EU must be ready to accept new members by 2030, Michel to propose

Good morning, and welcome back. I hope you all had a great summer break.

Today, I have an exclusive preview of what Charles Michel, the European Council president, will propose this afternoon as a target for adding new member states to the EU, while Romania’s prime minister tells our man in Bucharest that Brussels should give them more leeway on their swollen budget deficit.

Be prepared

The EU must be ready to accept new member states by 2030, Michel will declare today, kick-starting an existential debate on enlargement that is set to dominate high-level discussions within the bloc between now and the end of the year.

Context: Russia’s war against Kyiv has resurrected the EU’s previously comatose enlargement policy. Brussels has made Ukraine, Moldova and Albania candidate countries and instigated serious internal debate over how the bloc could accommodate as many as eight new members.

“If we want to be credible, we must talk about timing,” Michel will say in a speech today in Slovenia, according to written remarks seen by the FT. “As we prepare the EU’s next strategic agenda, we must set ourselves a clear goal . . . we must be ready, on both sides, by 2030 to enlarge.”

“We must now address enlargement as one of our major challenges. Both for the EU and for its future member states,” Michel will tell the Bled Strategic Forum and an audience set to include leaders from candidate countries Moldova, Albania, North Macedonia, Montenegro, Serbia and Bosnia and Herzegovina.

Michel’s role as council president is to encourage and cajole the 27 member states into consensus, and his bold declaration suggests he has heard enough around the table at recent leaders’ summits to believe it is possible.

Expect to hear a lot about enlargement over the next four months, and so-called “absorption capacity”, a buzz-phrase coined to cover the multitude of issues — from budgets to voting power — which will be affected by new members, and need to be negotiated before new memberships are granted.

EU leaders will have their first dedicated discussion on the topic in Granada, Spain, in early October. Ukraine is pushing for the EU to agree to start their formal accession process by the end of the year. And the question of how to provide financial support to all candidates (but Ukraine in particular) is at the heart of an ongoing, parallel debate on topping up the EU budget.

There are many member states who privately question how the EU can accommodate Ukraine, the poorest-ever candidate country. But political will is a powerful thing, and right now it’s pulling in Kyiv’s favour.

“This is ambitious, but necessary. It shows that we are serious,” Michel will say today. “The window of opportunity is open. We need to act on it.”

Chart du jour: Parched Europe

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Did you know that Belgium, a country famed for its grey weather, is the most water-stressed country in Europe? It is suffering acutely in the water crisis that’s afflicting the entire continent, thanks to droughts, leaky pipes and poor government planning.

Special dispensation

Romania’s finance, labour and EU funds ministers will hold talks with the European Commission today to try and convince them that the country’s bloated budget deficit is the result of Bucharest’s efforts to help Ukraine’s war effort and that elevated expenses should be forgiven, writes Marton Dunai in Bucharest.

Context: Romania hoped to squeeze its shortfall to 4.4 per cent of GDP, but the country’s central bank recently projected a 7.5 per cent deficit. That’s so far above the 3 per cent guideline that the commission could launch disciplinary action. Bucharest has been under the so-called Excessive Deficit Procedure since before the coronavirus pandemic.

Prime Minister Marcel Ciolacu told the FT that the budget gap, which was 6.2 per cent of the country’s gross domestic product last year, would definitely decline in 2023, although he did not commit to a specific figure.

“We had a very different economic situation three years ago than now,” Ciolacu said. “Romania is now stable, with Europe’s number-two growth rate rooted in foreign direct investment. But the budget had to be reorganised to aid Ukraine, especially grain shipments,” he added, referring to the export corridor Romania has maintained for Ukraine to replace Black Sea shipments.

“These were unforeseen expenses . . . [so] we need an exception from the fiscal rules,” he said, adding there was “no way” the EU would penalise Romania for the overshoot.

He said Bucharest would reorganise the budget again and save expenditure, including an administrative reform that he insisted he could pull off despite the country facing four elections in 2024: European, municipal, presidential and general.

A spokesman for the premier said Ciolacu will go to Brussels on Friday for discussions on Romania’s pandemic recovery funds and the budget deficit.

What to watch today

1. Bled Strategic Forum begins in Slovenia.

2. Ukraine’s foreign minister Dmytro Kuleba visits Jan Lipavský, his Czech counterpart, in Prague.

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