Can the EU step in if Donald Trump goes ahead with the cutbacks at the US development agency USAID as announced and projects around the world are left without funding? This question is also likely to be on the minds of the development ministers at tonight’s informal dinner and tomorrow’s informal meeting in Warsaw. On the official agenda: How the geopolitical instrument of the Global Gateway can be expanded and the resilience of partner countries further strengthened. In view of the looming catastrophe, this sounds strangely out of date.
Instability will increase, especially in the eastern neighborhood, the Balkans, and North Africa, if USAID, often the largest donor, suddenly drops out. Independent media are already expecting to have to cease operations. NGOs that specialize in fact-checking or journalist training are on the brink of collapse. Projects that serve to strengthen civil society are generally at risk. Local oligarchs will quickly be able to fill the vacuum. Russian or Chinese influence will be able to spread even more freely.
The EU cannot fill the gap left by others alone, warned EU Commissioner Hadja Lahbib last week at the Ambassadors’ Conference in Brussels with regard to humanitarian aid. In view of the already growing need, everyone must make their contribution. In contrast to the “transactional” Donald Trump, the EU is a predictable partner, but the EU cannot become the “donor of last resort”, added Development Commissioner Jozef Síkela. That sounds fatalistic. Lamenting is useless; what is needed is a concept of how Europe can react to the looming vacuum and make more funds available. It would also be an opportunity to strengthen its reputation as a reliable partner.
Work on the Action Plan for the automotive industry, which Transport Commissioner Apostolos Tzitzikostas is due to present on March 5, is in the decisive phase. Following the launch of the Strategic Dialogue on the future of the industry on Jan. 30, at which Commission President Ursula von der Leyen heard from CEOs of manufacturers and suppliers as well as representatives of NGOs and trade unions, the second phase of the discussion format is now beginning.
Under the leadership of commissioners, industry representatives are invited to five thematic workstrands. The sessions, each lasting two hours, take place in the following formats:
So far, the participants do not know the agenda for the meetings of the working groups. However, it is assumed in the industry that the two-hour meetings are more for the purpose of exchanging ideas and not for drawing up resolutions.
The Commission’s consultation is running in parallel. Comments can be submitted until Feb. 13. On March 3, there will be another round of the Autodialogue at senior management level, at which von der Leyen will again hear the representatives who were already present at the launch on January 30. This leaves a total of three weeks until the Action Plan is presented. Lobbyists have rarely had so little time to influence an important industry decision.
At the end of February, the entire college will also be traveling to India for two days on the 27 and 28, meaning that the commissioners will only be able to work to a limited extent.
In view of the tight schedule and the organization of the work strands, suppliers and manufacturers assume that the Commission has largely completed the action plan. It is reported that von der Leyen has not delegated the work, but is making the decisions herself. At official level, DG Grow is said to be in charge, DG Clima and DG Move are involved. DG Grow reports to Vice-President Séjourné, but Transport Commissioner Tzitzikostas is to present the Action Plan.
It is expected that the Action Plan will make clear how the Commission intends to deal with the threat of fines for manufacturers for failing to meet the CO2 fleet targets for 2025. As the fines of up to 15 billion euros are additional revenue for the EU budget, no separate legislative procedure is necessary if the Commission wants to refrain from levying the fines, according to Brussels. It is also expected that the Action Plan will at least define a position on other important issues:
Statements are also expected on social leasing programs to boost sales of EVs and decarbonization requirements for company fleets. In the case of incentives for EVs, local content clauses should ensure that value creation is promoted in Europe.
It is unclear how willing von der Leyen is to meet the demands of manufacturers and suppliers for an easing of the CO2 fleet limits. Participants in the kick-off meeting reported that von der Leyen was visibly affected when the CEOs presented the serious situation of the industry and their demands. In contrast, Climate Commissioner Hoekstra was largely unimpressed. It remains to be seen whether he will offer resistance to cutting back on climate targets.
