A busy week lies ahead: On Tuesday, the EU Commission will present its concept for the electricity market reform in Strasbourg, then on Thursday, a whole package is on the agenda in Brussels – from the European response to the US Inflation Reduction Act to the Critical Raw Materials Act draft and details on the hydrogen bank. Everything is coming thick and fast, but for our readers, most of the content will not be entirely new.
The IRA and certain minerals for EV batteries were also the topics of the meeting between US President Joe Biden and Commission President Ursula von der Leyen. Of greater significance, however, are the agreements they reached with regard to China. Read more in Eric Bonse’s and my analysis.
Keeping EU borders and markets open even in the event of a pandemic or war is the purpose of the Single Market Emergency Instrument. The European Parliament’s rapporteur, Andreas Schwab, is now calling for substantial changes to the Commission’s proposal: The authorities should not be allowed to dictate to companies so quickly what they have to produce in a crisis. Markus Grabitz knows the details.
The US and EU plan to cooperate even closer in the future against rivals such as China. Both sides want to work to “strengthen our economic security and national security”, announced US President Joe Biden and EU Commission President Ursula von der Leyen after their meeting in Washington on Friday evening. This includes diversifying supply chains and increasing collective resilience to non-market policies and economic coercion.
China is mentioned only once in the joint statement, but the warnings are primarily directed at Beijing and are to be fleshed out by the time of the G7 summit in Japan in mid-May. The rapprochement agreed upon by Biden and von der Leyen in the dispute over the Inflation Reduction Act (IRA) and its massive US subsidies for eco-friendly technologies also ultimately helps to form a front against Beijing. The US government and the EU Commission now want to swiftly sign an agreement on critical minerals that would grant European battery companies access to IRA EV subsidies.
The Europeans have so far avoided taking Washington’s side in the superpower struggle with Beijing for the sake of economic interests. However, faced with an aggressive neighbor, Russia, the EU is increasingly seeking closer ties with its transatlantic ally. Bernd Lange, chair of the Committee on International Trade in the European Parliament, is already warning of an “anti-China coalition” that could lead to a “stronger bloc formation” to the detriment of all.
Von der Leyen does not go as far as Washington regarding talks about decoupling from China. Like the German government, she prefers the term “de-risking” – that is, reducing dependencies on China.
In their statement, however, she and Biden announced closer cooperation to further prevent the outflow of sensitive technologies that could strengthen the military and intelligence capabilities of strategic rivals. To this end, both sides plan, on the one hand, to tighten up the already existing controls on dual-use exports, foreign direct investment and research cooperation.
The EU and the USA also want to create new instruments. The statement mentions explicitly so-called outbound investments. The US government wants to introduce a new tool this year to make it more difficult for domestic companies to invest in security-relevant sectors in China. Washington is urging the Europeans to do the same.
The discussions about it in the EU Commission are still at an early stage. But there are many indications that the Commission will propose a monitoring system for such outbound investments before the end of the year. It must be prevented that European companies can circumvent export controls for dual-use goods by building factories in the destination country, according to high-ranking EU circles.
Recently, the Europeans have also followed Washington’s example on other related issues.
Read also at our colleagues at China.Table how Beijing landed a diplomatic coup in the Middle East.
The rapporteur for the Single Market Emergency Instrument (SMEI), Andreas Schwab (CDU), wants to give the authorities fewer intervention powers in the event of a crisis than envisaged by the EU Commission. Instead, he wants to strengthen the self-responsibility of companies. This comes from the explanatory notes to his report, to be published soon. The notes are available to Table.Media.
Last fall, the Commission proposed a series in response to the first phase of the Covid pandemic. At that time, border closures, export bans on medical equipment and travel bans for medical personnel had severely affected the internal market. In crisis mode, the Commission is now planning deep market interventions such as production targets for companies and the obligation to build up strategic reserves.
While Schwab in principle supports the Commission’s approach of ensuring that the free flow of goods, services and people functions even in the event of a pandemic, a military conflict or any other unforeseeable crisis, he wants to focus more on the concept of internal market resilience. For this purpose, the instrument is to be renamed from Single Market Emergency Instrument (SMEI) to Internal Market Emergency and Resilience Act (IMERA).
