Vulcan View: The latest EU developments 9 June – 13 June

EU and UK reach an agreement in respect of Gibraltar

On Wednesday, 11 June, the EU and the UK reached an agreement resolving the long-standing post-Brexit border issues in Gibraltar. Central to the deal is the removal of passport controls at the border, reconnecting Gibraltar with Spain.

Gibraltar will be incorporated into the EU’s Schengen Area, allowing passport-free movement for residents and approved individuals. The agreement will also implement both Spanish and British officers conducting parallel checks at the border.

Additionally, the agreement enables Gibraltar to enter the EU customs union, in turn abolishing physical inspections for goods moving across the land border. Gibraltar’s Chief Minister Fabian Picardo and UK Foreign Secretary David Lammy emphasised that although the border arrangements will change, the agreement does not affect sovereignty.

European Commission President Ursula von der Leyen welcomes the agreement stating:

“I welcome the conclusion of the talks on the future EU-UK agreement on Gibraltar. It safeguards the integrity of Schengen and the Single Market, while ensuring stability, legal certainty and prosperity for the region.”

Meanwhile, Maroš Šefčovič, the EU’s Commissioner for Trade, shared:

“A truly historic milestone: an EU-UK political agreement on the future relationship concerning Gibraltar. This benefits everyone and reinforces a new chapter in the EU-UK relationship.”

The joint statement by Šefčovič, Spanish minister for Foreign Affairs José Manuel Albares, and UK Foreign Secretary David Lammy, together with the Chief Minister of Gibraltar Fabian Picardo, can be found here.

Next steps include formalising the agreement through a full treaty requiring ratification by Spain, the UK, and the EU institutions.

The recent EU-UK agreement on Gibraltar marks a significant step in resolving one of Brexit’s most complex issues. By integrating Gibraltar into the Schengen Area and EU customs union, the deal promotes smoother cross-border mobility and trade. Additionally, joint border checks and the elimination of passport and goods inspections should foster regional stability and economic continuity. If formal ratification is successful, this agreement may serve as a model for future cross-border arrangements post-Brexit.

 

Bridging the gaps: infrastructure investment key to Ireland’s economic competitiveness

The European Commission published its annual ‘Health Check on the Irish Economy’, offering valuable insights into Ireland’s infrastructure gaps and the growing risk of diminished competitiveness. The report spotlights three critical areas where existing challenges are undermining Ireland’s competitiveness. These include energy, water, and housing supply.

A major challenge for Ireland is managing the increasing demand for energy and housing due to ongoing economic growth. In particular, the growing energy demand of data centres, which is crucial to the digital transformation, is placing additional strain on an energy system already operating near full capacity.

Addressing the issues: energy 

Higher energy prices are primarily influenced by external factors, particularly the Russian offensive in Ukraine. As a result, the government should focus on areas within its control, leveraging Ireland’s strong potential for offshore renewable energy and accelerating investment in grid infrastructure. In May, Energy Minister Darragh O’Brien announced €13 billion in funding to enhance grid capacity over the next five years. Minister O’Brien acknowledged the need to develop a strong infrastructure and expand the country’s renewable energy capacity.

Regarding data centres, Ireland needs a clear governing strategy that accommodates technological growth while aligning with national climate goals. Rather than criticising the existence of such centres, a considered approach is essential to determine how best the country can accommodate them.

Speaking at the Global Economic Summit, Taoiseach Micheál Martin criticized the “ill-informed” and “negative domestic debate” on data centres. He stated that investment in technology must be considered part of the green economy as both the digital and green transition are “key pillars” of Ireland’s future.

In an attempt to harmonize the growing demand for data centre connections and legally binding climate targets, the Commission for Regulation of Utilities placed new restrictions on data centre energy usage. However, industry giants such as Amazon, have warned that Ireland is losing out on investment opportunities due to the restrictions. In contrast, energy tycoons have cautioned that growth in data centre demand is “incompatible” with Ireland’s short-term climate goals.

The government must strategically balance climate objectives with the growing demands of data centres, as both are vital to economic prosperity. In an era defined by digital transformation and sustainability, investing in renewable energy has become essential to maintaining economic competitiveness while working towards a greener future.

Addressing the issues: water 

A reliable water treatment system is crucial for both industrial and domestic use. However, the State is failing to address persistent issues within Ireland’s water supply system, with key infrastructure projects facing ongoing delays. This has a knock-on effect across the economy, undermining investment attractiveness due to unserved sites and impeding the delivery of new housing developments.

