TL:DR – European leaders propose two-speed union to address economic reform impasse

• French President Emmanuel Macron announced a summer deadline for a broad EU deal on economic reforms.
• Macron stated on Monday that an agenda must be finalised by June.
• European Commission President Ursula von der Leyen highlighted plans for enhanced cooperation if no progress is made.
• Enhanced cooperation could expedite initiatives like the Savings and Investment Union, aiming for consideration by June.
• Danish Prime Minister Mette Frederiksen expressed support for a two-speed Europe due to urgent reforms needed.

Leaders embrace two-speed Europe to break impasse as Macron sets June deadline for economic reset

European leaders discussed a two-speed union as a solution to the political impasse hindering economic reforms, as French President Emmanuel Macron announced a summer deadline for an agreement on 27 October. The proposal has gained urgency amid frustrations over the pace of necessary reforms to rejuvenate the European economy.

The initiative highlights the shifting dynamics within the European Union (EU), with leaders seeking greater action and speed by considering smaller groups of countries to address issues. Enhanced cooperation, a legal provision allowing at least nine member states to advance initiatives independently, emerged prominently following the provision of a €90 billion loan to Ukraine without the involvement of Hungary, Slovakia, and the Czech Republic.

Macron and Von der Leyen Support Enhanced Cooperation

“What we decided today is that between now and June, we will have to finalise the agenda,” said President Emmanuel Macron. Ursula von der Leyen, the President of the European Commission, indicated that enhanced cooperation could be invoked for the Savings and Investment Union and other legislative measures if sufficient progress is not made by June.

While Macron expressed optimism, António Costa, the President of the European Council, stated he would “work to avoid” a two-speed Europe and emphasised the need for consensus among all 27 member states. Costa reaffirmed that finding common ground remains the primary goal, although enhanced cooperation remains a potential solution within the Treaty of Lisbon.

Leaders Call for Urgent Reforms

During discussions at the Alden Biesen castle in Belgium, leaders emphasised the increasing urgency for reforms to enhance competitiveness, especially in light of growing global competition from the United States and China. German Chancellor Friedrich Merz expressed a “strong sense of urgency” for the EU to “act swiftly and resolutely.”

Notable support for the two-speed approach was echoed by Danish Prime Minister Mette Frederiksen, who stated it was now an acceptable route. “Several (countries) can block Europe from doing what is right for Europe,” she said, referring to the influence of pro-Russian governments.

Former European Central Bank President Mario Draghi further urged leaders to consider enhanced cooperation for expedited action on high-priority areas, including energy prices and the single market. The concept of a two-speed Europe, while controversial, reflects existing divisions within the EU, such as the eurozone and the Schengen Area.
“