EUROGROUP,COUNCIL OF THE EU:update

 

Meetings Thursday 7 December 2023

● Eurogroup   07/12/2023 21:36 | MEETING | Main results - Eurogroup, 7 December 2023   The Eurogroup reviewed the economic and fiscal situation of the euro area member states, based on the European Commission’s opinions on their draft budgetary plans, and exchanged first views on the euro area recommendation published with the autumn package. Ministers took stock of the European Stability Mechanism treaty ratification and discussed the future of European capital and financial markets.

Press material Thursday 7 December 2023

● Eurogroup   07/12/2023 17:06 | Statements and remarks | Eurogroup statement on draft budgetary plans for 2024   We welcome the Commission’s Communication and its Opinions on the member states’ draft budgetary plans (DBPs), published on 21 November, and underline the key importance of this exercise for the coordination of fiscal policy in the euro area. The euro area economy has shown resilience in the face of large economic shocks over the last number of years, also reflecting a strong, coordinated, and timely policy response. After a strong recovery, growth momentum has slowed markedly this year, amid higher costs of living, weak external demand and as the effect of tightening monetary policy works its way through the economy. A gradual recovery in growth is expected for 2024, supported by a strong labour market and the continuing disinflationary process. Uncertainty and downside risks to the outlook have increased in recent months, primarily related to geopolitical tensions, including the volatility of the energy markets. Headline and core inflation are on a decreasing path, though core inflation remains more persistent. It is essential that inflation falls further and that inflation expectations remain well anchored. We will continue to monitor key determinants of inflation, associated risks and the consequences for our citizens and businesses. Based on the Commission forecast, the euro area general government deficit is projected to continue declining from 3.6% of GDP in 2022 to 3.2% in 2023 and to just below 3% of GDP in 2024. Eight euro area Member States are projected to still have a deficit above the 3% of GDP Treaty reference value in 2023 and nine in 2024. Public debt in the euro area is expected to amount to around 90% of GDP in 2024, decreasing marginally compared to 2023, however notably below the peak in 2020, while remaining above the pre-COVID-19 crisis level. The euro area fiscal stance has moved into contractionary territory in 2023, after three years of crisis-related expansion, which helped address the external shocks and protect vulnerable households and viable firms. The change in the fiscal stance has been necessary to underpin sustainable public finances and has supported monetary policy in its efforts towards restoring price stability. A further tightening in the euro area fiscal stance is expected for 2024, on the back of the phase out of most of the remaining energy support measures. The eventual size of the contractionary effect could be influenced by the possible measures taken by Germany in response to the ruling of its Constitutional Court. While policies should remain agile in view of the prevailing uncertainty, an overall restrictive fiscal stance in the euro area for 2024 is appropriate, to enhance public finance sustainability and in order to avoid fuelling inflationary pressures. We welcome that investment is expected to increase across the euro area, contributing to sustainable growth and we underline the importance of ensuring the effective absorption of Recovery and Resilience Facility and other EU funds. Coordinated and prudent fiscal policies remain essential beyond 2024. We remain fully committed to a strategy of determined, differentiated, gradual and realistic fiscal consolidation to strengthen fiscal sustainability, to rebuild fiscal buffers, to deliver higher sustainable growth and to boost the euro area’s resilience to future challenges including intergenerational equity. We will continue to pursue ambitious structural reforms and productive investments, including in areas of common priority, such as the green and digital transitions, as well as defence capabilities, financed through national and EU sources, including the Recovery and Resilience Facility. We take note of the Commission assessment of the individual draft budgetary plans (DBPs), focusing on compliance with the Council recommendations on fiscal policy from July 2023, which included quantitative requirements with differentiated fiscal efforts as well as qualitative requirements, notably regarding the emergency energy support measures and preserving nationally financed investment. We welcome that most euro area member states plan to wind down their energy support measures, absent renewed energy price shocks, and call on those member states expected to have significant measures still in force to phase them out as soon as possible in 2024. Moreover, member states should use the related savings to reduce government deficits. We also note the Commission’s intention to propose to the Council the opening of deficit-based Excessive Deficit Procedures in spring 2024 and we encourage member states with deficits above 3% of GDP to take the necessary measures. The Eurogroup welcomes that the DBPs of Cyprus, Estonia, Greece, Spain, Ireland, Lithuania and Slovenia are in line with the fiscal recommendations of the Council based on the Commission assessment. The Eurogroup notes that the DBPs of Austria, Germany, Italy, Luxembourg, Latvia, Malta, Netherlands, Portugal and Slovakia are broadly in line with the Council fiscal recommendations. The Eurogroup invites these member states to stand ready to take action as necessary. We also took note of the announcement of Germany that adjustments might be necessary to its budget plans and welcome its willingness to keep the Eurogroup informed. We note that Spain, Slovakia and Luxembourg submitted DBPs on no-policy-change basis. We welcome that these countries will submit updated DBPs and look forward to the Commission assessment of those updates. The Eurogroup notes that, based on the Commission assessment, the DBPs of Belgium, Finland, France and Croatia risk being not in line with the fiscal recommendation of the Council. The Eurogroup notes that fiscal policy in Belgium and France is nevertheless projected to be contractionary. The Eurogroup invites these member states to consider in a timely manner and as necessary to take action to address the risks identified by the Commission to ensure that fiscal policy is in line with the recommendations adopted by the Council and welcomes their commitment to follow-up as needed. The Eurogroup remains focused on the long-term successful functioning of the Economic and Monetary Union. A revised economic governance framework is a key element in that regard, and we welcome the progress made in the discussions in the Council, with a view to concluding legislative work in 2023. The Eurogroup will continue to closely monitor economic and fiscal developments regularly and reinforce its policy coordination.

