Bank Union and contracts between States on the agenda for the EU’s last working week in 2013

Five days full of meetings are scheduled in Brussels before the Christmas Break
Germany insists on a definitive agreement on the resolution of the banking system

A very dense week awaits the European Union: the Foreign Affairs Council, the Agriculture Council, the General Affairs Council, the Eurogroup, ECOFIN and, for a great ending, the Heads of State and Government Council. There are many issues on the agenda and for several important decisions are expected.

Monday will begin with foreign affairs with a restricted session on Iran led by the High Representative Catherine Ashton, who will give an update on the Iranian nuclear negotiations. However, she will also talk about Syrian chemical weapons and the humanitarian situation, then Lebanon and the partnership with the Orient. We do not expect important discussions about any of these issues except for the last one, where one can see the two factions within the EU after the free trade agreement with the Ukraine was lost – the one in favor of a hard line with Russia, who is accused of interference – and the one who prefers the softer line of dialogue. Italy is among the last ones, as “our relationship with Moscow has always been good” and then “the majority of our gas comes from there,” this European source emphasizes, illustrating certain realism.

On the other hand we expect acceleration from the General Affairs Council towards beginning the accession procedure for Serbia and the adoption of decisions on the revisions proposed by the EU Foreign Service reporting to Ashton – revisions which foresee that in the future the High Representative will acquire more responsibilities, not just in the field of security, but working on the coordination of the foreign policies of the member states. This is truly a difficult task but certainly the one to which the EU must aspire if they want to finally have a true common foreign policy.

However the most important issue of the week remains the discussion about the mechanism for a single resolution to the bank crisis. A special ECOFIN meeting has been scheduled on Wednesday to find a final technical agreement so as to close the issue at the European Council, where the subject will be part of the decisions. “Germany, above all, is the one who wants to reach an agreement quickly,” the source says. The country which has opposed the issue the most wants, in fact, to close the issue, leaving Angela Merkel in charge of  fine tuning the closing details and making the official announcement.

At the Thursday and Friday meetings the “Contractual Agreement” issue will be another important one. It’s about a dossier with low media attention but one that is creating a lot of discussion with the EU. It talks about reforms that the member states committed to, in exchange for just a ‘commitment’ which should, according to some governments, obtain financial support. Not everybody likes this, especially the Northern countries who don’t understand “why they’d need an incentive for commitments that they would have to keep anyway,” the source explains. Italy views the issue favorably; if in fact, there will be incentives. What such incentives will amount to still remains to be seen – it could be loans with advantageous interest rates. “One would play on the spread – the source continues – if an interest rate is at 4%, a loan at a lower rate would be convenient” and would allow the austerity pill to be swallowed more easily – “a pill which some countries must take with or without incentives.” However it appears no clear decisions will be taken this time around.

Finally, there will be talks about how to share more the burden of the migration waves, for which the European Council will incorporate the findings of the working group established by the Commission, adding the requirements to make them more operational and transforming them into actions. The first real step should be the finalization of a maritime strategy under the Italian Presidency which will start in July. It won’t be a revolution but it’ll be a step forward, particularly for our country.