will also contribute to the implementation of the Paris agreement on climate change (COP 21).

On the basis of an initial budget of 3,35 billion euros, the fund is designed to trigger up to 44 billion euro of investments. This amount could be doubled if member states and other donors match EU contributions.

The EFSD will operate as a "one-stop shop" to receive financing proposals from financial institutions and public or private investors and deliver a wide range of financial support to eligible investments. It will offer guarantees and use blending mechanisms to encourage the private sector to invest in more risky contexts, such as fragile states or conflict-affected areas.

The Parliament and the Council will now be called on to formally adopt the regulation, in order to be able to setup the fund as soon as possible.

On 28 June 2017, EU ambassadors endorsed the agreement reached between the Presidency and the European Parliament on temporary autonomous trade measures in favour of Ukraine. 

"These measures are a gesture on our part of tangible political and economic support to Ukraine. Given the difficult situation Ukraine is currently facing, we hope to proceed swiftly with the implementation of this regulation "

Christian Cardona, Minister for the economy, investment and small business of Malta

The proposal is aimed at improving access for Ukrainian exporters to the EU market, in view of the difficult economic situation and the economic reform efforts undertaken by Ukraine. 

It adds to trade provisions already introduced under an EU-Ukraine association agreement signed in 2014. Those provisions have been provisionally applied since 1 January 2016.

Applying for a three-year period, the proposed measures consist of: 

1) additional annual import quotas at zero tariff for the following agricultural products ('tariff rate quotas' at 0%): 

• Natural honey - 2500 tonnes
• Processed tomatoes - 3000 tonnes
• Grape juice - 500 tonnes
• Oats - 4000 tonnes
• Wheat - 65 000 tonnes
• Maize - 625 000 tonnes
• Barley - 325 000 tonnes
• Groats and pellets of certain cereals - 7800 tonnes

 2) full removal of import duties on several industrial products, such as fertilisers, dyes, pigments and other colouring matters, footwear, copper, aluminium, as well as television and sound recording equipment. 

Safeguard measures will apply. Ukraine will be obliged to respect the same principles as under the association agreement. These include respect for democratic principles, human rights and fundamental freedoms and for the principle of the rule of law, as well as continued and sustained efforts with regard to the fight against corruption and illegal activities. 

Procedure and next steps

The INTA committee endorsed the deal on behalf of the Parliament on 20 June. The Parliament and the Council will now formally adopt the text by the end of July. The regulation should be published and enter into force by the end of September. 

An EU-Ukraine summit is scheduled for 12-13 July 2017 in Kiev.