Croatia will soon preside over EU, but will it know how to benefit and is it even ready?

Autor:

03.09.2018.

Zagreb, 290617.
Predsjednik Vlade Republike Hrvatske Andrej Plenkovic osvrnuo se se na odluku Stalnog arbitraznog suda u Den Haagu, o granicnom sporu Hrvatske i Slovenije.
Na fotografiji: Andrej Plenkovic i Marija Pejcinovic Buric.
Foto: Ronald Gorsic / CROPIX
Ronald Goršić / HANZA MEDIA

Minister of Foreign and European Affairs Marija Pejčinović Burić and Prime Minister Andrej Plenković

Croatia is facing one of the biggest opportunities since acceding to the EU, but also one of the biggest challenges. Many countries have managed to profit significantly from their turn at the helm, but the question remains whether Croatia will be one of them, as it hasn't even defined the priorities of its presidency yet...

On January 1 2020, less than seven years after joining the European Union, Croatia will face one of the largest administrative and political challenges since it joined the EU – presiding over the Council of the EU, colloquially called presiding over the EU. This is regular duty of EU member states, which take turns every six months to help secure continuity of operation of the EU in the period they preside over meetings of the Council.

Even though presiding over the Council of the EU lost importance after the Treaty of Lisbon came into force in 2009, it still presents a significant challenge as well as opportunity for the presiding country.

Official webpage of the Council describe presiding over the body through two key tasks – planning and presiding over Council meetings as well as representing the Council in its dealings with other institutions in the EU. This means that Croatian officials, diplomats and politicians will prepare, plan and secure regularity of discussions while remaining neutral and impartial. The presiding country has to secure fair and impartial framework for negotiations, promotion of the EU agenda, focus on reaching compromise with the aim of adopting legislation and fight for the interests of the Council in trilateral talks – negotiations with the European Commission (EC) and the European Parliament (EP). While presiding over the EU, member states have to protect the interests of the EU first, subordinating their own interests and political priorities to those of the EU.

The EU has faced a series of complicated international, European and national challenges over the last years, including consequences of the financial crisis (Greek scenario), the migrant crisis, trade war with USA, economic sanctions imposed on Russia, Brexit and its consequences, violation of rule of law in member states and more. As consequence, member states presiding over the EU got a third (unofficial) task – strong management of political agenda and development of regulations, quick reaction to current crises, like the migrant or the financial crisis, as well as prediction and reaction to potential crises. It is successful accomplishment of the third task that often times adds to the overall success of how well a member state presided over the EU.

More than 1500 meetings

Speaking in numbers, the three tasks include holding more than 1,500 meetings among 150 working groups and preparation of close to 300 legislative dossiers and high-level meetings in the six-month period. Each presiding country must secure required financial and administrative capacities for smooth presiding. They can count on EU aid, which can come in two forms – the presiding model and the so-called trio. The trio presents a model where three countries group up to make sure that political and legislative processes run smoothly over an 18-month period and that continuity and coherent work on joint priorities and goals is maintained.

Croatia is part of the trio with Romania and Finland. The second form of aid is the “national” presiding model where the member state in question takes over all work, or the “Brussels” model, where a significant portion of work is done in the European capital and where the member state in question can count on significant help from EU bureaucracy. This is why it comes as no surprise that all presiding countries, with the exception of France, opted for this model.

Even though Croatia’s presiding over the EU will be split between Brussels and Zagreb, it will still require significant logistical and administrative effort, high level of political responsibility towards the European project and intensive coordination between all parties, which could in this case include the academic community, the civic sector as well as the real sector, which can contribute to the presiding process through sponsorship and identification of Croatia’s priorities in presiding over the Council of EU.

Logistics and administration

As far as logistics go, Croatia will preside over approximately 20 high-level meetings and some 1,000 working group meetings that will prepare several hundred documents. Besides formal meetings, a series of informal meetings and approximately 100 cultural events will be held as part of the presiding process in Zagreb and, likely, Rijeka, which will be the European Capital of Culture in 2020.

