Recovery, Power, Belonging: The Priorities of the French Presidency of the Council of the European Union (January - June 2022)

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  1. Background

France will take over the Presidency of the Council of the European Union (EU) from January 1st to June 30th, 2022, coinciding with the general election campaign, i.e., the election of the President of the Republic in April, and that of the National Assembly members (Parliament's lower house) in June.

This overlap in timing is both a challenge and an opportunity for the incumbent President - and likely candidate for reelection - Emmanuel Macron, who has made his unabashed stance on European integration a key element of his political value proposition. It is likely that he will play on this theme in the campaign to frame the choice as being between him and anti-EU populist candidates, betting that a large majority of the French electorate will prefer him over populist crusaders. In short, this overlap in time will be echoed by an overlap between the priorities of the French EU Presidency and France’s domestic agenda, with the latter prevailing.

Unsurprisingly, EU sovereignty themes will be at the core of the French EU Presidency. Summarized by the motto “Recovery, power, belonging”, Macron outlined the main priorities of the EU Presidency on December 9th, setting milestones in the areas of defense, security and migration, the digital transition, climate change, and social policies, as well as the budgetary framework. Guided by the same sovereignty considerations, Macron also hopes to leverage an EU heads of state or government summit on March 10th addressing a new “European production and solidarity model”.

The President and the Government studded the agenda of the first three months of the French EU Presidency with ministerial meetings, summits and other initiatives, as they will subsequently be subject to a duty of self-restraint as of April 1st.

A conference on A Stronger Industry for a More Autonomous EU in early January is meant to mark the start of the French EU Presidency, which will then reach its high point with the Conference on the Future of Europe at the end of March in Strasbourg, a host of citizens’ debates held across Member States sponsored by France and the European Commission.

President Macron and the Government will have a very narrow window in which to score EU Presidency points that are meant to lend momentum to the electoral campaign. The number of matters considered as priorities is therefore rather small.

 

2. Digital transition

According to Junior Minister for Digital Affairs Cédric O, strategic autonomy will drive the French EU Presidency’s digital priorities in order to achieve the following results:

  • Adopting within the first three months of its Presidency the proposed Digital Markets Act (DMA), which sets out an ex-ante regulatory regime for the largest tech players defined as “gatekeepers”. The French EU Presidency aims to fast-track inter-institutional negotiations, which will very likely begin in January.
  • Making progress on and potentially adopting the proposed regulation on a Digital Services Act (DSA), which overhauls online commerce rules. However, the French EU Presidency may not be able to wrap up DSA discussions, considering that the European Parliament has not yet adopted a position.
  • Making progress in the inter-institutional negotiations on the revision of the Directive on security of network and information systems (NIS2 Directive), which increases the cybersecurity requirements for operators identified as essential or important in specific sectors. Negotiations will begin during the French EU Presidency but may not be finalized by June 2022.
  • Moving ahead with discussions in Council on the proposed regulation on an Artificial Intelligence Act (AI Act), which seeks to define requirements for handling AI-based systems according to the level of risks posed to the protection of fundamental rights, health and safety.

Less focus is expected to be placed on key data protection and privacy matters that EU lawmakers have been discussing for years without overcoming points of contention. These include the proposed e-Privacy Regulation and the legislative package framing EU law enforcement authorities’ access to electronic evidence in cross-border cases (e-Evidence).

The Scale-up Europe initiative that the French government and the European Commission unveiled in March 2021 will provide a space for the Presidency to communicate on support for home-grown innovation.

The French EU Presidency will also kick off legislative work on key initiatives due to be presented in the first half of 2022. This includes the proposed Regulation on a Data Act, expected in February, a key initiative driven by Internal Market Commissioner Thierry Breton that should facilitate the sharing of public and private sector data.

 

3. Finance

In his speech outlining the priorities of the French EU Presidency, Emmanuel Macron raised a theme particularly dear to France: reconsidering the EU budget rules. A new budgetary framework could boost the investments needed for the green and digital transitions and strengthen the EU’s resilience ahead of other possible crises.

The ability to raise new financing on European markets and to channel European citizens’ savings into needed investment spending will be critical for the French Government. France should consequently push to give a political impetus to the coordination work in Council on the Capital Markets Union legislative package presented by the European Commission on November 25th, 2021, i.e.:

  • The revision of MiF 2 to improve the information provided to the market and to simplify citizens’ access to capital markets;
  • The revision of the European Long-Term Investment Funds (ELTIFs) Regulation to promote investment products that meet the long-term needs of professional and retail investors.

