Welcome to Better Europe’s weekly update on EU Affairs.
DAMAGE OF OMNIBUS I FINALLY DOCUMENTED
Remember the days of evidence-based policy-making? When the Commission’s Better Regulation strategy was still being applied? Well, we’re far away from the return of the impact assessment — the Commission is planning to present a package revamping its rules on how to engage with stakeholders and how to estimate the impact of different policy options on 28 April. Potentially on the agenda: replace stakeholder consultation by implementation ‘dialogues’ to understand corporate compliance concerns, replace public consultations with an intimate ‘reality check’ session with a few friends in the Commission’s headquarters, and followed by a quick 48-hour internal inter-service consultation. The manual will likely echo the process of the EU’s deregulated corporate sustainability reporting and responsibility rules, which were run over by an Omnibus in 2025. But the negotiations weren’t very evidence-based, as MEPs and Member States had no clue how many companies would be covered by the rules as they were horse-trading not so academic thresholds of 1.500, 2.000, or why not, 1.750 staff. However, thanks to our friends at SOMO, we now finally know who is going to be covered by the rules — no more rough estimates of ‘between 7 689 and 13 707 companies‘. And no more guessing how many Member States must transpose a Directive that will not even apply to anyone inside their territory. That number is four; thanks SOMO for doing the Commission’s homework a year late!
EU BUDGET: THE TWO TRILLION EURO QUESTION
As EU ambassadors meet today, Parliament is stepping up pressure to start the fight on the size of the multi-trillion EU budget for 2028-2034 and how to spend it. Seven years is a long time, and the process last time proved how difficult it is to define a budget that foresees how the world will change — Covid, wars, energy shocks. When the budget proposal was announced last summer, the Commission prided itself in moving the EU budget to a record-high 2 billion euros, up from just over one billion seven years earlier. That sounded amazing for many federalists, who believe the EU must have more money to play a bigger role in research, defence, regional policy, and let’s not forget the digital and green transition. It also infuriated national leaders who found it unacceptable to ‘double’ the EU budget in times of stress on national budgets — from that perspective, it was not a smart communication move. Especially as the number is highly inflated: it includes inflation and other increases of national income, new direct EU taxes on tobacco, e-waste and large companies, and additional EU income due to the Emissions Trading System and the Carbon Border Adjustment Mechanism, all policies that are under heavy political pressure. Expressed in GDP terms, the increase is minor: from 1.13 to 1.15 percent of EU gross national income, if we remove the repayment of the recovery fund agreed in 2020 after the budget was adopted. So the only solution is to move money within the budget, and that is exactly the political fight we’ll see in the coming months.
BUT WE HAVE THE EURO
Ah, the euro, our beloved common currency that landed in our wallets well over two decades ago. People hated it for its inflationary effects, nostalgic to the days of border queues and queues at the bank to change your francs for pesetas. But what most citizens do not realise, is that the euro also has the potential to break the hegemony of the U.S. dollar as the world’s reserve currency. In theory. Because when EU companies purchase oil products, the price is still quoted in U.S. dollars, a currency that neither of the parties to the transaction use domestically. Airbus, the Franco-German poster child of EU aviation, sells most of its planes in dollars. And when we evaluate economic developments, amounts are converted to MAGA-land money for the sake of comparison. At the same time, EU citizens outside of the Eurozone and many other countries are using the euro as a parallel currency, and might even be able to do so formally when the digital euro becomes available to them. Politically, strengthening the international role, prestige and relevance of the euro has been on the agenda for a while, with the ECB analysing non-euro country use of the euro every year. This week, experts chipped into a Parliamentary hearing on the topic, suggesting the euro could be one of the global currencies in a multi-polar world — anything that reduces dependence on the US dollar is welcome.