This article is part of POLITICO’s Guide to the Czech EU Presidency special report.
The Czech presidency needs to carry the EU through an energy crisis, galloping inflation and a war in Ukraine — all on a shoestring budget.
Call it the crisis presidency.
In the midst of a war and a gathering economic crisis, the small Central European country will be tasked with making sure the EU secures a lasting supply of energy while not letting go of its plan to decarbonize the economy.
Also on its plate: AI rules, new trade agreements and finalizing a deal to phase out the combustion engine by 2035.
Czech officials admit that, with so much going on, some policy aims may fall by the wayside. But Prague hasn’t made things easy for itself, thanks to a shoestring budget locked in by the previous government.
What’s in store — and what’s likely to make progress under the Czechs? Read on …
FILLING EUROPE’S TANK
Name of key legislation here: REPowerEU, Taxonomy, Renewable Energy Directive
Why it matters: The Czechs will have the delicate task of making sure the EU has enough natural gas stored up to weather any interruption of supply from Russia ahead of winter — all while staying green and not locking in long-term dependence on fossil fuels. This means facilitating deals with alternative gas suppliers and passing mandatory minimum gas storage requirements. It also means developing strict rules for the future hydrogen market and green finance to avoid hidden emissions and greenwashing by investors. Keeping energy prices affordable and speeding up timelines for renewable energy installation also looms large for the Czechs.
State of play: The bloc has already missed its 2022 goal of cutting Russian gas reliance by two-thirds. Trilogues are set to begin on rules to mandate gas storage capacity and joint EU gas purchases, and are expected to conclude quickly. The real challenge will be securing Parliament’s approval in July for labeling nuclear and natural gas as green investments — and finding common ground on hydrogen rules that keep climate-conscious countries happy without hampering producers’ ability to deliver 10 million tons by 2030. A major risk is failing to find consensus on higher country targets for energy efficiency and renewable rollout.
EU fault lines: There is broad agreement on the need to diversify away from Russian energy, but expect a tough battle on the role of gas as a whole in the meantime. Central and Eastern European countries will push to allow gas and nuclear to be used to make hydrogen and count as sustainable investments, while a coalition of hard greens, anti-nuclear, and renewable-rich countries — Ireland, Spain, Portugal, Austria and Luxembourg come to mind — will call for strict definitions. Most countries are opposed to hiking efficiency and renewable targets.
Chances of success: 6/10. The issue isn’t whether progress will be made on these files, but whether the resulting agreements will be seen to sacrifice long-term climate goals to short-term energy-security concerns. That said, Prague will be under pressure to make sure gas-storage levels across the bloc hit 80 percent by November as planned — and keep countries from losing time squabbling over sharing the burden.
— America Hernandez
GETTING THE FREE-TRADE ENGINE GOING AGAIN
Name of key legislation here: Multiple stalled free-trade deals
Why it matters: Striking trade deals has become tough for the EU, which has failed to conclude and ratify numerous free-trade agreements in recent years. Russia’s invasion of Ukraine, combined with supply-chain disruptions, has fueled calls to open up more commerce with the rest of the world to diversify sources of everything from natural gas to sunflower oil.
State of play: Moving on trade was particularly hard during the French presidency and the French presidential and parliamentary elections, as President Emmanuel Macron wanted to avoid upsetting his farmers by backing new trade deals with agricultural powerhouses like Latin American countries, Australia and New Zealand. The EU’s free-trade advocates have their hopes set on the upcoming Czech and Swedish presidencies, two EU countries who are firm believers in the benefits of free trade.
EU fault lines: The Nordic countries have led the free-trade push after Brexit, often supported by a range of other EU members such as the Czech Republic, Ireland, the Baltics and the Netherlands. Spain and Portugal have traditionally been in favor of more trade deals with Latin American countries, such as the Mercosur trading bloc, while France has traditionally been more hesitant.
Chances of success: 4/10. While the Czechs hope to make some progress on trade deals, it’s not their major focus. The expectation is that, especially on the more sensitive negotiations, the Czechs will mostly pave the way for the Swedes, who are very determined to get the EU’s free-trade engine going again.
— Barbara Moens
CLASSIFYING PLATFORM WORKERS
Name of key legislation here: Platform Work Directive
Why it matters: Gig-economy platforms like Uber and Deliveroo are now integral to many people’s daily lives. But the status of their couriers and drivers is challenged by workers — leading up to legal uncertainty for platforms. The distinction between in-house employment and self-employed contract work is a critical one, potentially affecting workers’ remuneration, hours and flexibility, while also impacting platforms’ business model.