The EU Commission wants to deliver when it comes to cutting red tape. Following the announcement by Climate Commissioner Wopke Hoekstra to exempt the majority of companies from CBAM, German SMEs are satisfied. A spokeswoman for the DIHK said on Friday that the effort involved in CBAM was far too great for many small imports.
In addition, producers often lack the data for the CO2 content of goods, but importers are still responsible: “The fact that the EU Commission is planning to simplify both aspects – through a higher threshold for the reporting obligation and through standard values for the reports – is good news.”
In the current test phase of the CBAM, importers will have to report data on the CO₂ content of imports for goods worth 150 euros or more, and from 2026 they will also have to pay levies. This is intended to compensate for the disadvantage for domestic producers who are subject to European emissions trading and who are threatened by imports from countries where the CO2 price is lower or which have not yet introduced emissions trading at all.
Table.Briefings already reported in mid-January that Climate and Tax Commissioner Wopke Hoekstra is having the de minimis threshold for imports and protection for export goods reviewed. Last Thursday, Hoekstra first made a political statement in the Financial Times and then in the EU Parliament’s Subcommittee on Taxation. One-fifth of importers would have to pay around 97 percent of the levies in the future, said the Commissioner. “Wouldn’t it be wise to let the 80 percent off the hook in terms of the administrative burden? In my opinion, yes.”
The environmental organization Germanwatch also understands the argument. “I do not assume that an exemption for a few percent of imported CBAM goods will lead to significant problems for competitiveness or climate action,” says climate expert Oldag Caspar. However, it depends on the details and trading partners should not get the impression that the EU is dismantling its border adjustment mechanism.
According to “Contexte”, the Directorate-General for Taxation revealed further details at a meeting with stakeholders shortly after Hoekstra’s appearance in Parliament. According to the report, the simplifications are to be part of the first omnibus law to reduce bureaucracy, which the Commission intends to present on Feb. 26, as previously announced. According to a presentation on Thursday, the DG proposes exempting companies from the tax that import products with an annual carbon footprint of less than 100 tons.
According to Handelsblatt, the monetary value will no longer be the sole criterion for calculating the levy. There should also be a simplification of the information currently required on the third country.
According to “Contexte”, a major revision of the regulation will follow in the second half of the year. On the one hand, the Commission wants to address the issue of exports once again. Export-oriented industries have long complained that protection against CO2-intensive imports alone is of little help to them – they would prefer to continue to receive free certificates in European emissions trading. However, the Commission’s tax experts also want to look into including other sectors in the scope of the CBAM – refineries and the chemical and paper industries are being discussed.
So far, the CBAM applies to imports of cement, iron, steel, aluminum, fertilizers, electricity, and hydrogen. The Commission now also wants to examine extending the mechanism to products that are downstream of these products in the value chain. Indirect emissions could also be included to a greater extent. The Commission also wants to take measures against the circumvention of the CBAM by third countries.
On Friday, CDU MEP Peter Liese suggested a further possible simplification of the levies on imports. While the carbon footprint of a load of raw steel costing EUR 150 may be relevant, the situation is different for a package of special screws costing EUR 150. “We should therefore also have threshold values for the weight and not just the value of goods,” said the environmental politician.
Open source is here to stay. Most people who deal with software projects on a daily basis are aware of this: Whether for apps, operating platforms on the internet or machine control – established open standards are better than reinventing the wheel. The multiple-eyes principle and the increasing maturity of software make security vulnerabilities less likely. And young companies can start adding value as soon as they enter the market instead of having to work out the basics first.
In the field of artificial intelligence, these open ecosystems are emerging right now. It is clear that the development of large language models (LLMs) with their unlimited data, computing, and resource requirements is only open to a few. Nevertheless, the release of the open-source AI DeepSeek recently caused considerable price falls on the stock markets after the developers quoted a paltry six million US dollars as the budget for training – a fraction of the more than 100 million US dollars that OpenAIs has set aside for its current model.
For many European companies, however, such resources are not available. The ongoing operation of even small AI models runs into the thousands, regardless of whether they procure the hardware themselves or rent computing time from the American cloud top dogs.
