Finland’s six-month Presidency, which begins in July, is expected to be extremely challenging. Not only will Brexit complicate matters, but the European Parliament elections and the resulting distribution of seats may also cause uncertainty. How big a group will the far right manage to form? Budget negotiations, the high-level appointments to the Commission, European Council and the ECB, as well as the situation in Hungary will also have a bearing on Finland’s Presidency, believes Laura Nordström, a researcher at the University of Helsinki.
Brexit has taken up a lot of space in the day-to-day politics of the EU, and may continue to do so in the coming months, since the deadline for the UK’s withdrawal from the EU has been extended until the end of October.
“As for Brexit, all the alternatives discussed to date are still possible,” says Nordström.
In addition to Brexit, the Finnish Presidency will also be greatly influenced by the European Parliament’s political map. Decision-making may be hampered if certain groups gain enough power to tip the balance in the Parliament. These groups include the far right, where populist and radical parties are riding high. Any triumph of the far right would be an answer to EU-critical voices.
“EU politics is largely about the ability to compromise, and compromises may become more difficult if these groups gain power.”
According to election polls, the proportion of anti-immigration and anti-EU populist groups in the Parliament will increase notably. The resulting fragmentation is expected to reach previously unheard of levels in the EU.
A maximum of 751 seats will be allocated in the elections, and according to Nordström, the groups traditionally in power, that is, the EPP (the European People’s Party, with 218 seats at present) and the S&D (Socialists and Democrats, with 186 seats at present) look to be losing their majority. This would be historic. The ECR (Conservatives and Reformists, with 74 seats at present) is also set to lose seats, while the far-right ENF (currently holding 37 seats) is expected to achieve a major win.
The Parliament now has eight political groups, and Finland will get 13 to 14 seats, depending on whether the UK remains an EU member.
The crucial role of monetary policy in the financial framework
Finland’s Presidency will coincide with a concrete goal that Finland must pursue in earnest: reaching an agreement on the EU's financial framework. The EU’s annual budget outline is regulated by the multiannual financial framework, which spans seven years. The next framework is to take effect at the beginning of 2021.
“The final negotiations on the financial framework will take place during Finland’s Presidency and will reflect the Union's new challenges,” says Nordström.
With the Member States differing widely on these issues, an ever greater emphasis is placed on the ability to compromise. Challenges are posed, for example, by Hungary, a net beneficiary, and its attitude to the rule of law and to the idea of linking rule-of-law development to EU funding. In this situation, Finland’s recognised negotiation skills will be put to the test.
According to Nordström, the appointment of the President of the European Central Bank is another key event during Finland's Presidency. Mario Draghi, the current President of the ECB, will be stepping down at the end of October. His successor will most likely be elected in the summer, following the European Parliament elections, as part of the major set of high-level appointments in the EU. Erkki Liikanen, former Governor of the Bank of Finland, and Olli Rehn, current Governor of the Bank, have been put forward as potential successors to Mario Draghi.
As the holder of the Presidency, Finland will also play an important role in the nomination of the European Commission’s President. Forming the Commission is expected to be a difficult task.
“The Commission prepares a five-year plan on political priorities, and the country holding the Presidency can influence the direction of the plan.”
The goals of the Member State holding the Presidency can make a difference
Through their own goals, the Member States holding the rotating Presidency aim to influence the direction taken by the EU. Finland’s priorities for the Presidency will be published in late June, early July of 2019. The national presidency programme will be given to Parliament as a Prime Minister’s announcement in June after a statement on the Government Programme has been made.
Finland listed its three priorities back in October. With its priority focusing on citizens, Finland wishes to emphasise that the Union’s financial policy rules apply to all Member States. The priority targeting climate policy strives to implement the emissions targets laid out in the Paris Agreement in all fields of policy, while the priority highlighting a stronger Europe aims to develop EU-led defence cooperation.
“Correctly used, the Member State’s own goals can help create a sense of solidarity that contributes to the accomplishment of individual policy goals, such as bringing the negotiations on lobbying regulations to a successful conclusion or laying the foundation for future compromises, for example in climate policy.”
“This is also a chance to present themes in a positive light to EU citizens,” says Nordström.
The researcher talks about gaining goodwill, meaning that Finland now has an excellent chance to portray itself as a reliable player, capable of working out compromises.
First, however, Finland needs a functioning government of its own. This highlights the importance of the government formation talks, conducted in May and June, in terms of the EU Presidency. Antti Rinne, who chairs the Social Democratic Party and is in charge of the talks, aims to have a government in place before the European Parliament elections, seeing as an extraordinary summit will be held right after the elections to deal with the EU leadership appointments.
“The new government must have a clear vision on how to progress during the Presidency,” says Nordström.