Report to the Houses of the Oireachtas on Developments in the European Union

AN ROINN GNÓTHAÍ EACHTRACHA DEPARTMENT OF FOREIGN AFFAIRS

Report to the Houses of the Oireachtas on developments in the European Union

1 July 2020 – 31 December 2020

Table of Contents

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INTRODUCTION

This report summarises key policy developments in the EU during the six-month period July to June 2020, when Germany held the Presidency of the Council of the European Union.

This report is submitted in accordance with the requirements of Section 2(5) of the European Union (Scrutiny) Act 2002.

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BREXIT

Over the period July-December 2020, the Department of Foreign Affairs continued to coordinate the whole-of-Government response to Brexit with the Department of the Taoiseach, including on the negotiation of the future EU-UK relationship, on the implementation of the Withdrawal Agreement and on readiness for the end of the transition period on 31 December 2020.

Conclusion of EU-UK Negotiations

On 24 December 2020, the EU and the UK concluded negotiations on a Trade and Cooperation Agreement (TCA). The TCA, together with the Withdrawal Agreement,

including the Protocol on Ireland/Northern Ireland, means that Ireland’s key objectives in

the Brexit process have been achieved, in particular:



protection of the Good Friday Agreement and the gains of the peace process, including avoiding a hard border on the island of Ireland;

ensuring the best possible outcome for trade and the economy, notably tariff and

quota free trade with the UK and protection of Ireland’s place in the Single

Market;



It creates a new stable relationship with the UK for the Irish transport and energy sectors and ensures cooperation between police services on these islands continues.

However, the agreement does not replicate the status quo. The UK is no longer part of the EU's Single Market or Customs Union, which means that there are now checks and controls for goods moving from, to or through Great Britain. Seamless trade no longer exists.

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Implementation of Withdrawal Agreement and Protocol

On 8 December, it was announced that agreement in principle had been reached between the EU and the UK on outstanding issues regarding the implementation of the Protocol on Ireland/Northern Ireland. This positive development came following significant and productive engagement between the EU and the UK on implementation of the Protocol, as provided for under the Withdrawal. Importantly, it included the commitment by the UK to withdraw clauses 44, 45 and 47 of the Internal Market Bill, bringing it back into line with its legal obligations under the Withdrawal Agreement.

Ireland recognises that for Northern Ireland, and indeed for businesses across the island, adapting to the changes since 1 January has been challenging. We continue to engage with all stakeholders, including with the business community and political representatives in Northern Ireland, to ensure the smoothest possible implementation of the Protocol.

Readiness for the end of the Transition Period

The whole-of-Government preparation for Brexit continued, with a focus on ensuring Irish citizens and businesses were ready from the end of the transition period. The Government also continued its engagement with our EU partners for responses at the EU level. This work was overseen by an Assistant Secretaries Group on Brexit Readiness, cochaired by the Department of the Taoiseach and the Department of Foreign Affairs.

On 9 September the Government published its Brexit Readiness Action Plan. Departments and Agencies intensified their readiness work, including through legislation, supports for business and other sectors and stakeholder outreach. This work was supported by a major and widespread public communications campaign including radio, TV, print and online ads underpinned by a broad range of vital information on supports available and with the steps businesses need to take set out on gov.ie/Brexit.

Budget 2021 provided for additional staff for Departments and Agencies to support and carry out checks and controls, bringing the total additional staffing provision, as a result of

Brexit, to around 1,500. The Government also decided to establish a €3.4 billion Recovery

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Fund to stimulate increased domestic demand and employment in response to COVID-19 and Brexit.

The Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act 2020 - the “2020 Brexit Omnibus Act”- was introduced into the Dáil in October and signed into law by the President on 10 December 2020. It deals with the range of complex immediate and permanent changes that arise at the end of the transition period.

The 2020 Act consists of 22 Parts under the remits of Ministers responsible for eleven Departments and draws on the Brexit Omnibus Act 2019, which was in place for the earlier no-deal deadline of 29 March 2019. Many Parts of the 2019 Act could not be commenced once the Withdrawal Agreement was concluded and entered into force.

At EU level, in the second half of 2020, Ireland secured amendments to the EU Official Controls Regulation to ensure goods could continue to move across the UK Landbridge. Ireland also engaged on the adoption of EU contingency legislation on basic air connectivity, aviation safety, basic road connectivity and fisheries ahead of the end of the Brexit transition period.

