A new report reveals that member states are routinely ignoring E.U. guidelines and recommendations, making consensus-building on the increasingly fraught issues facing the bloc harder and harder.

(Source: Reuters) Member states are ignoring up to 96 percent of E.U. guidelines.

Donald Tusk is a man in a hurry. The president of the European Council, the group made up of the leaders of E.U. member states, wants to streamline the twice-yearly European Union summit. At his insistence, this week’s meeting breaks with tradition, shrinking from 2 days to just one.

So when leaders of the 28 member states meet in Brussels today, they will have considerably less time for their packed agenda. At lunch, they will discuss the refugee crisis, Russian sanctions, Syria and negotiations with Ukraine. In the afternoon, it is defense. Dinner is for tackling Brexit.

But this kind of high-speed, low-focus summit may end up in the same doldrums currently afflicting Europe and its institutions. Mr. Tusk is pinning his hopes on a smooth meeting, with no problems to derail the talks. But others see little cause for optimism: “We will be walking through a minefield,” warned one high-ranking E.U. diplomat.

The European Union is finding it harder and harder to achieve consensus, especially on economic questions. And when ministerial summits manage to reach agreements, they are increasingly ignored. This is the finding of a new European Parliament report, which Handelsblatt has seen.

It suggests that only 4 percent of the European Commission recommendations in 2015 were implemented “fully or to a substantial extent.” In 2012, the figure was 11 percent, but since then, the trend has been steadily downwards. To put it another way: of the economic recommendations made in 2015, 96 percent have been ignored by member states, or their implementation has seen “limited progress.”

Of the economic recommendations made in 2015, 96 percent have been ignored by member states, or their implementation has seen “limited progress.”

When states ignore the commission’s advice, it in effect means that finance ministers are ignoring the targets they themselves set. The E.U.’s economic recommendations are agreed by finance ministers, meeting in what is known as the “European semester,” a system introduced in 2011 to establish and coordinate national economic goals.

Ministers are destroying their own credibility, and the Commission is whitewashing the mess, said Sven Giegold, a member of the European Parliament from Germany’s Green party. “The euro zone needs institutions with the courage and competency to motivate its members to sustainable structural reform,” he added.

Germany is among the countries which help formulate the recommendations, only to completely ignore them. For years, the Commission has urged Berlin in vain to cut the country’s high level of taxation for the low paid. Likewise, Brussels’ suggestion that Berlin opens up competition in the service sector — for example, by loosening restrictions on some professions — have fallen on deaf ears. And in fact, the European Union has no legal authority to enforce its suggestions.

This lack of a coherent economic policy is problematic for the euro zone, as a yawning gap opens up between states holding surpluses, and countries running budget deficits.

Mr. Tusk may hope this week’s E.U. summit will be tightly focused and committed to agreement. But consensus may be hard to achieve or enforce. Defense will be a major bone of contention. France is keen that all E.U. states commit to spending at least 2 percent of their GDP on defense. This benchmark already exists for NATO members: this week’s meeting may now also approve the 2 percent rule for the European Union.

In a new development, France could find support for the measure from Germany. “We could imagine a two percent rule,” said sources within the German government. What was more significant than any particular target, they said, was a general agreement among member states to spend more money on defense.

But underlying this position is resistance to the proposal from a number of non-NATO E.U. member states, above all Sweden. On principle, these countries do not want to be bound by NATO guidelines.

The draft summit statement thus only commits E.U. member states to doing more for defense, “including with sufficient additional resources.” In the draft, which Handelsblatt has seen, only the NATO states within the European Union will commit to the 2 percent target. Currently, only four E.U. member states achieve this level of defense spending.

The European Union has declared defense a priority because of the clear worsening of the geo-political situation. As well as instability in the Middle East, Russia’s behavior is a source of concern for many member states. Moreover, under Donald Trump, the United States may no longer be available as a protective power.

However, the prospective withdrawal of the United Kingdom from the European Union may allow for more security cooperation, since London has traditionally blocked any expansion of E.U. activity in this area, insisting that it should not encroach on NATO’s role.

Disputes on refugee allocation also continue to smolder. The entire issue is “an open wound,” said one E.U. diplomat.

It is by no means clear how expanded defense spending is to be paid for. Italy is apparently demanding an exemption from the strict terms of the E.U. stability pact, designed to ensure sound public finances among members, in order to pay for it. Whether this will be allowed by the Commission has not yet been established. The German government has yet to take a public position on the question.

Also undecided is whether defense projects can be paid for using low-interest loans from the European Investment Bank and the European Fund for Strategic Investments. France is demanding that this be allowed, but the EIB is opposed to the measure.

As if this were not enough, disputes on refugee allocation also continue to smolder. Under a Commission proposal, each member state must accommodate a quota of refugees to help manage the huge influx seen over the past two years. The entire issue is “an open wound,” said one E.U. diplomat.

However, the opponents and supporters of mandatory quotas seem to be edging closer to each other. “The atmosphere has improved enormously,” said a senior figure in the Slovakian government, the current holder of the E.U. presidency. Berlin and the Commission have been pushing hard for mandatory quotas for all member states, while other states are firmly opposed, above all Hungary and Poland.

By contrast, there is likely to be strong support from all members for the refugee agreement with Turkey, in spite of growing criticism directed at Ankara in the wake of this year’s coup attempt. “The agreement is working,” said Jean-Claude Juncker, the president of the Commission. The European Union wanted to extend implementation of the deal, “Erdogan or no Erdogan,” he added, alluding to the authoritarian policies of the Turkish president.

Ruth Berschens heads Handelsblatt's Brussels office, leading coverage of European policy. Till Hoppe reports on politics for Handelsblatt, with a focus on defense, domestic policy and cyber issues. To contact the authors: [email protected], [email protected]