If Meta offers its Llama model in its entirety for download on the Internet, virtually nobody can operate this “full version” with its parameters running into the hundreds of billions and trillions. Models reduced to a few billion parameters can also be run on more affordable hardware, but may not offer the same level of quality (which is always the case with hallucinating LLMs). The fact that Meta describes its Llama as open source is therefore more of a fig leaf and is also rightly criticized as “open-washing” due to restrictive conditions in the license.
So is open source AI the European answer to Meta, OpenAI and DeepSeek? Last week, the European Commission announced that it would invest EUR 37.4 million in the development of a European open source LLM called OpenEuroLLM. Compared to EUR 25,000 million investment capital for OpenAI, this amount is also rather small, but it is a start.
The availability of a European open source AI could allow start-ups and SMEs to use the technology as a basis for their own further developments. There are many demands for trustworthy AI. The open source business model has the potential to provide answers to demands for transparency and traceability, as the open source idea is best described by the four freedoms it takes from the free software movement: Use, Study, Share, and Improve.
For software, this basically means that the source code and everything needed to operate, understand, further develop and distribute it is granted by means of a license agreement. For AI, the Open Source Initiative (OSI, which coined the term in 1998) presented its first open source AI definition in October. This is because AI raises a number of new questions in relation to the four freedoms.
There is still a heated debate as to whether AI can be considered “open” if not all data is supplied under equally open licenses. Without being able to shed final light on this at this point: An overly strict approach would mean that only a vanishingly small proportion of AI could ever be “open”. Even open data sets may not always be passed on, and this would never be possible where highly sensitive medical data requiring special protection is involved.
Unlike Meta for Llama, Deepseek grants a genuine open source license, but it is obvious from its use that the system contains censorship measures in line with the Chinese leadership. How they come about, how deeply they are embedded in the system, and whether they can be removed is still unclear. However, a team from the open source AI platform Hugging Face has already set out to find out.
Meta has now had to admit in court that he used illegal book downloads to train Llama.
A European open source AI would have to disclose all data sets used, if possible under an open license. But all training steps, red teaming processes and guard rails must also be open source. This is because only complete traceability and reproducibility allow companies that use AI to meet all legal requirements, such as those arising from the AI Act, and to rule out the possibility of copyright infringement. Only if companies can design, operate and control AI themselves will this prevent them from reproducing existing dependencies on proprietary providers.
After the OpenEuroLLM training, the Commission still has to answer questions about the financing of ongoing operations, as these costs are also prohibitive. If the right course is set now, the project could prove to be the long-overdue starting signal and recognition of the strategic importance of open source innovation in Europe.
Sebastian Raible manages relations with the EU in Brussels for the European open source business association APELL. The computer scientist worked for nine years as a speaker in the European Parliament, where he was most recently part of the negotiating team for the Artificial Intelligence Act.
Parliament’s slide to the right is also making itself felt in the ECON Committee. This year, as every year, the committee has once again drawn up a report on the European Central Bank’s annual report. The wind has shifted noticeably.
In the last legislature, the reports were strongly influenced by Green and Social Democrat MEPs. They put pressure on the ECB to keep an eye on its secondary objectives so that it could also use its influence in the fight against climate change.
Two years ago, when Green MEP Rasmus Andresen was the rapporteur and the eurozone inflation rate was above eight percent, the report stated that inflation was “mainly supply-driven” and that the ECB had only “limited influence” to combat supply-driven inflation.
Alternative monetary policy concepts were also mentioned, for example that rising corporate profits had had an important influence on the inflation episode of 2022. The report devoted an entire chapter to climate-related aspects of monetary policy.
Pressure from the Greens and Social Democrats was probably partly responsible for the ECB’s decision in 2022 to take climate criteria into account when purchasing corporate bonds. In 2023, it decided to gear its bond purchases even more strongly in favor of companies with good climate performance.