For example, the Greater Dublin Drainage Project is currently in planning and has been in limbo for seven years. This is due to the slow judicial process related to objections and appeals, further complicated by the bureaucratic nature of the planning system itself. Uisce Eireann has warned that there will be no capacity for new homes in Dublin in less than three years if the project, which is estimated to take three years, is not delivered.

Projects like the Greater Dublin Drainage Project are becoming increasingly important due to the rising volumes of wastewater, population growth, economic expansion, and the necessity for newly constructed buildings to be connected to the pipelines. As the government has consistently fallen short of new housing targets, prioritising water connections as part of initial groundworks is essential to accelerating housing delivery and enabling development.

Minister Jack Chambers launched a public consultation for the Review of the National Development Plan. The objective of the consultation is to inform the government’s ambition to prioritise the delivery of “transformative, critical and growth-enhancing infrastructure”. This will determine the level of funding needed for capital infrastructure projects over the next ten years. In the context of the review, Uisce Eireann has stated that in addition to the 12 billion needed to deal with the State’s water infrastructure needs up until 2029, an extra 3.7 billion will be required in 2030.

Ultimately, barriers to project delivery must be addressed if Ireland is to remain competitive. Dublin, as the economic hub, plays a central role in attracting skilled workers. However, this depends on the availability of adequate housing. There are clear and interconnected links between the three core infrastructure pillars: energy, water, and housing. The government must strike a balance between meeting industry demands, securing reliable domestic supply, and advancing sustainable, green practices.

 

European Commission announces 18th sanctions package against Russia

On Tuesday, 10 June, European Commission President Ursula von der Leyen and High Representative Kaja Kallas unveiled a proposal for an 18th package of sanctions against Russia. They announced significant new measures to choke off Moscow’s financial and military capabilities. The proposals target Russia’s lucrative energy revenues, its banking sector, and the international network supporting its war effort in Ukraine. The move, coordinated with international partners, signals a renewed determination to increase economic pressure on the Kremlin, with the Commission  President stating that “strength is the only language that Russia will understand” as it continues its full-scale invasion.

Sanctioning Russia’s energy sector

A central pillar of the new sanctions package is a concerted effort to slash the income Russia earns from its vast energy resources. The EU is taking aim at the so-called ‘shadow fleet’ of tankers that Moscow uses to circumvent existing restrictions and transport its oil across the globe. The proposal aims to add 77 more vessels to the sanctions list, increasing the total number of targeted ships to over 400. “When sanctioned, Russia’s shadow fleet tankers cannot dock in ports and Russia has to find new vessels,” explained High Representative Kallas: “This costs them more and runs down their profits.”

Moreover, in a direct move to cut deeper into oil revenues, the Commission has proposed lowering the price cap on Russian crude oil, a measure enforced by the Group of Seven (G7) nations. The plan is to reduce the cap from $60 to $45 a barrel, pushing it significantly below the current market price. Furthermore, the proposals aim to close a critical loophole by banning the import of refined petroleum products that are produced in other countries using Russian crude oil. In a move signalling a permanent shift away from Russian energy dependence, the EU also intends to sanction the Nord Stream gas pipelines to “prevent Russia from generating any revenue in the future in this way.”

Targeting Russian banks and military suppliers

The EU plans to escalate its financial restrictions far beyond simply removing banks from SWIFT, the global financial messaging network. The proposal calls for a full transaction ban on 22 additional Russian banks, effectively freezing them out of the international financial system. Crucially, these measures would also apply to banks in third countries that are found to be helping Russia evade sanctions.

The package also targets the international supply chain that feeds Russia’s war machine. The EU is looking to blacklist 22 more companies, including some based in China and Belarus, for their role in producing weapons or supplying dual-use goods—items with both civilian and military applications. This would bring the total number of entities facing such stringent export restrictions to over 800. The message is clear: any company, regardless of its location, that aids Russia’s military efforts will face consequences. As the High Representative underscored: “Putin’s ability to sustain the war very much depends on the support he receives from third countries.”

Conclusions

This 18th sanctions package represents a significant escalation in the economic pressure campaign against Russia. The EU maintains that previous sanctions have already had a substantial impact, pointing to Russia’s shrinking economy and dwindling sovereign wealth fund. The proposals will now be debated by the 27 EU member states, who must unanimously agree for them to be adopted, although Slovakia and Hungary could hamper its adoption.

 

Compliments of Vulcan Consulting – a member of the EACCNY