Press material Thursday 7 December 2023

● Eurogroup   07/12/2023 21:30 | Statements and remarks | Remarks by Paschal Donohoe following the Eurogroup meeting of 7 December 2023   For some time, the Eurogroup has been talking about the need for us to change the direction of budget policy in the aftermath of the pandemic, at a time in which we are looking to bring down inflation, while finding the space needed to invest in those projects that can make a difference to the future of the EU and all of its member states. Today the Eurogroup reached an agreement on a statement with regard to budget policy for 2024 that attains that balance. It stresses that while we need to maintain agility and be capable of adapting to conditions in the world and in Europe, an overall restrictive budget stance in the euro area for 2024 is appropriate. This is consistent with the statement that we issued on budget policy before the summer. We emphasised that a coordinated and careful approach to fiscal policies is essential not only for next year, but beyond. We agreed again on the need to phase out the energy measures that have been in place in recent years to deal with the higher cost of energy and to feed the savings from those changes into lower levels of borrowing. The statement recognises the differentiated recommendations that have come from the Council with regard to national budget plans. It acknowledges the three different groups that are contained within the work of the Commission - those groups that are in line, those that are broadly in line, and those that are at risk of not being in line in terms of their budget plans for next year, and how that is consistent with the approach that we are outlining for budget policy. Where plans are not considered to be in line with recommendations, we are asking that actions be taken as soon as necessary to reduce the value of energy support measures, in order to generate savings for deficit reduction. The statement also notes the reduction that has taken place in borrowing levels at national and European level and takes good note of the Commission's intentions with regard to the excessive deficit procedure. We encourage those member states with deficits above 3% of GDP to take measures. Budgetary surveillance will again have a very important quantitative dimension, and we hope that work that is underway will reach agreement on a reformed economic governance framework. I want to emphasise in any case, that the Eurogroup statement from today provides an important anchor for budget policies for next year and continues to change the approach to budget policy that we began earlier in 2023. We then turned to the draft recommendations on the economic policy of the euro area – the euro area recommendations - that were proposed by the Commission as part of the Autumn package. These cover a wide range of fiscal, structural and financial priorities. Today, we had a first exchange of views on the recommendations to guide work at the technical level. There was a clear understanding of the importance of achieving an appropriate policy mix in the euro area to address inflation, as well as developing policies to support the euro area competitiveness. We will be endorsing the recommendations in January, once the technical work is concluded. We continued our meeting with a stocktake on the ESM Treaty ratification, informed by an update from the Italian Minister of Finance, Giancarlo Giorgetti. We re-emphasised our hope that the process would be concluded swiftly. Our banking sector is well-capitalised, and the Single Resolution Fund has recently reached full capitalisation. But the absence of ESM Treaty ratification means the Single Resolution Fund remains without the common backstop. In the case of a major shock or heightened volatility, it would be important to have the common backstop in place to reinforce our safety net. After this regular part of the meeting, we were joined by our Bulgarian and Danish colleagues to discuss the state of play of implementation of the Exchange Rate Mechanism (ERM II) post-entry commitments by Bulgaria. Bulgaria gave an update on its progress in implementing its policy commitments. This is an important part of preparing for the smooth adoption of the euro in due course. Ministers welcomed the important progress that Bulgaria has made in its reform efforts and encouraged it to continue on this path. The Eurogroup supports Bulgaria’s path to euro area membership and its efforts to meet the criteria for accession as defined in the Treaty. We will come back to this next summer when the 2024 Commission and ECB Convergence Reports are published. Finally, we were joined by our non-euro area colleagues for another discussion on the future of European Capital and Financial Markets. To enrich today’s discussion, we welcomed two highly-esteemed guests. First, Mathias CORMANN, Secretary General of the OECD, brought a global point of view to the discussion, sharing best practices from non-EU capital markets. Then, we welcomed back Thomas WIESER, who is a veteran of Eurogroup meetings, former President of the Economic and Financial Committee and of the High-Level Forum on Capital Markets Union. His input highlighted the need for complementary policies at national and EU levels. Both our guests pointed to policy areas that they view as crucial to develop European capital and financial markets. Today’s discussion confirmed the strong engagement from Ministers to take work forward in a decisive manner. We have now concluded our exploratory phase of identifying obstacles, drivers for progress and possible solutions to develop our capital markets. From early next year, we will work towards a concluding political statement to which we can all subscribe. In this statement, we intend to set political priorities for the work ahead, both at EU and national level. The end objective would be to allow our capital markets to play their role as a catalyst for our growth, competitiveness, twin transition, resilience and strategic autonomy. That brings me to the end of our agenda, and us towards the end of a busy 2023 for the Eurogroup. Eurogroup statement on draft budgetary plans for 2024, 7 December 2023