The French EU Presidency will also seek to achieve the following results on digital finance matters:

  • Adopting the proposed regulation on markets in crypto-assets (MiCA), with France aiming to extend its scope of application to non-European players;
  • Adopting the proposed regulation on digital operational resilience for the financial sector (DORA), which aims at reinforcing digital resilience of financial entities and regulating their relationshipswith information and communication technologies service providers;
  • Promoting the European Central Bank’s experimentation with the Digital Euro, which the French government believes will help consolidate the position of the euro on the international financial scene.

During its Presidency, France will aim to achieve progress in the area of sustainable finance in particular:

  • The Corporate Sustainability Reporting Directive (CSRD), which aims to harmonize sustainability reporting and to end the proliferation of frameworks and standards;
  • The inclusion of the nuclear power within the EU rules on financial taxonomy.

Finally, France is expected to entrench the dimension of EU sovereignty within discussions concerning the impact of ‘Brexit’ on the financial sector, in order to rebalance the weight of the various financial centers.

 

4. Environment, energy and climate change issues

The French EU Presidency will have to deal with a large number of legislative matters that the European Commission presented in the framework of its Green Deal political program, which sets out a plan for the EU to reduce greenhouse gas emissions by 55% compared to 1990 levels by 2030, and to become climate-neutral by 2050. The significant divergences between EU political groups and the EU Member States, which have different strategies for increasing their energy independence and addressing climate change, are sure to complicate the achievement of these objectives.

The Presidency will focus on a small number of environmental, energy and climate change priorities:

  • The proposal for a Regulation for a Carbon Border Adjustment Mechanism (CBAM), a proposal included in the European Commission’s July 2021 “Fit for 55” package. CBAM aims to set a carbon price on imports in areas identified as energy-intensive, i.e., iron and steel, cement, fertilizer, aluminum and electricity generation;
  • A proposal for a Regulation on deforestation-free imports, presented by the Commission in November 2021. The proposal seeks to increase supervision over imports into the EU of six raw materials (wood, cocoa, palm oil, beef, coffee, and soy) in order to fight against deforestation outside the EU.
  • The promotion of reciprocity principles in trade agreements in order to foster the EU’s environmental and climate standards.

According to French Minister for Ecological Transition, Barbara Pompili, the Presidency will also work on reducing fossil fuel dependence, renovating buildings and mobility transformations.

The French EU Presidency will kickstart discussions in the Council on two major packages the Commission will present on December 14th:

  • An energy and climate package that will include a proposal to revise the directive on the energy performance of buildings and to revise the third energy package for gas, a new proposal for a regulation to reduce methane emissions in the energy sector, a communication on restoring sustainable cycles, and a proposal for a Council recommendation to address the social and labor aspects of climate transition;
  • An efficient and green mobility package that will include a proposal to revise the regulation on the trans-European transport network and to revise the directive on intelligent transport systems, and two communications on urban mobility and on boosting long-distance and cross-border passenger rail.

 

5. Health

Although healthcare did not play a prominent role in Emmanuel Macron’s speech announcing the French EU Presidency's priorities, health issues are part and parcel of his sovereignty rhetoric. An ardent defender of EU countries’ autonomy in terms of production capacity, Macron promotes the localization and/or relocation of health industries in France and Europe and the adoption of EU concerted action in partnerships and negotiations with third parties.

  • A European Health Union: The Presidency has included in its agenda the objective of identifying priority areas for action for a European Health Union and thus marking a "paradigm shift for an effective EU public health policy". A “body of elders” should be set up to make recommendations to this end.
  • European Health Emergency Response and Preparedness Authority (HERA): France wants to make progress on the implementation of HERA, seen as a pillar of greater EU integration in health, particularly in times of crisis. The Presidency is counting on the European Medicines Agency (EMA) and national regulators to accelerate its implementation and the joint procurement of vaccines.
  • Global health: A ministerial conference scheduled on February 11th in Lyon (France's second largest city after Paris) will convene the EU Member States’ ministers responsible for foreign affairs and the ministers responsible for health. The conference will mark the launch of a joint action having the objective of incorporating the dimension of global health into the EU’s foreign and security policy.
  • The rare diseases 2030 plan: France is likely to take advantage of the EU Presidency to begin work on a European fund for rare diseases. In the absence of consensus, the Presidency will try to leverage the European Commission to open up discussions in the coming months. France's ambition is to pool together resources for therapeutic research and the purchase of therapies to obtain more affordable prices for each EU Member State.
  • Health data: The French government wants to make progress on the establishment of a “European health data space”. Mindful about the short window of time, the Government aims to make enough progress for this initiative to be finalized under the Czech EU Presidency (July 1st-December 31st, 2022).