Aspen Institute Romania
Europe NEXT Project Report contains arguments in defence of a united Europe and an impetus
for a new stage in the European Union’s journey, with a renewed emphasis on respecting and
reflecting the different views, interests, needs and ambitions of the member states. In our
view, Europe NEXT Project should provide cohesion and competitiveness, while maintaining
Europe’s position in the world, and representing its citizens with accountability. Building on
the Sibiu Summit and the Romanian Presidency of the Council of the EU, this document aims
to contribute to the upcoming Presidencies (Finland and Croatia), as well to the new
Commission and European Parliament resulting from the recent European elections.
EUROPE NEXT PROJECT
The Europe NEXT Project
A new political ambition for Europe
Aspen Initiative for Europe (AIfE), a consortium comprising of the eight European Aspen
Institutes (France, Germany, Italy, Central Europe, Romania, Spain, Ukraine, UK).
Since the Great Recession the social and economic gaps between North and South have
widened, but anti-establishment and anti-EU political parties have been particularly
successful in core member states such as France, Italy, Germany and, most spectacularly, in
the United Kingdom. Despite its fast economic recovery, the Eastern periphery has
experienced systemic challenges to its political status and traditionally integrationist
positions against the background of unfulfilled social development aspirations. Indeed, the
convergence of views and capacities towards a renewed integrationist line seems more
elusive than ever.
The debate on managing convergence and divergence in the EU, as well as on the future of
the Cohesion Policy are essential in the context where there are still significant differences in
economic and social development. The European project and the European budget have to
deal with both “old” and “new” issues, Northern and Southern Europe, as well as increasing
disparities at subnational level against the background of proliferating disagreements. At
stake is nothing less than the capacity of the Union to close the widening gaps between the
political, economic and social understandings of the future of the European project.
This report on the Europe NEXT Project aims to contribute to the coming European Council
in Sibiu, the Presidencies of the Council of the EU (Romania, Finland, Croatia) as well to the
new Commission and European Parliament resulting from the recent European elections. It
contains arguments in defence of a united Europe and an impetus for a new stage in the
European Union’s journey, with a renewed emphasis on respecting and reflecting the
different views, interests, needs and ambitions of the member states, and citizens.
CURRENT CONTEXT .......................................................................................................... 4
EUROPEAN PERSPECTIVES ................................................................................................. 5
Cohesion and Unity in European Politics ..................................................................................................... 5
Social Compact .....................................................................................................................................................7
European Competitiveness ....................................................................................................................... 10
European Added Value ...................................................................................................................................... 11
Investments ....................................................................................................................................................... 12
Digitalisation & AI .............................................................................................................................................. 14
Europe’s Relevance in a Changing World ................................................................................................... 17
Migration ........................................................................................................................................................... 18
European Defence ............................................................................................................................................. 20
Multilateralism .................................................................................................................................................. 21
Citizens’ Voice and Rights in the European Union ...................................................................................... 25
Legitimacy .......................................................................................................................................................... 26
Political Polarization .......................................................................................................................................... 28
ROMANIAN PERSPECTIVES ...............................................................................................30
Romania’s Presidency of the Council of the European Union ...................................................................... 30
Context and Expectations .................................................................................................................................. 30
Main themes and progress ................................................................................................................................ 31
Contentious issues ................................................................................................................................................0
Looking Forward ...................................................................................................................................................2
Romanian Votes in the European Parliament .............................................................................................. 3
Budget & Investments ..........................................................................................................................................4
Energy Policy...................................................................................................................................................... 14
Digitization and Automation ............................................................................................................................. 19
Europe is facing a variety of challenges, as recent developments have opened debates on the
future shape and direction of the European Union. From a diminishing economic dominance
in world markets, to contentious politics within and among member states, the EU faces both
current and specific challenges (e.g. Brexit, European Parliament elections), as well as the
need to reassert its identitu, and what it aims to achieve in the medium-term.
A series of overarching themes emerge from the diagnostic of the current challenges of the
EU. First and foremost, there is a persistent lack of convergence between European regions
and, increasingly, between different elements of the public. The challenge of internal
convergence is amplified by a larger trend of catching-up in the world economy, between
developed and emerging markets. Europe must demonstrate its ability to produce shared
prosperity within the Single Market, as new economic growth models emerge elsewhere.
The second overarching challenge is the design of the intergovernmentalism or multilevel
governance in the European Union. Given the various transnational or sectorial challenges
that arise, the idea of a multi-speed Europe seems difficult to apply. Nevertheless, the
principle of subsidiarity, the limits of the national powers, and the depth and spread of
European powers are all subject to current deliberations.
The current Trio Presidencies of the Council of the European Union comprised Romania,
Finland and Croatia stands as it stood at the crossroad between the end of term of the Juncker
Commission and the instalment of the new executive. At the beginning of 2019, a common
18-month programme has been published for this Trio. The Programme is based on the
former Strategic Agenda and comprises objectives on security, migration, growth and jobs,
digital market, energy union, social policies and democratic legitimacy. Some of these issues
have been included in the draft of the Future Strategic Agenda presented at the Sibiu Summit
in May 2019, and will likely be pursued further in the Finish and Croatian Presidencies of the
Council of the EU.
This report presents a dual perspective: that of Europe as a whole, and that of a member
state that just concluded the Presidency of the Council of the EU—Romania.
Cohesion and Unity in European Politics
If the European Union is to survive and thrive it has to put forward a comprehensive plan to
deliver shared prosperity to its citizens and regions. Cohesion has been one of the primary
goals of the European Community and it still remains one of the top priorities.
New division lines appear in the European Union, without having necessarily resolved the
historical disparities of development between the member states and regions. Divisions
within the different categories of the public across Europe and within member states are
currently just as important as the traditional divides across member states.
Regional divisions are persistently present in the EU, and they no longer align to the classical
old vs. new member states categories. Newer member states are facing challenges of
convergence, or catching up, as many have been recently labeled by the European
Commission as “lagging regions”. However, despite the fact that CEE is still struggling with
low incomes in some of its regions, high economic growth rates have been recorded across
the region, as opposed to older member states, in Southern Europe (i.e. Portugal, Spain, Italy
and Greece) whose lagging regions are marked by low economic growth
. Many of the EU
member states have seen a growing regional inequality
, as convergence has stalled during
and after the economic crisis
Social divisions have become increasingly more apparent according to the various
Eurobarometer data of the past decade. The values and beliefs of European citizens reflect
new division lines on top of the persistent socio-economic ones, as the economic crisis in the
Southern Europe and its strong negative social impact, or the current migration crisis amplify
social insecurity across Europe. Capital cities are increasingly behaving very differently from
rural areas in elections (e.g. Poland, Hungary, Bulgaria, UK), according to different alignments
of values: as capitals remain predominantly liberal and cosmopolitan, the rural areas are
increasingly turning to traditional or even fundamentalist values.
Economic divisions were meant to be tackled with from the very early existence of the
cohesion policy and the integration process. Still economic grievances persist and amplify
social and cultural insecurities.
There are two levels of intervention for delivering cohesion in the European Union: policies
and politics. Mechanisms of coordination between national and European policies such as
the European Semester have proven to bring about harmonization between member states
European Commission (2017) Economic Challenges of Lagging Regions.
See the Index of Regional Inequality in Pike, A., Rodríguez-Pose, A., & Tomaney, J. (2017). Shifting horizons in
local and regional development. Regional Studies, 51(1), 46-57.
Farole, T., Goga, S., & Ionescu-Heroiu, M. (2018). Rethinking Lagging Regions: Using
Cohesion Policy to Deliver on the Potential of Europe's Regions. World Bank Report on the
and the European Commission, yet Country Specific Recommendations (CSR) often fail to be
implemented over long periods of time.
It is obvious that a better fit between national and European measures should be developed
in the next budgetary cycle. However, in terms of political will, we see many member states
eager to play national agendas so as to mobilise their electorate at home, rather than agree
upon common ways forward for the entire Union. With rising challenges, both in new and
older member states, the European budget becomes ever more stretched.
The studies find that in the area of employment, between 2000 and 2017, there was upward
convergence of the Member States in the indicators of labour market participation, such as
activity and employment rates, and labour market exclusion, with a reduction of
unemployment rates. There was also an increase in the average performance of the EU as a
whole, and an overall reduction of disparities between Member States in most living
conditions indicators, such as poverty and social exclusion.
With regards to socioeconomic convergence, there
has been an overall EU trend of convergence during
the same period, this is shown in disposable
household income and national minimum wage
measures. At the same time, income inequality in the
EU population has increased considerably, with
growing differences between Member States – this
reflects the severe and uneven impact of the
However, the positive trends in convergence
between member states are not necessarily reflected
at subnational level. Disparities in labour market
indicators have been larger across EU regions than
across EU Member States: there was convergence of
Member States in relation to the employment rate
over the 2004–2016 period, and yet divergence was
recorded at subnationa level (see Figure).
Surprinsingly, the Eurofound data on convergence trends shows clearly that the trend is
higher in the case of countries that fall outside the eurozone, than for those that have
adopted the single currency. This can be attributable to several elements. First, there is the
component of risk sharing within the eurozone: as Southern member states have had very
poor macroeconomic performance since the economic crisis, and the burden was shared with
the northern member states from the eurozone. Secondly, new member states have had a
Eurofound (2018), Progress on convergence in employment, Publications Office of the European
Eurofound (2018), Progress on convergence in the socioeconomic area, Publications Office of the
European Union, Luxembourg.
much larger development deficit, and their catching up process was significantly supported
by the European integration and the single market. Finally, the most significant share of
convergence funding (i.e. cohesion and agricultural policies) have been channelled to newer
member states whose regions were in the less develpped category, as opposed to more
developed regions from the Eurozone.
The New Strategic Agends 2019-2024 restates the commitment to achieve upward
convergence amongst member states.
EU is currently undergoing a deep social transformation, with a changing labour market and
welfare state, a greater role for new actors and social innovation and a crucial need to
strengthen the European social model for all generations.
The meaning of “social compact” can be defined in two ways. Both a bottom-up and and a
top-down perspectives are necessary to understand the stakes of social reform in Europe.
In a bottom-up persepective, the social compact should provide such elements as shared
prosperity, or a decent standard of living. The Single Market has been one of the most
powerful drivers of integration—without a level of shared prosperity, the commitment to the
European project and shared values is threatened. It was to a certain extent the economic
failures that populist parties used to mobilize much of their electorate
In a top-down approach, the social compact in the European Union has a much more strategic
role: to provide social peace, medium- and long-term (political) stability, consensus—leading
to limited use of force, etc. Both are equally important for the European project today.
Arguably the most important achievement of the European project so far has been that of
peace and stability. While frequently overshadowed by issue related to economic integration
or boarder security, the form and implementation of social policies will be equally important
in upholding the main achievements of the EU.
The social compact can and should be deployed both at the European and at the national
level. At each level, there is a different set of opportunities in the current context. At
European level, the social compact could actively help bridge the East-West divide. As such,
it could effectively translate the process of integration intor economic and social
convergence. More generally, it is a move towards equally shared prosperity among
countries. At national level, there are certain distinctive features between old and new
member states. In Central and Eastern Europe, the recovery after postsocialist economic
chaos meant a return on the trajectory of tangible socio-economic development. As such, the
social compact is a means of catching up to the living standards of Western countries.
One of the more stringent issues related to the social policies in Europe has been that of
workers’ mobility and rights. Workers should earn the same pay for the same work in the
same place. Steps in consolidating the European Pillar of Social Rights have been taken
recently with the reform of the Posting of Workers rules (benefiting approximately 2 mil.
workers temporarily posted in other member states) and the newly established European
Hopkin, J. (2020). Anti-System Politics: The Crisis of Market Liberalism in Rich Democracies. Oxford University
Labour Authority. The latter will support cooperation between EU countries in the cross-
border enforcement of relevant Union law, including facilitating joint inspections, and access
for individuals and employers to information on their rights and obligations as well as to
If the European project is to move forward convincingly, it has to address certain persistent
challenges for the CEE periphery.
In the short-term, the low wage model is withering away under the pressure of demographics
and mass outmigration. The main reason for this spectacular population movement was and
remains the wide pay gap between local and Western labor markets, a gap maintained by
high taxes on labor relative to capital. Today, CEE has the world’s fastest shrinking population
and countries such as Poland, Latvia and Romania face mass migration phenomena without
precedent in Europe during the past four decades. While this has been positive by putting
upwards pressure on wages, it has also dampened the region’s long term growth prospects,
threatened pay as you go pension systems and deprived the high migration region of
optimistic economic prospects.
Given onshoring, the whooping productivity increases in ECE and the large wage gaps
between core and periphery, there is considerable room to increase real wages without
threatening cost competitiveness and to shift the debate towards a more comprehensive
social package based around the ILO’s decent work agenda and the concept of a living wage.
Thus, poor public transport, extreme levels of urban congestion, lack of social housing and
the high share of rent costs relative to wages translate into low mobility for potential workers
stuck in high unemployment rural regions whose choice is between migration and low paying
(usually seasonal) work. Even assuming that vocational and dual education enrollment would
skyrocket, the chance of graduate “leakage” to better paying Western markets is bound to
Convergence with the EU “core” should entail tax change, wage policies and industrial
relations leading to a similar balance between capital and labor in GDP
In the medium- and long-term, there is another perspective to be considered. Even though it
is definitely not the case yet, a “middle-income trap” scenario is a likely possibility for the
future. The decades long strategy to compete on low cost resulted in the concentration in
lower and medium value-added products.Dealing with this problem would require structural
changes for professional training systems, social dialogue, R&D spending and sectoral policies
in CEE economies
However, a win-win scenario in which all of Europe has core-like features is rather illusory,
even in theory. Any attempt at effectively dealing with tough issues such as transfer pricing
policies would immediately expose major European-level tensions that are now played out
in terms of “excessive” wage growth and ineffective national-level policies in the periphery.
The unvirtuous circles represented by chronically weak tax collection and the ample tax
planning strategies deployed by firms to minimize their tax footprint have led to the
European Commission (2019) Top 20 EU Achievements 2014-2019.
undersupply of public goods needed to deal with the demographic crisis, work automation
and the emerging climate catastrophe.
Enhancing the productivity and competitiveness of the EU economy requires attention to be
paid to innovation, including investment in intangibles, particularly skills, as the EU is falling
behind peer economies in this regard.
The most recent efforts of the European institutions with regards to European
Competitiveness have focused on improving the functionality of the single market, while
promoting a smart economy based on research, development and innovation (RDI) and
Achieving competitiveness at EU level should not be a zero-sum game amongst its member
states or regions. Since 2010, the European Commission compiles a EU Regional
Competitiveness Index to compare and contrast the ability of a region to offer an attractive
and sustainable environment for firms and residents to live and work. The differences
between European regions in terms of competitiveness remain very large. The regional
competitiveness follows to a large extent the overall level of development of the member
states, with the top ten performing regions coming from Germany, Netherlands and Sweden,
while the bottom ten belonging to Romania, Bulgaria and Greece.
Ensuring the full potential of the Single Market also requires safeguards for capital and the
financial system. As such, the European Union has been commited to a series of measures
that targeted the development of new tools for investment, as well as safeguarding the
economy against potential imbalances. Amongst the main recent accomplishments, one can
cite the European Plan for Strategic Investments, the ‘New deal for consumers’ package
legislation, or the European Systemic Risk Board.