Press material Thursday 7 December 2023

● Council of the EU   07/12/2023 22:36 | Press release | Reform of the Statute of the Court of Justice: Council and Parliament negotiators reach provisional agreement   The EU has taken an important step towards a more effective administration of justice by the EU courts. The Council presidency and European Parliament representatives today reached a provisional agreement on a reform of the Statute of the Court of Justice, which will improve the functioning of the Court of Justice of the EU against the background of a steady increase in the number of cases brought before it and in the complexity and sensitive nature of questions raised. The changes to the Statute of the Court of Justice will allow the Court of Justice of the EU to manage its judicial work more efficiently, by taking advantage of a previous judicial reform that increased the number of judges in the General Court. Changes regarding preliminary rulings The reform will permit the transfer of jurisdiction over preliminary rulings to the General Court in specific areas, while the Court of Justice will retain jurisdiction over questions of principle, like those that involve interpretation of the Treaties or the Charter of Fundamental Rights. The specific areas in which the General Court will be competent over preliminary rulings include: the common system of value added tax excise duties the Customs Code and the tariff classification of goods under the Combined Nomenclature the tariff classification of goods under the Combined Nomenclature compensation and assistance to passengers in case of delay or cancellation of transport services or denied boarding the scheme for greenhouse gas emission allowance trading On the procedural aspects, the reform provides for a “one-stop-shop” mechanism, under which national judges will continue to address requests for preliminary rulings to the Court of Justice, which will in turn forward to the General Court the questions under its jurisdiction. The procedural guarantees before the General Court mirror those already applicable at the Court of Justice. In particular, judges of the General Court will be designated to act as Advocates-General to provide an opinion on the preliminary question, and a chamber of intermediate size will be created at the General Court to deal with certain requests for preliminary ruling. Limiting appeals to the Court of Justice The reform also extends the filtering mechanism for appeals adopted in 2019 to any EU institutions, agencies, offices and bodies with an independent board of appeal. Under that mechanism, cases that have already been considered twice – by an independent board of appeal and the General Court – will be allowed to proceed before the Court of Justice only if they raise an issue that is significant with respect to the unity, consistency or development of EU law. This mechanism will also be applied to appeals in cases where the Court of Justice is competent by means of an arbitration clause included in a contract, in which the dispute normally refers to national law. However, when the dispute involves the application of EU law and raises issues significant to the unity, consistency or development of EU law, an appeal will remain possible. Other measures The reform also increases the transparency of proceedings on requests for preliminary rulings. Without prejudice to the rules on access to documents laid down in regulation 1049/2001, which remains fully applicable, written submissions of the parties will be made public after the judgment, unless the party concerned objects to such publication. This will increase accountability and strengthen trust in the EU as well as in EU law, to the benefit of citizens and national judges. Next steps The provisional agreement reached today will now need to be endorsed by the Council and the Parliament. It will then be formally adopted by both institutions following legal-linguistic revision. Background The Court of Justice submitted a proposal for amending Protocol No 3 on its Statute in December 2022. The changes were agreed in negotiations between the European Parliament and the Council, with the participation of the Court of Justice and the Commission.

Press material Thursday 7 December 2023

● Council of the EU   07/12/2023 20:10 | Press release | ‘Fit for 55’: Council and Parliament reach deal on proposal to revise energy performance of buildings directive   The Council and the Parliament today reached provisional political agreement on a proposal to revise the energy performance of buildings directive. The revised directive sets new and more ambitious energy performance requirements for new and renovated buildings in the EU and encourages member states to renovate their building stock. "Buildings are responsible for over one third of greenhouse gas emissions in the EU. Thanks to this agreement, we will be able to boost buildings’ energy performance, cut emissions and tackle energy poverty. This is one more big step closer to EU’s objective of reaching climate neutrality by 2050. Today is a good day for citizens, our economy and our planet." Teresa Ribera, Spanish third vice-president of the government and minister for the ecological transition and the demographic challenge The main objectives of the revision are that by 2030 all new buildings should be zero-emission buildings, and that by 2050 existing building stock should be transformed into zero-emission buildings. Solar energy in buildings The two co-legislators have agreed on article 9a on solar energy in buildings which will ensure the deployment of suitable solar energy installations in new buildings, public buildings and existing non-residential ones which undergo a renovation action that requires a permit. Minimum energy performance standards (MEPS) When it comes to minimum energy performance standards (MEPS) in non-residential buildings, the co-legislators agreed that in 2030 all non-residential buildings will be above the 16% worst performing and by 2033 above 26%. Concerning the renovation target for residential buildings, member states will ensure that the residential building stock will reduce the average energy consumption by 16% in 2030 and a range between 20-22% in 2035. 55% of the energy reduction will have to be achieved through renovation of the worst performing buildings. Phasing out fossil fuels in buildings Finally, in relation to the plan to phase out fossil fuels boilers, both institutions agreed on including in the National Building Renovation Plans a roadmap with a view to phase out of fossil fuel boilers by 2040. Next steps The provisional agreement reached today with the European Parliament now needs to be endorsed and formally adopted by both institutions. Background The Commission submitted to the European Parliament and the Council a proposal for a recast of the Energy Performance of Buildings Directive on 15 December 2021. The Directive forms part of the ‘Fit for 55’ package, setting the vision for achieving a zero-emission building stock by 2050. The proposal is particularly important because buildings account for 40% of energy consumed and 36% of energy-related direct and indirect greenhouse gas emissions in the EU. It also constitutes one of the levers necessary for delivering on the Renovation Wave Strategy, published in October 2020, with specific regulatory, financing and enabling measures, with the objective of at least doubling the annual energy renovation rate of buildings by 2030 and fostering deep renovations. The existing EPBD, last revised in 2018, lays down minimum requirements for the energy performance of new buildings and of existing buildings that are being renovated. It establishes a methodology for calculating the integrated energy performance of buildings and introduces an energy performance certification for buildings. General approach on the Energy Performance of Buildings Directive ‘Fit for 55’ package (background information) Meetings Thursday 7 December 2023   ● Council of the EU   07/12/2023 16:10 | MEETING | Main results - Competitiveness Council (Internal market and industry), 7 December 2023   Ministers responsible for the internal market and industry met in Brussels to adopt a Council position on Net Zero Industry Act and to hold a debate on the Forced Labour regulation and on SME policy.