State of play: The EU in December unveiled a directive in order to harmonize how EU countries treat platform workers — which could potentially reclassify 4.1 million of them. Core to the plans are criteria for determining whether a worker should be reclassified, such as a platform’s control over a worker’s hours or appearance when on the job. Legislation is currently in the works, which might upset some member countries that have already tried to tackle the issue on their own. Spain was a pioneer last year by reclassifying delivery couriers, while Belgium rewrote its platform rulebook in February, already implementing some of the EU principles. France, on the other hand, attempted to reach compromises using a social dialogue system with elected worker representatives.
EU fault lines: The point person in Parliament, Italian S&D lawmaker Elisabetta Gualmini, significantly beefed up the EU’s existing proposal — increasing the number of platform workers who could be reclassified. Lawmakers in Parliament and Council, however, both face difficult negotiations in the fall. Gualmini’s stance might be too extreme for some, like the center-right European People’s Party or the liberal Renew Europe. In Council, conversations will mainly focus on how this will work on the ground, and whether the EU doesn’t overstep its competences — something that the Swedes in March already warned about.
Chances of success 7/10. The scope of reclassification will continue to yield disagreements along political and national lines, but there is broad support for an overhaul of worker protections, making landing on a compromise feasible.
— Kelsey L. Hayes and Pieter Haeck
LEADING THE WORLD WITH ARTIFICIAL INTELLIGENCE RULES
Name of key legislation here: Artificial Intelligence Act
Why it matters: In a race to master a crucial technology, the EU could set global standards with the world’s first plan to regulate artificial intelligence. Proposed in 2021, the European rulebook could rein in facial recognition, social scoring and algorithms to determine social benefits and recruitment. Big Tech is spending mountains of cash to become leaders in the technologies while governments ramp up their use of algorithms to make decisions about immigration, justice and law enforcement. The new rules could better protect citizens from unchecked technologies.
State of play: Preoccupied with fundamental rights, the European Parliament has been trying to ramp up obligations for governments and AI companies to ensure more human oversight of risky AI, including in health and elections. They also want to ban controversial algorithms used to predict crimes. While lawmakers still have to decide on their final version of the text in the fall, the Czech presidency has high ambitions and will seek to bring together EU countries around one common position after more than a year of negotiations.
EU fault lines: Prague will also have to reconcile diverging positions among EU countries about how to regulate the brain of AI, or general purpose AI systems — broad artificial intelligence models that aim to understand images and speech, generate audio and videos, detect patterns, answer questions and translate text. Countries also have yet to settle on a definition of what AI is; which applications of AI to ban and impose the most obligations on; and how to oversee the rules. Meanwhile, more controversial fights are expected as a number of MEPs have set their sights on a full ban on facial recognition. That’s a big no-no for EU capitals, who are keen to give as much leeway as possible to their police and intelligence services.
Chances of success: 6/10 Faced with a complex and ambitious law, the Czech presidency will still have a lot of sensitive issues to thrash out with other EU capitals before finding a deal.
— Clothilde Goujard
BANNING THE COMBUSTION ENGINE
Name of key legislation here: Revision of car, van CO2 standards legislation
Why it matters: The law sets in place a zero-emissions mandate for sales of new cars and vans from 2035, effectively directing the auto industry to produce only fully electric models after that date. That’s aimed at curbing emissions from road transport (a laggard when it comes to decarbonization) and putting EU countries on track to clear most polluting vehicles off the road by 2050. That means an end for the combustion engine, an industrial speciality for Europe’s world-beating car companies. The legislation is a critical part of the Fit for 55 package of climate change-mitigating policies unveiled last year.
State of play: The European Parliament has now backed the 2035 plan, leaving only the Council to endorse it at a meeting of environment ministers on June 28. Right now, it looks like they will agree, given only a clutch of countries are against the zero-emissions mandate.
EU fault lines: Crucially, Germany backs the ban plan as it stands but the Czech Republic, a major car producing country, has suggested that it is against setting a phaseout date now. The question is whether the French presidency, another skeptic on the 2035 date, which wants a role for plug-in hybrids after that date, can garner enough support to change the draft. Otherwise, the Czechs will be guiding trilogue talks with all the institutions already having agreed to a 2035 mandate.
Chances of success: 8/10. Should fly unless a small group of opponents, principally France, manage to fix a last-minute change to the text on June 28.
— Joshua Posaner
TAKING ACTION ON CLIMATE
Name of key legislation here: Fit for 55
Why it matters: The European Union has set itself a legally binding target to reduce greenhouse gas emissions by 55 percent by 2030. Now it needs to translate that promise into action. The Commission’s Fit for 55 mega-package of climate legislation is meant to do just that; negotiations between Parliament and Council are set to start — and, ideally, finish — under the Czech presidency.
