General Affairs Council Prepares for European Council Meeting

Brussels, March 18, 2025 – The General Affairs Council (GAC) convened today to set the stage for the upcoming European Council meeting scheduled for March 20-21, where EU leaders will discuss key policy priorities and address pressing challenges. The meeting covered a broad range of issues, including EU-UK relations, the 2025 European Semester, the approval of a joint declaration on the EU’s legislative priorities, and the next multiannual financial framework (MFF). Ministers also discussed potential new own resources to strengthen the EU budget.

EU-UK Relations: A Fragile Post-Brexit Balance

One of the most anticipated topics of discussion was the state of EU-UK relations. Since the UK’s departure from the European Union, both sides have sought to maintain economic, political, and security cooperation. However, several contentious issues remain, particularly regarding trade, regulatory divergence, and Northern Ireland.

Ministers assessed the progress made since the signing of the Windsor Framework, which sought to ease post-Brexit trade frictions between Northern Ireland and the rest of the UK while preserving the integrity of the EU single market. The GAC emphasized the importance of continued dialogue with London to avoid disruptions in supply chains, ensure financial market stability, and uphold commitments made under the Trade and Cooperation Agreement (TCA).

There was also discussion about the UK’s potential participation in future EU research and development programs, particularly Horizon Europe. The EU has sought to maintain scientific collaboration with the UK, but disagreements over financial contributions and data-sharing mechanisms remain obstacles.

2025 European Semester: Coordinating Economic and Fiscal Policies

The GAC reviewed the progress of the European Semester, the EU’s framework for economic and fiscal policy coordination. With inflationary pressures still affecting households and businesses, ministers stressed the need for economic policies that promote stability while fostering sustainable growth.

The discussion focused on:

• Fiscal discipline vs. economic stimulus: With some EU economies still recovering from the energy crisis and supply chain disruptions, ministers debated whether fiscal policies should remain expansionary or shift toward reducing budget deficits.
• Labor market reforms: The council examined measures to address labor shortages, boost employment rates, and encourage digital upskilling in the workforce.
• Green and digital transition: Member states were urged to integrate environmental and digital priorities into their economic planning, ensuring that EU recovery funds are effectively utilized to meet long-term sustainability goals.

The Country-Specific Recommendations (CSRs) for member states are expected to be finalized at the European Council meeting later this week, guiding national governments in their policy implementations for the remainder of 2025.

Joint Declaration on EU Legislative Priorities for 2025

A crucial part of the meeting was the approval of a Joint Declaration on the EU’s Legislative Priorities for 2025, setting out key policy areas that will take precedence in the coming year. The declaration outlines objectives across multiple sectors, including:

• Strengthening the EU’s single market by removing trade barriers and improving competition policies.
• Enhancing digital sovereignty by promoting investments in AI, quantum computing, and cybersecurity.
• Advancing the EU’s Green Deal by ensuring climate targets remain on track, particularly in emissions reduction, renewable energy adoption, and circular economy initiatives.
• Boosting security and defense cooperation, particularly in response to ongoing geopolitical tensions with Russia.

The legislative agenda will be further refined during the European Council meeting, where heads of state will discuss how to implement these priorities effectively.

Multiannual Financial Framework (MFF) and New Own Resources

One of the most significant discussions centered around the Multiannual Financial Framework (MFF), the EU’s long-term budget. Ministers debated how to finance key initiatives such as defense, infrastructure, and social programs while ensuring fiscal discipline.

Key challenges include:

• Addressing shortfalls in funding: The current MFF, covering 2021-2027, has been stretched due to unexpected crises, including pandemic recovery measures and financial assistance for Ukraine. Ministers debated whether the budget should be revised to accommodate new priorities.
• New own resources: The EU is considering new revenue sources, such as carbon border taxes, digital levies, and a financial transaction tax. Some member states expressed concerns over the potential economic impact of these measures, while others argued they are necessary to reduce reliance on national contributions to the EU budget.

The European Commission has proposed a series of revisions to the MFF to ensure that EU-funded programs remain adequately supported. However, disagreements persist over the allocation of resources, particularly in balancing investments between southern and eastern member states.

Looking Ahead to the European Council Meeting

The discussions at today’s GAC meeting will serve as a foundation for the European Council meeting on March 20-21, where EU leaders will make final decisions on these critical topics. While there is broad agreement on the need for economic coordination, digital and green investments, and security measures, the details of funding and policy implementation remain contentious.

As the EU navigates a complex global landscape—marked by geopolitical instability, economic uncertainty, and technological shifts—the outcome of this European Council meeting will play a crucial role in shaping the Union’s future direction.

Conclusion

The General Affairs Council’s preparatory discussions reflect the EU’s commitment to strategic policymaking in the face of economic, political, and social challenges. While disagreements persist, the overarching goal remains clear: to ensure a stable, competitive, and resilient European Union in 2025 and beyond.

With the European Council meeting just days away, all eyes will be on Brussels as leaders seek to reach consensus on the Union’s priorities and policy directions for the coming year.