Portugal hosted a meeting of EU member states with Atlantic coastlines this week in Porto, in an effort to build a coalition of countries to protect the interests of Europe’s western flank in the face of the EU’s potential eastward expansion.
“The aim of this initiative is the creation of an informal European Atlantic group and how it can contribute to the opportunities and challenges faced by the European project,” a statement from the Portuguese government said of the May 23rd meeting.
Delegations from Spain, France, Ireland, Belgium, the Netherlands, and Denmark met in Porto for discussing “matters of common interest and setting up the right balance between Europe’s continental and Atlantic projections.”
The meeting agenda had two topics: “opportunities and challenges the European Union faces in terms of managing, developing and protecting the Atlantic space,” and “the institutional and budgetary challenges brought on by the EU enlargement.”
According to the Portuguese government, the gathering was also a preparation for the European Council meeting in June.
The plan for the Atlantic coalition was laid out earlier this year. In February, Portuguese Prime Minister António Costa outlined in a speech the detailed reasons for bringing the countries with Atlantic sea outlets together.
“Each enlargement to the East means that Europe’s centre of attention is shifted to the centre of Europe. This isn’t necessarily a bad thing, yet it is indispensable for us to greatly boost the Atlantic alliance,” he said during his speech at the Fórum La Toja closing session in Lisbon.
“Just as it was important to create the reunions and dynamics for Southern European countries, I believe that today it is important to set up a forum of the EU’s Atlantic countries as a way of being organised,” he added.
Nine countries are currently seeking EU membership, including Ukraine.
The prime minister called for reforms of criteria to enter the bloc, citing the failed attempt of Turkey and the expectation surrounding Ukraine’s candidacy.
“[The EU] must take very seriously the expectations it created regarding Ukraine and the Western Balkan states,” he said.
Europe’s greatest tragedy in the future would be frustrating those expectations. It would be a huge betrayal of everything we tell the Ukrainians today. However, to take the expectations we created seriously, we need to be aware that we require a deep institutional and budgetary reform.
He noted that the entry of Ukraine alone into the bloc would cause serious realignments, as the country is huge in terms of territory but relatively small in its economic output.
He cited as a clear example the Common Agricultural Policy (CAP), a program of farm subsidies that amounts to a third of the EU budget. Integrating Ukraine and its vast agricultural lands, “would imply almost doubling the necessary resources” or decreasing the amount that each member state received, he said.
Several countries in eastern Europe bordering Ukraine received emergency funding from the CAP after complaining that their cereal markets had been flooded by Ukrainian cereals—some unilaterally blocked Ukrainian imports—while according to industry experts, much of the problem was self-inflicted, blaming Romanian and Polish farmers for missing opportune windows to sell their crops.
The Atlantic Alliance has good reason to be anxious over whether Eastern European expansion will drain their resources. On May 23rd, the Commission announced it had approved a €1 billion package of direct aid to Polish farmers. At the same time, Portugal and Spain are in the second year of a serious drought and have not yet received a response to their request for emergency aid for farmers.
Costa also expressed fears that state aid programs such as the Next Generations funds were disrupting the common market by creating too much competition between countries to subsidise multinationals and attract their business. He called for assurance that public money would go to supporting industry both east and west of Germany, citing the example of German car makers with factories in Portugal, Spain, Hungary, Poland, and other countries.
“We need to ensure that State aid ensures a minimum level of proportionality for all,” he said.
This is important to help set up value chains that effectively integrate the different countries in Europe. [For instance] Portugal, Czech Republic, Hungary, Poland, and Spain have the same car manufacturers in their countries and many of them have their head offices in Germany.
“What is the reason for not weighing a joint effort by all these countries, where there are also German manufacturers, so that together we can balance out what each one can do competing with Germany?” he added.
He explained by example how requirements for maintaining operations across the bloc would work.
Let’s say that Germany grants the Volkswagen group State aid. To avoid a competition logic where each one offers more to retain the productive capacity, assistance offered by Germany to Volkswagen should have as a return maintaining the productive capacity of the group in the countries where it operates, whether in Palmela, or anywhere else.
He also called for more common funding mechanisms, like the pandemic recovery funds, to keep industry in Europe in the face of international competition.
“We need to use that fund now starting from one that already exists, RePower, and the unused resources in the Recovery and Resilience Facility in its loan dimension that can and should be integrated into the RePower mechanism. It will be an additional funding instrument to ensure European companies’ competitiveness, given the risk of relocation,” he said.