Press material Thursday 7 December 2023

● European Council   07/12/2023 15:37 | Statements and remarks | Remarks by President Charles Michel at the press conference following the EU-China summit in Beijing   We have just concluded our EU China Summit. First, I would like to thank President Xi and Premier Li for hosting us today. The EU is committed to engaging openly with China across a wide range of topics. Seven months ago, in June, the 27 EU leaders had a strategic in-depth discussion on our relationship with China and we have a clear position: all EU member states are united. This summit was prepared by many high-level dialogues on trade and economy, climate, environment, digital, human rights and foreign policy issues. Today we continued to build on this work. The EU and China have a shared interest in a stable and constructive relationship, and this must be based on respect for the international rules-based order. We discussed our trade and economic relationship. The EU and China are major economic partners and global powerhouses. We trade over €2 billion in goods every day, but the EU has a trade deficit of almost €400 billion. We need to make our trade and economic relationship more balanced and reciprocal. In the EU we continue to work towards a real level playing field for our companies and we expect China to take more concrete action to improve market access and the investment environment for foreign companies. We intend to continue to diversify our supply chains and address our dependencies to be fit for tomorrow's challenges. Let me give you just one example. Graphite is fundamental for the defence industry. China has decided to limit its export of graphite, and this has consequences for our sovereignty and strategic autonomy. This example shows what is at stake. In the EU we must better protect our interests, and this does not mean decoupling or turning inward, because both the EU and China have an interest in an effective rules-based trading system, with the WTO at its core. As we speak, Russia continues to illegally attack Ukraine, and you know that we strongly support the people of Ukraine. This includes Ukraine's future in our European Union. As a permanent member of the UN Security Council, China has a special responsibility, because this Russian war threatens global stability and the world economy. It also affects the most vulnerable around the world, for instance by increasing food insecurity and driving up commodity prices. This is not in Europe's interest, this is not in China's interest, this is not in the world's interests. This is why we strongly encourage China to engage constructively on Ukraine's peace formula. Russia continues to look for ways to access technology to power its war. Once again, we insisted that China should not supply military tools to Russia. And we reiterated how important it is that China help to prevent Russia from circumventing sanctions. We also discussed the tragic war unfolding in the Middle East. Since the first hours, the EU has condemned Hamas’s horrific attack on the people of Israel. Israel has the right to defend itself and this must be done in line with international humanitarian law, including the principle of proportionality. Each civilian life matters; every effort must be made to protect civilians. The humanitarian situation in Gaza is dire, and the EU is the largest international aid donor to the Palestinians. Since the start of the war, we have quadrupled our humanitarian aid to over €100 million. We agree with China that getting lifesaving aid to the most vulnerable must be a top priority. And together, we support reviving the political process based on a two-state solution. Peace and stability are important everywhere, including here in Asia. We are concerned about the growing tensions in the Taiwan Strait and in the South China Sea. We are opposed to any unilateral attempt to change the status quo by force or coercion and the EU maintains its One China policy. I trust that China is fully aware of the serious consequences of any escalation in this region. For the European Union, human rights and fundamental freedoms are universal. We will never turn a blind eye to human rights cases. Today we welcome China's resumption of the human rights dialogue, as we agreed during my visit. It’s a step in the right direction and today we continued this conversation at the highest level. We also highlighted cases of specific concern, such as the human rights violations in Xinjiang or Tibet, for instance. More cooperation is the only way to tackle the world's most difficult challenges, so we also discussed areas where we can and where we should work together. We encouraged China to be more ambitious in fighting climate change and protecting the environment. We also invited China to join global efforts to triple renewable energy capacity and to double energy efficiency by 2030 and to cut methane emissions. We are also cooperating to improve global health, and this includes work on the international pandemic treaty. China has a role in helping to address the debt burden and in tackling the consequences for vulnerable countries in a sustainable way. Together with the President of the Commission and the High Representative we are here in China to promote our values and to protect our interests. We have made progress in areas of shared interest and we will continue to engage with China based on transparency, predictability, and reciprocity. Now it's time to speed up this progress and to make our relationship fairer and more reciprocal, and to work together to tackle some of the world's most pressing challenges.

Press material Thursday 7 December 2023

● Council of the EU   07/12/2023 15:02 | Press release | Cyber: Statement by the High Representative on behalf of the European Union on the protection of democratic processes against malicious cyber activities   The European Union and its Member States strongly condemn malicious cyber activities targeting democratic institutions and electoral processes. We closely monitor any attempts of cyber-attacks on our democratic processes, especially in the context of the upcoming European elections. As pressure is mounting on democracy globally, we continue assisting and working with partners against these ongoing cyber threats. In this vein, the European Union and its Member States share the serious concern of the United Kingdom and other partners as stated in their declarations on December 7th and express our full solidarity. Activities that seek to threaten our integrity and security, democratic values and principles and the core functioning of democracies are unacceptable. Those activities are contrary to the norms of responsible state behaviour in cyberspace as endorsed by all UN Members. We continue to promote due diligence and responsible State behaviour in cyberspace and call upon all states to comply with these norms and principles. We have called out against those activities before. For instance, in 2020 we imposed sanctions on those responsible for the hack of the Bundestag. In 2021, we made a Declaration strongly denouncing malicious cyber activities, collectively designated as Ghostwriter, targeting numerous electoral processes in different EU Member States. The European Union and its Member States have the responsibility for and are determined to protect and defend our electoral and political processes. We remain vigilant and ready to undertake any action necessary from the EU Cyber Diplomacy Toolbox, including sanctions to prevent and respond to unacceptable cyber-attacks.