On 25 December, the European Commission published a proposal for the Brexit Adjustment Reserve, an EU-wide fund of over €5 billion aimed at supporting the sectors

most adversely affected by Brexit. Ireland’s initial allocation was more than €1 billion. The Commission’s proposal, including initial allocations, will now be considered by the Council

of the EU and by the European Parliament before it is finalised.

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MULTIANNUAL FINANCIAL FRAMEWORK

The President of the European Council, Charles Michel, continued to take forward work on the Multiannual Financial Framework (MFF) for the period 2021-2027 with the aim of reaching a final agreement. In the lead up to a special European Council on the MFF and the Next Generation EU (NGEU) on 17 July, President Michel continued to engage with Member States bilaterally on issues of ongoing disagreement. He issued a revised Negotiating Box on 10 July in the form of draft Conclusions for the upcoming European Council. Key obstacles to agreement continued to be different views between Member States on the overall size of the MFF budget and the new unprecedented NGEU Recovery Instrument requiring borrowing on the markets by the Commission for allocating nonrepayable grants as well as loans to Member States to support their recovery from the impact of the pandemic.

The European Council met in Brussels over four days (17-21 July) to seek to reach agreement. Intensive, and at times difficult, discussions largely focused on five key issues: the overall amounts for the MFF and NGEU; the balance of loans and grants; the allocation of the new Recovery and Resilience Facility under the NGEU and its governance; a rule of law mechanism to protect the EU budget and rebates for the highest net contributors. President Michel tabled a revised proposal on the second day of the meeting which resulted in further lengthy and intensive discussions. This allowed President Michel to table two further compromise proposals on the evening and early morning of 20/21 July, the last of which was ultimately accepted unanimously by the European Council. Key elements of the agreed package were an MFF of €1,074 billion for 2021-2027, which protected Cohesion funding, the common agricultural policy, Erasmus and Horizon

Europe. A NGEU Recovery Instrument of €750 billion was also agreed, including €390 billion in grants and €360 billion in loans, bringing the total MFF/NGEU package to €1,804

billion. Other elements were an overall target of 30% for climate spending and a new Brexit Adjustment Reserve of €5 billion to address the impacts on sectors and regions most impacted by Brexit. Following the July agreement, the German Presidency led discussions with the European Parliament on reaching agreement on the MFF/NGEU

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which required the European Parliament’s assent. After lengthy negotiations, a

compromise package was agreed on 10 November which included additional allocations for certain programmes but within the ceilings of the July agreement.

The July agreement stated that a regime of conditionality to protect the budget and Next Generation EU (NGEU) would be introduced. The Presidency tabled a compromise proposal on 27 September intended to strike a balance between the various Member States’ positions on this contentious issue and to satisfy the European Parliament’s request for strong rule of law conditionality in the Multiannual Financial Framework (MFF)/NGEU. Despite the concerns of many Member States, the Presidency was given a mandate to open negotiations with the European Parliament on 30 September and after weeks of discussion, agreement was reached on 5 November. The Presidency sought to get political agreement on the overall MFF and Recovery package on 16 November but failed to achieve it due to ongoing opposition by some Member States to the rule of law mechanism agreement. After intensive engagement with some Member States to find a compromise solution, the Presidency issued draft European Conclusions on the rule of law mechanism prior to the European Council of 10-11 December. The focus of the draft Conclusions was on clarifying how the draft Regulation on a general regime of conditionality for the protection of the EU budget would apply. They were unanimously adopted and the entire MFF/NGEU package for the period 2021-2027 was endorsed by leaders. The European Parliament approved the MFF/NGEU package at its final plenary session of 2020 on 16 December and the Council unanimously approved it via written procedure on 17 December.

In addition to the adoption of the five Regulations as part of the MFF/NGEU package, work on concluding 53 MFF/NGEU related sectoral files progressed in parallel, agreement was reached with the EP on 22 files (e.g. Horizon Europe, Erasmus+, Recovery and Resilience Facility) and the European Commission published its proposal for the Brexit Adjustment Reserve on 25 December 2020.

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CONFERENCE ON THE FUTURE OF EUROPE

The Conference on the Future of Europe is a proposed series of conferences aimed at promoting greater citizen involvement in the European Union. Ireland has welcomed the Conference and in our discussions to date with the various EU Institutions and other Member States, we have repeatedly called for the Conference to focus on delivering the

EU’s Strategic Agenda rather than examining any possible treaty changes. Minister Byrne spoke to the Joint Oireachtas Committee on EU Affairs in November 2020 on Ireland’s

priorities for the Conference and he also took part in a discussion with young people from across the EU on the future of Europe at the General Affairs Council in December. The original launch date of the Conference was postponed due to the Covid-19 pandemic but was launched on Europe Day (9 May) this year.

