FRIEDRICH-EBERT-STIFTUNG AWAITING THE GERMAN EU PRESIDENCY: CHALLENGES AND OPTIONS FROM AN EASTERN EUROPEAN PERSPECTIVE vulnerabilities and limitations of local labour markets: while the West is trying to cope with shortages of labour, Eastern Europe is seeking opportunities for all categories of workers, thus placing the issues of cohesion and convergence in a different, yet realistic light. During further debates on this topic, the German EU Presidency may find itself in a position where it is forced to counteract tendencies to call into question the free movement of labour within the bloc, but in this context, it can perhaps build on its own special experience to advance a unified approach to social protection standards for seasonal workers. German­Romanian governmental cooperation can serve as an example of how to prevent the EU or bilateral relationships from becoming hostage to domestic populism. A solution-based approach remains the best option to bolster citizen confidence and the feeling that there are – but should not be – any double standards. UPHOLDING DEMOCRACY AND RULE-OF-LAW PRINCIPLES – HEATED DISPUTES AHEAD? As the Coronavirus pandemic has revealed new challenges to democracy and rule of law across the EU, controversial decisions in countries like Poland and Hungary have fuelled the debate over the need to observe rule-of-law principles under crisis conditions in order to limit possible abuses and dangerous precedents. Strengthening the powers of governments in times of crisis to ensure immediate responses to pressing challenges should not contribute to a deepening of the crisis itself by casting doubt on national authorities' true intentions. In the Coronavirus context, the ruling forces in Hungary have faced accusations of taking»rule by decree« too far, even to the point of instituting measures to»silence« criticism, without ensuring a better response to the Coronavirus in the process. The ruling party of Poland has been accused of pushing through controversial legislation, from changes to the electoral code to introducing restrictions on abortion rights and allegedly launching attacks on civil society. If these charges are true, the intent behind such measures goes beyond generalised corruption and rule-of-law deficits, and red-flag instrumentalisation of a public health crisis to promote political agendas and remain»under the radar« as the EU attempts to deal with the effects of the pandemic and shift priorities at the level of the EU Member States. Current accusations being levied against Budapest and Warsaw once again raise the issue of linking EU funding to rule-of-law criteria, in order to tie the access of Hungary and Poland to needed funding. This means Berlin should be prepared on the one hand for a certain degree of CEE wariness as regards the initiative(if not solidarity with Poland and/or Hungary), and on the other, for pan-EU disputes with accusations being traded, including a return to conspiracy theories(in the past, populists in the East have, with varying degrees of success, peddled the false narrative that the West treats the East as a»colony« and is not really interested in the development of the new Member States). How this issue plays out will depend on two key aspects: first, on how vocal and radical Poland and Hungary become; and second, on cohesion within the Visegrad group in the wake of recent political changes in Slovakia. For different reasons, Romania and Bulgaria will most likely be on board when it comes to connecting European funds and the rule-of law-requirement: the liberal Romanian leadership has been a long-time supporter of the approach, while the Bulgarians will fall in line while quietly negotiating on other fronts. For these two countries, who are still under the Cooperation and Verification Mechanism, an end to monitoring(at least as an agreed timetable) or sequential access to Schengen could sweeten the pill. All in all, this highly divisive topic will be addressed as part of the upcoming negotiations on the next MFF, although the crisis has prompted the EU to drop this discussion from the EU's priority list(something that would not really displease Eastern Europeans, although different countries have different expectations and stakes), especially as the applicability of the rule-of-law criteria to EU funding may be challenged by the targeted capitals, based on the arguments of sharing a common burden at the level of the EU. As underlined by the Commission's 2018 proposal,»the Union is a community of law and its values constitute the very basis of its existence. They permeate its entire legal and institutional structure and all its policies and programs. Respect for these values must therefore be ensured throughout all Union policies. This includes the EU budget, where respect for fundamental values is an essential precondition for sound financial management and effective EU funding.« Based on the link between rule of law and sound management of EU funds, the next MFF is set to drive, on the one hand, a»protective« approach(safeguarding the EU budget from breaches of rule of law, while nurturing EU recovery) and, on the other hand, a »strategic« one, reinforcing the leverage of EU funding to promote common European values. It will therefore be the task of Germany's EU Presidency to strike a balance in forging an agreement between EU Member States on this complex matter. DEALING WITH STRATEGIC ALLIES AND COMPETITORS IN TIMES OF A ZEITGEIST MARKED BY GREAT POWER COMPETITION The EU's current roadmap for recovery acknowledges that the EU »as a global actor« has a»particular responsibility to help frame a global response through multilateralism and a rules-based international order, with its partners in the UN, in the WTO, in the G20 and in the G7.« In this framework, a sound contribution to preserving fully functioning multilateral approaches and a rules­based international order constitutes one of the main expectations from the German EU Presidency. The realignment of global alliances- and particularly the multilayer competition between the United States of America and China- has been pushing the limits of the EU's traditional deal-making power and exacerbating political differences between European capitals, each driven, as it were, by its own strategic priorities. Thus, while 6