Many of the big issues that have loomed over the EU remain unresolved as Lithuania takes the helm. A durable solution to the euro crisis has been stalled to suit the whim of the German electoral cycle, but Europe now needs to move towards a democratic economic, fiscal and political union as soon as possible.
We have to end the stopgap approach to the economic crisis. This means finally addressing unsustainable debt levels, whether through restructuring in Greece or breaking the toxic link between bank and sovereign debt in countries like Ireland and Spain.
The crisis has politically divided the EU and led to growing distrust among its members. There is a need to bridge this gap and overcome knee-jerk national responses. We will ultimately only draw a line under the crisis by mutualising sovereign debt. The EU urgently needs to take concrete steps in this direction. This should be a priority for the Lithuanian presidency.
The troubled state of Europe's financial sector requires urgent attention. While tentative steps towards the vaunted banking union have been taken, with the agreement on EU banking supervision, further progress is urgently needed. An effective banking union implies urgently providing measures for bank resolution, including a resolution fund, as well as providing for an EU deposit guarantee scheme. This is necessary to restore the viability of the sector.
The repercussions of the Arab spring are ongoing. This remains a major challenge for the EU, as it struggles to develop a common foreign policy. The Lithuanian presidency must try and formulate a coherent, common EU position on these key questions.
With revelations continuing to emerge about the extent of the US's NSA snooping programme of EU citizens and institutions, a robust response is needed. The suspension of negotiations on an EU-US trade agreement must be an immediate consequence. In addition to reviewing various data agreements with the US, the current review of EU data protection legislation must deliver stronger rules to allow people in Europe to regain control of their data and prevent outside access.
On the environmental side, the EU is no longer credible in its claim to be a climate leader and redressing this must be a focus of the presidency. Progress needs to be made at the UN climate summit in Warsaw, so that we can achieve a binding international agreement in Paris in 2015, and the EU must be proactive to this end.
Repairing the faltering emissions trading scheme is a top priority. While the proposal to backload the auctioning of permits is a necessary interim step, it is no more than that. The only way to address the oversupply of emissions allowances, and the resulting depressed carbon price, is to permanently retire the surplus permits (around 1.4 billion), as well as finally moving to a more ambitious and effective emissions target for 2020: a 30 per cent reduction.
The EU also needs to start moving towards setting medium term climate and energy targets, with 2030 the next benchmark year. This is vital for investor certainty. To this end, there is a need to adopt ambitious 2030 greenhouse gas reduction, energy saving and renewable energy targets.
If the devastating consequences of biofuels are to be properly addressed, the EU needs to adopt robust rules on the climate impact of indirect land use change (ILUC). The full impact of ILUC, and the additional greenhouse gas emissions, must be accounted for otherwise we are simply brushing the problem under the carpet to facilitate biofuel producers at the expense of the climate. The presidency should also prevent further delay in setting medium-term limits for car CO2 emissions even if the ambition of the proposals is limited.
