EU skeptical of new energy and defence funds pushed by Macron and Sanchez


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Russia’s invasion of Ukraine and its impact on the European Union will monopolize all debates at this Thursday’s informal summit of 27 heads of state and government in Versailles. European leaders will discuss for the first time the new European fund the French president wants to create, Emmanuel MacronThe purpose is to Increase defense and energy investment response to war Vladimir Putin. An initiative backed by the President of the Government, Pedro Sanchezbut other partners and even Brussels institutions are skeptical.

“We are considering the possibility of developing resiliency plans at the European level to Accelerate and increase investment in defense, energy and climate transitionswith the help of a joint debt”, explains sources from the Elysee Palace. The new plan, whose donation has not yet been specifiedwill follow The ‘successful’ model for an $800 billion next-gen fundcreated in 2020 to mitigate the impact of the Covid-19 crisis.

At the Elysee, they admit Discussions are still at a very preliminary stage“The first thing to do is to document the economic impact of the Ukrainian war on Europe. In the second phase, this will be a matter of examining at the national and European level the tools we have to equip ourselves to face them,” Emmanuel Macron’s team said.

For his part, Sanchez sees a solution through Increase the size of the next generation fund and extend the maturity, which is in principle a special initiative that should end in 2026. Moncloa sources said the government supports any European co-financing initiative for projects of common interest.

Spain is second biggest beneficiary of next-gen aid (It has been awarded as much as $140 billion between subsidies and credits). Moncloa stressed that our country is also the most advanced in execution, as it has received two payments (totaling $19 billion). Another European program that has been “successful” and that the Sanchez government wants to consolidate is the SURE Fund, Used to fund ERTE at the start of the pandemic.

frugal, against

Prime Minister of the Netherlands, Mark Rootleading the “Frugal Nations” club (which also includes Austria, Sweden and Denmark) has been Cool Macron and Sanchez expectations first“I am not in favor of the second part of the next generation right now,” Rutte said during a visit to Paris this Wednesday, according to the information he collected. politicianIn his view, the EU must exhaust all existing financial tools to deal with the war in Ukraine before tackling the new joint debt problem.

Most other European leaders agree. “The new debt scheme is not suitable today because we already have the next generation and it covers major identified needs. Recovery plans already include energy or strategic dependencies. Funds are just starting to flow to member states. What can be done, for example, is to adjust the recovery plan,” a senior European official said.

not even a committee Ursula Von der Leyen Convinced that a new European fund is needed to invest in energy and defence. “We have no such plan in the committee. I don’t know if there will be in some member states,” said the Dutch Socialist’s vice-president for ecological transition Frans Timmermans.

Although there was no agreement on funding, European leaders to pledge ‘substantially’ defence spending at Versailles In their state budget, although no figures are set. Germany and Denmark were the first member states to announce increased military investment after the outbreak of the war in Ukraine, and the European Council will invite other partners to follow suit.

The Heads of State and Government also declared, Promote joint programsespecially in areas where European militaries are least capable, such as airlift or combat drones.

EU will also pledge to defend Sweden and Finland Oppose any possible attack from Russia. Stockholm and Helsinki, which are not NATO members, have demanded the activation of the collective defense clause stipulated in the European treaty under threats from the Kremlin.

‘Optimizing’ the electricity market

On energy, European leaders will confirm their intentions End reliance on Russian gas (now 40% of consumption) although they don’t give any date. The European Commission has just proposed an action plan to end the “addiction” to Russian gas by 2030. Unlike the US, UK and Canada, the EU has refused to impose an immediate embargo on gas, oil and coal from Russia.

The Community Executive’s strategy sets supply diversification priorities by betting on liquefied natural gas (LNG), accelerating the deployment of renewable energy, and ditching gas for heating and power generation.These measures can EU demand for Russian gas to fall by two-thirds by end of yearAccording to Brussels.

In this regard, the draft conclusions of the summit include two initiatives of particular interest to Spain.First, improve the interconnection of European gas and electricity networks, which is essential if our country wants to exercise center For the distribution of LNG as an alternative to Russia. European Leaders Further Commitment “Monitor and optimize the operation of the electricity market“.

Sanchez will again ask other leaders and Von der Leyen Emergency and extraordinary measures to reduce electricity bills. The most important is precisely the market reform to separate the electricity price from the gas price.Brussels has just taken its first steps in this direction, recognizing that temporary restrictions on electricity prices and Authorize rates to power companies in recognition of their extraordinary benefits.

Ukraine, EU candidate country?

As for the Ukraine war, the absolute priority for European leaders is to “keep the pressure” on Vladimir Putin for a ceasefire and an immediate withdrawal of Russian troops.In this sense, heads of state and government They will discuss further tightening of economic sanctions against Moscowexpanding the oligarchic blacklist and the number of banks disconnected from SWIFT, the international financial information network.

But the fiercest debate at the Versailles summit will be about the demands made by the president Vladimir Zelensky be awarded Ukraine’s status as an EU candidate. This decision has the full support of Poland and the Eastern and Baltic states, but conflicts with the reluctance of Germany, France, the Netherlands or Spain, Indicates that a country at war is not ready to join.

Despite these differences, European leaders seek a deal to “Send a political signal to Ukraine about its membership in the European family“.”Joining the issue must not distract us from our current priorities. The process of scaling up is very slow, but here we have a sense of urgency. Once the war is over, we must bring Ukraine, Moldova and Georgia (the other two countries that have also applied to join) as close to the EU as possible. in a form we haven’t invented yetbut this allows faster than adhesion”, explains Elíseo’s source.

Russian-Ukrainian War


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