As we announced in July: the European Commission is represented on an administrative level at the informal council meetings (under the Hungarian presidency). Of course, the Commission continues to be represented at the political level, at the official council meetings, where the real decisions are made
– was said on Friday at the usual daily press conference of the EU executive body. Thus, the European Commission continues to boycott the events organized by the Hungarian Presidency. Although no substantive decisions or real proposals are almost ever made at these meetings, the professional work is also slowed down by the fact that only the heads of the EU directorates (directorate generale, DG) appear at the meetings.
Moreover, sources in Brussels informed Portfolio that more and more DGs were trying to delegate participation to even lower positions.
The other EU member states nearly two-thirds do not send ministers to informal events, which further complicates meaningful work. A good example of this was last week’s finance minister’s meeting (Ecofin), where 10 ministers took part together with Mihály Varga, the other EU countries were represented only by state secretaries. All this forced the Magyar Nemzeti Bank to take action as well, which postponed the Lámfalussy meeting citing technical reasons, but also, according to several people who told us, due to the boycott of the EU presidency.
The It was held in Hungary in the days before Ecofin portrayed in the press as a mysterious organization, in fact, the three-day meeting of Eurofi, well-known in the economic and financial world, showed a strong contrast with the events of the presidency. The non-public meeting of the non-profit association based in Paris was also attended by economic experts and decision-makers who otherwise refused their invitations to the programs of the Hungarian EU semester. Although the Minister of National Economy Márton Nagy and the Minister of Finance Mihály Varga were also present at the meeting, the attention was clearly focused on the Polish delegation.
Several of our sources have confirmed that in Eurofin’s presentations and coffee break discussions, everyone talked about the possibility of European competitiveness, including the capital market union, being born in the semester led by Poland starting in January (Capital Markets Union) related weighty decisions. Polish Deputy Finance Minister Pawel Karbownik was one of the most popular among those present.
The Poles are already being prepared in the background
Several Brussels officials confirmed to Portfolio that decision-making has slowed down, which is partly made worse by the slower-than-expected formation of the new European Commission, but more decisive is the boycott announced against the Hungarian government due to Prime Minister Viktor Orbán’s visit to Russian President Vladimir Putin in early July. Basically, few concrete decisions are expected for the most important matters, especially the competitiveness program. Even though Viktor Orbán promised that a package of proposals would be presented on November 8 at the informal summit of heads of government and heads of state in Budapest,
according to the EU diplomats, the basic scenario is that they will not go ahead with the development of the measures, based on the report issued by former ECB President Mario Draghi published on September 9.
They do not expect to be able to decide on substantive competitiveness measures, for example, the 11-point e-car program presented by the Hungarian government in July has already been removed from the agenda. At the same time, there is not complete agreement on this: we had a source who said that the Hungarian plan is perfectly in line with the objectives of the EU Green Agreement, so it is worth carrying forward parts of it.
In the negotiations on the capital market union, they are already concentrating on next year in Brussels. The CMU is one of the EU’s master plans – the introduction of which is also urged by the Draghi report – to channel approximately 620 billion euros of private funds into investments within the Union every year. Even the original agenda expected breakthroughs by 2025, but for this it would have been necessary for them to be able to meaningfully discuss the programs at the council events of the Hungarian presidency. Now the Hungarian permanent representation in Brussels is conducting the professional consultations, but in the background they are already trying to speed up the work due to the preparations for the Polish presidency in 2025, so that the reduction of market fragmentation and the deeper integration of European capital markets can start next year.
Mario Draghi presented his competitiveness report on September 9, in which he makes several proposals for EU reforms. As we have presented in detail, it would transform the EU’s decision-making mechanisms, strengthen market protection measures, in addition to pushing for railway and other transport developments, strengthening the defense industry, and also reconsidering e-car subsidies.
Among the most important priorities are the improvement of financing opportunities for businesses, especially SMEs and start-ups, and the mobilization of investments essential for the green and digital transition. Efforts also focus on creating better transparency and more accessible financial information for private investors, which could make European capital markets more attractive globally.
The plan is strongly supported by Germany and France, and in 2023 they agreed on a joint schedule to speed up the realization of these goals.
On the other hand, there are concerns that the semester lost due to boycotts by the commission and member states will cause further delays in the development of the CMU and competitiveness plans. Moreover, they are already seriously worried in Brussels that Oliver Várhelyi will not be allowed to pass after his hearings in the European Parliament. If the candidate is unable to take over his mandate at the head of the health and animal welfare portfolio, then Prime Minister Viktor Orbán should send a new name to Ursula von der Leyen, with no deadline for nomination, so a stalemate could paralyze Brussels for months.
This is the scenario that everyone wants to avoid. Allegedly, the hope of the chairman of the board was that by delegating the less important areas to Várhelyi, he could achieve that the representatives of the European Parliament would definitely vote for the Hungarian candidate. Although the old Commission could continue its work as caretaker, due to the sudden and unexpected departure of the French Internal Market Commissioner Thierry Breton, the most important competitiveness reforms may be left behind. Mainly so that von der Leyen would carry out one of the biggest transformations in this area in the new board.
Cover image source: EU
Source: www.portfolio.hu