There are three elements that could be the foundation of a new age of European
Competitiveness. Firtly, there will be a larger application of the concept of European Added
Value (EAS) so as to prioritise European projects over national ones. This approach has the
downside of making it more difficuly for member states to fund local investments, but it will
bring a much needed efficiency to the use of a relatively modest EU budget.
Secondly, the new Multiannual Financial Framework (MFF) 2021-2027 will bring forth an
ecompassing approach to financing European investment through the InvestEU umbrella
Thirdly, digitalisation is a key area for Europe. 64 to 75% of Europeans believe that digital
technologies have a positive impact on our economy, society and quality of life
transformations bring numerous opportunities for EU’s competitiveness in the world, but
they also pose the challenge of creating fair, safe and effective regulation. Europe should
strive to be a global norm leader in AI or blockhain.
EIB (2017) From Recovery to Sustainable Growth.
European Commission (2017) Special Eurobarometer 464b - Europeans’ attitudes towards security.
European Added Value
The concept of „European Added Value” is now a cornerstone of the budgetary philosophy
of the European Commission. It is defined as the value resulting from an EU intervention
which is additional to the value that would have been otherwise created by Member State
action alone. It may result from different factors, e.g. coordination gains, legal certainty,
greater effectiveness or complementarities.
One of the first areas in which it was introduced as a key concept was European Research,
Development and Innovation (RDI) programmes
. Key elements of the concept of European
Added Value are: scale (i.e. projects are too big for member state to handle alone), efficiency
(i.e. joint approach is financialy advantageous), quality (i.e. EU-wide competition), or driver
of integration (e.g. cohesion, unification, coordinating national and EU programes)
upon the innovation framework, European Added Value (EAS) is now a core element of
The logic of efficiency in prioritizing projects with European Added Value (EAS) is very much
dictated by the limited resources available at EU leve, compared to the economic output
intended. One way of creating a stronger connection between the allocation and usage of
resources is to link the payments to specific projects in connection with the country-specific
recommendations (CSR) made by the European Commission
In the future Multiannual Financial Framework (2021-2027), the EU added value plays an
important role and it refers to the areas where the Union budget can have a bigger impact
than public spending at national level could. Examples in this direction given by the European
Commission can include cutting-edge research projects that bring together the best
researchers from across Europe, or empowering young people and small businesses to take
full advantage of the opportunities the Single Market and the digital economy offer. Using
the European Added Value, the European Commission wants to rebalance the budget and to
focus on areas where this added value is the highest. This presents both an opportunity and
a challenge for new member states whose investment needs are high, yet absoption capacity
is sometimes low.
The intention of the new EC proposal for the future MFF is to improve the management of
the EU budget by direct and shared management for as many programs as possible. This
would avoid the simple substitution of national funding with European one, as it happened
after the crisis. However, national institutional capacity (e.g. better planned succession of
funding programs) is the key to the new vision of the European budget management.
European Commission (2011) The added value of the EU budget.
European Commission (2014) European Added Value of EU Science, Technology and Innovation actions and
EU-Member State Partnership in international cooperation.
Idem fn. 12.
der Gesamtwirtschaftlichen Entwicklung, S. Z. B. (2018). Vor wichtigen wirtschaftspolitischen
Weichenstellungen. Jahresgutachten 2018/19 (No. 2018/19). Jahresgutachten.
The investment conditions in Europe thanks to a more favourable economic situation and
public interventions such as the European Fund for Strategic Investments (EFSI)—the heart
of the Juncker Plan. However, there is still a sizeable investment gap in Europe, with
investment levels 15% to 20% lower than pre-crisis levels, and 34% of European
municipalities say infrastructure investment is bellow needs
. As such, most EU countries
slashed capital spending and financed parallel increases of current expenditure, resulting in
large contractions of government investment financing.
European Investment Bank (EIB) shows that the investment in infrastructure in the EU has
been decreasing over the past years, since the financial crisis. The sectorial distribution is
relatively constant over the years, with the highest percentage of GDP being allocated toe
transport and utilities infrastructure. Also, as shown in the figure above, the governmental
investments cover the largest share of infrastructure development in the EU, even if before
the financial crisis public-private partnership projects were starting to develop more.
The InvestEU Programme will bring together under one roof the multitude of EU financial
instruments currently available and expand the successful model of the Investment Plan for
Europe, the Juncker Plan. With InvestEU, the Commission will further boost investment,
innovation and job creation, triggering at least €650 billion in additional investment.
core is the European Fund for Strategic Investments (EFSI) whose objectives were three-fold:
European Investment Bank (EIB) (2018) What is EFSI?.
EIB (2017) From Recovery to Sustainable Growt.
European Commission (2018) What is the InvestEU Programme.
Infrastructure investmet by sector and source (%GDP) (2005-2016)
removing obstacles to investment, provide visibility and technical assistance to investment
projects, and mobilising private investment via a public guarantee
The InvestEU Programme will bring together under one roof the existent investment tools for
investment ( 14 different financial instruments). While designed to make investment projects
simpler and more efficient, there is still some lack of clarity with respect to the actual
implementation of Invest EU during the future MFF 2021-2027. The EU Parliament and the
Commission have adopted congruent positions early on, while the Council of the EU has
reached an agreement later on, under the Romanian Presidency.
The InvestEU fund has several promising features. Firstly, it seeks to encourage projects
among 3 countries or more, by incentivizing their respective National Development Banks to
Secondly, it provides a member state department, which makes it possible for EU member
states to transfer EU structural funds into a member state department which can be used by
national development banks to leverage domestic and private resources and to lend to more
Thirdly, the general structure of the Juncker plan, which is to be maintained to some degree,
is the use of EU structural and regional funds as revolving financial instruments, which are
channeled by pooling expertise and capabilities of the EIB and national development banks.
This is beneficial as local/national knowledge is combined with the financing capacities at teh
EU level, where the credit rating is often better than at the national level. Also, the financing
of smaller projects operating at the national level brings with it the possibility to use more
The need to act in a concerted fashion by different development banks/institutions and the
EU is possibly the most important lesson learned over the course of the last 6 years, which
should be maintained.
Capital markets union (CMU) is the Commission’s plan to create deeper integration of capital
markets in EU, to mobilise capital and channel it to specific growth generating investments,
especially in SMEs and infrastructure. Despite a downward trend over the past years, the EU
is still a net exporter of capital with the outflows of foreign direct investments being larger
than its inflows
Given that the most prominent capital market in the EU is unlikely to be part of the CMU after
Brexit, the overall potential of the CMU at global scale will be limited. However, CMU can be
seen as a much as a Europe-wide growth initiative, in a context in which both the national
and the supranational level lack effective traditional expansionary capacities, be it in the form
of fiscal policy, wage coordination or competitive devaluation
. The limitations of member
states to apply such macroeconomic tools are curtailed by the Stability and Growth Pact,
while the EU has not received powerful attributions beyond those to monitor and enforce
budgetary discipline at national level.
European Commission (2019) Top 20 EU Achievements 2014-2019.
Eurostat Statistics on FDI (last accesed on 07.08.2019).
Braun, B., Gabor, D., & Hübner, M. (2018). Governing through financial markets: Towards a critical political
economy of Capital Markets Union. Competition & Change, 22(2), 101-116.
There is also an emergent policy nexus between the Investment Plan for Europe (Junker Plan)
and the Action Plan on Building a CMU, as part of EU’s strategy of governing the economy
through financial markets. This brings forth the role of public development banks, including
the multilateral European Investment Bank (EIB), as these state-owned financial institutions
have moved into a key position in the recent evolution of the European financial system and
Digitalisation & AI
The Digital Single Market is one of the key strategic priorities of the EU. The Strategic Agenda
2019-2024 reiterates that EU must work on all aspects of the digital revolution and artificial
intelligence: infrastructure, connectivity, services, data, regulation and investment, while at
the same time being accompanied by the development of the service economy and the
mainstreaming of digital services
Digital transformations are at the core of the development objectives of many EU member
states. Digitalization is having a considerable global impact. Technological progress seems to
be accelerating and it is driven by large companies and innovative startups alike. Recent
advances in software, deep tech, big data and artificial intelligence (AI) lead to a leap forward
in such areas as health or energy consumption.
The current developments under the broad label of the 4.0 industrial revolution impose
significant strains on the EU both in terms of competitiveness, and regulation. Disputes with
multinational giants in the digital sector have brought to light a new regulatory stance of EU
authorities. The development of artificial intelligence (AI) programmes is highly reliant on
data collection, which in turn imposes new responsibilities of regulation with concern for
both data privacy, and competitive potential of EU companies in comparison to companies
from USA or China. The biggest limitation for EU in this regard is the poor integration of
databases across member states—a limitation that is not applicable to its competitors. As
such, a recent report proposes the developed of shared, cleaned-up European data bases for
research as a measure to surpass European vulnerabilities in the field of AI
Europe is currently in the process of establishing itself as a global norm leader in AI and
blockchain. Through the General Data Protection Regulation (GDPR) process, the EU has had
a global impact on data-sharing norms
. Following the positive experience of standard
setting with GDPR, it has recently put forward a Draft Ethics Guidelines for Trustworthy AI
This guidance forms part of a vision of enabling Europe to become a globally leading
innovator in ethical, secure and cutting-edge AI. These have to be backed by an ambitious
Mertens, D., & Thiemann, M. (2018). Market-based but state-led: The role of public development banks in
shaping market-based finance in the European Union. Competition & Change, 22(2), 184-204. Gabor, D., & Ban,
C. (2016). Banking on bonds: The new links between states and markets. JCMS: Journal of Common Market
Studies, 54(3), 617-635. Mertens, D., & Thiemann, M. (2019). Building a hidden investment state? The European
Investment Bank, national development banks and European economic governance. Journal of European public
policy, 26(1), 23-43.
European Council (2019) A new strategic agenda 2019-2024.
ECFR (2019) Strategic sovereignty: How Europe can regain the capacity to act.
Mark Leonard and Jeremy Shapiro (2019) Strategic Sovereignty: How Europe Can Regain The Capacity To Act.
European Commission (2019) Draft Ethics guidelines for trustworthy AI.
industrial policy plan to raise EU’s competitiveness in this field. The combination of
competitiveness and high standards is difficult to achieve if one considers that the EU is
lagging behind the US and China in terms of R&D, patents, market uptake and
implementation in Artificial Intelligence
While Industry 4.0, digitalization and artificial intelligence offer effective solutions for a
number of actual challenges, they also raise concerns about their social impact, employment,
education, and last but not least, about governance. As announced in the Single Market
Strategy and Digital Single Market Strategy, in 2017 the Commission adopted a
comprehensive package of measures to further improve the application and enforcement of
intellectual property rights, and to step up the fight against counterfeiting and piracy. It is
necessary to use intellectual property in local production processes, so that its
competitiveness does not deepen the disparities.
Central and South East European countries are the most dynamic within the EU. Their fastest
convergence is happening in digitalization. The region’s digital infrastructure is relatively well
developed, as Central and South East European member states are almost on par with the
EU15 in terms of internet access and mobile broadband usage. Well-performing high-tech
companies in CEE today are the ones that nurture collaborations with local university centres
What is important to realise in the context of the StartUp Europe initiative is that the majority
of the tech start-ups are born globals (i.e. companies rapidly become players on the global
. Many European tech companies are moving up on the value chain, shifting from
mobile apps to deep tech. As such, necessary but not sufficient conditions to perform are
access to capital (i.e. larger markets such as USA, UK, or Japan), and access to skilled human
resources—computer engineers, and connected business specialties. As more than the sum
of its parts, European tech start-ups need a prolific ecosystem to perform and be competitive
on the global markets. In order to properly reflect the current dynamics and challenges of the
tech sector in Europe today, it is important to involve business accelerators in the policy-
making process currently shaping the entrepreneurial environment in the EU
The competitiveness of the digital sector raises some new challenges of its own in fiscal
matters. Until recently, a company’s tax base was established according to headquarters
location. Multinationals have tended to pay lower taxes than small and medium enterprises
(SMEs) on average. The European commission’s report “A Fair and Efficient Tax System in the
European Union for the Digital Single Market“, published in 2017, reveals that digital
businesses are paying an effective tax rate about half that of traditional businesses in Europe.
As such, traditional international business models pay an effective rate of 23.2% vs 9.5% for
their digital counterparts.
The EU is stepping up plans for an EU wide digital tax on tech giants, such as Google, Apple,
Facebook and Amazon. These moves have been championed especially by large consumer
Gros, D. et al (2019) Global Trends 2035, European Parliamentary Research Service (EPRS) Report; Digital
Transformation Monitor, January 2018.
Moen, Ø., & Rialp-Criado, A. (2018). European SMEs and the Born Global concept. In The Routledge
Companion to European Business (pp. 79-90). Routledge.
See for example Spherik Accelerator in Romania as a Startup Europe Ambassador.
countries, such as France and Spain. The prospects of such a digital tax have specifically grown
with recent EU Commissions proposed a 3% tax on revenues of tech giants with more than
€50m revenue in the EU and €750m worldwide. Brussels estimated that this proposal would
affect 150 tech giants and would yield as much as €5bn per year. In the mean time, France
has put up a digital services tax of 3%, while UK is proposing its own 2% tax on revenue earned
by social media sites, search engines and online marketplaces.
Europe’s Relevance in a Changing World
While the European Union has a common voice in foreign affairs under the High
Representative, member states still have a variety of interests and plurality of visions
regarding the changing world order. As the multilateral consensus is seemingly left aside in
current day international affairs, rising bilateralism and regionalism gain ground instead.
Facing numerous internal and external pressures, Europe is as constrained as ever to draw
strength from unity. There are also opportunities to be considered. Europe as a whole can be
an important economic and geopolitical actor on the world stage, in a manner in which none
of the member states can be no longer. As such, the concept of “strategic sovereignity”
comes up as a measure of change both within the EU (i.e. substituting nationalistic tendencies
with a shared European identity) and outside the EU (i.e. representing itself effectively in
. Furthermore, there is increasing overlap between external and
internal pressures as exemplified by the migration crisis derived from a failed international
management of the conflict in Syria. EU is currently faced with a number of contentious issues
that have to managed swiftly and effectively, from neighbouring wars and conflict (e.g.
Ukraine, Libya) to common security threats (e.g. Russia in energy, China in trade or
technology such as 5G
The migration crisis is one of the far reaching challenges that Europe is facing today. On one
hand it raises the question of managing the surge in migratory inflows, at home, on route,
and once they reach European member states. On the other hand, it raises cultural anxieties
amongst European citizens that are already in a precarious position due to globalisation and
the economic crisis.
With wars and conflicts building up in the European periphery, there is clearly an increasing
need for a stronger system of ensuring European defence. EU citizens are disposed towards
collective action by the EU in questions of foreign, security and defence policy, which may
facilitate EU’s agency in these areas.
Europe continues to be commited to the global multilateral agenda. It’s position on world
markets is strengthened by a unity and openness to trade. However, it is important to
mediate the effects of globalisation at home, so as to ensure the equitable distribution of
Mark Leonard and Jeremy Shapiro (2019) Strategic Sovereignty: How Europe Can Regain The Capacity To Act.
Daniel Gros (2019) Europe’s 5G Wake-Up Call, Project Syndicate.
