European politics

From North to South - Spain taking over the EU Presidency from Sweden

On the 1st of July, Sweden will hand over the six-month rotating Presidency of the European Council to Spain. With European elections coming up in 2024, this will be the last opportunity to finalise important legislative files during this mandate. Under the Swedish Presidency, progress has been made on important files related to Europe’s support for Ukraine, migration and the environment, but much still remains to be concluded under Spanish leadership.

Rocky start of Sweden’s Presidency

Sweden started its Presidency at a tumultuous time. Domestically, Sweden had a brand-new government that had to hit the ground running. The three-party minority coalition of the Moderates, the Christian Democrats and the Liberals, with support from the far-right Sweden Democrats party, was installed on the 18th of October last year and had less than three months to prepare. At the European level, Russia’s full-scale war of aggression against Ukraine raged on and demanded continued European support for Ukraine’s war efforts. With the implications of the ongoing war affecting nearly every policy domain at the European level many of the priorities were determined by the situation the Europe finds itself in. In this context, the Swedish Presidency steered through its policy agenda, which focussed on four priorities: security, resilience, prosperity and democratic values and the Rule of Law.

Security
In terms of security, the Presidency unsurprisingly focussed on the European response to the war in Ukraine. A broader focus in these efforts was to preserve the unity between EU Member States, in which the Swedish Presidency has succeeded. On the policy level, there have been several successes, most notably in the areas of sanctions and ammunition supplies. The Council has adopted two new sanctions packages against Russia and approved important files related to production and procurement of ammunition and a plan to speed up ammunition deliveries to Ukraine.

Resilience
The priority of resilience was seen through the lens of competitiveness. Much of the attention was dedicated to the European response to the Inflation Reduction Act. This massive US stimulus programme contains almost $400 billion to support domestic clean energy production and manufacturing. By favouring US-made clean energy and technology, it led to sharp criticism from the EU as it could harm the competitiveness of European companies on the American market. As a strong supporter of free trade, Sweden has tried to subdue the growing calls for protectionist EU measures in response to the IRA. Although discussions on the EU’s response, the Green Deal Industrial Plan, are still ongoing, the risk of a trade war seems to have waned, for now.

Prosperity – green & energy transition
Connected to resilience was the priority of prosperity, with a focus on the green & energy transition. Arguably, this area received the most attention. As part of the Fit for 55 package, the Council agreed on key pieces of legislation delivering on 2030 climate targets, the hotly debated Nature Restoration Law (despite Sweden voting against its own compromise text because of domestic pressure), and made progress on a revision of EU air quality legislation.

In addition, Sweden tabled the Critical Raw Materials Act, a key piece of legislation to secure Europe’s supply of these key materials. The Friedrich Naumann Foundation previously addressed this topic in the study “Tackling the EU’s Dependency on Raw Materials From China” (2022) and with Renew Europe MEP Nicole Beer as the European Parliament’s rapporteur on this file it remains a topic of strong liberal interest.

Democratic values and the rule of law
Possibly the least prioritised of Sweden’s priorities. Apart from the regular Annual Rule of Law Dialogue and Article 7 hearings with Poland and Hungary, the only notable initiative in this area was a symposium on democracy and the rule of law in Stockholm a few days before the end of the Presidency.

But that is not all, as one of the biggest merits of the Presidency falls outside its previously set priorities. After years of negotiations, EU Member States in early June reached an agreement on the New Pact on Migration and Asylum. Against all expectations, the Swedish Presidency managed to broker a deal on key pillars of the EU asylum system, responsibility, solidarity and procedural rules. This package will now head into trialogue negotiations with the Commission and the Parliament under the Spanish Presidency, with the aim of finalising the reform by spring 2024.

To conclude, the Swedish Presidency did not rock the boat and quietly worked on key pieces of legislation on Europe’s support for Ukraine, migration and the environment. Fears of government instability and Euroskeptic influence on Sweden’s agenda were largely unfounded, but the Sweden Democrats certainly left their mark. And although progress was made, much is now passed on to the Spanish Presidency to finalise in trialogue discussions.

Spain taking over

From 1 July, Spain will take over the baton from Sweden. Prime Minister Pedro Sánchez, in his first speech at the Moncloa Palace on the agenda, highlighted his country's pro-European spirit and expressed concern about the growing support for Eurosceptic parties. The priorities of the Spanish Presidency focus on four main areas: strategic autonomy, ecological transformation, social justice and European unity.

Strategic Autonomy
Europe should learn leassons from the COVID-19 pandemic and global conflicts and make the European industry more sovereign and resilient. The targeted promotion of strategic industries and technologies should gradually reduce dependence on third countries in key areas such as energy, health, digital technologies and food. Since the pandemic and the Russian war of aggression, the diversification of supply sources and trade relations has come into focus to ensure economic security and a global leadership role for Europe in a new international order.

Spain, with its close historical and linguistic ties as a gateway to Latin America and the Caribbean, is committed to further developing a strategic partnership. In July, EU heads of state and government will meet their counterparts from the Community of Latin American and Caribbean States (CELAC) under the Spanish Presidency for the third EU-CELAC Summit. Due to its climatic conditions, the continent offers great potential for green hydrogen for Europe and has raw materials such as natural gas, oil or lithium. However, there is also a potential for conflicts in the desired close relations, for instance by having to deal with authoritarian regimes and human rights violations in Latin America or agreeing on a common position on the war in Ukraine.

Ecological transformation
With the use of renewable energies and a reform of the electricity market, ecological transformation will be advanced and dependence on energy and raw materials from Russia and China reduced. At the same time, this should promote the competitiveness of European companies and new jobs. Spain also wants to use its location on the Mediterranean to strengthen cooperation on energy in the region (in view of the H2Med agreement adopted in Alicante). Spain, thanks to its favourable location in the Mediterranean, plans to become the hub of a green energy corridor for green hydrogen from the Iberian Peninsula to Central and Northern Europe. The ambitious H2Med project, which Germany, France and Portugal have joined, aims to transport 2 million tonnes of green hydrogen per year from Spain. For this, however, the infrastructure still has to be created.

Social justice
Social justice is another building block in the Socialist-led government's roadmap for the Council Presidency. With the strengthening of workers' rights, the introduction of minimum standards for corporate taxation and the consistent prosecution of tax evasion by large multinational companies, Sánchez wants to create more social and economic justice.

European unity
European unity in the face of growing geopolitical tensions will be promoted by further deepening the Single Market, and completing the Banking Union and the Capital Markets Union. Common financial instruments such as NextGenerationEU are to be used for this purpose. Coordinated management of migration and asylum procedures should prevent tragedies like the recent one in the Ionian Sea – in theory at least. This should be possible in the future thanks to a change in voting rules from unanimity to qualified majority in some areas and the agreement on the New Migration and Asylum Pact, which was prepared under the Swedish Presidency. In order to better manage migration flows and stem irregular migration, deepened cooperation in various fields of action was agreed within the framework of the European-African dialogue and the Rabat Process. The aim is, among other things, to combat the causes of irregular migration and displacement and, at the same time, to make the positive effects of regular migration more usable with the help of facilitated visa issuance procedures.

Spain is a valued partner in Europe, but there is also new uncertainty about the Council presidency. There could be trouble ahead for the implementation of the goals of the Spanish government, because the head of government, Pedro Sánchez, is threatened with new elections at the national level. He has called elections for 23 July, which will take place in just three weeks, right at the beginning of the Spanish Presidency of the European Council. If there is a change of government, this could once again bring about a change in political support for the priorities of the Presidency.