EU

A pro-Russian militant stands guard at a checkpoint outside Donetsk earlier this week.

UPDATE: We’ve now posted the draft communiqué on Ukraine. You can read it here.

Today’s special EU summit was originally called to hash out nominees for the remaining jobs atop the big Brussels institutions – the European Council president, the EU foreign policy chief and the chair of the eurogroup of eurozone finance ministers. But recent events in Ukraine have pushed Russia policy back onto the agenda.

According to a draft of the summit communiqué obtained by Brussels Blog – which was pulled together at a marathon session of EU ambassadors on Tuesday – EU leaders could go beyond so-called “phase two” sanctions, which involve targeting individuals for travel bans and asset freezes. But it won’t be all the way to “phase three”, which constitutes sanctions on entire sectors of the Russian economy.

The new intermediate phase, which diplomats say is an intentional blurring of phase two and three, would focus on four elements. First, the EU would cut all new project funding for Russia from the European Investment Bank and caucus together to prevent similar investments from other international organisations where EU countries are members – particularly the European Bank of Reconstruction and Development. Other international financial institutions are not mentioned by name, but diplomats said the World Bank was raised during deliberations. The draft language now looks like this:

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The Belchatow power station in central Poland, one of the largest coal-burning plants in the world

While Brussels winds down for the summer and preoccupies itself with finding new commissioners, there will be some very busy people left working on a climate policy conundrum that needs to be solved by autumn. We’ll be hearing quite a bit about it, so here at the Brussels Blog we’ve decided to give it a name: The Polish Puzzle.

By October, the EU needs to agree a target for reducing greenhouse gases by 2030. This is one of the most critical numbers for the determining the course of European industry over the next 15 years, so it is not a decision to be taken lightly. The commission has proposed a cut of 40 per cent from 1990 levels.

Poland, which derives about 85 per cent of its energy from coal, does not like this target one bit. The alternative – switching to cleaner gas – could make it more vulnerable to imports from Russia, which would be anathema in the current geopolitical environment. Unless one side gives, a climate deal by October could prove elusive. Read more

When looking for scapegoats for the EU’s energy crisis and our dependence on Russian gas, it is all too easy to attack “district heating”.

District heating is the main way that cities are heated in eastern Europe and the Soviet-era infrastructure can often be wastefully inefficient, as we write about in a story today.

But don’t write it off too quickly. The truth is that western Europe is probably going to see a lot more of this technology in the next decade as it rethinks its urban energy consumption. Read more

Thorning-Schmidt, left, and Merkel at last week's EU summit. Is the Danish PM's star falling?

With Jean-Claude Juncker’s confirmation as European Commission president by the European Parliament in two week’s time something of a foregone conclusion, attention in Brussels corridors has turned to the other two top jobs that are due to be decided at a special summit July 16: European Council president and High Representative for foreign affairs.

According to officials and diplomats, there was much discussion of candidates’ names on the sidelines of last week’s EU summit, and while two weeks is a long time in politics, a few trends are emerging:

1. Momentum to get a centre-left candidate into the European Council presidency is stalling. Going into last week’s summit, it was widely assumed that because the centre-right European People’s party (EPP) got one of their own atop the Commission, the Council job would go to the centre-left Party of European Socialists (PES). But that conventional wisdom has changed. Read more

A bullet hole in an armoured police car used during this week's cannabis raid in Lazarat.

Eight hundred police and SWAT officers besieging a village? Armed drug dealers fighting back with grenades and mortars? This is hardly familiar territory for the wonkish world of the Brussels Blog but a dramatic battle in the Balkans is of critical importance to the course of the EU’s enlargement.

It is all happening in Lazarat in Albania, from where the Associated Press has a hair-raising dispatch. The police moved in to take out what has become the cannabis capital of Europe. Incredibly, AP cites an estimate that the area was earning about $6bn a year through cannabis cultivation, which would be just under half of Albania’s GDP.

It is the timing of this operation that is so vital. On Tuesday, Albania will learn whether it has been accepted for “candidate status” for becoming a member of the EU.