The migration crisis has presented Europe with a dual problem. One is that of humanitarian
proportions of dealing with the massive inflow of persons that came through the
Mediterranean (and not only) due to prolonged and escalating conflicts in the European
periphery (e.g. Syrian civil war). The second problem is that of cultural anxiety within the
European Union, where many still feel the economic downturn of the 2012 financial crisis
and see the migrants as competitors to the jobs and social services they themselves aspire
Migration is a challenge on the EU agenda as there are still record levels of displacement,
human suffering, or complex political uncertainties in many countries. From 2014 to
December 2017, the EU Member States accepted almost 3.7 million first-time asylum
applications, three times more than from 2010 to 2013
. About 1.6 million asylum seekers
were granted some sort of international protection.
Over the past years refugees and illegal migrants have entered the EU in large numbers
through the Mediterranean sea. The peak was recorded in 2015 when more than a million
persons arrived in Europe, while last year the figure decreased to a tenth
. Some progress
has been made so far, as by the end of 2017, irregular arrivals on the Central Mediterranean
route were down by 67 %
Current initiatives regarding the strengthening of EU’s external borders target FRONTEX (i.e.
the EU's border and coast guard agency) by adopting a broader mandate to meet new
security challenges, as well as additional staffing of 10,000 corps by 2020
. Joint border
control and surveillance operations were also instituted in the Mediterranean, called ‘Triton’
. Frontex is also expected to become more involved in ‘joint return
operations’ and to create a dedicated returns office to organise return operations.
Efforts with regards to the advancement of the asylum policy are equally important, as well
as the body of the European Asylum Agency.
One of the measures that led to this overall decrease in migration flows was the EU-Turkey
Statement that meant providing humanitarian assistance to refugees; EU supported refugees
in Turkey with €3 billion in 2016-2017 and already made €1.2bn of a further €3 billion
The €4.2 billion Emergency Trust Fund for Africa is another way to tackle the root causes of
migration. It is designed to fund migration related programs in home countries, but also wider
Bremmer, I. (2018). Us vs. them: The failure of globalism. Penguin.
CEPS (2018) Global Trends to 2035 - Economy and Society, p. 22-23.
UNHCR (2019) Operational Portal Refugee Situations.
European Council (2018) The European Council May 2016 to June 2018, Vol.2.
European Commission (2018) A strengthened and fully equipped European Border and Coast Guard, State of
the Union Factsheet.
Carrera, S., Blockmans, S., Gros, D., & Guild, E. (2015). The EU's Response to the Refugee Crisis: Taking Stock
and Setting Policy Priorities. CEPS Essay, (20/16).
Idem fn. 36.
European Commission (2019) Top 20 EU Achievements 2014-2019.
economic development and good governance. It will be paired with External Investment Plan
set to mobilise over €44 billion in both public and private investments by 2020 in Africa and
in the EU neighbourhood.
As of 2018, the UN Global Compact for Safe, Orderly and Regular Migration (GCM) is another
layer of mobilization at international level, to manage the migratory inflows in a coordinated
manner. It aims at tackling the issue in a holistically, given that root causes in home countries
have to be addressed more effectively before European policy measures can measure up to
the task at hand.
Still, despite all these efforts, thousands die every year in the migration process, and the
challenges of integration remain very high, given that the access routes involve southern
member states that are going through their own economic challenges.
Nowadays, migration is listed on top of European citizens’ concerns, rising from merely 10%
on 2012, to almost 40% in 2018. According to the Eurobarometer data, immigration is
currently the main concern of EU citizens. It is also clear that populist politicians have
exploited the issue to their advantage
The debate on this subject is centred in the European context on addressing the different
needs and interests without forgetting about the human rights. As the European Commission
admits in 2018, migration continues to dominate much of the political agenda and achieving
a sovereign, comprehensive approach to migration management remains one of the biggest
To help Member States deal with the asylum claims, while regaining full
control over common European borders, and sustaining public order and security, the
European Commission has proposed in 2018, through the next Multiannual Financial
Idem fn. 38.
Krastev, I. (2017). After Europe. University of Pennsylvania Press.
European Commission (2018) State of the Union 2018: Our Destiny in Our Hands.
Framework, tripling the budget for external border management, migration and asylum
(around 35 billion euro intended for this area).
The European project is at cross roads also in the field of security and defence. The wars and
conflicts that are developing in its periphery (i.e. Ukraine, Syria, Libya)
clearly show the
increased necessity for EU’s own capabilities for defense and security.
Moreover, there are a number of assertive global powers with military capabilities and will to
use military instruments (e.g. Russia). The total military expenditure of EU member states
declined from 1.81% to 1.40% of GDP during 2005–2015. At the same time, Russia increased
its military spending from 3.3% to 5.4% of GDP between 2008 and 2015. In absolute terms,
from 2005 to 2015, Russia increased its defence spending by 110% and China by 170%, while
the EU decreased its spending by 12% and the US by 2%
The development of the EU’s Common Foreign and Security Policy (CFSP) and Common
Security and Defence Policy (CSDP) has been an incremental process. Nevertheless, the EU
has managed to carve out a role for itself in both foreign and security policy.
Lack of cooperation between Member States in the field of defence is estimated to cost
between €25 billion and €100 billion every year
. As such, under the the Common Security
and Defence Policy (CSDP) the Permanent Structured Cooperation (PESCO).
The European Defence Fund is another notable achievement, with first projects fostering
cross-border investments in state- of-the-art and fully interoperable defence technology and
equipment in areas such as encrypted software and drone technology.
Increased geopolitical competition and climate change have security implications. Yet we
should not down play globalization and interdepended as key “factors” shaping the world
EU’s 2016 global strategy on foreign and security policy emphasises the security of the Union
as the highest priority of the EU’s external action
The EU Global Strategy on foreign and security policy also a deeper cooperation between the
EU and NATO, and as a result it has EU and NATO agreed to expand cooperation in seven
areas: countering hybrid threats; operational cooperation, including at sea and on migration;
cyber security and defence; defence capabilities; defence industry and research; exercises;
support to our Eastern and Southern partners’ capacity-building efforts
. Furthermore, a
‘European Centre of Excellence for Countering Hybrid Threats’ has just been established in
Council on Foreign Relations (CFR) Global Conflict Tracker, Last updated August 13, 2019.
Tuomas Iso-Markku, Juha Jokela, Kristi Raik, Teija Tiilikainen and Eeva Innola (eds.) (2017) The EU’s Choice:
Perspectives on deepening and differentiation. FIIA Report No. 50.
Matti Pesu, Tuomas Iso-Markku and Juha Jokela (2019) Towards an EU Security Community? Public Opinion
and EU’s Role as a Security Actor. FIIA Briefing Paper no. 266.
European Commission (2019) Top 20 EU Achievements 2014-2019.
Idem fn. 45.
European External Action Service (EEAS) (2016) EU Global Strategy.
European External Action Service (EEAS) (2019) The European Union’s Global Strategy Three Years On, Looking
Helsinki. The Centre represents a joint effort by several EU and/or NATO member states and
aims to support both organizations as well as national authorities, which still bear the main
responsibility for responding to hybrid threat.
The future of transatlantic security relationship is central to the issue of European defence.
On the one hand we have an increasing US presence in Europe and a dedicated defense
budget for Europe; this is all in the logic of building deterrence. On the other hand, we have
the politics of the Trump administration highlighting European defence spending increases;
and some of the statements have casted a shadow over the US commitment in European
defence. Yet we should bear in mind that transatlantic security cooperation is not just
defence, it is also close cooperation in security and foreign policy.
Europe faces a tough challenge in the years ahead. On the one hand it should work to
strengthen the transatlantic bond, but it must also prepare for longer term change. This is
however a long term project for the Europeans, as building capabilities and improving efficacy
and strength of EU foreign policy is a long term project which is often punctuated by crisis.
EU’s ability to contribute to the security of its citizens forms a key part of a new emerging
narrative for the Union. In general, EU citizens are disposed towards collective action by the
EU in questions of foreign, security and defence policy. Support for the CFSP and CSDP has
remained high and strikingly stable. Moreover, there seems to be a nascent sense of solidarity
and unity among Europeans, which may facilitate the EU’s agency in these areas.
The European Union is by definition a promoter of multilateralism in international affairs.
While it is yet to establish the balance of power on which it will act internally in the coming
years, it is much more clear that externally it will continue to support a multilateral approach
on the world stage. Main areas in which the EU plays a leading role in the multilateral
consensus and common action are the Agenda 2030 for sustainable development and
In terms of trade, there is an important shift in the structure of of the international economy.
Technological innovation, and know how transfers, as well as increasing margins of
profitability in international trade have produced a large convergence between developed
and developing economies
. For years now, the rise of the emerging markets like China and
India have proven the benefits of a multilateral global trade system. However, the
competitiveness of EU is especially important in the context of what is generally referred to
as Trade Wars (i.e. increase in protectionism, and contestation of multilateral liberalization).
Baldwin, R. (2016). The great convergence. Harvard University Press.
Externally, the EU loses ground in international trade, competitiveness of its MNCs or
innovation, and there is yet to be achieved consensus on how to tackle these threats to
European growth and development. The main EU partner for exports in 2018 was the United
States and for imports China. And yet, with the United States and Europe increasingly pulling
back from multilateral agreements on the grounds of unfulfilled reciprocity, and seem to
favour bilateral relations or protectionist measures in various sectors, the future of the
international economy might look very different in the near future.
The EU is the world's largest trading block, the world’s largest trader of manufactured goods
and services, and it ranks first in both inbound and outbound international investments.
However, there are signs that its dominant position is decreasing, as in 2018, EU accounted
for 15.8% of global exports of goods, while China surpassed it accounting for 16.9%
In this context, the EU should develop a very clear strategy of what are the sectors and
markets in which it can outperform other economic powers, and what are the areas in which
it will continue to pursue a multilateral agenda. For example, machinery and transport
equipment accounted for more than 41% of EU exports and 31% of EU imports in 2018.
A quarter of the European Union’s trade with outside partners is realised by Germany alone.
One of the main elements of the trade performance of Germany is its own market. It has
some of the largest multinational companies in the world while also having a large and
dynamic SMEs sector. Sustained economic growth in Germany is also maintained through
EU position in World Trade.
Eurostat (2019) International Trade in Goods.
Main players for international trade in goods (2018) (bil. EUR)
technological innovation, having substantial public and private funding allocated in this
direction, and high value- added products as a result.
The bilateral approach in EU’s trade policy is reflected in the recent EU-Japan Economic
Partnership Agreement, signed by President Junker in July 2018, which aims to create new
opportunities for selling European goods and services to the fourth biggest economy in the
world. This agreement creates an open trade zone covering over 600 million people and
nearly a third of global Gross Domestic Product. EU’s annual exports to Japan are expected
to increase by 13.2%, overall.
The EU-Japan Economic Partnership Agreement is the biggest
trade agreement ever negotiated by the EU and the first ever trade deal to include a
commitment to the Paris Climate Agreement, and it was complemented by a mutual
adequacy arrangement with Japan that created the world’s largest area of free data flows,
based on a high level of protection
Recent important new generation free trade agreements (i.e. covering a large set of issues
beyond trade itself) that entered into force are the ones with Canada and Vietnam. Significant
progress is being made also with Singapore and other ASEAN countries, as well as with
Australia and New Zeeland. Negotiations with China proceed on the track of investment, and
the April EU-China Summit marks a move forward in this direction. In addition to the existing
Deep and Comprehensive Free Trade Areas (DCFTAs) with some of the Eastern Partnership
countries (i.e. Georgia, Moldova and Ukraine), and EU is also involved in similar negotiations
with other periphery countries (i.e. Armenia, Azerbaidjan, Morroco and Tunisia).
Across the continent there is a palpable apprehension about the benefits of trade, even
though one third of the EU’s income comes from trade with the rest of the world. For many
Volintiru, C., & Drăgan, G. (2019). “Nous Choisissons L’Europe”: EU’s Economic Development and Current
Challenges. In Development in Turbulent Times (pp. 59-71). Springer, Cham.
State of the Union Speech (2018) THE HOUR OF EUROPEAN SOVEREIGNTY.
European Commission (2019) Top 20 EU Achievements 2014-2019.
Euripean Commission (2018) Overview of FTA and other trade negotiations.
Share in the world maket for exports and imports of
Europeans, globalization has become linked to job losses, lower standards for safety, health
and the environment, and an erosion of traditions and identities.
The EU also proposes a multi-level approach to tackle the opportunities and challenges of
globalization: at European level (e.g. FTAs, measures to address tax avoidance, evasion, and
erosion, promotion of globally relevant regulatory standards, European external investment
plan), at member state level (e.g. national investment plans, development assistance, active
labour market policies, infrastructure spending), at regional level and at local level (cluster
policies and smart specialization, regional funding and development, integration of
migrants). Such measures are important to address the challenges of global integration and
ensure shared prosperity for European citizens.
European Commission, “Reflection Paper on Harnessing Globalisation,” May 10,
Citizens’ Voice and Rights in the European Union
The European Union has always faced critique from the point of view of its the democratic
deficit. However, never before have so many external and internal threats attacked the trust
citizens have in the European project.
Challenges to the democratic and participatory mechanisms of the EU and its member states
include such factors as: shrinking civic spaces, bias introduced by misinformation, new forms
of illiberalism and growing challenges to EU values.
Disinformation from outside the EU is
considered to be at considerable scales. An Action Plan was recently put forward by the
European Commission and High Representative to counter such threats to democratic
processes. Regarding internal threats, the poor delivery on the elements of the social contract
and the growing disparities make citizens feel dettached from the decision-making process.
For citizens from new member states, the primary role of the EU is to improve economic
growth, while in older member states, citizens what the EU to be primarily focused on
promoting values and democracy across Europe.
This diverging vision on what the EU
should be reflects the persistent disparities between its citizens and regions.
An integrative new project for Europe has to reflect in a unitary manner the different visions
of citizens from different member states. This means tackling deeper issues of what EU is and
its fundamental institutional contruction. And indeed, European citizens expect that from the
national and European decision-making bodies, as a recent poll shows that 90% of EU citizens
feel that the EU should be more than just a single market
The European Union is trying hard to maintain both a legitimacy of output, judged in policy
results, as well as a legitimacy of process, judged by the manner in which decisions are taken.
A series of measures have been adopted recently in this respect, but there is a inherent
tradeoff between the two. The very choice between further integration and national
sovereignity is at the core of this institutional dilemma.
Citizens’ voice is best reflected in electoral choices and the new European Parliament reflects
an imerging polarization between new and traditional political families.
European Economic and Social Committee (EESC) (2017) rEUnaissance: Dare a Sustainable Europe, p. 3.
EuropeMatters Survey (2018).
Idem fn. 60.
European institutions suffer from a ‘democratic deficit’
. It is based on an inherent trade-off
between the legitimacy of output (i.e. swift decision-making and policy delivery) and the
legitimacy of process (i.e. proper delegation of interests based on electoral mechanisms and
principle-agent theory). Given the multitude of challenges the European continent faced
since the dawn of the EU project, the majority of its accomplishments can be legitimised
through the results and not the due process. The European Commission makes efforts to
address both the throughput and output legitimacy.
Between 1979, the date of the first direct vote for the EP, and 2014 there was a continuous
decreasing trend of voter turnout. One exception to this rule were the 2019 elections in which
slightly more than 50% of the electorate participated. Elections were appealing to fewer
people every electoral cycle. One explanation for this descending trend of participation was
the distance between the parliamentary party groups and citizens, directly derived from the
fact that people do not vote for them, but for the national parties that make those large
entities. Another explanation is the fact that European elections were and continue to be
second-order, considered by voters as less important.