However, Andresen’s report was probably the high-water mark of green influence on monetary policy. The 2024 report under rapporteur Johan Van Overtveldt (ECR) was already much more conservative. However, Overtveldt’s report also stated that the ECB, as an EU institution, was bound by the Paris Climate Agreement. It also mentions the need for private and public investment to combat supply-driven inflation dynamics “after decades of underinvestment“.
That is now a thing of the past. The latest draft report, which was written by Anouk Van Brug (Renew) from the Netherlands, takes on a much harsher tone. There is no mention of the Paris Climate Agreement. With stronger words than before, the draft approved by the ECON Committee insists on the ECB’s primary mandate: price stability.
The report also “insists” that the ECB must act in a market-neutral manner. And “regrets that the ECB’s measures to decarbonize its corporate bond holdings have not followed a market-neutral approach“.
The report emphasizes the political independence of the ECB. This also means that the ECB is not allowed to make political decisions. Of course, as a public institution with power over potentially unlimited amounts of money, the ECB cannot act or not act in an apolitical manner. De facto, the report demands that the ECB should not take any decisions that could cast doubt on its (highly political) primary mandate. Monetary policy has moved to the right.
The development can also be seen in the support the report receives from the various political groups. While Overtveldt’s report was still supported by the Social Democrats, they abstained from voting on this year’s report in the ECON Committee. Van Brug only found the support of her liberal group, the EPP, and the ECR in the committee.
Today, Monday, the Parliament is discussing the report in the Strasbourg plenary, with a vote on Tuesday. According to reports, the Social Democrats could still be brought on board if the statements on market neutrality are softened somewhat.
Parliament will also vote on an amendment proposed by the Greens on Tuesday. After the US Federal Reserve withdrew from the Network for Greening the Financial System (NGFS) in January shortly before Trump took office, the Greens tabled an amendment praising the ECB for its participation in this network of central banks and supervisory authorities.
If they fail with their proposed amendment, the Greens will only have a small ray of hope in view of the rightward slide: The parliamentary report is so insistent on the independence of the central bank that the ECB can ignore it with a clear conscience. János Allenbach-Ammann
Can the EU step in if Donald Trump goes ahead with the cutbacks at the US development agency USAID as announced and projects around the world are left without funding? This question is also likely to be on the minds of the development ministers at tonight’s informal dinner and tomorrow’s informal meeting in Warsaw. On the official agenda: How the geopolitical instrument of the Global Gateway can be expanded and the resilience of partner countries further strengthened. In view of the looming catastrophe, this sounds strangely out of date.
Instability will increase, especially in the eastern neighborhood, the Balkans, and North Africa, if USAID, often the largest donor, suddenly drops out. Independent media are already expecting to have to cease operations. NGOs that specialize in fact-checking or journalist training are on the brink of collapse. Projects that serve to strengthen civil society are generally at risk. Local oligarchs will quickly be able to fill the vacuum. Russian or Chinese influence will be able to spread even more freely.
The EU cannot fill the gap left by others alone, warned EU Commissioner Hadja Lahbib last week at the Ambassadors’ Conference in Brussels with regard to humanitarian aid. In view of the already growing need, everyone must make their contribution. In contrast to the “transactional” Donald Trump, the EU is a predictable partner, but the EU cannot become the “donor of last resort”, added Development Commissioner Jozef Síkela. That sounds fatalistic. Lamenting is useless; what is needed is a concept of how Europe can react to the looming vacuum and make more funds available. It would also be an opportunity to strengthen its reputation as a reliable partner.
Work on the Action Plan for the automotive industry, which Transport Commissioner Apostolos Tzitzikostas is due to present on March 5, is in the decisive phase. Following the launch of the Strategic Dialogue on the future of the industry on Jan. 30, at which Commission President Ursula von der Leyen heard from CEOs of manufacturers and suppliers as well as representatives of NGOs and trade unions, the second phase of the discussion format is now beginning.
Under the leadership of commissioners, industry representatives are invited to five thematic workstrands. The sessions, each lasting two hours, take place in the following formats:
So far, the participants do not know the agenda for the meetings of the working groups. However, it is assumed in the industry that the two-hour meetings are more for the purpose of exchanging ideas and not for drawing up resolutions.