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COMMON FOREIGN AND SECURITY POLICY (CFSP)

During the second half of 2020, EU Foreign Ministers met in a variety of physical and videoconference formats and continued to discuss a range of foreign policy issues. The

multi-faceted impact of the Covid-19 pandemic and the EU’s response to it was discussed

and assessed from a number of different perspectives. In July, Ministers discussed the impact of Covid-19 in Latin America and the Caribbean in particular, while the EU’s Southern Neighbourhood was discussed at the September Foreign Affairs Council (FAC) meeting. Developments in Belarus and the Eastern Mediterranean, as well EU-Russia, EU- US and EU-African Union relations were also the subject of discussions throughout this period, with the FAC adopting a number of actions, including packages of restrictive measures, in response to evolving events. In November, the FAC had a discussion on multilateralism, while in December, the Council established a global human rights sanctions regime.

COMMON SECURITY AND DEFENCE POLICY (CSDP)

Ireland is an active participant in both civilian and military CSDP missions and operations. As of the start of December 2020, 19 seconded civilian experts, including one member of An Garda Síochána, were serving in six of the EU’s eleven civilian missions: in Europe / the Caucasus (Georgia, Kosovo and Ukraine), the Middle East (Iraq) and Africa (Niger and Somalia). At the same time, 28 members of the Defence Forces were serving in three UN- mandated EU military missions and operations; the EU Training Mission in Mali, Operation Althea in Bosnia-Herzegovina, and Operation Irini’s Operational headquarters in Rome.

On 23 November 2020, the second Annual Review Conference (ARC) of the Civilian CSDP Compact was held virtually. The ARC was followed by December 2020 Council Conclusions on the Civilian CSDP Compact, which commended the progress made towards

implementing the Compact’s 2023 targets, and endorsed waypoints to be met in 2021.

In November 2020, the Council approved Conclusions on the first Strategic Review of Permanent Structured Cooperation (PESCO). The review assesses progress made on

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PESCO in its initial 2018–2020 phase and looks ahead to the next phase of implementation in 2021–2025. Separately, in October 2020, Member States reached agreement on the principles allowing for third state participation in PESCO projects.

CYBERSECURITY

The EU Security Union Strategy 2020-2025 was published on 24 July 2020 and contains proposals to enhance internal EU security to combat terrorism and organised crime, and to promote cybersecurity. The new EU Cybersecurity Strategy is a key component of the Security Union strategy and was published on 16 December 2020. The Strategy aims to strengthen the physical and digital security of critical networks and network

infrastructure, as well as promoting the EU’s international engagement to maintain and

promote a global, free, accessible and safe cyberspace, where human rights apply online as well as offline. The Strategy includes proposals for enhanced cyber capacity-building with third countries.

On 30 July 2020, Member States agreed to impose EU sanctions against several individuals and entities responsible for cyber-attacks, including an attempted attack on the Organisation for the Prohibition of Nuclear Weapons (OPCW). This was the first time such measures have been used since their adoption. Further sanctions were imposed in October 2020 related to hacking of the German Bundestag in 2015. The cyber sanctions aim to prevent and discourage malicious cyber activity and protect citizens and business across the EU.

HYBRID THREATS AND DISINFORMATION

In September 2020, the Commission presented its review of the implementation and effectiveness of the Code of Practice on Disinformation. The European Democracy Action Plan, published on 3 December 2020, also proposes a range of measures to tackle disinformation. Council Conclusions were adopted on 15 December, focused on strengthening resilience against and countering hybrid threats, including disinformation.

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TERRORISM

Work continued on the implementation of Council Conclusions adopted on 16 June, which committed to strengthening EU external action to counter terrorism and violent extremism. In December 2020, the Commission presented a new Counter-Terrorism agenda. It includes new measures to identify, prevent and respond to terrorism internally and internationally.

HUMAN RIGHTS

In November 2020, the Foreign Affairs Council (FAC) adopted the EU Action Plan On

Human Rights And Democracy (2020-2024). The Plan outlines the EU’s strategy and

priorities for the promotion and protection of human rights and the advancement of democracy in its relations with third countries over the next five years.

In the same month, the EU put forward its third Gender Action Plan, which sets out the

EU’s ambitions to promote gender equality and women’s empowerment through all