Through these elections, citizens held
the national governments accountable and are often more inclined to vote for protest or
fringe parties. This behaviour resulted in an important presence of anti-establishment and
Eurosceptic parties in the EP. Some of these parties succeeded only in European elections
and the vast majority had considerably better results in this type of elections compared to
the national elections. The presence in the EP of a large number of political parties contesting
the legitimacy of the European project can damage both the decision-making process and the
image of the institution.
Given the increasing complexity of the European decision-making process, and the goal of
achieving a stronger voice in the international arena, leaders in Brussels have sought more
agile and responsive policy tools. In 2019, the Commission considered necessary to take a
step forward in ensuring the EU has agile and flexible decision-making tools through the
return of the ‘Passarelle clauses’ from the Lisbon Treaty. It essentially allows for a transition
from voting by unanimity to qualified majority voting in specific policy area. So far, concrete
proposals on moving from unanimity to qualified majority voting were made for specific areas
of the Common Foreign and Security Policy (CFSP) (i.e. human rights violations, sanctions,
, and fiscal
policies. Some of the other policy areas to which
the Passarelle clause could be applied are: judicial cooperation in civil matters, environmental
Moravcsik, A. (2002). Reassessing legitimacy in the European Union. JCMS: journal of common market
studies, 40(4), 603-624. Majone, G. (1998). Europe’s ‘democratic deficit’: The question of standards. European
law journal, 4(1), 5-28. Follesdal, A., & Hix, S. (2006). Why there is a democratic deficit in the EU: A response to
Majone and Moravcsik. JCMS: Journal of Common Market Studies, 44(3), 533-562.
For an extensive discussion about the types of legitimacy, see Schmidt, V. A. (2013). ‘Democracy and
Legitimacy in the European Union Revisited: Input, Output and Throughput.’ Political Studies, 61(1), 2–22.
Reif, K., & Schmitt, H. (1980). ‘Nine Second-order National Elections – A Conceptual Framework for the
Analysis of European Elections Results’. European Journal of Political Research, 8(1), 3–44.
European Commission (2018) State of the Union 2018: Making the EU a stronger global actor. Press release.
European Commission (2019) A gradual transition to more efficient and democratic decision-making in EU tax
policy. Fact Sheet.
European Commission (2019) More efficient decision-making in social policy. Fact Sheet.
policy and the Multiannual Financial Framework.
Shifting to qualified majority voting has
been shown to change negotiating dynamics in the EU.
However, one of the frequent criticisms against the decision-making process in the EU is that
it is ultimately unelected bureaucrats in the Commission who design the policies that affect
the population. As such, fast-tracking decision-making—which would de facto increase the
competences of the European Commission over those of the more representative bodies (i.e.
European Parliament and European Council), could further decrease the legitimacy of the
decision-making bodies at EU level.
In contrast, to increase the legitimacy of the decision-making process, the European Citizens’
Initiative (ECI) was launched in April 2012 with the aim to provide people a voice in the
decision-making process of the EU.
Its requirements set the bar quite high to avoid the
cramming of the Commission’s agenda with a large number of initiatives. It has a strong
participatory component both at individual and organizational level. More precisely, it
enhances the involvement of civil society organizations, which have to coordinate the
collection of signatures required for the ECI to succeed. Until 2019, more than nine million
Europeans have supported an ECI and the Commission has taken concrete action, including
by proposing legislation, to follow up on initiatives that gathered at least one million
. An online collaborative platform was set up to provide advice and allow citizens
from across Europe to get in touch to prepare their initiatives.
There are two main problems with the ECI. On the one hand, it does not deliver what it
promises. Although it is promoted as a citizens’ initiative, it lacks the power of such a direct
democracy tool. Instead, it takes the form of a petition submitted to the European
Commission with the main purpose of bringing to the attention of decision-makers some
issues that are salient for the population. After submitting the ECI to the Commission there
is no pressure on the institution to adopt the legislation. As such, the instrument can bring
legitimacy in theory but in practice rarely does so. For example, the use of ECI does not
contribute to a more positive perception of citizens about the EU mainly because people do
not understand how this tool gives them an effective voice.
On the other hand, only a
limited number of ECIs made it on the Commission’s table. Although there were several tens
of initiative since its launch, only five met the required criteria. This happened due to a poor
coordination of the civil society involved in the initiatives and to the fact that people get
involved only under special circumstances. Research shows that citizens are likely to sign an
ECI when they perceive a personal benefit as opposed to sharing the common values of the
European project as initially envisaged.
European Commission (2019) A Union that Delivers Making Use of the Lisbon Treaty’s Passerelle Clauses.
European Political Strategy Centre (EPSC) Brief.
Bouza Garcia, L., & Del Río Villar, S. (2012). The ECI as a Democratic Innovation: Analysing its Ability to Promote
Inclusion, Empowerment and Responsiveness in European Civil Society. Perspectives on European Politics and
Society, 13(3), 312–324.
European Commission (2019) Top 20 EU Achievements 2014-2019, available at:
Gherghina, S., & Groh, A. (2016). A poor sales pitch? The European Citizens’ Initiative and attitudes toward
the EU in Germany and the UK. European Politics and Society, 17(3), 373–387.
Kandyla, A., & Gherghina, S. (2018). What Triggers the Intention to Use the European Citizens’ Initiative? The
Role of Benefits, Values and Efficacy. Journal of Common Market Studies, 56(6), 1223–1239.
The legitimacy of the EU elected representatives is sometimes also affected by
disinformation. To this end, the EU officials have recently adopted an Action Plan against
Disinformation designed to counter impact of fake news on the democratic procedures.
The 2019 European Elections demonstrated once again that Europe faces severe polarization.
Not only have the voting patterns been consistent with existent socio-economic cleavages in
Europe, but they highlighted new dividing lines. While traditional parties and political families
have lost both at home and at European level, new forces emerged. 63% of the current
members of the European Parliament are new MEPs. Within some of the largest member
states the renewal rate has been highest: Romania 75% of MEPs are new, France 73% of MEPs
are new, Spain 69%, Poland 63%, Italy 62%, and Germany has also more than half of its MEPs
elected for the first time—52%
. This raises both a problem of polarization of political forces,
but also raises doubts about the professionalization of MEPs. The newcomers lack experience
in European politics and will require a certain time for adaptation to the new institutional
settings; political careers at national level may help, but an adaptation period will still be
The biggest national parties within the European Parliament after the 2019 elections are also
relatively new. Most of these national parties can be categorised as nationalist or Eurosceptic,
and highly reliant on the leader persona: Nigel Farage’s Brexit Party (29 seats), Salvini’s Lega
(28 seats), Kaczynski’s Law and Justice (26 seats) and Marine Le Pen’s Rassemblement
National (22 seats). On the political centre, Angela Merkle’s CDU won 29 seats, and Macron’s
En Marche came second in France with 21 seats. The Green Party also had a notable win in
Germany with 21 seats bringing up the total for this European political family to 77 seats. In
contrast to national results where nationalist parties seem dominant, at aggregate level, in
the European Parliament, the centrist political families still hold the majority of 59% of the
votes through a super grand coalition between S&D (154 seats), Macron’s new political group
Renew Europe (108 seats) and EPP (181 seats). This majority is largely due to Southern and
Eastern European votes that consolidated the position of the traditional political families. In
contrast, Western Europe went for either progressives or nationalists.
Significant divergences of opinion in the European Parliament are likely to occur, especially
with regards to social policies, internal market and consumer protection, environment and
public health. As usual, these dividing lines are not only between political families, but also
between the delegations of the member states. For example, on the commitment to
transatlantic partnership and free trade, Easter European member states are most
supportive, while Western counterparts grow increasingly reluctant. In contrast, on support
for environmentally progressive policies, the situation is reversed.
In Europe, there is also a party system transformation driven by the rise of anti-system parties
claiming to challenge the neoliberal cartel
. Inclusive growth generally maintains the political
Idem fn. 67.
Hopkin, Jonathan and Blyth, Mark (2018) The global economics of European populism: growth regimes and
party system change in Europe (The Government and Opposition/Leonard Schapiro Lecture 2017). Government
and Opposition. 1– 33.
status quo, while a combination of inequality and poor growth is a good predictor of an
increased anti-establishment votes
. In Eastern and Southern Europe, the informal linkages
between the political representatives and their supporters allowed for a much longer survival
of the political cartels even in the absences of a healthy macroeconomic outlook
Clientelistic distribution of goods and services can often substituted the Western-type social
policies in transitioning democracies
Idem fn. 69.
Volintiru, C. (2016). Clientelism and cartelization in post-communist Europe: the case of Romania (Doctoral
dissertation, The London School of Economics and Political Science (LSE)).
Gherghina, S., & Volintiru, C. (2020) Party Organization and Clientelism in Transition Countries: Evidence from
Georgia, Moldova and Ukraine. Acta Politica. Forthcoming; Volintiru, Clara, Gherghina, Sergiu, Knott, Ellie and
Muetescu, Radu (2017) Preventing Corruption and Promoting Public Ethics at the Local and Regional Level in
Eastern Partnership Countries. Committee of the Regions Report http://www.lse.ac.uk/business-and-
Romania’s Presidency of the Council of the European Union
Context and Expectations
The Romanian Presidency of the Council of the European Union (the Council) has successfully
managed to close a relatively large number of files. According to the latest data available, by
the end of May 2019, under the Romanian presidency of the Council, approximately 90 files
have been closed, which is the highest number for any presidency in the legislative cycle that
The main challenge for the Romanian Presidency was also an opportunity: the nearing end of
term of both the European Parliament and the European Commission. The fact that European
Elections took place during the Romanian presidency meant that the time for effective
negotiations and deliberations in the European Parliament was restrained to approximately
two months before the start of the electoral campaign. In contrast, the fact that the European
Commission is coming to the end of its term meant that it had a vested interest in preserving
its political legacy and seeing many files through, and as such offered the Romanian
Presidency valuable support in concluding negotiations.
The Romanian Presidency of the Council was also constrained by the sequencing of its
activities with respect to the preceding and succeeding presidencies. From the preceding
Austrian Presidency, the Romanian officials had to take over the status of negotiations. In
some key areas, little progress was reported under the Austrian presidency, leaving the
Romanian counterparts in charge of negotiations. This created delays in conclusions. A prime
example of this takeover was the negotiation box for the Multiannual Financial Framework
(MFF 2021-2024)—one of the key pending issues at this moment. Had the Austrian
Presidency advanced more with the MFF 2021-2024 related negotiation, one could have
expected a political agreement by the Sibiu Summit, but this was not the case.
Similarly, the Romanian presidency is embedded in its own Trio, with the succeeding Finnish
and Croatian Presidencies. At the beginning of 2019, a common 18-month programme has
been published for this Trio. According to it, the main priority at the beginning of the
Romanian Presidency was the finalization of the still outstanding files of the current Strategic
Agenda and in particular those listed in the Joint Declaration on the EU's legislative priorities
for 2018-19. These totaled 65 files in 7 key areas: (1) better protecting the security of our
citizens, (2) reforming and developing our migration policy in a spirit of responsibility and
solidarity, (3) giving a new boost to jobs, growth and investment, (4) addressing the social
dimension of the European Union, (5) delivering on our commitment to implement
connected digital single market, (6) delivering on our objective of an ambitious Energy Union
and a forward looking Climate Change Policy, and (7) further developing the democratic
legitimacy at EU level.
The outline for the Strategic Agenda 2019-2024 focuses on four major themes: (1) protecting
citizens and freedoms, (2) developing our economic base: the European model for the future,
(3) building a greener, fairer, and more inclusive future, and (4) promoting Europe’s interests
and values in the world.
Following the elections that took place throughout the European Union between May 23 and
26, 2019, during turbulent times for the EU, where a Member State is about to leave the
group, the highest ballot was recorded in the last 2 decades of European Parliament
elections, strengthened by a first-ever increase in the number of voters since the first
European elections in 1979. Once completed, the European elections and, in particular, their
results lead us to a political battlefield. The ensuing negotiations will redesign the future of
the European Union for at least the next 5 years.
The architecture of the future European Union lies between two paradigms: national
sovereignity—that would involve the fragmentation of Europe for the sake of power, in which
Member States become the poles of power in the new European design, and federalization—
that would involve building a political pro-European majority in terms of values, one that can
achieve the transversal policies and measures that those commissioned to lead the European
Union will have to put into practice.
As mentioned earlier, the elephant in the room is Brexit and the future relationship between
the European Union and the United Kingdom after Theresa May’s resign. There are various
scenarios concerning the future Prime Minister, but the favorite seems to be Boris Johnson,
a former foreign secretary and leader of the 2016 referendum campaign to leave the EU.
With the extension for the Brexit until October 31, 2019, the UK will have to decide upon this
matter. But until then, a second referendum can take place, or a no-deal Brexit can happen.
Because until now the British MPs have shown three times that they do not agree with EU’s
Main themes and progress
It is hard to define the progress indicators for a presidency of the Council, as circumstances
and file content differ greatly. For the Romanian Presidency one can choose as progress
indicator either the number of resolved files—more than 90 files, or the difficulty to close
some of those files (e.g. gas directive). Additionally, the success of any presidency should be
weighed against its ability to serve as an “honest broker” (i.e. objectively manage
deliberations, so as to achieve consensus and close negotiations). There is always a large
temptation for national representatives to pursue national interests in various files, either by
advancing negotiations in files of interest, or by delaying the process for contentious issues.
By all accounts, Romania acted as an honest broker, which means that it closed many of the
files that were important to other member states (e.g. migration, digital market). It remains
to be seen if and how this political capital can be used later on in future negotiations.
With the extension to the Brexit process in October — or a revocation of Article 50 before
then, while French President Emmanuel Macron was reluctant to grant the UK an extension
to the process, the European Union’s chief Brexit negotiator insisted Britain’s next leader
would not be able to reopen Mrs May’s divorce deal. Even if the next Conservative leader
was not chosen, concerns have arisen that EU capitals will block any future attempts coming
from a new British prime minister to ask for another extension to renegotiate the overall
Brexit package. Foremost the Slovakia’s foreign minister vowed not to grant another
extension to a British prime minister trying to reopen the withdrawal agreement.
Apart from being concerned about the safety of EU 27, the leaders of the EU have to finalise
the negotiation on the Multiannual Financial Framework (MFF) for 2021-2027, the seven-
year agreement that regulates the European Union’s budget. The agreement on the EU’s
finance will be concluded after European elections, as they were considered they could
become an unnecessary distraction that prevented any agreement that could have satisfied
the Multiannual Financial Framework. In the last Council about this matter, from May 2019,
ministers focused on the proposals from the European Commission related to the European
Development Fund and the European Neighbourhood, discussions that shall be continued in
the June Council.
While the Multiannual Financial Framework 2021-2017 negotiation box will continue to be
an issue on the agenda in the months to come, the Romanian Presidency has cored notable
progress in the area of the Common Agricultural Policy (CAP) procedures. The post-2020
Common Agricultural Policy (CAP) reform package includes three regulations: on CAP
Strategic Plans, on the financing, management and monitoring of CAP and on common
market organisation of agricultural products. All three represent a move towards a more
integrated, and competitive approach to financing agriculture from the EU budget. It is
especially the Regulation on the rules on support for strategic plans to be drawn up by
Member States that will force national governments to address both pillars—direct payments
and rural developments, as well as environmental objectives.