The Commission’s consultation is running in parallel. Comments can be submitted until Feb. 13. On March 3, there will be another round of the Autodialogue at senior management level, at which von der Leyen will again hear the representatives who were already present at the launch on January 30. This leaves a total of three weeks until the Action Plan is presented. Lobbyists have rarely had so little time to influence an important industry decision.
At the end of February, the entire college will also be traveling to India for two days on the 27 and 28, meaning that the commissioners will only be able to work to a limited extent.
In view of the tight schedule and the organization of the work strands, suppliers and manufacturers assume that the Commission has largely completed the action plan. It is reported that von der Leyen has not delegated the work, but is making the decisions herself. At official level, DG Grow is said to be in charge, DG Clima and DG Move are involved. DG Grow reports to Vice-President Séjourné, but Transport Commissioner Tzitzikostas is to present the Action Plan.
It is expected that the Action Plan will make clear how the Commission intends to deal with the threat of fines for manufacturers for failing to meet the CO2 fleet targets for 2025. As the fines of up to 15 billion euros are additional revenue for the EU budget, no separate legislative procedure is necessary if the Commission wants to refrain from levying the fines, according to Brussels. It is also expected that the Action Plan will at least define a position on other important issues:
Statements are also expected on social leasing programs to boost sales of EVs and decarbonization requirements for company fleets. In the case of incentives for EVs, local content clauses should ensure that value creation is promoted in Europe.
It is unclear how willing von der Leyen is to meet the demands of manufacturers and suppliers for an easing of the CO2 fleet limits. Participants in the kick-off meeting reported that von der Leyen was visibly affected when the CEOs presented the serious situation of the industry and their demands. In contrast, Climate Commissioner Hoekstra was largely unimpressed. It remains to be seen whether he will offer resistance to cutting back on climate targets.
The EU Commission wants to deliver when it comes to cutting red tape. Following the announcement by Climate Commissioner Wopke Hoekstra to exempt the majority of companies from CBAM, German SMEs are satisfied. A spokeswoman for the DIHK said on Friday that the effort involved in CBAM was far too great for many small imports.
In addition, producers often lack the data for the CO2 content of goods, but importers are still responsible: “The fact that the EU Commission is planning to simplify both aspects – through a higher threshold for the reporting obligation and through standard values for the reports – is good news.”
In the current test phase of the CBAM, importers will have to report data on the CO₂ content of imports for goods worth 150 euros or more, and from 2026 they will also have to pay levies. This is intended to compensate for the disadvantage for domestic producers who are subject to European emissions trading and who are threatened by imports from countries where the CO2 price is lower or which have not yet introduced emissions trading at all.
Table.Briefings already reported in mid-January that Climate and Tax Commissioner Wopke Hoekstra is having the de minimis threshold for imports and protection for export goods reviewed. Last Thursday, Hoekstra first made a political statement in the Financial Times and then in the EU Parliament’s Subcommittee on Taxation. One-fifth of importers would have to pay around 97 percent of the levies in the future, said the Commissioner. “Wouldn’t it be wise to let the 80 percent off the hook in terms of the administrative burden? In my opinion, yes.”
The environmental organization Germanwatch also understands the argument. “I do not assume that an exemption for a few percent of imported CBAM goods will lead to significant problems for competitiveness or climate action,” says climate expert Oldag Caspar. However, it depends on the details and trading partners should not get the impression that the EU is dismantling its border adjustment mechanism.
According to “Contexte”, the Directorate-General for Taxation revealed further details at a meeting with stakeholders shortly after Hoekstra’s appearance in Parliament. According to the report, the simplifications are to be part of the first omnibus law to reduce bureaucracy, which the Commission intends to present on Feb. 26, as previously announced. According to a presentation on Thursday, the DG proposes exempting companies from the tax that import products with an annual carbon footprint of less than 100 tons.