Schwab demands that interfering in the market should only be a last resort. He believes Market-based measures and cooperation between governments and companies are generally the more efficient response to a crisis.
The Christian Democrat proposes to strengthen the resilience of supply chains by promoting cooperation between companies, member states and the Commission on a voluntary basis during regular operations. Every two years, stress tests are to be conducted, with emergency exercises and crisis protocols involving all relevant actors such as companies, social partners and experts. Schwab suggests creating an online platform where businesses can provide their input.
Schwab does not want to place the responsibility for building up strategic reserves in the alarm phase with the Commission, but with the member states. The member states would already have relevant experience in this area. He also warns that the pro-cyclical creation of reserves in both the “alarm” and the “emergency” mode harbors risks: Resulting bottlenecks and excessive prices could occur, distorting competition.
The most important task, he says, is to maintain the flow of goods, services and people during an emergency. The focus should be on the border regions between the member states, where bottlenecks are most likely to occur. He calls for a uniform definition of the term “remote work“.
Schwab wants to limit information requests by authorities to companies and fundamentally change them to a voluntary basis. The regulations for the use of data and the protection of business secrets must be improved. The law should ensure that public authorities can only dictate to companies what they have to produce if there is really no other way. In addition, the economic existence of companies should not be jeopardized.
The extent of financial sanctions against companies should be reconsidered, Schwab said, since crises put companies under economic strain as it is. Furthermore, member states should be able to issue a call for solidarity in a crisis if there is a glaring shortage of crisis-relevant goods or services. Accession candidates and the countries of the European Free Trade Association (EFTA) should then also be included in the procurement process.
The Commission should also develop an EU-wide digital tool based on the COVID certificate. According to Schwab, it should ensure that “fast lanes” for important goods and services function in the event of a crisis. In the advisory body for the crisis instrument, the status of the European Parliament and the neighboring countries such as Switzerland, Norway, Iceland and Liechtenstein is to be upgraded. The Commission plans to admit them only as observers.
Europe wants the energy transition – but it requires raw materials for solar cells and electric cars, including chrome, platinum and iron ore from South Africa. In February, Hannah Pilgrim met with South African organizations representing miners and local residents. The 30-year-old coordinates the working group network AK Rohstoffe at the NGO Powershift. She demands that the EU should ensure higher standards and a say for those affected whenever it sources so-called critical raw materials from the Global South.
Pilgrim studied social sciences and human geography, worked for NGOs on hunger crises and was involved in the Hambach Forest against coal mining. Her life’s work, however, revolves around metallic raw materials and rare earth elements, Pilgrim says. These could soon be more important than oil and gas, because they are used in many technologies that Europe urgently needs for digitization and the energy transition.
“These are not just raw materials that need to be extracted,” Pilgrim says. In South Africa, she has visited villages where mining has caused sinkholes as deep as power poles. “There simply is no such thing as responsible or green mining per se,” Pilgrim says. But the EU can ensure higher social and environmental standards in supply chains, she says.
Pilgrim also believes that the local population needs to have a say: “Not just information campaigns, but also the right to say no in case of doubt. After all, mining reproduces neocolonial structures in many places. For those affected, wounds from past decades are still open. “Companies have not provided sufficient compensation, and in some cases have not even apologized,” Pilgrim criticizes. “We can’t expect people to just trust them now.”
She attended the Alternative Mining Indaba in Cape Town – a conference for organizations representing people affected by mining. They have high expectations for Europe, for the Green Deal and the planned Critical Raw Materials Act. The EU wants to use these to secure the supply of so-called critical raw materials. Above all, the member states want to diversify the supply chains and become less dependent on individual states.
For Hannah Pilgrim, the focus is too much on the supply of metals and rare earth elements, and not enough on European demand – which, she says, is far too high. The EU must set itself the goal of using fewer critical raw materials through lower consumption and more recycling, she says. This is what Powershift demands in a joint paper with organizations such as BUND and the Heinrich Böll Foundation. After all, compared to the rest of the world, the European population consumes far too many raw materials, Pilgrim says. “This is also about global justice.” Jana Hemmersmeier
A busy week lies ahead: On Tuesday, the EU Commission will present its concept for the electricity market reform in Strasbourg, then on Thursday, a whole package is on the agenda in Brussels – from the European response to the US Inflation Reduction Act to the Critical Raw Materials Act draft and details on the hydrogen bank. Everything is coming thick and fast, but for our readers, most of the content will not be entirely new.