In the administrative sense, two activities are of paramount importance – employment of additional workers and timely training for upcoming activities. According to assessments, Croatia will need some 230 experts on a whole spectrum of EU policies in Brussels alone, which is two times more compared to the current number of experts in the permanent representation. Croatia will need 160 managers and as many deputies for presiding over expert groups of the Council of the EU, about 50 new workers at the Ministry of Foreign and European Affairs and several new employees in other ministries, needed for forming functional teams for different political dossiers. Before this can be done, the Government has to amend regulations on State employees and officials as well as change and prepare plans for presiding over the Council, communication and education of employees. The latter means that more than 800 employees will have to take training courses, including advanced foreign language courses and those on European regulations, meeting and working group management, as well as basic understanding of lobbying methods in the EU. Financing said activities will cost some HRK 1.5 billion, which has been secured from EU funds.

To secure the presiding process goes smoothly, more than 1,000 people will have to be hired (including officials and volunteers), more than 200 vehicles will have to be procured, including limousines and buses, some 11,000 lunches prepared, 4,000 dinners, more than 20,000 ties and scarves handed out, more than 1,400 journalists accredited and tens of thousands of overnight stays arranged (presiding over the EU brought Estonia more than 35,000 overnight stays). Number of overnight stays means that at least 20 hotels will be full approximately 6 months, but the ability to secure sufficient capacities is under question. A significant challenge next year will be finding enough officials.

Of course, the presiding itself comes at a price. In the case of smaller countries such as Croatia, the figure stands between EUR 70 million and 100 million, with the lion’s share covered from the national budget. Even though this is a lot of money, if Croatia learns from Lithuania, Latvia and Estonia, it can profit from the process politically and socially. The three member states experienced growth of tourism after the end of their respective presiding processes as well as increased foreign investments, and they established themselves in the EU as initiators or supporters of key initiatives. The best case in point is digital economy in Estonia. Besides that, some countries experienced decline of euroscepticism, like Lithuania, where the presiding process brought strengthening of EU identity, or Latvia, which underwent complete integration. The presiding process as well as the challenges it brings for the administration and politics completed the process of integration to the EU and brought functional membership. Croatia still has not gone through this phase.

Political challenges of presiding

Besides administrative and logistical challenges, Croatia will face a series of political challenges brought on by 2019 and 2020. The EU is still fighting internally over migration, is facing challenges from Russia and USA as well as growing populism, rule of law is jeopardized in several member states, and EP elections are ahead, which could bring significant changes on the European political scene, as well as Brexit. In the same period, the 7-year EU budget should be adopted, worth more than EUR 1.2 trillion. Croatia is taking over presiding over the EU under these circumstances.

Croatia is entering the process of presiding as a small country that has a quiet, almost inaudible voice in Brussels. Unfortunately, the EU still has not become part of internal politics and is still seen as “something external,” in the sphere of foreign relations, with many EU politicians and bureaucrats echoing this sentiment. Still, after five years in the EU, Croatia is enjoying many advantages of membership while its business sector is gradually starting to understand the importance of presence in Brussels. Increasing number of companies is joining different business (and political) associations and increasing number of Croatian experts is participating in different working groups of the EC, which is directly contributing to improvement of business climate and standard of living. Croatian Government can successfully present a vision of development of the European project and joint policies through a series of priorities if it manages to mobilize all parties, which could increase Croatia’s visibility in Europe.

Priorities unknown

The real power that lies in taking the helm of the EU is in development of priorities, management of political agenda and setting the pace of adoption of new regulations.

Even though the presiding country cannot formally promote its national interests, it can focus on priorities it finds important through European policies and documents. Estonia can serve as an example again, as it promoted completion of package of policies on the single digital market (cybernetic security, e-management, digital corridors, e-healthcare, digital business), with the small country strengthening its position of digital leader in the EU after presiding over the EU. The recently completed term of Bulgaria can serve as another example. The country continued working on digital economy as part of its program, which does not come as a surprise since Bulgarian commissioner is in charge of the segment, but the country adapted policies to its needs, with the main discussion at the conference on Western Balkans dedicated to digital connectivity. By lobbying for digital infrastructure projects, Bulgaria is actively contributing to stabilization and strengthening economy in the region as well as growth of its digital sector, which is among the strongest in this part of the EU. One of the coming moves is the abolition of roaming charges between EU member states and Western Balkans, which will improve competitiveness of the region and is partly due to Bulgaria’s presiding over the EU.

