BRUSSELS. Coordination of economic policies, the need to implement national recovery plans quickly and well, and create the right conditions to attract the investments necessary for the double green and digital transition hinged on the European Green Deal. The second day of work of the European Council summit focuses on the economy and the need to continue moving forward together on a common agenda on which common competitiveness largely depends.
Having resolved the issues on the Middle East, Ukraine, defence, preparation for situations of potential threat, immigration, the most politically sensitive points on the leaders’ agenda, the Twenty-Seven can now concentrate on the part of the agenda of the summit which does not see issues subject to discussion on the table stalemate nor possible collision. The heads of state and government will first meet the leaders of Iceland, Liechtenstein and Norway, to celebrate 30 years of the European Economic Area, the particular commercial union between the EU and those countries that have decided to join the EU on a partial basis, different, but still in the spirit of that multilateralism that the European Union has flaunted so much in recent years. The celebrations are a message for the other side of the Atlantic, and a Donald Trump who intends, and with enthusiasm, to return to the House White.
But prosperity cannot only be achieved through economic cooperation, it also passes through the capital market which the European Union still has to build and which it increasingly needs to create. This is the main point of the Eurosummit meeting, the Eurogroup at the level of leaders rather than at the level of economic and finance ministers. The double green and digital transition will require additional investments of 650 billion euros until 2030, according to European Commission estimates. Money to be found especially from private individuals. The Capital Markets Union becomes a key tool, as underlined by Eurogroup President Paschal Donohoe in his letter to leaders ahead of today’s meeting. “Creating a well-functioning and effective single capital market through the advancement of the Capital Markets Union is a necessity for Europe.” It is from here that the game of “competitiveness of the euro area is played, which is fundamental for responding to the profound changes occurring in the global economic panorama”.
The discussion doesn’t look particularly long. Indeed, industry experts speak of short expected times. We are awaiting the mandate for ministers to continue thinking about the architecture of the capital market, the invitation to countries to keep their accounts in order until the new rules of the reformed stability pact come into force (there is an inter- institutional, but the approval process is not yet concluded), and then the round of the table with Christine Lagarde. The president of the ECB will discuss the economic context and, above all, prospects with the heads of state and government. Among these is the timing of the interest rate cut. Lagarde hinted that it could happen in June, based on the data at that time being more complete than it is today, but Lagarde herself also said she wanted to wait for the April data, which is practically around the corner.
Brussels awaits a second day of the summit which is not particularly demanding. It could end soon, because at a decision-making level the menu is poorly provided. Even on the planned debate on agriculture, the commitment to meet the requests of the world of the sector remains firm, with the necessary short-term and longer-term measures. But today is not the time to put these measures on the table. The von der Leyen Commission has already adopted the first, granting greater flexibility, environmental conditionality, no longer rotation but diversification of crops, exemption from controls and fines for companies with less than 10 hectares of land (a decision, the latter, much appreciated in Italy given that businesses with less than 10 hectares of agricultural surface area account for 65% of our active businesses). It is on the second set of measures that the leaders will ask ministers and the Commission to work.