Still in the field of the Agrifish Council Configuration, an notable achievement has been the
update to the 2018 Bioeconomy Strategy aiming to accelerate the deployment of a
sustainable European bioeconomy so as to maximise its contribution towards the 2030
Agenda and its Sustainable Development Goals (SDGs), as well as the Paris Agreement.
In general, the majority of the economic objectives revolve around the future MFF, but also
fiscal issues and the resilience of the financial system. With regard to the latter set of
objectives, a number of measures have been successfully adopted under the Romanian
Presidency of the Council of the EU. The set of revised rules aimed at reducing risks in the EU
banking sector comprises two regulations and two directives concerning bank capital
requirements and the recovery and resolution of banks in difficulty.
With an eye to risk reduction, and one to the development of the Capital Markets Union, a
Regulation was also adopted on improving the existing regulatory framework applying to the
over-the-counter (OTC) derivative market; it simplifies the European Market Infrastructure
Regulation (EMIR) and addresses disproportionate compliance costs, transparency issues and
insufficient access to clearing for certain counterparties. Still part of the Capital Markets
Union provisions, under the Romanian Presidency of the Council, a Regulation targeting
SMEs’ access to capitalization. Of the 20 million SMEs in Europe, only 3,000 are currently
listed on stock-exchanges. This is partially due to high compliance costs on the one hand and
insufficient liquidity on the other. The proposed rules therefore aim at reducing the
administrative burden and cut red-tape faced by smaller companies.
Amongst the main achievements of the Romanian Presidency of the Council of the European
Union one can also cite the adoption of the Action Plan against Disinformation. Eu officials
have long been concerned with the impact of fake news on the democratic procedures, and
in the run up to the European elections, the presidency updated ministers on ongoing activity
on securing free and fair elections and on countering disinformation. The Action Plan
responds to the calls of the European Council in June and October 2018 to develop a
coordinated response to the challenges in this field, especially in view of the forthcoming
European elections. It focuses on how to deal with disinformation both within the EU and in
its neighbourhood. Efforts to strengthen the Strategic Communication Task Forces of the
European External Action Service will play a key role here. Other actions aim to strengthen
coordinated and joint responses to disinformation, to mobilise the private sector to make
sure that it delivers on its commitments in this field, and to improve the resilience of society
to the challenges that disinformation creates.
One of the important achievements of the Romanian Presidency of the Council of the
European Union is the agreement to enhance the mandate of the European Border and Coast
Guard (Frontex). As such, EU can improve the protection of its external borders as part of its
comprehensive approach to migration. The European Border and Coast Guard Agency
(Frontex) is being strengthened in terms of staff and technical equipment. It is also being
given a broader mandate to support member states' activities on border protection, return
and cooperation with third countries. The proposed new rules will incorporate the European
Border Surveillance System (EUROSUR) into the Frontex framework, to improve its
functioning. The new mandate also foresees the setting up of a standing corps to respond to
situations of crisis, with up to 10 000 operational staff by 2027.
Enlargement is a divisive issue on the European agenda nowadays. However, for Romania it
is important to support the advancement of enlargement and cooperation programmes in
EU’s periphery, as this shifts the burden of border country from Romania itself. On one hand,
important progress has been achieved in the enlargement negotiations over the course of
the Bulgarian and Romanian Presidencies of the Council of the European Union, albeit
pending contentious positioning (see below). On the other hand, EU’s relationship with third
parties in the Black Sea region, such as China has become increasingly structured—an
objective of Romania’s Presidency of the Council. The recent EU Strategy on Central Asia
means that EU can enhance policy effectiveness and regional positive-sum games by
cooperating with other external partners, while maintaining European standards for
Common Fisheries Policy
Reform of the Common Agricultural
Preserving farming competitiveness
Consolidate farmers’ position in the
agri-food supply chain
Finalizing the multiannual
management plans and achieving
progress on the future European
Maritime and Fisheries Fund and the
Single strategy on monitoring and
protecting animal health on EU
Post-2020 Common Agricultural Policy (CAP)
reform package (Regulation on CAP Strategic
Plans, Regulation on the financing,
management and monitoring of CAP and
Regulation on common market organisation of
Directive on Unfair Trading Practices
Regulation on the definition, description,
presentation, labelling and the protection of
geographical indications of spirit drinks
Update on the 2018 Bioeconomy Strategy
European single market
Full functionality of the European
Advance the negotiations on the New
Deal for Consumers package and on
supplementary protection certificates
The directive on better enforcement and
modernisation of EU consumer protection rules
('Unfair Commercial Practices Directive'), within
the context of the 'New deal for consumers'
package, is still under discussion within the
Substantially advance the negotiations
on Horizon Europe
Promoting a smart economy
Promote a Strategic Agenda for
research and innovation in the Black
The issue of dual quality was raised as it
concerns products with the same name and
labelling that are sold in different EU countries,
often by the same producer, but that have
different composition and quality. Therefore in
March 2019, within the Competitiveness
Council was agreed upon a directive that covers
a wide range of topics and it amends the unfair
commercial practices directive 2005/29/EC, the
consumer rights directive 2011/83/EU, the
unfair contract terms directive 93/13/EEC and
the price indication directive 98/6/EC. Together
with a proposal on representative actions for
the protection of the collective interests of
consumers, it is part of the 'New Deal for
Consumers' launched by the Commission in
The revision of EU company law rules, ensuring
they remain fit for purpose in the digital age and
create the conditions for EU businesses to grasp
the opportunities of digital technologies
Horizon Europe shaped – the EU’s framework
programme for research and innovation
between 2021 to 2027
Fair and effective taxation
Economic and Monetary
Capital Markets Union
Structural reforms and
Modernize the VAT system, especially
the VAT regime for e-commerce
Common corporate tax base
Taxation of the digital economy
Updating the EU list of non-
Regulation on financing border control
equipment as a priority
Regulation on Customs post-2020
Regulation on Fiscalis post-2020
Risk reduction process
European Stability Mechanism as a
backstop for the Single Resolution
European Deposit Insurance Scheme
FinTech action plan
2019 European Semester Process
Package of New Rules for VAT on electronic
commerce (Directive on value added tax
obligations for supplies of services and distance
sales of goods, Directive on the common system
of value added tax, and Regulation on
administrative cooperation and combating
fraud in the field of value added tax)
EU list of non-cooperative jurisdictions
Preliminary agreement on InvestEU
The Paris Agreement
CO2 emission standards for new heavy-
The Romanian Presidency concluded Europe’s
first-ever CO2 emission reduction targets for
The 2030 Agenda for
The Marine Environment
Coordinate the active participation of
the EU and Member States in several
meetings on the subject, such as the
international negotiation session in
Bonn (17-27 June 2019) regarding the
Paris Agreement or the fourth meeting
of UNEA from Nairobi, 11 - 15 March
Advance the negotiations on the LIFE
trucks. The new rules will ensure that between
2025 and 2029, new trucks will emit on average
15% less CO2 compared to 2019 emission levels.
From 2030 onwards, they will be required to
emit on average 30% less CO2. The new rules
close a gap in European environmental
The rules on the most lasting and polluting
chemicals were toughened under the RO
Presidency as to ensure the protection of
human health and our environment, ensuring
safe and clean drinking water and improving
access to water, as well as updating LIFE
programme and ensuring appropriate funding
for nature, biodiversity, climate action and the
transition to renewable energy and increased
Policy, Health and
European Pillar of Social
Promoting the labour mobility
principle as a driver for
competitiveness on the single market
Consolidating mobile workers’ access
Encouraging cooperation between
public employment services and
The EU is working to make the rules for
returning irregular migrants more effective
Adopted new rules which ban certain single-use
plastic items and aim to reduce plastic pollution
and marine litter (MS have agreed to achieve a
90% collection target for plastic bottles by 2029,
and plastic bottles will have to contain at least
Innovative, safe and easily
Healthcare digitisation (e-
labour inspectorates in the Member
Pursuing with the implementation of
Directive 24/2011/EU on the
application of patients’ rights in cross-
Ensuring equal opportunities for
women and men
Guaranteeing access to healthcare for
all European citizens
25% of recycled content by 2025 and 30% by
Adopted a regulation which improves ten EU
environmental legislative acts by simplifying
EU ambassadors meeting in COREPER on 20
March 2019 have confirmed the common
understanding reached by the Romanian
Presidency with the European Parliament on
the LIFE regulation
Work-Life Balance Directive - promoting gender
equality across the EU by encouraging the
participation of women on the labour market
and the equal sharing of care responsibilities
between women and men
Continue negotiations on the proposal for a
Regulation amending Regulation (EC) No
883/2004 on the coordination of social security
systems and Regulation (EC) No 987/2009 laying
down the procedure for implementing the
Culture and Sport)
European Education Area
childhood education and
European Solidarity Corps
Programme (2021 – 2027)
Strengthening the European identity
through education and culture
Promoting training, multilingual and
Promoting the active participation of
the young, including those from
disadvantaged areas, in the European
Promoting the increase of the
adaptability of young people to
challenges faced in finding a job
It will emphasise the importance of
preserving cultural heritage
Maximizing the European cultural and
creative potential for the benefit of all
Supporting the review of the World
Anti-Doping Code and International
Standards that accompany it
A regulation that aims to ensure that: ongoing
learning mobility activities under Erasmus+
programme which have started at the latest on
the date on which the Treaties cease to apply to
the UK will not be disrupted; Erasmus+
participants from EU-27 and the UK will not lose
their academic credits and will not be obliged to
repeat their academic semester or year
EU enlargement process
Consistency of the EU’s
policy in its neighborhood
Combating hybrid threats and
enhancing strategic communication
Commission and the High Representative
adopted the Joint Communication setting out
an “Action Plan against Disinformation”
Maintaining the rules-
based international order
Strengthening ongoing CSDP initiatives
and the EU-NATO partnership
Black Sea and the EU-Central Asia
Implementation of the sustainable
New partnership with African,
Caribbean and Pacific (ACP) countries
Opening of accession negotiations with Albania
and North Macedonia
New EU Strategy on Central Asia
EU enlargement process
Advancing with the negotiations for
the Multiannual Financial Framework
2021-2027, with a special focus on the
Adopt unitary Council Conclusions on
Macro-regional strategies and review
process for the EUSDR Action Plan
Advance negotiations on a
comprehensive partnership with UK
(Justice and Home
Fight against terrorism
Adoption of the interoperability
Initiatives in the field of police
cooperation pursuing the use of
Council adopted two regulations establishing a
framework for interoperability between EU
information systems in the area of justice and
home affairs (PE-CONS 30/19, PE-CONS 31/19)
technology and closeness to the
Monitor the progress made on the EU
policy cycle for organised and serious
international crime for the period
Monitor the progress made in the
implementation of the Action Plan
2017-2020 under the EU Drugs
Reform package on the Common
European Asylum System
New proposal to strengthen the
operational capacity of the European
Border and Coast Guard Agency
E-evidence legislation package
Proposal for a Directive of the
European Parliament and of the
Council on the protection of persons
reporting on breaches of Union law
Stronger mandate for the European Border and
Coast Guard (Frontex)
Council agrees its position on rules to appoint
legal representatives for the gathering of
evidence (E-evidence package)
Directive on the protection of whistleblowers
Funding for migration, border and security
Council adopted conclusions on Securing free
and fair European elections
EU Strategy for the
Incentivise connectivity and mobility in
the Danube region
Directive of the European Parliament and of the
Council on copyright in the Digital Single Market
Facility (CEF 2.0)
The Energy Union
Clean Energy package
Natural Gas Directive
Ensure a more competitive and safer
Continue the negotiations on Mobility
The revision of the Combined
Advancing negotiations on legislative
files such as the re-use of public sector
information, Digital Europe
Programme, or CEF-Telecom
Creating the European Cybersecurity
Industrial, Technology and Research
Promoting the participation of women
in the tech sector -’Women in tech –
towards a cultural change’
Improving connectivity and energy
Starting the discussions regarding the
Conference on Physical Protection of
Nuclear Facilities of 2021
- a unified set of laws governing intellectual
property rights in the European Union
Adopted a directive amending Directive
2009/73/EC concerning common rules for the
internal market in natural gas following a first-
reading agreement with the European
Parliament. The Bulgarian delegation abstained.
(8089/19, PE-CONS 58/19)
The Council formally adopted an amendment to
the so-called gas directive which aims at closing
a legal gap in the EU's regulatory framework and
boosting competition in the gas market. The
overall objective of the amendment to the gas
directive is to ensure that the rules governing
the EU's internal gas market apply to gas
transmission lines between a member state and
a third country, up to the border of the member
state's territory and territorial sea. Among the
main elements of the EU gas market rules,
which are set out in the so-called gas directive
from 2009, are ownership unbundling, third-
party access, non-discriminatory tariffs and
Simpler rules on seafarers' training and
certification (will bring also safety at sea and
Adoption of the files on electricity market and
Agency for the Cooperation of Energy
The creation of the first EU space policy
programme for the years 2021-2027, securing
EU leadership in space activities, fostering
innovative industries, safeguarding
autonomous access to space and simplifying
Started talks on establishing a top knowledge
base for cybersecurity called the European
Cybersecurity Industrial, Technology and
Research Centre and setting up a Network of
National Coordination Centres
According to the Romanian Presidency Programme, the EU enlargement process is amongst its
priorities. Special attention must continue to be paid to the Western Balkans, in order to ensure
the stability, security and development of the EU’s immediate neighborhoods.
At a leaders’ summit in Berlin in April, French President told Albania, Bosnia and Herzegovina,
Montenegro, North Macedonia, Serbia and Kosovo, six western Balkan nation’s aiming to join the
EU in the nearby future, that they would need to provide “political stability” in their countries
before joining the EU. The relatively cold stance towards enlargement on the part of president
Macron can be attributed to his vision of a strengthened core (i.e. Two-speed Europe), as well as
an endeavour to swing voters away from the Front Nationale in internal elections. However, the
European Commission issued a recommendation on opening EU accession negotiations with the
Republic of North Macedonia and Albania, while it rests with the Member States to decide thereon
in the Council. The GAC of June 25, 2019, might have on its agenda the enlargement discussion,
being the last change under the Romanian Presidency to make progress and facilitate the political
decisions on the enlargement partner countries.
Strengthening ongoing CSDP initiatives and the EU-NATO partnership
The dual focus of the Romanian Presidency on both the Common Defence and Security Policy
(CSDP) has been put to a test by current geopolitical circumstances in which there is an increasing
tension in the transatlantic relationship, and implicitly in the NATO alliance. Reforms in the CSDP
field are obviously designed as a central component of an increased EU global role, through the
strengthening of the existing mechanisms and ensuring the synergy of new instruments (e.g.
Coordinated Annual Review on Defence/CARD – European Defence Fund/EDF - Permanent
Structured Cooperation). However, the cooperation agenda in the EU-NATO partnership can be
constrained by weakening political commitments on both sides of the Atlantic.
The Romanian Presidency continued the work on the negotiations for the next MFF, with an
intention to present a reviewed and updated document before the June European Council. Apart
from the intensive work of the Member States delegations at the technical level, the General
Affairs Council (GAC) had regular meetings on the topic. For example, at the GAC meeting on May
21, 2019, the national delegations exchanged views on external dimension of the proposed MFF
(the Neighbourhood, Development and International Cooperation Instrument) and the
controversial issue of the budgeting of the European Development Fund. Both the GAC discussions
and the content of a draft Negotiating Box show that the differences of opinion on many aspects
remain significant. For example, opposing views persist as to the overall MFF size, funding of the
CAP and cohesion policy, climate mainstreaming, link with the European Semester and the new
instrument supporting economic and monetary union. Therefore, despite the progress made in
the framework of the GAC meetings, many aspects of the future MFF are likely to require political
guidance from the EU leaders.
