Migrants on the deck of merchant ship Tuna 1 in the port of Palermo, after being rescued at sea off the Libyan coast | Alessandro Fucarini/AFP via Getty Images Brussels plans to drop permanent refugee relocation scheme Estonian proposal described as the ‘mother of all compromises.’

The EU is preparing to ditch controversial plans to set up a permanent — and mandatory — relocation scheme for refugees.

On Wednesday, Estonia, which holds the rotating presidency of the Council of the EU, gave EU ambassadors a proposal for reforming the way the bloc deals with migrants.

The document, obtained by POLITICO and which still needs approval, envisages three scenarios that could lead to a new migration crisis — "normal," "challenging" and "severe" circumstances — and looks at how the EU would deal with such events.

It's the Estonians' attempt to reform the so-called Dublin system, under which the first country that an asylum seeker enters becomes responsible for them. Frontline states such as Greece and Italy have always opposed this system, arguing that it places an unnecessary burden on them. However, Central European countries such as Hungary and Poland oppose the introduction of a mandatory relocation scheme.

In 2015, during the migration crisis, the European Commission launched a temporary, mandatory relocation scheme. It expired in October and was not a success, with the EU falling well short of a target of relocating 160,000 refugees over two years. The Commission also put forward a proposal in 2015 for a permanent relocation mechanism for all EU countries.

Relocation, in EU jargon, is when a refugee is moved around once inside the EU. If the asylum seeker is brought in from outside the EU, it is called resettlement.

Estonia held a number of meetings in recent months to try to find a compromise on an issue that has long been divisive. At a meeting of EU leaders in December 2016, Malta was charged with “achieving consensus” on the Dublin system during its six-month EU presidency. At this October's EU summit, the leaders said they hoped to “reach a consensus during the first half of 2018.”

The proposal outlined Wednesday would give the Commission a leading role in migration policy by asking it to set up an early warning system.

The document says “the Commission assessment of the situation should be carried out [within two weeks] after a member state has reached 90 percent” of the number of migrants it can cope with. That figure would be worked out by taking into account factors such as GDP, the unemployment rate and how many migrants are already in the country.

If a country is struggling to cope, the Commission could "propose solidarity measures to be triggered before a possible Council decision is proposed.” These solidarity measures could include sending staff, equipment and other forms of support. The Commission could also “invite member states to join a voluntary relocation pledging exercise,” the document says.

If the crisis were to continue and a country get close to 150 percent of its "fair share" of migrants, then a more formal procedure would kick in and oblige other countries to help.

But one member country would only take asylum seekers from another if both sides agree on the terms.

“For the effective application of relocation it is important that member states to which the solidarity measures apply and member states that contribute agree with the measures taken,” the proposal says.

"In our view, we have a good understanding of where the possible middle ground lies," an Estonian presidency spokesman said.

He described the proposal as the "mother of all compromises."

However, another diplomat closely involved in the discussions was critical. “We have wasted a crisis and are not even close to [being] ready for the next,” he said.

“There is no plan apart from keeping an obligatory quota out,” he added. “The presidency seems to think that tiptoeing around the issue makes it go away. It won’t. It will only bring talk of a mini-Schengen back on the agenda,” he said, referring to plans reportedly put forward at the peak of the migration crisis by Germany, Austria, Belgium, the Netherlands and Luxembourg for a scaled-down version of the passport-free zone in order to protect their borders.

A final decision will have to be taken by EU leaders at a meeting in June 2018, and by the European Parliament — or be postponed. "With Germany in this [political] situation, pressure on reforms like this will be much lower," said another diplomat who took part in the talks, referring to uncertainty in Germany following the recent collapse of coalition talks.

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