Press material Thursday 7 December 2023

● European Council   07/12/2023 14:56 | Press release | 24th EU-China Summit: engaging to promote our values and defend our interests   The European Union (EU) and China held their 24th Summit in Beijing on 7 December 2023. President of the European Council, Charles Michel, and President of the European Commission, Ursula von der Leyen, met with China’s President, Xi Jinping, followed by an exchange with China’s Premier, Li Qiang. The Summit was an opportunity to engage with China following a period of intensified bilateral contacts and dialogues. High-level visits and dialogues on strategic and foreign policy issues, human rights as well as trade and economy, climate, and environment, digital have paved the way for the Summit, demonstrating the EU’s commitment to engage with China. The EU highlighted the need for concrete progress following these discussions. “The EU-China relationship is one that matters. But we need to make our trade and economic relations more balanced, reciprocal, and mutually beneficial. We will continue to work for equal opportunities for our companies. Today should be a first step. We also count on China, as a Permanent Member of the UNSC, to protect the UN charter and notably the sovereignty and territorial integrity of all countries. We will continue to engage with China based on transparency, predictability, and reciprocity.”, said President of the European Council Charles Michel “Our relationship with China is complex and we have a responsibility to make it work. We agreed that it is in our joint interest to have balanced trade relations. And we need to address challenges in a world with increasing geopolitical frictions. We must all work to ensure Russia stops its war of aggression against Ukraine,” said President of the European Commission Ursula von der Leyen. The EU stressed the importance of a well-functioning, rules-based international order, with the United Nations at its core. The leaders discussed Russia's war of aggression against Ukraine. The EU reiterated that, as a permanent member of the UN Security Council, China has a special responsibility in upholding the UN Charter’s core principles, including territorial integrity and sovereignty. The EU called on China to use its influence on Russia to stop its war of aggression and strongly encouraged China to engage on Ukraine’s Peace Formula. The EU underlined the importance of China continuing to refrain from supplying lethal weapons to Russia. The EU equally urged China to prevent any attempts by Russia to circumvent or undermine the impact of sanctions. On the Middle East, the EU condemned in the strongest terms the indiscriminate and brutal terrorist attacks by Hamas against Israel. The EU reiterated Israel’s right to defend itself in line with international humanitarian law. Both sides agreed on the importance of ensuring the protection of all civilians, improving the dire humanitarian situation in Gaza and implementing UN Security Council Resolution 2712. The EU and China confirmed their commitment to the two-state solution. The EU and China are major economic partners with EUR 2.3 billion in goods trade per day. However, with an EU trade deficit of almost EUR 400 billion, this relationship is critically and structurally imbalanced. The EU does not intend to decouple or to turn inwards. The EU therefore raised concerns about underlying distortions and the negative effects of manufacturing overcapacity in China's economy. The EU stressed to China the importance of achieving a more balanced economic relationship with a level playing field and reciprocity. The EU equally underlined the need for progress in addressing the core EU interests and longstanding demands (e.g., transparency in the business environment, predictable supply chains, trade distortions including industrial subsidies, and sector-specific trade barriers). The EU expressed its expectation that China takes concrete action to improve market access and the investment environment for EU investors and exporters. The EU recalled that de-risking but not decoupling aims at strengthening resilience by addressing critical dependencies in specific sectors, in full compliance with the World Trade Organisation rules. The EU and China share an interest in an effective multilateral rules-based trading system, equipped to address key challenges of our time. The EU stressed the two sides' joint responsibility to ensure a transparent and competitive environment for the digital economy, including a level playing field for artificial intelligence that respects human rights and fundamental freedoms. The EU underscored the common goal of avoiding fragmentation of standards for information and communication technologies. Leaders noted recent agreements, including the establishment of working groups on financial regulation, cosmetics, export controls, and wines and spirits. The EU looked forward to the rapid activation of the mechanism to ease cross-border data flows. Leaders also noted the work undertaken since the last Summit on customs and intellectual property rights, food safety and safety of products sold online, as well as on geographical indications. The leaders agreed to relaunch the High-Level People-to-People Dialogue in 2024. Leaders welcomed continued cooperation on climate change and the environment, as exemplified by recent agreement to work further on emissions trading and circular economy. As major economies, the EU and China must lead global efforts to reduce greenhouse gas emissions including at the ongoing COP28. The EU acknowledged recent progress on expansion of renewable energy and China’s intention to tackle methane emissions. The EU underlined the urgent responsibility for all states to step up climate ambition and called on China, to join the Global pledge to triple renewable energy capacity and double the rate of energy efficiency improvements by 2030, as well as the Global Methane Pledge. Leaders also discussed debt sustainability, food security, health and pandemic preparedness, biodiversity, water, ocean governance, plastic pollution, and deforestation. The EU reiterated its deep concerns about the human rights situation in China, notably systemic human rights violations in Xinjiang and Tibet, forced labour, the treatment of human rights defenders and persons belonging to minorities, as well as the continued erosion of fundamental freedoms in Hong Kong, where China should honour its prior commitments. The EU welcomed the resumption of the Human Rights Dialogue in February 2023 and underlined its expectation for the next dialogue to take place in 2024 in China. The EU reaffirmed its consistent One China policy and expressed concerns about increased tensions in the Taiwan Strait. Heightened instability in the East and South China Seas threatens regional and global prosperity and security. We oppose any unilateral attempts to change the status quo by force or coercion. Disputes must be resolved through peaceful means in accordance with international law, in particular the United Nations Convention on the Law of the Sea (UNCLOS). Leaders further discussed the situation on the Korean Peninsula, in Afghanistan, Myanmar, and Iran.