Fiscal consolidation in the EU
The fiscal reform package supported by the French Commissioner (i.e. Business Taxation 21)
includes three objectives: designing a proper tax system to capture current business models where
companies can operate without physical presence and to tax new realities of value creation (i.e.
digital tax), (2) putting a floor to tax competition and limiting profit-shifting, especially for highly
mobile income (i.e. minimum corporate tax) and (3) ensuring a simple and stable business
environment and avoiding distortions and double taxation inside the single market. While for the
digital tax progress has been recorded under the Romanian Presidency of the Council so far, for
the latter two much less support has been achieved.
EU Tax policy makes a substantial contribution to the fight against tax fraud and supports revenue
collection for the EU and Member States' budgets. However, during the Romanian Presidency
there was no notable advance on the Fiscalis post-2020 cooperation programme enabling national
tax administrations to create and exchange information and expertise. Similarly, on the Customs
2020—an EU cooperation programme which provides national customs administrations with the
possibility to create and exchange information and expertise, limited progress was recorded.
FinTech action plan
The plan will help the financial industry make use of the rapid advances in technology such as
blockchain and other IT applications and strengthen cyber resilience. This will benefit consumers,
investors, banks and new market players. The Action Plan is part of the Commission's efforts to
build a Capital Markets Union (CMU) and a true single market for consumer financial services. It is
also part of its drive to create a Digital Single Market. The Commission aims to make EU rules more
future-oriented and aligned with the rapid advance of technological development. The FinTech
action plan has not been adopted yet, as the specific mechanisms that would make it serve the
higher purpose of European competitiveness remain to be agreed upon. FinTech also presents
challenges such as cyber-related risks, data, consumer and investor protection issues and market
European Deposit Insurance Scheme
Completing the Banking Union with an European Deposit Insurance Scheme (EDIS) would bring
new instruments of risk management on the table of European decision-makers. However, the
extent to which member states are willing to enact risk sharing is relatively limited. For example,
Italy's loose fiscal policy means that Germany now rejects a European Deposit Insurance Scheme
(EDIS), fearing German depositors would have to bail out Italians if Italian banks got into trouble.
This is emblematic of the way in which national and regional disparities continue to stall further
Common Agricultural Policy (CAP)
Despite notable progress on the post-2020 CAP reform package, there are still pending issues
related to the allocation of CAP funds and design of policy instruments. Amongst this criticism, it
is the tension between large industrial producers, and small farmers. The latter seem to be the
main focus of the post 2020 interventions, but it is questionable the extent to which agricultural
producers can remain competitive globally with lesser support measures, at a time when the global
context of trade wars can place European producers at an advantage. Also, large sums have been
used for sale promotion of certain products such as wine that due to market composition place a
significant advantage on large producers.
EU Strategy for the Danube Region (EUSDR)
The Danube region is important for Romania’s strategic agenda, and it could provide a useful
platform for the development of transnational projects with European added value of the type
envisioned as eligible for funding in the future MFF. Following 8 years of joint efforts for a more
prosperous and cohesive common European space, the Danube Strategy faces a revision phase,
which started under the Bulgarian EUSDR Presidency, now taking the final phase under the
Romanian EUSDR Presidency. A new Action Plan for the Danube region can more effectively
facilitate joint efforts, especially with regards to cross-cutting topics (e.g. climate protection,
infrastructure development, digitalisation). The endorsed timeline considers the drafting process
of EU’s cohesion programs for the years 2021 to 2027. The first draft of the new Action Plan has
been finalised under the Romanian Presidency, but further national consultations will take place
over the summer with relevant stakeholder, expecting a final endorsement in the autumn of 2019.
In the coming months, there are two stakes for Romania: advancing its policy agenda, and
maximising its political leverage in key positions in the European institutions.
In terms of its policy agenda, Romania has very clear objectives in some areas such as the cohesion
policy and the common agricultural policy (CAP). In these areas, Romania’s interest is twofold: to
maximize the overall level of allocations, and to ensure a smooth as possible procedure for drawing
these funds. The latter seems at this moment much harder to achieve than the former. Due to the
fact that Romania still has all its regions in the “less developed” category (with the notable
exception of Bucharest-Ilfov region), it will most likely benefit from similar allocations to the
current MFF 2014-2020. This is an important advantage in a context in which the EU budget is
going through a downsizing exercise, with a particular focus on diminishing the funding for
cohesion and CAP. However, a number of conditionalities and new procedures can restrict
significantly Romania’s capacity to benefit from the future allocations, and as such the negotiations
of the Partnership Agreement and the Operational Programmes will likely be more important than
that for the overall amount of the future MFF 2021-2027.
Other policy objectives for Romania are joining the Schengen Area, convergence assistance for
adopting the euro, such as the Reform Delivery Tool, or policies targeting the youth, labour
mobility and social services. In general terms, Romania is invested in promoting and implementing
policies related to further integration in the Energy Union, the Digital Union, and common security
and defence programmes.
Concerning the political game, Romanian delegations should focus on capitalising on the Romanian
Presidency of the Council of the European Union, as major positions are in play across the leading
European institutions. From the European Elections, the Romanian political groups win positions
of relative influence in each of their respective political families: PSD will be the third largest
national group in S&D, PNL will be the third largest group in PPE, and USR will likely be the largest
in the “ALDE-Macron” group. Therefore, our country has a say in the positions for which the real
political struggles are beginning to take place: the President of the European Commission, the
President of the European Parliament, the High Representative of the Union for Foreign Affairs
and Security Policy, the President of the European Central Bank and, last but not least, the
President of the European Council. In this context, the political capital the Romania holds
collectively is very high and should be focused on specific national priorities in key areas, such as
energy, digitalisation and innovation, security, and enlargement.
Romanian Votes in the European Parliament
The 2019 European elections are generating a situation without precedent for the EU, resulting in
a Parliament more fragmented than ever. At the same time, the European Council is preparing
EU’s Strategic Agenda 2019-2024, which will guide the actions of the future Executive
(Commission) during the new political cycle. The key question is how concrete can this agenda be
and how much of it will prove feasible in the new political context.
What are the implications for this new balance of powers between political forces that have
contrasting opinions on how the competences should be shared between Brussels and the national
Capitals? How can Romania defend its interests in this new European political framework?
The changing political composition of the European Parliament after the 2019 elections will affect
the level of support for key policies. In particular, the losses of left-wing groups (taken as a whole)
will lead to a decrease in the level of support for progressive social and fiscal policies, which is
likely to hold back current proposals of stronger EU harmonization of fiscal and social security
systems. From a different perspective, the losses of left-leaning groups will also make it easier for
the forces that promote faster digitization and automation of the EU economy to get traction for
their proposals, although this trend will be nuanced by the rise of right-wing nationalist forces,
which share some of the concerns over the social impact and side-effects of the technological
revolution. On other topics, such as the size of the EU budget and the agricultural budget in
particular, or the geopolitics of energy, differences among the countries are more visible, ie. the
balance of power is less likely to change substantially after the elections as is in these cases the
political colors of the MEPs matters less (while nationality matters more).
Overall, this mapping (as well as previous studies) highlights that MEPs are more likely to vote (and
take positions) along ideological (political group) lines rather than national ones, ie. Romanian
social-democrats are more likely to vote as social-democrats from countries like Germany, France,
etc, rather than in the same way as the Romanian EPP MEPs. European political groups tend to
have a strong cohesion, in particular the Christian-Democrats, the Social Democrats, the Greens
and the Liberal & Democrats. The behavior of Romanian members tends to follow these overall
trends, which makes it difficult, in some cases, to clearly define a certain direction as being “the
national interest”. However, Romanian MEPs do occasionally go against their political groups when
voting on issues that strongly affect their home country.
Concretely, Romanian members are more likely to vote in the same way (regardless of different
political affiliations) on issues such as the size of CAP budget or Nord Stream II: all (or almost all)
Romanian MEPs back a bigger EU agricultural budget and want to block the Nord Stream II project.
However, when it comes to specific regulations of the internal market, we observed divergences
in the views of Romanian MEPs on issues concerning digitization, automation, social and fiscal
policy. Romanian parties tend to follow the lines of their European political groups on these
matters. For instance, Romanian Social Democrat members support the proposed reform of the
coordination of social security systems of the Member States, whereas the National Liberals (PNL)
opposed it. On the other hand, the PNL members have endorsed a proposal to strengthen e-
commerce, while the PSD has opposed it.
This following pages analyse some of the priorities that Romania aims to promote at EU level and
show which are its allies and opponents, among the political forces of the other EU member states.
This provides us with insights into the room for maneuvering that the national leaders will have
during the next years when defending the Romanian competitive advantages in the EU decision-
The analyzed here are placed among the Romanian priorities set out in the expert studies, which
have been cross-checked with the availability of decision-making data from the European
• Common Agricultural Policy and European funds: the budget for agriculture, easier access
to funding, the greening of conditionality, access to the European Investment Bank’s funds;
• Energy policy: electricity interconnection, North Stream II, support for biofuels;
• Digitization and automation: development of e-commerce, taxation of robots, EU cyber-
• Social and fiscal policy: the harmonization of taxation systems, the common minimum
wage, the coordination of social security systems;
Budget & Investments
Budgetary discussions are sometimes seen as a zero-sum game by the participating negotiators.
Politicians coming from net-paying countries to the EU budget are often very defensive when it
comes to budgetary increases, as they have to provide their electorate with more justifications of
the added value of additional expenditure. Conversely, being one of the poorest members of the
EU, Romania has a clear interest in supporting a bigger budget for the EU. However, while the
uneven geographical allocation of EU financial resources leads to budgetary clashes between the
interests of the richest and poorest countries, decision-makers are more likely to split along
ideological lines when it comes to how the money should be spent, as different political forces put
forward different priorities (economic growth, environment, social cohesion, etc…)
Size of CAP (Common Agricultural Policy) budget
Agricultural funding is the biggest item of expenditure of the EU budget, although its share has
decreased over time.
The debate on the size of the CAP budget feature a recurrent clash between net contributors and
net recipients of agricultural funding. Net contributor countries are critical of the money spent for
agriculture, in particular as the weight of agriculture in the EU economy as decreased over the
decades. However, most other countries argue that the CAP is still relevant in order to support
agricultural production and security of food supply. Romania is one of the biggest net recipients of
agricultural funding, whereas the biggest net contributors are found among Germany, the UK and
the Netherlands. Countries with a lower level of national investments in this sector (e.g. Romania,
Bulgaria and Lithuania) would be more severely affected by potential cuts in the CAP budget.
Net contributors would like to cut CAP budget (as well as the EU budget as a whole) after Brexit.
The UK has been a net contributor, hence its departure would lead to a shortfall in the EU budget.
However, a majority of forces within both the European Parliament and the EU Council would like
to increase CAP budget in the next Multi Annual Financial Framework, or at least, to maintain it at
the same relative level (and to keep up with inflation).
Balance of views at EU level
Those who oppose cuts in CAP budget can count on the support of a majority of members of each
political groups, with the exception of the liberal ALDE group and the British Eurosceptics. In this
case, most members of the European Parliament tend to vote along national lines on this matter.
For this reason, the balance of power on this matter will not change dramatically after the EU
elections. While the political forces that are the less keen on higher CAP spending (liberals and
right-wing nationalists from net contributor countries) are gaining ground, the re-distribution of
seats in the European Parliament after Brexit will mainly strengthen national delegations that are
supportive of more money for agriculture: Spain, France and Italy.
The analysis of votes on this subject in the European Parliament highlights that political groups are
not highly cohesive when it comes to the size of CAP funding. All Romanian members, regardless
the political group, have thrown their support behind the push for a bigger CAP budget. Likewise,
all (or almost all) Italian, Polish, Spanish members support more agricultural funding, regardless of
political affiliation. Conversely, all (or almost all) Dutch, Swedish and Danish members want a
smaller CAP budget. The German and British delegations seem to be more divided, although these
countries are the biggest net contributor to CAP spending in absolute terms. The German and
British members of ALDE and right-wing nationalist groups are opposed to a bigger CAP budget,
whereas the German and British members of the other political groups seem to be more
Greening of CAP
Environmental forces have been leading the calls for aligning CAP spending with climate and
environmental objectives, in particular following the Paris Agreement on Climate. These initiative
also aims at making food production more sustainable and discourage overproduction. This would
attach further conditions on the recipients of EU agricultural funds, who would have to meet
additional requirements on ‘green’ production practices, possibly bearing additional costs. These
proposals are also opposed by the biggest recipients of agricultural funding (such as Poland and
Romania), whereas they are seen more favorably by some of the net contributors to the EU budget
(e.g. Sweden and the Netherlands).
Balance of views at EU level
Opposition against a strict green conditionality of CAP funds is currently majoritarian within the
European Parliament and the EU Council. This majority is likely to further increase after the
European Parliament elections, as the left-wing forces advocating for a strict green conditionality
will lose ground vis-à-vis more conservative ones.
The opponents to a stricter green conditionality on CAP funding can rely on the support of free-
market oriented political families (ALDE, EPP and ECR), as well as right-wing nationalists forces.
Left-wing GUE/NGL and Greens/EFA groups are in favour or more green conditionality, whereas
S&D group and the Italian 5 Star Movement are also in favour, but have more moderate views. For
instance, the S&D group supports lifting the exemptions from climate requirements for small and
medium sized farms, although it opposes more radical proposals.
Romanian MEPs tend to vote alongside their political groups on this matter, meaning that most
Romanian members would vote against strict green conditionality of CAP funding, with the
exception of Social Democrat MEPs. For instance, Romanian PSD voted alongside S&D in
supporting the lifting of the current exemptions (from climate and environmental measures) for
small farms. However, other political parties from other countries tend to disagree more with their
political groups on these topics. For instance, Italian and Spanish members (who also come from
countries that receive a substantial amount of funds) tend to be opposed to lifting exemptions
from climate rules, whereas some of the Dutch and Swedish members (who come from net
contributors countries) tend to go against theirs group in backing stricter rules on agricultural
MFF quota for climate action funding
Since Member States have to approve the 7 years-long Multi Annual Financial Framework by
unanimity, the exact outcome of the negotiations is not always easy to predict and multi-faceted
compromises are needed in order to get each government on board with the proposal.
8 national governments have proposed allocating at least 25% of MFF funding to projects that
contribute to reaching the targets of the Paris Agreement. These governments are mostly from
Northern and Western Europe (France, Belgium, Denmark, Luxembourg, the Netherlands,
Sweden), as well as the left-leaning governments in Iberia (Portugal and Spain). The other
governments that are part of the so-called Green Growth Group (Finland, Germany, Austria, Italy,
Slovenia and UK) are also seen as supportive, but there views are more moderate, as they have
not backed the more recent proposals by the other 8 hard-line governments. Changes in the
composition of governments in these countries have diluted their position, as it’s the case of Italy.
In the European Parliament, some political forces advocate for having at least 30% of MFF
expenditure dedicated to climate change.
However, such diversion of funding is likely to negatively affect Central and Eastern European
countries (including Romania), since allocating the funding based on this criterion would imply the
diversion of funding away from other spending items (agriculture, cohesion, etc.). For this reason
(as well as the Polish reliance on carbon-intensive sources of energy), the Polish government is
among the staunchest opponent to a higher quota.