The IRA and certain minerals for EV batteries were also the topics of the meeting between US President Joe Biden and Commission President Ursula von der Leyen. Of greater significance, however, are the agreements they reached with regard to China. Read more in Eric Bonse’s and my analysis.
Keeping EU borders and markets open even in the event of a pandemic or war is the purpose of the Single Market Emergency Instrument. The European Parliament’s rapporteur, Andreas Schwab, is now calling for substantial changes to the Commission’s proposal: The authorities should not be allowed to dictate to companies so quickly what they have to produce in a crisis. Markus Grabitz knows the details.
The US and EU plan to cooperate even closer in the future against rivals such as China. Both sides want to work to “strengthen our economic security and national security”, announced US President Joe Biden and EU Commission President Ursula von der Leyen after their meeting in Washington on Friday evening. This includes diversifying supply chains and increasing collective resilience to non-market policies and economic coercion.
China is mentioned only once in the joint statement, but the warnings are primarily directed at Beijing and are to be fleshed out by the time of the G7 summit in Japan in mid-May. The rapprochement agreed upon by Biden and von der Leyen in the dispute over the Inflation Reduction Act (IRA) and its massive US subsidies for eco-friendly technologies also ultimately helps to form a front against Beijing. The US government and the EU Commission now want to swiftly sign an agreement on critical minerals that would grant European battery companies access to IRA EV subsidies.
The Europeans have so far avoided taking Washington’s side in the superpower struggle with Beijing for the sake of economic interests. However, faced with an aggressive neighbor, Russia, the EU is increasingly seeking closer ties with its transatlantic ally. Bernd Lange, chair of the Committee on International Trade in the European Parliament, is already warning of an “anti-China coalition” that could lead to a “stronger bloc formation” to the detriment of all.
Von der Leyen does not go as far as Washington regarding talks about decoupling from China. Like the German government, she prefers the term “de-risking” – that is, reducing dependencies on China.
In their statement, however, she and Biden announced closer cooperation to further prevent the outflow of sensitive technologies that could strengthen the military and intelligence capabilities of strategic rivals. To this end, both sides plan, on the one hand, to tighten up the already existing controls on dual-use exports, foreign direct investment and research cooperation.
The EU and the USA also want to create new instruments. The statement mentions explicitly so-called outbound investments. The US government wants to introduce a new tool this year to make it more difficult for domestic companies to invest in security-relevant sectors in China. Washington is urging the Europeans to do the same.
The discussions about it in the EU Commission are still at an early stage. But there are many indications that the Commission will propose a monitoring system for such outbound investments before the end of the year. It must be prevented that European companies can circumvent export controls for dual-use goods by building factories in the destination country, according to high-ranking EU circles.
Recently, the Europeans have also followed Washington’s example on other related issues.
Read also at our colleagues at China.Table how Beijing landed a diplomatic coup in the Middle East.
The rapporteur for the Single Market Emergency Instrument (SMEI), Andreas Schwab (CDU), wants to give the authorities fewer intervention powers in the event of a crisis than envisaged by the EU Commission. Instead, he wants to strengthen the self-responsibility of companies. This comes from the explanatory notes to his report, to be published soon. The notes are available to Table.Media.
Last fall, the Commission proposed a series in response to the first phase of the Covid pandemic. At that time, border closures, export bans on medical equipment and travel bans for medical personnel had severely affected the internal market. In crisis mode, the Commission is now planning deep market interventions such as production targets for companies and the obligation to build up strategic reserves.
While Schwab in principle supports the Commission’s approach of ensuring that the free flow of goods, services and people functions even in the event of a pandemic, a military conflict or any other unforeseeable crisis, he wants to focus more on the concept of internal market resilience. For this purpose, the instrument is to be renamed from Single Market Emergency Instrument (SMEI) to Internal Market Emergency and Resilience Act (IMERA).