Press material Friday 8 December 2023

● Council of the EU   08/12/2023 10:15 | Press release | Council approves conclusions on strengthening the role and impact of research and innovation in the policymaking process in the Union   The Council has today approved conclusions on the impact of research and innovation (R&I) in policymaking. These conclusions imply three mutually complementary dimensions: first, regarding the contribution of science to reinforce policymaking, including its impact to improve the lives of citizens and strengthen democracy; second, on the topic of regional and local innovation ecosystems, with focus on enhancing cooperation and territorial cohesion through R&I, and, third, on the policy impact of the Recovery and Resilience Facility (RRF) on the design of R&I policies in the European Research Area (ERA), focusing on Europe's key objectives, including gender equality. "Good policymaking is essential for the progress of research and innovation, but research and innovation are also fundamental for the success of the regulatory process. Strengthening the contribution of research and innovation to policymaking benefits society as a whole, has a positive impact on the planet and eventually improves citizens’ lives and reinforces democracy." Diana Morant Ripoll, Minister for Science, Innovation and Universities Science and policy, hand in hand The analysis of these three dimensions shows that R&I, through an appropriate design, improve policymaking by including scientific evidence and knowledge in the regulatory process and by enhancing the coherence of policy initiatives in different areas. They also improve the response of the Member States and the Union to the challenges they face - both structural (i.e. included in the European Semester Recommendations) and cyclical or circumstantial (such as the response to the economic or the COVID crisis for which the RRF has been essential). All these R&I dimensions create synergies that have a significant social and economic impact, leaving no one behind. Research and innovation in regional ecosystems The conclusions highlight the importance of the regional R&I ecosystems. The policies to support ecosystems should be designed to create synergies between cohesion policy and R&I funds. In these ecosystems - particularly in the less innovative ones - the regional dimension should be strengthened with regional centres of excellence, and facilitated through cross-border cooperation (especially between less and more innovative Member States and regions) in order to increase economic, social and territorial cohesion and reinforce R&I efficiency. The impact of the Recovery and Resilience Facility Finally, the conclusions refer to the policy impact of the RRF on Europe’s key objectives and the ERA after the COVID-19 crisis. The RRF mechanism has enabled actions at national level with targeted investments and reforms maturing and strengthening sectoral and R&I policies in a joint manner, including the additionality of the Facility with other EU funds. Background The council conclusions were proposed by the Spanish Presidency at the initiative of the Ministry of Science, Innovation and Universities. They are one of the priorities of the presidency in the area of research and innovation. Draft Council conclusions on the impact of research and innovation in policymaking European Research Area (background information)

Meetings Friday 8 December 2023

● Council of the EU   08/12/2023 09:03 | MEETING | Agriculture and Fisheries Council, 10-11 December 2023   Background brief - Agriculture and Fisheries Council of 10-11 December 2023

Meetings Friday 8 December 2023

● Council of the EU   08/12/2023 16:11 | MEETING | Foreign Affairs Council, 11 December 2023   Background brief - Foreign Affairs Council, 11 December 2023

Press material Friday 8 December 2023

● Council of the EU   08/12/2023 15:25 | Press release | Financial Regulation: Council and Parliament reach an agreement   The Council and the European Parliament yesterday evening reached a provisional agreement on the EU’s financial regulation. The main reason for this targeted revision is the need to align the financial regulation with the current multiannual financial framework (MFF) 2021-2027. In addition, targeted improvements and simplifications are introduced, such as better protecting the Union’s financial interests, provisions for crisis procurement and simplification of rules. Alignment with multiannual financial framework Certain derogations from the budgetary principles set out in the sectoral basic acts will be reflected in the financial regulation in line with the ‘single rulebook’ approach. Better protected EU financial interests The provisional agreement ensures that any additional administrative burden remains limited for national administrations, and safeguards data protection in the process of digitalisation. Crisis management Building on the lessons learnt from the COVID-19 pandemic, the provisional agreement implements changes for a more efficient crisis management, by enabling EU institutions or bodies to procure on behalf of member states or to act as a central purchasing body, to donate or resell supplies and services. EU budget The provisional agreement provides a solution for the financing of negative interests until the end of the current MFF. Simpler rules for recipients Rules and procedures are simplified, to improve legal certainty and clarity for recipients, while reducing administrative burden for applicants. Background and next steps On 16 May 2022, the Commission presented a proposal for a recast regulation on the financial rules applicable to the general budget of the Union. The provisional agreement needs to be formally adopted by the Council and the European Parliament, before being published in the Official Journal and entering into force. Financial regulation – Council’s mandate for negotiations Commission proposal The EU long-term budget (background information)