State of play: Parliament this month adopted its position on part of the package, with the remainder of votes to follow in the fall. The Council has found agreement on some elements, but remains at odds over others; there is one last set of meetings of energy and environment ministers in late June under the French presidency that could see more progress.
EU fault lines: Council is broadly split in half between countries pushing for more ambitious climate action and others hitting the brake, but there’s no neat dividing line. Sweden and Finland, which tend to want more ambition overall, don’t want to see strict rules for carbon sequestration that could affect their forestry industry. Some see the war in Ukraine as a reason to step up decarbonization efforts, while others say now’s not the time to burden industry with new targets. The Czech Republic has so far not signaled it’ll prioritize climate action, raising concerns in some capitals over the likely pace of progress.
Chances of success: 5/10 for completing negotiations, with files related to achieving energy independence from Russia having a far higher chance of reaching the finish line by December. But the real measure of success will be whether what comes out of talks between Council and Parliament does add up to minus 55 percent.
— Zia Weise
GREENING UP FARMING
Name of key legislation here: Farm to Fork, Common Agricultural Policy (2023-2027)
Why it matters: Reining in the climate and environmental impact of intensive agriculture is crucial if the EU hopes to deliver on climate and Farm to Fork (F2F) goals. These include halving chemical-pesticide use, boosting organic farming and improving animal welfare.
As calls for greener and less industrial farming grow louder, policymakers are under pressure to lay the groundwork for a new food-production system that will respond to these demands while also ensuring EU farmers can keep competing on the global stage.
On top of that, the ongoing food-security meltdown spurred by Russia’s invasion of Ukraine is a sobering reminder that any future food systems should be resilient enough to withstand geopolitical or climate shocks — without sending the entire global food chain into shambles.
State of play: Most of the actual laws that make up F2F have yet to be formally proposed. The next big bill to watch will be a proposal to reduce the use of chemical pesticides, which landed on June 22 — just in time for the Czechs’ debut.
The EU’s next Common Agricultural Policy — which doles out subsidies and is thus by far the largest determinant of how the EU farms its food — is set to come into force next year but, tellingly, many EU governments are still squabbling with Brussels over how strictly they should follow the policy’s greener aspects.
EU fault lines: While most EU countries publicly say they support the ambitions of the F2F and the next CAP, many push back against any binding rules from Brussels, especially on pesticides. As the Ukraine war rages on, many capitals also warn that now is not the time to adopt greener measures which might reduce farmers’ productivity in the short run. In this context, Germany’s Green farming minister, Cem Özdemir, will be one to watch, as he seeks to balance productivity and environmental concerns. While it should be neutral throughout its presidency, Prague’s view that EU rules must not be so stringent is also likely to influence the Council’s work.
Chances of success: 5/10. With global food-security pressures bearing down, Brussels will likely face an uphill climb to get capitals to stick to the Farm to Fork and Green Deal’s vision.
— Gabriela Galindo
TACKLING EUROPE’S MOST PRECIOUS DATA
Name of key legislation here: European Health Data Space
Why it matters: The European Health Data Space is meant to dramatically reshape how patients, researchers and policymakers access and use health data. If the Commission’s figures pan out, the policy will add up to €11 billion to the EU economy over the next 10 years, through improved data exchanges in the health care system and through the use of this data in research and policy. It should have tangible benefits for every citizen, making it easier for them to access cross-border health care.
State of play: The Commission presented its legislative proposal in May, so it’s early days yet. The Czech presidency has highlighted the health data space as one of its key targets. But the negotiations will be highly technical given the importance of the final outcome as it concerns the use (and prevention of misuse) of people’s most sensitive and personal data. The aim is for the health data space to really take shape in 2025, with tangible results. A pilot for the reuse of health data for research in the EU is also set to be announced imminently.
EU fault lines: Member countries are broadly on board with many of the central tenets of the health data space, with health ministers welcoming the proposal at a meeting on June 14. However, there is a twofold challenge: The scale of the ambition and privacy concerns. As it stands, the Commission’s proposal is incredibly wide-ranging and aims for tangible change in a short period of time. Officials working on health data in member countries have already expressed concerns about the feasibility of the plan. Health ministers also noted sensitive issues arising around security and protection of data at their recent meeting. Over at the Parliament, this is likely to be a key issue for MEPs.
Chances of success: 6/10. The Czech presidency could be the key moment for some of the central themes of the health data space to be thrashed out. But it’s unlikely that the more technical or politically sensitive topics will be decided in the next six months.
— Ashleigh Furlong