Schwab demands that interfering in the market should only be a last resort. He believes Market-based measures and cooperation between governments and companies are generally the more efficient response to a crisis.
The Christian Democrat proposes to strengthen the resilience of supply chains by promoting cooperation between companies, member states and the Commission on a voluntary basis during regular operations. Every two years, stress tests are to be conducted, with emergency exercises and crisis protocols involving all relevant actors such as companies, social partners and experts. Schwab suggests creating an online platform where businesses can provide their input.
Schwab does not want to place the responsibility for building up strategic reserves in the alarm phase with the Commission, but with the member states. The member states would already have relevant experience in this area. He also warns that the pro-cyclical creation of reserves in both the “alarm” and the “emergency” mode harbors risks: Resulting bottlenecks and excessive prices could occur, distorting competition.
The most important task, he says, is to maintain the flow of goods, services and people during an emergency. The focus should be on the border regions between the member states, where bottlenecks are most likely to occur. He calls for a uniform definition of the term “remote work“.
Schwab wants to limit information requests by authorities to companies and fundamentally change them to a voluntary basis. The regulations for the use of data and the protection of business secrets must be improved. The law should ensure that public authorities can only dictate to companies what they have to produce if there is really no other way. In addition, the economic existence of companies should not be jeopardized.
The extent of financial sanctions against companies should be reconsidered, Schwab said, since crises put companies under economic strain as it is. Furthermore, member states should be able to issue a call for solidarity in a crisis if there is a glaring shortage of crisis-relevant goods or services. Accession candidates and the countries of the European Free Trade Association (EFTA) should then also be included in the procurement process.
The Commission should also develop an EU-wide digital tool based on the COVID certificate. According to Schwab, it should ensure that “fast lanes” for important goods and services function in the event of a crisis. In the advisory body for the crisis instrument, the status of the European Parliament and the neighboring countries such as Switzerland, Norway, Iceland and Liechtenstein is to be upgraded. The Commission plans to admit them only as observers.
Europe wants the energy transition – but it requires raw materials for solar cells and electric cars, including chrome, platinum and iron ore from South Africa. In February, Hannah Pilgrim met with South African organizations representing miners and local residents. The 30-year-old coordinates the working group network AK Rohstoffe at the NGO Powershift. She demands that the EU should ensure higher standards and a say for those affected whenever it sources so-called critical raw materials from the Global South.
Pilgrim studied social sciences and human geography, worked for NGOs on hunger crises and was involved in the Hambach Forest against coal mining. Her life’s work, however, revolves around metallic raw materials and rare earth elements, Pilgrim says. These could soon be more important than oil and gas, because they are used in many technologies that Europe urgently needs for digitization and the energy transition.
“These are not just raw materials that need to be extracted,” Pilgrim says. In South Africa, she has visited villages where mining has caused sinkholes as deep as power poles. “There simply is no such thing as responsible or green mining per se,” Pilgrim says. But the EU can ensure higher social and environmental standards in supply chains, she says.
Pilgrim also believes that the local population needs to have a say: “Not just information campaigns, but also the right to say no in case of doubt. After all, mining reproduces neocolonial structures in many places. For those affected, wounds from past decades are still open. “Companies have not provided sufficient compensation, and in some cases have not even apologized,” Pilgrim criticizes. “We can’t expect people to just trust them now.”
She attended the Alternative Mining Indaba in Cape Town – a conference for organizations representing people affected by mining. They have high expectations for Europe, for the Green Deal and the planned Critical Raw Materials Act. The EU wants to use these to secure the supply of so-called critical raw materials. Above all, the member states want to diversify the supply chains and become less dependent on individual states.
For Hannah Pilgrim, the focus is too much on the supply of metals and rare earth elements, and not enough on European demand – which, she says, is far too high. The EU must set itself the goal of using fewer critical raw materials through lower consumption and more recycling, she says. This is what Powershift demands in a joint paper with organizations such as BUND and the Heinrich Böll Foundation. After all, compared to the rest of the world, the European population consumes far too many raw materials, Pilgrim says. “This is also about global justice.” Jana Hemmersmeier