Press material Friday 8 December 2023

● Council of the EU   08/12/2023 15:20 | Press release | Space traffic management: Council adopts conclusions on the current state of play   The Council has today adopted conclusions on ‘Space traffic management: state of play’. The conclusions address the challenges of an increasingly congested orbital space and the need for a common approach to ensure a safe and sustainable European space policy. "Space policy has left the world of science fiction to become a crucial element of our daily lives, from watching television, monitoring climate change or choosing the day to harvest grain. Access to space will be fundamental to our open strategic autonomy. The conclusions adopted today show the way to ensuring a European presence in the orbits of our planet in a safe, secure and sustainable way." Diana Morant Ripoll, Spanish Minister for Science, Innovation and Universities The conclusions stress the urgency of developing an EU space traffic management (STM) approach, which will contribute to space safety, sustainability and security, and welcome the progress made so far. They also highlight the importance of taking into account both civil and military space traffic management needs. To that end they call on the Commission, the European External Action Service and the European Defence Agency to work with member states to ensure that defence and security aspects are given due consideration, while stressing the civil nature of the EU space programmes. The conclusions also highlight the role of the EU space surveillance and tracking (SST) system, which operates a network of ground-based sensors that survey and track space objects, and call for the development of services for space debris mitigation. The EU SST system will be fundamental to enhancing Europe’s strategic autonomy. The conclusions call on member states and industry to enhance existing SST services and encourage R&D in this area. They highlight the significant contribution of space traffic management to the main political priorities of the EU, including the green and digital transitions, technological non-dependence, and the safe and sustainable use of space, as well as security and resilience, while reinforcing the global competitiveness of EU’s space industry. Background Space traffic management (STM) refers to the means and rules for accessing orbital areas and outer space, carrying out activities there and returning in a safe, sustainable, and secure way. STM has become a priority issue in space policy since the steady increase in the number of satellites and the amount of debris in space. According to some estimates, more than 1 million pieces of debris larger than 1 cm are currently orbiting the Earth. More than 50 000 additional satellites are expected to be launched over the next decade. The resulting congestion in space puts the security and resilience of EU and Member States’ space assets at risk. The likelihood of a satellite being severely damaged or destroyed in a collision is expected to increase dramatically unless action is taken. On 15 February 2022 the Commission and the High Representative of the Union for Foreign Affairs and Security Policy presented a communication on ‘An EU Approach for Space Traffic Management – An EU contribution addressing a global challenge’. These conclusions on STM acknowledge the role of security and defence in space, given the geopolitical context, and acknowledge the forthcoming regulatory framework on space traffic management that the Commission intends to present in 2024. The conclusions adopted today follow a series of Council activities on space traffic management, including a roadmap towards a common position on STM at EU level, and the Council conclusions on ‘an EU approach to STM’ under the French presidency, following the joint communication of the Commission and the High Representative. Draft Council conclusions on “Space traffic management: state of play” An EU Approach for Space Traffic Management Council conclusions on an EU approach to space traffic management EU space policy (background information)

Press material Friday 8 December 2023

● Council of the EU   08/12/2023 16:31 | Press release | Gas package: Council and Parliament reach deal on future hydrogen and gas market   The Council and the Parliament today reached a provisional political agreement on a regulation that establishes common internal market rules for renewable and natural gases and hydrogen. The purpose of the legislation is to facilitate the penetration of renewable and low-carbon gases into the energy system, in particular hydrogen and biomethane. "This agreement will bring many benefits for consumers and for our planet. It will cut our use of fossil fuels and reduce our dependency on imported fossil fuels. It will enable a switch to renewable energy and strengthen security of supply. And importantly it will protect consumers." Teresa Ribera Rodríguez, third vice-president of the Spanish government and minister for the ecological transition and the demographic challenge The regulation is part of the hydrogen and gas markets decarbonisation package, which also includes a directive. Both the regulation and the directive are part of the Fit for 55 package. They are aimed at creating a regulatory framework for dedicated hydrogen infrastructure and markets and integrated network planning. They also establish rules for consumer protection and strengthen security of supply. The Council and the Parliament reached a provisional agreement on the directive on 27 November 2023. Amendments to the regulation agreed by Council and Parliament The provisional agreement provides for a separate new entity in the hydrogen sector: an EU entity for Hydrogen Network Operators (ENNOH). It will be independent of the existing European Network of Transmission System Operators for Gas (ENTSOG) and the European Network of Transmission System Operators for Electricity (ENTSOE), while taking advantage of synergies and cooperation between the three sectors. Both institutions agreed to extend the demand aggregation/joint purchasing mechanism for gas adopted during the energy crisis, though participation by gas undertakings must be fully voluntary. Gas undertakings established in Energy Community countries may participate in the mechanism as purchasers, while supplies from Russia or Belarus are excluded. In addition, the Council and the Parliament agreed on creating a voluntary mechanism for support to market development for hydrogen, with the aim to facilitate the tasks carried out by the European Commission under the European Hydrogen Bank. The regulation will contain provisions allowing member states to adopt restrictions to the supply of natural gas, including liquefied natural gas (LNG), from Russia or Belarus, with the aim of protecting the essential security interests of the member states or of the EU, while taking account of security of supply and diversification objectives. On solidarity, the Council and the Parliament agreed to establish default provisions to operationalise the solidarity principle in case of a crisis, where bilateral agreements are not in place. The agreement also includes the establishment of a cross-border conciliation mechanism for an ex-post revision of compensation, the voluntary reduction of non-essential consumption by protected customers, and safeguards for cross-border flows. In addition, the provisional agreement provides a voluntary mechanism, whereby on the basis of a request for solidarity by a member state, another member state not directly connected may also provide volumes of gas by applying market-based measures. Concerning network tariffs, both institutions agreed that for the hydrogen market every national regulatory authority must consult the neighbouring national regulatory authorities on the draft tariff methodology and submit it to the Agency for the Cooperation of Energy Regulators (ACER). Each national regulatory authority will maintain the right to set its own tariff. Moreover, upon request by a national regulatory authority, ACER may propose solutions by means of a non-binding factual opinion. ACER will also inform the Commission of the outcome of such a request. Finally, the Council and the Parliament recognised the EU's ambition to increase production of biomethane. Next steps The provisional agreement reached today with the European Parliament now needs to be endorsed and formally adopted by both institutions. Background The regulation is part of the hydrogen and gas markets decarbonisation package, which also includes a directive. The Council and the Parliament have already reached on 27 November a provisional political agreement on the directive. The Commission presented the proposals on 15 December 2021 as part of the second batch of proposals under the Fit for 55 package, which aims to align EU climate and energy laws with the EU's target to reduce greenhouse gas emissions by at least 55% by 2030 and its goal to become climate-neutral by 2050. General approach on the regulation on the internal markets for renewable and natural gases and for hydrogen Proposal for a regulation on the internal markets for renewable and natural gases and for hydrogen Fit for 55 the EU's plan for a green transition (background information) Internal markets in renewable and natural gases and in hydrogen: Council and Parliament reach deal (press release, 28 November 2023)