According to Handelsblatt, the monetary value will no longer be the sole criterion for calculating the levy. There should also be a simplification of the information currently required on the third country.
According to “Contexte”, a major revision of the regulation will follow in the second half of the year. On the one hand, the Commission wants to address the issue of exports once again. Export-oriented industries have long complained that protection against CO2-intensive imports alone is of little help to them – they would prefer to continue to receive free certificates in European emissions trading. However, the Commission’s tax experts also want to look into including other sectors in the scope of the CBAM – refineries and the chemical and paper industries are being discussed.
So far, the CBAM applies to imports of cement, iron, steel, aluminum, fertilizers, electricity, and hydrogen. The Commission now also wants to examine extending the mechanism to products that are downstream of these products in the value chain. Indirect emissions could also be included to a greater extent. The Commission also wants to take measures against the circumvention of the CBAM by third countries.
On Friday, CDU MEP Peter Liese suggested a further possible simplification of the levies on imports. While the carbon footprint of a load of raw steel costing EUR 150 may be relevant, the situation is different for a package of special screws costing EUR 150. “We should therefore also have threshold values for the weight and not just the value of goods,” said the environmental politician.
Open source is here to stay. Most people who deal with software projects on a daily basis are aware of this: Whether for apps, operating platforms on the internet or machine control – established open standards are better than reinventing the wheel. The multiple-eyes principle and the increasing maturity of software make security vulnerabilities less likely. And young companies can start adding value as soon as they enter the market instead of having to work out the basics first.
In the field of artificial intelligence, these open ecosystems are emerging right now. It is clear that the development of large language models (LLMs) with their unlimited data, computing, and resource requirements is only open to a few. Nevertheless, the release of the open-source AI DeepSeek recently caused considerable price falls on the stock markets after the developers quoted a paltry six million US dollars as the budget for training – a fraction of the more than 100 million US dollars that OpenAIs has set aside for its current model.
For many European companies, however, such resources are not available. The ongoing operation of even small AI models runs into the thousands, regardless of whether they procure the hardware themselves or rent computing time from the American cloud top dogs.
If Meta offers its Llama model in its entirety for download on the Internet, virtually nobody can operate this “full version” with its parameters running into the hundreds of billions and trillions. Models reduced to a few billion parameters can also be run on more affordable hardware, but may not offer the same level of quality (which is always the case with hallucinating LLMs). The fact that Meta describes its Llama as open source is therefore more of a fig leaf and is also rightly criticized as “open-washing” due to restrictive conditions in the license.
So is open source AI the European answer to Meta, OpenAI and DeepSeek? Last week, the European Commission announced that it would invest EUR 37.4 million in the development of a European open source LLM called OpenEuroLLM. Compared to EUR 25,000 million investment capital for OpenAI, this amount is also rather small, but it is a start.
The availability of a European open source AI could allow start-ups and SMEs to use the technology as a basis for their own further developments. There are many demands for trustworthy AI. The open source business model has the potential to provide answers to demands for transparency and traceability, as the open source idea is best described by the four freedoms it takes from the free software movement: Use, Study, Share, and Improve.
For software, this basically means that the source code and everything needed to operate, understand, further develop and distribute it is granted by means of a license agreement. For AI, the Open Source Initiative (OSI, which coined the term in 1998) presented its first open source AI definition in October. This is because AI raises a number of new questions in relation to the four freedoms.
There is still a heated debate as to whether AI can be considered “open” if not all data is supplied under equally open licenses. Without being able to shed final light on this at this point: An overly strict approach would mean that only a vanishingly small proportion of AI could ever be “open”. Even open data sets may not always be passed on, and this would never be possible where highly sensitive medical data requiring special protection is involved.
Unlike Meta for Llama, Deepseek grants a genuine open source license, but it is obvious from its use that the system contains censorship measures in line with the Chinese leadership. How they come about, how deeply they are embedded in the system, and whether they can be removed is still unclear. However, a team from the open source AI platform Hugging Face has already set out to find out.
Meta has now had to admit in court that he used illegal book downloads to train Llama.