Balance of views at EU level
Only a minority of members of the European Parliament and the EU Council are in favour of a 10%
increase (from 20 to 30%) in the share of MFF expenditure to be dedicated to climate goals. In this
regards, we do not expect big changes in the balance of power on this issue after the elections, as
the left-wing forces that are advocating for setting a minimum quota of at least 30% are set to
make limited gains after the elections.
The opponents to a higher share of MFF climate spending can count on the support of free-market
oriented groups in the European Parliament (ALDE, EPP and ECR), as well as the right-wing
nationalists and part of the Social Democrats. There are clearly some nuances, as both the Social
Democrats and the Liberal and Democrats support the proposed 20% share of MFF expenditure,
whereas EPP, ECR and the right-wing nationalists are more critical. Conversely, left-wing
Greens/EFA and GUE/NGL are pushing for diverting more funding towards climate action.
While political affiliations play an important role in this case, voting data also sheds light on key
national cleavages. For instance, several Swedish and Danish members (and to a lesser extent
Dutch and Finns) are more supportive of a 30% minimum quota of climate action funding than
their political groups’ colleagues from other countries. Conversely, very little support for such
proposal is found among Romanian MEPs, as they all oppose it (with no exceptions in this case).
Greening of Cohesion Fund and European Regional Development Fund (ERDF)
In addition to the overall increase of the share of the MFF to be dedicated to climate action, there
is a strong push to transform the Cohesion Fund and the European Regional Development Fund
into a “greening instrument”. In particular, Nordic countries and left-leaning forces support the
introduction a minimum quota of 40% of the ERDF to be allocated to climate objectives and as
much as 45% of the Cohesion Fund expenditure to be destined for the same purpose.
However, these proposed new rules would divert funding away from other infrastructural projects
within net recipients of cohesion money. This explains why higher quotas for climate objectives
are not supported by most Central and Eastern European governments. During the period 2014-
2020, Romania was allocated over 20 billion euros from the ERDF and Cohesion Fund.
Balance of views at EU level
A small majority within the European Parliament, and the EU Council, oppose the most ambitious
proposals of a 40% minimum quota of ERDF funding and 45% quota of Cohesion Fund to be
dedicated to climate objectives. We expect opposition to a faster greening of the Cohesion funding
to slightly increase after the elections, due to the gains of right-wing nationalist forces (that tend
to be skeptical of the need for climate policies), which will compensate the losses of other right-
leaning groups, such as the EPP.
Those who oppose higher quotas (of 40% and 45%) can count on the support of free-market
oriented EPP and ECR, as well as right-wing nationalist groups. Conversely, left-leaning groups
S&D, Greens/EFA and GUE/NGL, as well as Italian 5 Star Movement back higher green quotas for
cohesion funding. The centrist ALDE group is split on this matter, although the increasingly
influential French members are in favour of diverting more funding towards de-carbonization.
While, overall, MEPs tend to follow their political groups on this matter, national divisions are also
observed. For instance, we observe stronger support among Danish, Swedish, Dutch and Belgian
MEPs for a bigger focus on climate action. Conversely, Romanian members tend to be among the
most opposed within the European Parliament. Romanian Social Democrats tend to vote against
their political group on this matter, therefore opposing higher green quotas within the cohesion
budget, the only exception being Tapardel. The Romanian EPP members also oppose the proposal,
in line with the position of their political group.
Easier funding from European Investment Bank
The European Investment Bank plays a key role in injecting funding into infrastructural projections
across the EU as beyond. Over the past 5 years, the EIB has financed projects for over 300 billion
euros. Clearly, the funding is not evenly distributed across the EU, with Italy and Spain being the
bigger beneficiaries during the period 2014-2019. One of the key issues is what conditions should
be attached to funding from the EIB. In particular, some political forces would like to introduce a
stricter environmental conditionality on EIB financing and exclude support for projects such as
biorefineries, steelworks, regasification and gas storage facilities, and motorways. There are also
calls to make EIB support conditional on the sharing of fiscal and financial information by
However, stricter conditionality could severely affect countries that are still catching up with
regards to their infrastructure, as well as make the process to borrow money more burdensome
and bureaucratic. Since Romanian infrastructural system has still to reach the same level as
Western European ones, the country would need to ensure that there are not too many strings
attached to EIB funding.
Balance of views at EU level
There is currently a large majority within both the European Parliament and the EU Council that
rejects the introduction of a stricter conditionality on EIB loans. We expect support for a stricter
conditionality to increase after the EU elections, mostly because of the gains of fringe political
forces (both on the far-left and far-right of the political spectrum) and the losses of the more
The opponents to a stricter conditionality on EIB loans can count on the support of free-market
oriented political families (ALDE, EPP and ECR), as well as the Social Democrats. Left-leaning
Greens/EFA, GUE/NGL and the 5 Star Movement are the most supportive of a stricter
conditionality. Right-wing nationalists have more nuanced views, although they lean towards
supporting a stricter conditionality.
Generally speaking, ideological views seem to trump national cleavages on this topic: most far-left
wing members of the European Parliament support a stricter conditionality, as this would ensure
that taxpayers money is spent for project that comply with very high standards.
Romanian MEPs have similar views on what is Romania’s interest in this matter, almost all of them
expressing opposition to linking EIB financing to the environmental impact and financial disclosure.
The debate on energy policy often encompasses a plurality of interests, as energy decisions have
economic, environmental and geopolitical implications. While environmental groups are leading a
push towards phasing out the use of polluting sources of energy, other political forces are more
concerned about energy security. The discussions are further complicated by the different
geopolitical interests and energy preferences of EU Member States. With a growing economy that
still needs to catch up with those of the other EU countries, Romania tends to focus more on the
security of energy supply (abundant supply of cheap energy is needed for economic growth) and
prioritizes the development of the pan-European gas infrastructure which it could exploit. On the
other hand, the country is also worried about the predominance of oligopolistic sources of energy
and tends to oppose projects that would strengthen the hand of energy superpowers such as
A fully integrated electricity market is one of the requirements to build a European Energy Union,
as it would decrease the isolation of the electricity grids of individual Member States. However,
the 10% target of electricity interconnectivity between Member States set in 2002 has not been
reached in all countries: the problem of “energy islands” and the weak support of both some
political forces and some national governments have slowed down the process of reaching the
targets. Romania is part of the countries with the highest difficulties on this area but, according to
the Commission’s 2017 Report, Romania should still be able to reach its target by the deadline.
The other countries that are more isolated are Spain, Portugal, Italy, United Kingdom and Poland.
Balance of views at EU level
While additional funding would help the lagging countries, only a minority of members of the
European Parliament and the EU Council are willing to support further financial incentives to
increase the interconnection of EU Member States. Opposition is due to the fact that some forces
in the countries with higher electricity interconnection levels do not necessarily have an interest
in promoting investments in this regard and would rather prefer to allocate investments elsewhere
(for instance in the clean energy transition).
The supporters of the request to allocate more funds for reaching the 10% target of electricity
interconnection can find allies among the Social Democrat members and right-wing nationalist
ENF. However, MEPs from other groups are not highly supportive (for different reasons). Both free-
market oriented ALDE and EPP, as well as left-wing Greens/EFA, GUE/NGL and 5 Star Movement
tend to be on the opposing side.
The analysis of voting behavior reveals that some MEPs voted along national lines, although the
picture is quite nuanced. In the case of Romania, MEPs mostly followed the lines of their political
groups, with PSD voting in favour of additional support, whereas most EPP members voted against
(with the key exception of Muresan and Marinescu). Conversely, Spanish and Portuguese MEPs
(the Iberian Peninsula being another peripheral region with regards to electricity interconnection)
tend to be much more supportive of strong support for investments and they tend to vote against
their political groups when necessary.
Support for biofuels
While some political forces endorse the production of energy from biomass as a viable alternative
to traditional energy sources (e.g. fossil fuels), biofuels are also criticized for diverting agricultural
production away from the supply of food and promoting de-forestation.
While the debate often assumes ideological connotations, national cleavages are also observed,
since the production of biofuels is unevenly distributed across the European continent. While
Romanian production of biofuels is still lower than those of other EU countries, there is a strong
potential to increase production in the country.
Balance of views at EU level
The proposals to crack down on the production and use of biofuels are supported by only a
minority of members of the European Parliament and the EU Council. However, the level of
support for stronger limitations on the use of biomass for energy purposes is expected to increase
since the fringe forces that are keen on these proposals (the Greens, the far-left and most right-
wing nationalists) are set to grow in strength and size after the EU elections in 2019.
Those who want regulators to support the use of biofuels can count on the support of free-market
oriented groups EPP and ALDE. The strongest opposition comes from left-leaning groups,
Greens/EFA, GUE/NGL and the Italian 5 Star Movement. The Socialist and Democrats are also keen
on supporting certain types of biofuels, but are worried about those that contribute to
deforestation. Conversely, right-wing nationalists have also nuanced views on the matter: these
political forces are not keen on public support for biofuels, but they tend to be less concerned
about the environmental impact of biofuels (e.g. deforestation).
Our analysis of voting behavior shows that most MEPs tend to follow the lines of their political
groups on these matters, although there are significant exceptions, Romanians being one of them.
While Romanian EPP members are aligned with their political group, which is rather supportive of
biofuels, some Romanian S&D members are willing to defect from the position of the S&D group,
when needed, and still support the use of biofuels. Apart from Romania, Bulgarian and Polish
members also display stronger support for biofuels than their political group. At the opposite end,
Dutch and Belgian members seem to be less keen on incentives for biofuels than other national
delegations within the same groups.
Construction of Nord Stream II
The debate on the doubling of the capacity of Nord Stream pipeline focused on the geopolitical
implications of the project, rather than its environmental and economic impact. The project would
allow Russian gas to by-pass countries with which Russia has less friendly relations (such as Ukraine
and Poland) and to export more gas directly to Germany and Western Europe.
The project is backed by countries such as Germany, Austria and Netherlands, whose economies
would benefit from a bigger supply of natural gas. The project would also reduce the disruptive
impact of a conflict between Russia and Ukraine on the supply of gas to Western Europe.
Conversely, countries such as Poland and Romania are concerned about the Russian alleged ‘divide
et conquer’ strategy and its efforts to diversify its supply routes to Western Europe.
Balance of views at EU level
While the Council tends to be more divided (based on different national priorities), there is a bigger
majority in the European Parliament against the project. The balance of power in the European
Parliament will not change substantially after the elections, although the gains of right-wing
nationalist forces that tend to be more sympathetic towards Russia is set to increase the level of
support for the project.
The opponents to the project can count among their allies most political groups in the European
Parliament: both free-market oriented groups (ALDE, EPP, ECR) and left-leaning groups (S&D and
Greens/EFA), whereas Nord Stream II is mostly supported by the political groups that tend to be
more friendly towards Russia (ENF and GUE/NGL), whereas the Italian 5 Star and the British
Eurosceptics tend to be more neutral.
Differently from other issues, Nord Stream II tends to generate splits within some of the political
groups, as MEPs belonging to different countries do not necessarily see eye-to-eye with their
European group’s colleagues. For instance, German, Austrian and (to a lesser extent) Dutch
members tend to be more favorable towards Nord Stream II. For different reasons, Greek and
Bulgarian members are also more supportive, probably because of their close political and cultural
relations with Russia. Not surprisingly, Romanian MEPs tend to vote cohesively against Nord
Stream II, regardless of political affiliation.
Digitization and Automation
The economic and social consequences of the expansion of new technologies, in particular
digitization and AI, are increasingly under the scrutiny of political decision-makers. While
innovation can hardly be stopped, politicians are debating to what extent public authorities should
intervene in regulating the use of these technologies. Some countries, such as, arguably, Romania,
are trying to encourage digitization and automation in order to make their country more appealing
for businesses and investments. Other countries, as well as political forces, tend to be more
concerned about some of the negative social and economic impact of the digital revolution.
The digital dimension is becoming ever more important for the performance of social, economic
and even military activities. For this reason, cybersecurity ranks high in the list of priorities of EU
decision makers. However, whether the remit of European Cyber-security Industrial, Technology
and Research Competence Centre should be strengthened to also include defence-related projects
turned out to be highly controversial, also because this touches upon the debate on the EU
competencies and its role in defence matters.
While some EU countries (such as France) are seen as leaders in cybersecurity commitments and
investments, Central and Eastern European countries have still to catch up, including Romania.
Stronger EU coordination and investment in this field would help the countries to strengthen their
defence against cyber threats. However, those who do not trust the EU are less keen of supporting
its involvement in security and defence matters.
Balance of views at EU level
Overall, a large majority of policymakers within both the European Parliament and the EU Council
is in favour of funding research on defence and other defence-related purposes as part of the remit
of the dedicated cybersecurity agency. However, the size of this majority is set to decrease after
the European Parliament elections, which boosted the strength of fringe forces on both the right
and the left parts of the political spectrum.
The main supporters of funding military defence research or other defence-related projects on
cybersecurity can count on the support of ALDE and the EPP. Conversely, the main opponents can
be found among left-wing Greens/EFA and GUE-NGL (which oppose military research on pacifist
and, to some extent, also geopolitical grounds) and right-wing nationalists forces, which are
against any EU role in defence policy (although there are some exceptions, such as Italian Lega,
which is in favour of EU funding for defence research). Other groups tend to have more nuanced
positions, such as the Conservative ECR, which is currently sitting on the fence. S&D group leans
towards including defence research into the remit of the new agency, but does not have currently
a strong common view on whether the EU budget should be used for operations having military
or defence implications.
Our analysis of voting behavior shows that political affiliations are a stronger predictor than
nationality of MEPs’ when it comes to their views on EU cyber-defence. There a few exceptions,
though, such as the case of Irish members: coming from a neutral country, Irish members are more
wary of an increase of EU’s role in defense matters. With regards to Romanian MEPs, they tend to
vote alongside their political groups. All Romanian members tend to be supportive of extending
the remit of the new agency, regardless of political affiliation. However, Romanian S&D members
tend to follow the middle-ground position of their European group with regards to the use of the
EU budget for operations having military or defence implications, whereas Romanian EPP
members do not seem to have reservations in this regard.
Taxation of robots
The new technologies linked to Artificial Intelligence are increasingly changing the European
society and economy. While AI is likely to help companies increase their productivity, there are
concerns with regards to its impact on the job market. Some policy-makers are concerned about
the occupational status of the social categories that are more likely to be made redundant by the
development of AI and go as far as proposing a tax on robots in order to support the social security
system. This proposal is highly controversial though, as it could further slow-down the
development of AI in the EU at a time where the EU seems to be lagging behind the US and China
when it comes to Artificial Intelligence.
Balance of views at EU level
Currently in the European Parliament, there is a small majority against the proposal of a tax on the
use of robots, whereas the EU Council is even more skeptical (generally speaking, EU governments
ae not fond of EU interferences on taxation matters).
According to Eurostat, Romania ranked in 2018 among lagging countries that use robots in
industrial processes or in services. The very low density of industrial robots means that more
investments are needed in this sector, which would be deterred by the introduction of a dedicated
tax. On the other hand, the rise of automation in Western Europe can be seen as a threat in Eastern
Europe, since it would become less profitable for Western companies to relocate part of their
production to lower-wage countries in Central and Eastern Europe.
The level of opposition to the introduction of taxes on robots is likely is increase after the EU
elections, due to the losses of the progressive forces that are keener on taxing automation.
