EU summit: four construction sites and a question mark

After this Meeting with ASEAN countries the EU summit today turns to the problems within the Union. The fight for a gas price cap is likely to be particularly tough. But the focus is also on Hungary’s Prime Minister Orban.

The gas price cap…

… is still highly controversial. At least 15 countries finally want an upper limit, others are strictly against it. In the meantime, the EU Commission has made a proposal as to what a “limited and flexible upper price limit” could look like, which should at least prevent extreme fluctuations.

The problem: So far, the responsible energy ministers have not been able to agree on this. Resistance comes from Germany and the Netherlands, among others. They fear suppliers will divert their tankers to places where there’s more money to be made – leaving Europe stranded.

The federal government speaks of a conflict of objectives between security of supply and low prices. In plain language: You can either have one or the other.

Because of the dispute, plans for joint gas purchasing and faster approvals for the expansion of renewable energies are also on hold. In the event that the summit does not bring a solution, another special meeting of energy ministers is scheduled for Monday.

Unlimited travel…

… within the European Union is still a long way off for the people of Romania and Bulgaria. The accession of both countries to the so-called Schengen area, in which EU citizens can move freely and without passport controls, failed precisely because of resistance from Austria.

The country fears that more asylum seekers will come to other EU countries, but even leading members of the ÖVP-Greens coalition consider this to be unfounded. According to the EU Commission, both Romania and Bulgaria have long since fulfilled all the requirements for accession.

Germany and most other EU countries therefore hope to be able to change the mind of Austrian Chancellor Karl Nehammer at this summit. The government in Vienna recently only cleared the way for Croatia to enter the Schengen zone. Which may also be due to the fact that many Austrians like to vacation there.

The looming trade war with the US…

… should be avoided at all costs, after all the EU countries agree on this. There is great concern that President Joe Biden’s government, with its gigantic economic stimulus program, will give American companies unfair competitive advantages and that the Europeans will get nothing.

The United States wants to invest more than 350 billion euros in climate and social projects to boost the economy and curb runaway inflation. Among other things, massive subsidies for electric cars, batteries and renewable energies “Made in America” ​​are planned, i.e. for producers in the USA.

How Europe should respond to this is a matter of debate. With more relaxed state aid rules for European companies, as proposed by Commission President von der Leyen? With similar subsidies for products from the EU, which could result in a transatlantic subsidy race – and would possibly have to be financed with further, joint loans?

Not only Germany is skeptical. In any case, Finance Minister Christian Lindner currently sees no reason for new European debt.

The great quarrel with Hungary…

… on the other hand is off the table for now. Despite – or maybe even because of – the historic decision of the other EU countries to cut 6.3 billion euros in European subsidies from the country because Viktor Orban’s government is doing too little against rampant corruption and is deliberately dismantling the rule of law.

In any case, Orban withdrew his vetoes against important EU projects such as the 18 billion euro financial package for Ukraine and the worldwide minimum tax for large international corporations shortly before the summit. Probably to at least save the Corona aid. The EU had threatened to forfeit large parts of the money earmarked for Hungary.

So the feared showdown at this summit does not happen. It should be interesting to see how Orban will appear in the circle of his colleagues. Most of the Hungarian extra tours are obviously fed up.