A European open source AI would have to disclose all data sets used, if possible under an open license. But all training steps, red teaming processes and guard rails must also be open source. This is because only complete traceability and reproducibility allow companies that use AI to meet all legal requirements, such as those arising from the AI Act, and to rule out the possibility of copyright infringement. Only if companies can design, operate and control AI themselves will this prevent them from reproducing existing dependencies on proprietary providers.
After the OpenEuroLLM training, the Commission still has to answer questions about the financing of ongoing operations, as these costs are also prohibitive. If the right course is set now, the project could prove to be the long-overdue starting signal and recognition of the strategic importance of open source innovation in Europe.
Sebastian Raible manages relations with the EU in Brussels for the European open source business association APELL. The computer scientist worked for nine years as a speaker in the European Parliament, where he was most recently part of the negotiating team for the Artificial Intelligence Act.
Parliament’s slide to the right is also making itself felt in the ECON Committee. This year, as every year, the committee has once again drawn up a report on the European Central Bank’s annual report. The wind has shifted noticeably.
In the last legislature, the reports were strongly influenced by Green and Social Democrat MEPs. They put pressure on the ECB to keep an eye on its secondary objectives so that it could also use its influence in the fight against climate change.
Two years ago, when Green MEP Rasmus Andresen was the rapporteur and the eurozone inflation rate was above eight percent, the report stated that inflation was “mainly supply-driven” and that the ECB had only “limited influence” to combat supply-driven inflation.
Alternative monetary policy concepts were also mentioned, for example that rising corporate profits had had an important influence on the inflation episode of 2022. The report devoted an entire chapter to climate-related aspects of monetary policy.
Pressure from the Greens and Social Democrats was probably partly responsible for the ECB’s decision in 2022 to take climate criteria into account when purchasing corporate bonds. In 2023, it decided to gear its bond purchases even more strongly in favor of companies with good climate performance.
However, Andresen’s report was probably the high-water mark of green influence on monetary policy. The 2024 report under rapporteur Johan Van Overtveldt (ECR) was already much more conservative. However, Overtveldt’s report also stated that the ECB, as an EU institution, was bound by the Paris Climate Agreement. It also mentions the need for private and public investment to combat supply-driven inflation dynamics “after decades of underinvestment“.
That is now a thing of the past. The latest draft report, which was written by Anouk Van Brug (Renew) from the Netherlands, takes on a much harsher tone. There is no mention of the Paris Climate Agreement. With stronger words than before, the draft approved by the ECON Committee insists on the ECB’s primary mandate: price stability.
The report also “insists” that the ECB must act in a market-neutral manner. And “regrets that the ECB’s measures to decarbonize its corporate bond holdings have not followed a market-neutral approach“.
The report emphasizes the political independence of the ECB. This also means that the ECB is not allowed to make political decisions. Of course, as a public institution with power over potentially unlimited amounts of money, the ECB cannot act or not act in an apolitical manner. De facto, the report demands that the ECB should not take any decisions that could cast doubt on its (highly political) primary mandate. Monetary policy has moved to the right.
The development can also be seen in the support the report receives from the various political groups. While Overtveldt’s report was still supported by the Social Democrats, they abstained from voting on this year’s report in the ECON Committee. Van Brug only found the support of her liberal group, the EPP, and the ECR in the committee.
Today, Monday, the Parliament is discussing the report in the Strasbourg plenary, with a vote on Tuesday. According to reports, the Social Democrats could still be brought on board if the statements on market neutrality are softened somewhat.
Parliament will also vote on an amendment proposed by the Greens on Tuesday. After the US Federal Reserve withdrew from the Network for Greening the Financial System (NGFS) in January shortly before Trump took office, the Greens tabled an amendment praising the ECB for its participation in this network of central banks and supervisory authorities.
If they fail with their proposed amendment, the Greens will only have a small ray of hope in view of the rightward slide: The parliamentary report is so insistent on the independence of the central bank that the ECB can ignore it with a clear conscience. János Allenbach-Ammann
