by Ross Elwood
BRUXELLES (Public Policy Europe) – The EU has a bit of pep in its step this week. The possibilities seem endless, coming off the back of the Hungarian election. Von der Leyen has been front and center on announcements on energy, digital age verification, and the Hungarian elections. It has been a busy week as Brussels prepares for an important informal leaders’ meeting next week.
The Facts
Tech Sovereignty Package: Commissioner Virkkunen stated in a meeting with the JURI committee that the technological sovereignty package will include incentives for the development of a European cloud ecosystem as well as broader AI capacity. It will also include the microchip regulation, with semiconductors described as a precondition for all modern technology. A third key element will be an open-source strategy: through open source, Europe aims to stimulate its technology sector, including by making more active use of public procurement to strengthen innovation across the EU.
Age Verification App: The Commission announced that its EU age verification app is now technically ready, with several member states already planning integration into national digital wallets. It also noted that the Commission’s special panel on children’s online safety is ongoing and will deliver recommendations by the summer. A new EU-wide coordination mechanism will also be launched this month to support the accreditation of national systems and ensure age credentials can be issued and recognised across the EU, as part of building a common digital public infrastructure.
McGrath Meetings with Big Tech: Commissioner for Justice Michael McGrath met with the CEO of OpenAI, Sam Altman; the co-CEO of Netflix, Greg Peters; and the CEO of Electronic Arts, Andrew Wilson, as well as representatives from Anthropic, Roblox, Meta, Google, and Apple, among others. Discussions focused on the recently presented EU Inc. initiative (the “28th regime”), preparations for a Digital Fairness Act, and strengthening EU–US cooperation on data protection, consumer rights, and online child safety.
Trilogues on Tariff Agreement with the USA: The first trilogue meeting between the European Parliament and the EU Council, with the participation of the European Commission, on the legislative texts implementing the EU–US agreement on customs duties took place this week.
Anthropic Cybersecurity: In response to questions about the Anthropic Claude Mythos AI model, which, according to the company, has reached a new level of capability allowing it to discover vulnerabilities in software products, the Commission has said it is in contact with Anthropic. However, it is not among the companies given first access to the model, with none of the publicly mentioned partners being European companies.
The Analysis – All taboos on the table for EU Council
On Tuesday, EU Council President António Costa published the invitation letter (agenda) for next Thursday and Friday’s informal European Council. The meeting will discuss and crystallise European positioning on the EU budget (the MFF, or long-term budget) and on the energy crisis, security, and the situation in the Middle East, which are effectively one issue. These two key topics are intrinsically linked, given the enormous cost of the energy crisis, noted by Von der Leyen as being around half a billion euros a day for the EU.
The Commission is racing to organise and prioritise both short- and long-term responses ahead of the informal Council. On Monday, Ursula von der Leyen outlined the planning, stating that a Commission communication will be published next week with energy measures ahead of the informal EUCO. This will include better coordination, guidance on targeted support measures, and a new temporary state aid framework to be adopted this month. Beyond this, she said legislative proposals on energy taxes and grid charges are expected in May, with the grid package to be finalised before summer. Notably she also emphasised the importance of small modular nuclear reactors for European energy security (nuclear being another taboo topic in the EU). The grid package itself was discussed this week in the Energy Council working party, with new compromise texts circulated on Tuesday for the proposal to revise the TEN-E Regulation, and separately on Thursday for the accelerated permitting proposal. Both files are highly controversial, particularly regarding the use of member states’ grid operators’ funds to invest in other countries’ energy infrastructure. Full details of the compromise texts can be found in the Public Policy Europe newswires here
The discussion on the MFF is perhaps the most interesting. Costa’s letter refers to “an open discussion about how we can match our ambitions with the appropriate level of financing, including the importance of new own resources”. At its core, the MFF debate is about how to fund the scale of spending now required. That question is already meeting resistance from more frugal member states, who see the proposed size as too large, but the gap is becoming harder to bridge in light of the energy crisis. Historically, EU-level revenue sources have been a red line, seen as concentrating too much power in the Commission. Last week this newsletter flagged that the energy crisis would likely be linked to the MFF, possibly through a reallocation of cohesion funds. Now it seems the crisis has pushed the previously unmentionable issue of own resources to the forefront. The European Parliament’s negotiating position on the MFF was adopted in committee this week. It calls for an increase in the overall budget, something already resisted by frugal member states, and strongly supports new own resources or centralised revenue-raising mechanisms. Which they state could also include a digital services tax, an online gambling levy, or an extension of CBAM.
In his invitational letter, Costa also notes that the “challenging geopolitical and security environment will also be part of this discussion. This could include aspects related to Article 42(7) TEU”. Article 42(7) being the EU mutual defence assistance clause. This comes at an interesting moment: on Wednesday, the EU Defence Commissioner, Andrius Kubilius, told the European Parliament’s defence committee that a permanent front-line rapid support force would be necessary for the proper implementation of Article 42(7).
All the old taboos are on the table: own resources, an EU army, nuclear, qualified majority voting (see below article). What do they say about times of crisis again? “Europe will be forged in one” – Jean Monnet.
The Analysis – European euphoria leads to thoughts on what happens next
The European reaction to Sunday’s landslide win by Magyar over Orbán has been euphoric. Europe could not contain itself, with immediate congratulations incoming from Von der Leyen, Macron, Merz and Tusk as well as others. Von der Leyen, in newly found optimism, confided on Monday after the Security College meeting on the Middle East that with the current momentum, now is the time to move on Qualified Majority Voting in the Foreign Affairs Council.
Europe sees many possibilities ahead. Finally, with the Orbán thorn out of its side, the EU can be more agile in its decision making, which has become a must in today’s global climate. But there is a lot of expectation. This is dangerous. Brussels tends to get very ahead of itself in big pro-European moments. And there is a lot of hope placed on the new prime minister elect of Hungary. What we know for sure, and which you can read in our briefing last week, is that he is very much and publicly pro-European, but he is also a nationalist, and these two things don’t always sit well together.
On Monday, Magyar held a three hour press conference with national and international media. The main impression is of a man who is focused first on putting his country in order, rooting out the Orbánists from the system, and then looking outwards to restore trust with his neighbouring countries (Poland, Slovakia, Czechia, Austria) and with the EU. He sounds like a man with a lot of grand ideas, but the proof will be in the pudding, and the EU is anxious to know his plans. On Tuesday, Von der Leyen held a second phone call with Magyar since his victory to discuss exactly this. After the call, she summarised the task ahead as one of “swift work to restore the rule of law, realign with shared European values, and reform, in order to unlock the opportunities offered by European investments”. And separately, the EU Commission on Thursday announced that a delegation will travel to Budapest on Friday to discuss the unblocking of EU funds under the Recovery and Resilience Facility, cohesion funds and education and research. The Magyar government is expected to take office in mid-May, according to Magyar himself.
As for the grand push for QMV, one which Von der Leyen had already outlined as a key pursuit in her State of the Union speech in the autumn, the Commission stated on Wednesday that they are “hearing from others about the possibility” of starting a formal discussion on it, a reference to the EPP leaders’ statement on the topic during the last formal Council meeting in March. The debate isn’t so much on a formal QMV with all the complications, and near certain failure, of a treaty change, but on a way to get around it and create an effective QMV through “flexibilities”. If you are a seasoned Brussels hack you will know that QMV has been around for a long time and is deeply controversial amongst the smaller member states, who fear they would stand to lose influence if it were implemented. Watch out for where this formal discussion will start. It’s the real goal behind the more immediate ones of unblocking Ukrainian funding, extending sanctions and accession. (Public Policy Europe)