Press material Friday 8 December 2023

● Council of the EU   08/12/2023 15:01 | Press release | Recovery fund: Council greenlights amended national plans for 13 member states   The Council today adopted implementing decisions approving the amended recovery and resilience plans of Belgium, Bulgaria, Croatia, Cyprus, Finland, Germany, Greece, Hungary, Ireland, Italy, Latvia, Poland and Romania. Most of the amended recovery and resilience plans now include a new REPowerEU chapter. This will contribute to accelerating the countries' transition towards clean energy, diversifying their energy supplies and improving their energy efficiency. To finance the increased ambition of their plans, most member states have requested to transfer their share of the Brexit Adjustment Reserve (BAR) to the plans, in line with the REPowerEU Regulation. According to the analysis by the Commission, the modifications put forward by the member states do not affect the relevance, effectiveness, efficiency and coherence of their recovery and resilience plans. Belgium On 20 July 2023, Belgium submitted a modified recovery and resilience plan, including a REPowerEU chapter. The modified plan has a significant focus on the green transition, allocating 51% of the available funds to measures that support climate objectives, which is well above the required target of 37%. Moreover, the plan will devote 27% of its allocation towards supporting the digital transition. The EU contribution to the Belgian plan will be €5,3 billion in grants and loans. Bulgaria On 29 September 2023, Bulgaria submitted a modified recovery and resilience plan. It doesn’t include a REPowerEU chapter. The revision adjusts the EU contribution to the Bulgarian plan in accordance with the update of the allocation key that took in place in June 2022. The total contribution available to Bulgaria has gone down from €6.3 billion to €5.7 billion in grants. Croatia On 31 August 2023, Croatia submitted its amended recovery and resilience plan, which includes a new REPowerEU chapter. The plan is now worth €10 billion including €5.8 billion in grants and €4.2 billion in loans. The plan allocates 39% of funds to support climate objectives, while 20% of funds will be used to underpin the country's digital transition. Cyprus On 1 September 2023, Cyprus submitted its amended recovery and resilience plan, which now includes a REPowerEU chapter. The plan is now worth €1.22 billion, including €0.2 billion in loans and €1.02 billion in grants. The new plan devotes 45% to the green transition, up from 41% in the original plan, and 24.6% to the digital transition, up from 23%. The modified plan's important social dimension is also upheld. Finland On 5 October 2023, Finland submitted its amended recovery and resilience plan, which includes a REPowerEU chapter. The modified plan is rooted in the green transition, with 52.3%, up from 50.3% in the original plan, of funds being allocated to measures that support climate objectives. The plan is now worth €1.95 billion in grants. Germany On 15 September 2023, Germany submitted a modified recovery and resilience plan. It does not include a REPowerEU chapter. The revision adjusts the EU contribution to the German plan in accordance with the June 2022 update. The total contribution available to Germany will be €28 billion. Greece On 31 August, Greece submitted its amended recovery and resilience plan, which includes a REPowerEU chapter. The plan contains strong provisions for the green transition, allocating 38.1% (up from 37.5% in the original plan) of the available funds to measures that support climate objectives. The modified plan contributes to the digital transition with 22.1% of its funds. The plan is now worth €35.95 billion, with €18.22 billion in Recovery and Resilience Facility (RRF) grants and €17.73 billion in RRF loans. Hungary On 31 August 2023, Hungary submitted its amended recovery and resilience plan, which includes a new REPowerEU chapter. The total financial contribution available to Hungary will now be €10.4 billion, €6.5 billion in grants and €3.9 billion in loans. The modified plan puts significant emphasis on the green transition, allocating 67.1% of available funds to measures that support climate objectives, up from 48.1% in the original plan. The plan has an important social dimension and foresees that 29.1% of funds are dedicated to realising Hungary's digital ambitions. Ireland On 26 October 2023, Ireland submitted its amended recovery and resilience plan. The revised plan does not contain a REPowerEU chapter. The revision adjusts the EU contribution to the Irish plan in accordance with the June 2022 update. The total contribution available to Ireland will be €914 million in grants. Italy On 7 August 2023, Italy submitted its amended recovery and resilience plan, which includes a REPowerEU chapter. The modified plan has a strong focus on the green transition, devoting 39%, up from 37.5% in the original plan, of the available funds to measures that support climate objectives. The plan is now worth €194.4 billion, €122.6 billion in loans and €71.8 billion in grants, and reinforces Italy's digital preparedness and maintains its important social dimension. Latvia On 26 September 2023, Latvia submitted a modified recovery and resilience plan. The plan is now worth €1.97 billion in grants. The new plan has a strong focus on the green transition, allocating 42% of funds, compared to 37.6% in the original plan, to support climate objectives. Moreover, Latvia has committed 23%, up from 21% in the original plan, of its funds to boosting the digital transition. Poland On 31 August 2023, Poland submitted its amended recovery and resilience plan, which includes a REPowerEU chapter. The modified plan allocates 46.6% of funds, up from 42.7% in the original plan, to support the green transition, while Poland has also planned for 21.3% of the available funds to contribute to the digital transition. The total contribution available to Poland is €59.8 billion, with €34.5 billion in loans and €25.3 billion in grants. Romania On 8 September 2023, Romania submitted its amended recovery and resilience fund, which includes a REPowerEU chapter. Romania will be attributed €28.5 billion, €14.9 billion in loans and €13.6 billion in grants. The modified plan convey Romania's strong focus on the green transition, with 44.1% up from 41% in the original plan of funds being dedicated to measures that support climate objectives. Moreover, the plan still improves Romania's digital preparedness and social resilience, allocating 21.8%, up from 20.5%, to support the country's digital transition.