However, this trend will partially be compensated by the gains of some right-wing nationalist
forces, that tend to be critical of the extensive use of AI and automation, such as the Italian League.
Overall, the forces that oppose taxation of robots can count on the support of free-market
oriented groups (ALDE, EPP and ECR). Not surprisingly, left-wing groups tend to be more
favourable towards a robot tax (S&D, Greens/EFA, GUE-NGL and the Italian 5 Star Movement). In
this case, most right-wing nationalists tend to sit on the fence, as several parties have not made
up their minds yet. These political forces are afraid of crippling their national economies by
introducing such a tax, but they are also wary of the side-effects of the AI revolution on a
substantial part of their electorate: blue collar workers and small entrepreneurs (who have less
resources to invest in AI).
Our analysis of votes on the matter show that about half of Members of the European Parliament
oppose taxation of AI. These votes highlight stronger ideological cleavages rather than national
cleavages, meaning that most members tend to vote alongside their political groups. This is also
the case of the Romanian members of the European Parliament: Romanian EPP members tend to
be more opposed to the tax, while Romanian S&D members tend to be more supportive.
Development of e-commerce
While policymakers tend to agree on the benefits of e-commerce for consumers, they do not
necessarily agree on whether policymakers should remove regulatory obstacles in order to support
the expansion of e-commerce to new sectors and products. In particular, some political forces are
concerned by the disruptive economic and social impact of e-commerce. They deem e-commerce
to favour big digital players to the detriment of smaller shop-owners. The debate can also assume
a national dimension, since the digital revolution allows transnational e-commerce giants to
outsell local businesses. However, there are concerns about the EU lagging behind the United
States and China with regards to e-commerce (as well as the rest of the digital sphere), which also
entails that US and Chinese digital companies tend to be more competitive than the European
The online shopping sector is currently underdeveloped in Romania and public support might be
needed for its development. According to UNCTAD B2C E-commerce index, Romania is close to the
bottom of the ranking with regards to online shopping frequency from among the EU countries.
Balance of views at EU level
The support for further promotion of e-commerce, which entails the removal of barriers and
obstacles that remain for consumers and businesses, is majoritarian within the European
Parliament and the EU Council, since a majority of policy-makers believe in digital innovation as a
tool to make the EU economy more competitive. We expect the side in favour of promoting e-
commerce to remain majoritarian after the European Parliament elections, also because of the
losses of the progressive forces that are particularly concerned about the side-effects of e-
The stakeholders who have an interest in encouraging the e-commerce revolution are likely to find
allies among the free-market oriented political groups in the European Parliament (ALDE, EPP and
ECR), whereas left-leaning S&D and Greens/EFA have more reservations. The fringe groups have a
more nuanced position, in particular right-wing nationalist parties. While these political forces
agree on the need to reduce barriers for businesses and consumers, they do not want the EU to
actively support the expansion of e-commerce.
Our analysis of votes in the European Parliament shows that MEPs tend to vote alongside their
political groups, including the Romanian MEPs. PSD seems to share the concerns of their European
group (S&D) on the social impact of e-commerce, whereas centre-right wing Romanian MEPs from
EPP and ALDE are more supportive of the free promotion of e-commerce.
As the debate on e-commerce regulation will deepen, we expect stronger national cleavages to
emerge between the national groups that are in favour of a more gradual approach and those that
support stronger incentives for this new sector.
Social and Fiscal Policy
Over the past few months, calls for increasing harmonization of social and fiscal policies of EU
Members States have become louder, in particular during the electoral campaign. Some of these
proposals are not welcomed by some the governments, including in the Central and Eastern
European, which are afraid of having to adopt rules that are more in line with West European social
standards, as doing so could take a toll on their growing economies.
Revision of rules on CSSS (Coordination of social security systems)
The proposal for a stronger coordination of social security systems (CSSS) is one of main
cornerstone of the European Pillar of social rights. However, the current proposal turned out to be
so controversial that the EU legislators could not find an agreement on the text by the EU elections,
despite the efforts of the Romanian Presidency of the EU Council.
This proposal aims to clarify where benefits can be claimed with regards to cross-border workers.
The Commission wants to make it easier for frontier workers (who live in one country, work in
another country, and go home at least once a week) to get benefits in the country where they
worked. This explains why the proposal is strongly supported by countries such as France and Italy,
since their high number of frontier workers who work in Switzerland (in case of Italy and France),
Luxembourg and Germany (in case of France). It would also allow workers to export their benefits
for longer, which could be seen as beneficial for the highly mobile Romanian workers. However,
the proposal also aims to crack down on companies that act as posting platforms (also called by
their critics, ‘letterbox companies’), which explains the strong opposition of Poland and other
Central European countries.
Balance of views at EU level
Opposition against the revision of the CSSS is likely to get stronger after the EU elections, mainly
because of the losses of left-wing political forces that are pushing for a revision. On the other hand,
the departure of the UK might have the opposite effect, tilting the balance of power in favour of
the national groups that support the reform.
The proponents of the revision can rely on the support of the left-leaning political forces (S&D,
Greens/EFA and GUE/NGL) and some the right-wing nationalists (depending on the country),
whereas the opponents can count on the free-market oriented groups (which are also less keen
on promoting reliance on welfare benefits): ALDE, EPP and ECR, as well as the other right-wing
However, political groups tend to split long national lines on these matters, given the strong views
of some national delegations. The initiative is supported by almost all Italian, French and Spanish
members, even in the case of right-wing nationalists (e.g. Salvini and Le Pen’s parties). Almost all
Polish, Czech, Dutch and Danish members oppose the revision, regardless of political affiliation.
Other national groups are split along ideological lines and tend to follow the line of their political
groups, as in the case of Germany and Romania. This means that Romanian Social Democrats tend
to support the revision, alongside their political group, whereas Romanian EPP members are less
supportive of the proposed revision.
Common minimum wage
Similarly, the introduction of a common EU minimum wage may take a toll on countries with a
relatively low statutory minimum wage (or possibly not statutory minimum wage at all). The
opponents of this proposal argue that the companies operating in these countries could lose
competitiveness, since wages could increase irrespective of productivity. On the other hand,
workers would in a better position to cover their living expenses which would result in an increase
in consumption levels in the country’s economy. Here too, some national cleavages are visible,
since countries that have already introduced relatively high statutory minimum wages could
benefit from bigger harmonization at the EU level.
Since Romania has one of the lowest minimum wages (in absolute terms) in the EU, the
implications for Romanians would be greater. However, the impact of a common minimum wage
depends on how it is calculated. For instance, the current Romanian minimum wage is already
relatively close to the median wage of the country, although it is also relatively close to the poverty
Balance of views at EU level
Currently, the support for a Union-wide minimum wage is minoritarian within both the European
Parliament and the EU Council. Several national governments, as well as nationalist forces, are
wary of allowing the EU institutions to decide on such a delicate topic and they oppose the push
by the left for further harmonization. Additionally, liberal, free-market oriented forces tend to be
critical of minimum wages and their impact on the competitiveness of the EU economy as a whole.
Since the elections have strengthened both the nationalist forces and the centrist liberals, the
balance of power is likely to evolve in favor of the opponents in the immediate post-elections
landscape, despite the vigorous campaign by the forces advocating for a more social and
The political forces that oppose a Union-wide minimum wage can count on the support of free-
market oriented groups in the European Parliament (ALDE, EPP and ECR) and the right-wing
nationalist forces. Even far-left GUE/NGL and the Italian 5 Star Movement tend to endorse the
common argument that the EU does not currently have the needed regulatory powers to pursue
such an initiative. Conversely, Social Democrats and Greens/EFA are of the opinion that the EU
should do more in this regard, with the exception of the Nordic and British Social Democratic
members, who are more concerned about potential extension of the EU regulatory powers.
Nevertheless, we observed a stronger majority in favour of recommending Member States to
ensure that their minimum wage levels are equal to or higher than 60% of their average wages.
Such proposals are supported by the left-wing groups (S&D, Greens/EFA, GUE/NGL, the 5 Star
Movement), but also most members of the EPP. Free-market oriented ALDE and ECR, as well as
right-wing nationalist forces are more likely to reject these recommendations, as some members
deem high minimum wages to be harmful for the economy of their countries.
The members of Romanian PSD tend to follow the line of their group in supporting a common EU-
wide minimum wage. Romanian EPP members are more skeptical and would rather support a
more nuanced approach, such as recommending Member States to ensure a minimum wage of at
least 60% of the average wages. Some national groups tend to be more critical on common policies
on minimum wages, among which, notably, the British and Nordic members.
Common Minimum Corporate Tax Rate
Debates on taxation often tend to split policymakers along national lines. Countries with low
corporate tax rates have less incentives to support a minimum common corporate tax rate, as this
would force them to increase taxes on companies, therefore making their economy less
competitive vis-à-vis European countries that already have higher corporate tax rates. As Romania
is one of the EU countries with a low corporate tax (16%), the establishment of a higher common
minimum corporate tax could be inconvenient from the point of view of attracting foreign
investments. On the other hand, a more predictable (even though higher) tax rate would
strengthen the fiscal revenues of the country, therefore allowing bigger public investments. This
also explains why some national groups are internally divided on the matter.
Balance of views at EU level
Currently, the support for common minimum corporate tax rate is minoritarian within the
European Parliament and even more so within the Council of the EU, since national governments
are wary of losing the power to cut their corporate tax rates at will and, in doing so, to boost the
inflows capitals and investments. However, there are clear national differences. The governments
of countries with high corporate tax rates such as France and Belgium tend to support a high
minimum common tax rate, as this would allow them to gain relative competitiveness.
The balance of power is unlikely to change after the EU 2019 elections, as the left-wing forces that
advocate for such proposals are set to lose steam, whereas nationalist right-wing forces (which
tend to defend more vocally the national interests and are less inclined to compromise on
transnational solutions) will make significant gains.
The political forces that oppose a common tax rate can easily find allies among both the free-
market oriented groups in the European Parliament (ALDE, EPP and ECR) and the right-wing
nationalist forces. Conversely, the supporters are found among the left-wing groups (Greens/EFA,
GUE/NGL and the 5 Star Movement). The position of the centre-left Socialist and Democrats is
more moderate than the positions of the other left-wing forces. However, the S&D group joined
the other forces on the left in supporting a common minimum corporate tax rate of 20%, which is
higher than the one adopted by Romania and several other countries.
The analysis of the voting behavior reveals that significantly more than half of Members of the
European Parliament oppose a common minimum tax rate. On this subject, most members tend
to vote alongside their political groups. In the case of Romania, Social Democratic members follow
the line of their centre-left group and do not oppose the proposal for EU harmonization. On the
other end, Romanian EPP members oppose the proposal (also in line with the majoritarian EPP
Interestingly, other national groups are less aligned with the views of their political groups. For
instance, we found that several members of the Socialist and Democrats from Sweden, Bulgaria,
Malta and Cyprus are against such an initiative.
ABOUT THE AUTHORS
CLARA VOLINTIRU is Associate Professor in the Department of International Business and
Economics (REI), at the Bucharest University of Economic Studies (ASE). She graduated a PhD from
the London School of Economics and Political Science (LSE) and has been involved in various
international research projects in the field of behavioural studies, good governance, informal
exchanges and political economy. She has been a consultant for international organizations such
as the World Bank, European Commission, Eurofound, Committee of Regions, Partnership for
Research in International Affairs and Development. Her recent publications appeared with Oxford
University Press, in European Political Science Review, Eastern European Politics, or Research &
Politics. Synthetic versions of her work are available in videoabstracts or such online platforms as
Forbes, EUROPP, IPI Global Observatory, Emerging Europe, Global Policy or Huffington Post.
DORU FRANȚESCU is co-founder and director of VoteWatch Europe, the most followed policy
platform by the EU Parliamentarians in Brussels. A seasoned EU affairs and strategic
communication expert, Doru Frantescu is the main author of widely-disseminated reports that use
quantitative and qualitative analysis to shed light into the actual voting behavior of
Parliamentarians and Governments in the EU decision-making. His work is regularly quoted by
reputed institutions and the international media (such as Euronews, CNN, Financial Times, BBC).
CORNEL BAN joined City, University of London in January 2018 as a Reader in political economy.
Prior to this he had worked as an assistant professor at Boston University and research fellow at
Brown University in the United States. He was also a visiting researcher at the European University
Institute and a visiting associate professor at Copenhagen Business School. Professor’s Ban’s work
is situated at the intersection of international relations, comparative political economy, sociology
and economic history. He wrote two books and a dozen articles and book chapters on the politics
of economic expertise and income distribution, macroeconomic policy shifts and organizational
shifts in international financial institutions and capitalist diversity in Brazil, Spain and Romania. His
most recent book (Ruling Ideas: How Neoliberalism Goes Local, Oxford University Press, 2018)
received the political economy award for 2017 of the British International Studies Association.
MATTHIAS THIEMANN is an Assistant Professor of European Public Policy at Science Po. In his
work, he studies pre-and post-crisis dynamics of financial regulation in Europe as well as the rising
importance of national development banks. He focuses on the one hand on the detrimental effects
of national regulatory competition within European financial markets and on the other on the
possibility of a positive interaction effect between national development banks, the EIB and
private finance to channel abundant financial liquidity into the “real economy”. His latest book The
Growth of Shadow Banking was published in 2018 with Cambridge University Press.
MARIA-FLORIANA POPESCU is Lecturer at the Bucharest University of Economics Studies – Faculty
of International Business and Economics. She is currently involved in teaching activities, having
seminars on subjects such as European Economic Integration, International Commodities
Exchanges, International Negotiation, International Marketing etc. At the same time, Maria-
Floriana has published and presented more than 10 articles in international journals from Romania
and abroad; she is also co-author of the book named “Commodity Exchanges - Commercial
Markets”. In 2015, Maria-Floriana was awarded for outstanding results obtained in the scientific
research carried out within the project “Performance and Excellence in Doctoral and Postdoctoral
Research in Economics in Romania” carried out between June 2014 and May 2015. Between
October 2015 and August 2016, Maria followed a traineeship in the European Commission
Representation in Romania as an economic assistant of the European Semester Officer.
MARION LABOURE is an Associate of the Department of Economics at Harvard University. Prior to
this, she worked as an economist at the Luxembourg Central Bank, European Commission and
Barclays. Marion holds a PhD in Economics from the Ecole Normale Superieure, and a Master’s
degree in Economics from the London School of Economics, as well as a Master in Finance from
the University of Paris Dauphine.
JURGEN BRAUNSTEIN is a fellow at Harvard Kennedy School’s Belfer Center. He is a member of the
Sovereign Wealth Community of Practice, Collaboration for Development (C4D) platform at the
World Bank Group. Prior to that Juergen coordinated the New Climate Economy Special Initiative
on financing the urban transition under the leadership of Nick Stern and Felipe Calderon at the
London School of Economics (LSE) Cities. Juergen led the engagement program between the LSE
and the International Forum of Sovereign Wealth Funds in London. His areas of expertise include
financial instruments, emerging markets and state-owned enterprise reform and Sovereign
Wealth Funds (SWFs). He was a researcher at the Kuwait Programme on Development,
Governance Globalisation in the Gulf States, where he worked on one of the first databases on
SWF equity investments in OECD economies. His work on SWFs appeared in the Review of
International Political Economy, New Political Economy, Journal of Economic Policy, The Financial
Times and Forbes. He has a B.A. from the University of Vienna and a masters and doctorate from
the London School of Economics.