Austria, which is currently presiding over the EU, chose security and fight against illegal migration as its priorities, which is connected to the situation in the country, securing prosperity and competitiveness through digital economy and, of course, stability and accession ambitions in Southeast Europe. These priorities are largely in line with plans of Austria’s politics and business sector. In addition, Austria will call for stronger protection of external borders, lowering regulatory pressure on innovation and digitalization, modernization of public administration, digital security, preparations for artificial intelligence and the challenges it will bring to industry and labor market, as well as focus on EU aspirations in Southeast Europe, with which Austria shares historic and cultural heritage, and where it has significant business presence.

Another thing Bulgaria and Austria have in common, besides Western Balkans, is the issue of renewable energy sources and energy supply. It is likely that Croatian Government will have a similar position on this.

While the Government still has not released the draft list of priorities or started public consultation on this, unofficial sources talk about placing focus on transport policies, energy and, of course, the region and enlargement policies. This follows from Croatia’s geostrategic position and, while many analysts and politicians in Croatia already know about this, the opportunities provided by presiding over the EU open doors to creating added value, expanding interests and positioning as a member state that has something to offer in all three areas.

For instance, transport policies are not just a question of corridors, motorways, railway and the Pelješac Bridge, but also a question of decarbonization of traffic, electric vehicles, smart technologies in traffic, self-driving automobiles and 5G technologies.

At the same time, energy includes the question of battery technology, gradual disappearance of diesel engines, environmental protection (clean energy) and EU funds for renewable energy sources. This includes more than just INA and LNG.

Croatian companies like Dok-ING, Rimac and Altpro are near the top in their respective sectors in the EU, so Croatia’s presiding over the EU should be used to allow Croatian entrepreneurs to develop their businesses as well as find new partners and markets. Put simply – everyone is doing it and so should Croatia.

"Tough but fair" with neighbours

Furthermore, there is the region. Croatia can and has to continue supporting enlargement policies for neighboring countries under the principle “tough, but fair” with the possibility of providing technical assistance. Croatia still has the unique experience of negotiations, which can be of great help to all EU membership candidates. Croatia should include economic priorities in plans for the region, following in the footsteps of Bulgaria and Austria. It should continue working on abolishing roaming charges, make progress with regard to recognition of academic diplomas and qualifications as well as supporting digital economy and cross-border cooperation projects, among other suggestions. Economic stability and growth also mean stability of the region where Croatian entrepreneurs can do business, for instance those from the IT sector.

As far as crises that Croatia might face, I would like to point to the possibility of failing to reach an agreement on EU budget, consequences of Brexit as well as problems with facing the other side of the fourth industrial revolution and artificial intelligence – job loss and disappearance of some vocations. This example is interesting as it allows Croatia to transform from a country that was the last to sign the European Declaration on Cooperation on Artificial Intelligence into a country that was among the first to use its presiding over the EU for supporting development of AI (I will bring up the example of Rimac and STEM revolution), as well as start development of mechanisms for facing social aspects of technological innovation because Croatia is one of the countries which will be hit by negative consequences of the new industrial revolution in the future. This is why continuing work on digital economy policies should be an important priority for Croatia.

If Croatia successfully holds all meetings and informal events as well as actively promotes European priorities through convergence and joint effort of State administration, EU institutions and the business community, we could say that Croatia performed well and was influential. If presiding comes down to high-level meetings of politicians in Zagreb and on Adriatic coast, with expert consultations only in Brussels and without influence of business, academic and civil sector, Croatia will surely remain at the bottom in the EU as another invisible member state. Whether presiding will be performed well, a mere formality or will Croatia take a strategic position in Europe –depends entirely on Croatia and its performance.

The author is an expert on European affairs and CEO of Euronavigator consultancy.