The showdown in Lazarat is a sign of Albania’s intent in the area where it needs to show most progress: judicial accountability and the fight against corruption. It is hardly as if Albania’s security services have only just woken up to what goes on in Lazarat – the key issue is that a plantation of this epic scale must have been protected from on high. Albania wants to show that it is willing to take on vested interests. Read more

Beppe Grillo’s Five Star troops are on side with a vengeance. The Lithuanian stunt pilot is pledging loyalty. The Calvinist isn’t taking calls from British Tories bearing gifts. Even given the faltering efforts to woo the Irish cannabis campaigner, things are looking up for Nigel Farage in the wacky world of the European parliament group building. Read more

Campaign manager Selmayr, left, with Juncker on election night in Brussels last month.

In a town that is reading every tea leaf available to divine whether Jean-Claude Juncker, the ex-Luxembourg prime minister and front-runner for next European Commission president, will actually get the job, it seemed a rather big leaf of tea.

Martin Selmayr, the workaholic German lawyer who served as Juncker’s savvy campaign manager during last month’s European Parliament elections, took many EU officials by surprise when it was announced Wednesday he had been appointed to a top job in the London-based European Bank for Reconstruction and Development (see announcement here, under the “Five new senior management appointments” heading).

Many in Brussels had tipped Selmayr as Juncker’s chief of staff if he won the presidency. Prior to working for Juncker, Selmayr had been chief of staff to Luxembourg’s current commissioner, Viviane Reding, and he is close to the man who holds the powerful chief of staff job under José Manuel Barroso, fellow brainy German lawyer Johannes Laitenberger.

Is Selmayr’s departure a sign Juncker’s prospects for winning the presidency are dimming and he’s bailing out of a sinking ship? On Twitter, Selmayr denied it, tweeting: “You really think Juncker needs me to win? Believe in democracy!” Read more

Russia's Vladimir Putin at the launch of South Stream's Black Sea pipeline in 2012

Is it possible that, once again, one of Europe’s biggest strategic concerns ends up hinging on a Balkan intrigue?

This time, it is the Ukraine crisis, Europe’s fears about its energy security – and the influence of the king-making junior coalition party in the Bulgarian government, the Movement for Rights and Freedoms.

The concerns of Bulgaria’s small ethnic Turkish party may seem worlds away from the geopolitical confrontation between the Kremlin and the west. But on the group’s narrow shoulders could lie the fate of the landmark South Stream pipeline, a project that many believe will further cement Russia’s hold on Europe’s gas supplies. Read more

David Cameron and his wife Samantha after voting in last week's EU parliament elections

David Cameron’s anti-federalist group in the European parliament entered these elections looking a bit shaky. While anti-establishment parties were faring well, the polls for the ECR group were worrying. Cameron took a huge gamble when leaving the centre-right European People’s Party to form a eurosceptic bloc. Some ECR folk feared the group could unravel in the wake of the election.

Daniel Hannan, one of the ECR’s best known MEPs, dismissed the doom laden predictions from “half-clever commentators” (this correspondent included). He was correct; the speculation proved only half-right. The ECR have emerged in a solid position from the vote. It survived and its feathers are well preened for a beauty contest for the leadership of Europe’s eurosceptics. But the dynamics of the group are changing — and it poses some serious political dilemmas for Cameron.

1) The ECR is here to stay….

If it makes no new allies and loses no group members, the ECR will live on. The election results show it has cleared the rather arbitrary seven country official threshold to form a group (there are MEPs from at least 8 member states). At present though, their numbers are down. The ECR is projected to reach 45, a loss of 11 seats. The Tories and the Czech members both suffered at the hands of the electorate.

2) ….with reduced Tory influence

Perhaps as significant is the changing balance of power within the party. Read more

Juncker, left, with Schulz ahead of a debate in Hamburg, Germany earlier this week

With voting now underway in Britain and the Netherlands, the first two EU members to go to the polls in the three-day continent-wide election to pick the new European Parliament, Brussels’ favourite parlour game – guessing who will emerge as the next president of the European Commission – has shifted into high gear.

As with almost everything in the EU, from the eurozone crisis to Russian sanctions, all eyes are on Angela Merkel, the German chancellor, and whether she will throw her backing to one of the two “spitzenkandidaten” – the lead candidates for the largest political groupings – or decide to back someone else for the job.

“Nobody knows,” says a top political operative from a German-allied country. “Everybody has their opinions and views, but nobody really knows.”

To play our part in the echo chamber, Brussels Blog has compiled its own completely unscientific odds on where the main candidates stand. And as they say in US sports betting, these odds are for entertainment purposes only. The Brussels Blog does not advocate gambling (though you can do so at the UK’s gaming company Ladbrokes).

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