There had long been speculation in Brussels as to whether the Spanish Presidency would convene a special meeting of EU finance ministers to get the stalled negotiations on the new European debt rules off the ice. Now the time has come today. Spain’s minister Nadia Calviño has invited her colleagues in Brussels to a dinner – with an open end. If things don’t work out in the night session, negotiations can continue on Friday at the regular Ecofin meeting. According to diplomats, the chances of reaching an agreement are good. However, the agreement is not guaranteed.
Key points of the new fiscal rules are still open. As a safeguard for debt reduction, as demanded by Germany, Spain proposes that countries with a debt ratio of more than 90 percent of gross domestic product (GDP) should reduce their debt by an average of one percent annually. For countries with a debt ratio of 60 to 90 percent of GDP, the figure is 0.5 percent. Spain is also proposing a guarantee with regard to new debt. Existing structural deficits are to be reduced by up to 1.5 percent of GDP.
To this end, fixed annual reduction targets are to apply, albeit based on the structural primary deficit. However, this is bound to cause stress between the northern and southern EU partners. Reducing the deficit on the basis of the primary balance – which does not include interest payments – would achieve significantly less than on the basis of the structural balance. In other words, consolidation would take considerably longer.
Not surprisingly, Italy, one of the EU countries with the highest debt and interest expenditure, is celebrating the Spanish proposal. Germany and the Netherlands, on the other hand, which stand for a stability-oriented budgetary policy, reject it. It therefore remains exciting for today’s special meeting. Calviño has at least chosen the setting for the dinner so that the ministers can concentrate on the essentials – no culinary feast, just cold cuisine.
On the home stretch to the Buildings Directive, the German government wants to fall behind the Council’s general approach on several points. The member states had already adopted it in October 2022. The current German push revolves around the renovation pathways and the energy-saving targets for 2030, 2040, and 2050.
In addition to the controversial minimum energy performance standards (MEPS) for buildings, national governments should also be allowed to consider “other measures such as subsidies or financial incentives” to achieve the targets. This is what the German government writes in a non-paper for the Council from the end of November, which is available to Table.Media.
“Just last week, the Federal Constitutional Court warned that more needs to be done in the building sector. Without ambitious minimum efficiency standards, it will not be possible to meet the climate targets in the building sector”, says Sebastian Breer from WWF.
The German government is also questioning another point from the joint Council position that was agreed long ago: the renovation requirements for non-residential buildings. “Germany must discuss the options further to ensure that the general approach or a possible compromise solution with the EP does not lead to unreasonable challenges for those affected“, the non-paper states.
The Council and Parliament recently reached a provisional agreement to phase out subsidies for gas-only heating systems from 2025, which the German government is now trying to reconcile with the painstakingly reached agreement on the Building Energy Act. Boilers that are hydrogen-ready are also to continue to be subsidized.
For clarification, the German government proposes a new recital: “It should continue to be possible […] to grant financial incentives in relation to the additional costs for boilers arising from the ability of boilers to run on renewable fuels during a certain transitional period.”
“International efforts to move away from fossil fuels at the COP are coming up against contradictory actions by the German government in Europe”, says WWF employee Breer.
One day before the decisive trilogue, the Permanent Representatives of the Council Presidency yesterday imposed tight constraints. Last Friday, the Spanish presented a compromise proposal on the outstanding energy savings. According to the proposal, residential buildings should save 15 to 20 percent primary energy by 2030 and then 20 to 25 percent by 2035.
However, there were strong signals in Coreper yesterday to aim for the lower values, it was said. The situation is probably similar for the threshold values for non-residential buildings.
Meanwhile, support for the renovation of public buildings came yesterday from a broad alliance of NGOs. The focus is on a segment that has received little attention to date: schools. “We often overlook the importance of the necessary insulation and ventilation of buildings for children’s health“, said Dr. Heinz Fuchsig, occupational physician at the German Climate Change and Health Alliance (KLUG).
As a result of the renovation backlog, 200,000 days of school absences are recorded in Germany every year due to exposure to dampness and mold indoors. Summer heat in school buildings also puts a strain on children and young people.
Ms. Ribera, we have experienced a brilliant start to this COP28. Numerous announcements, the agreement on the Loss and Damage Fund, and the first financing commitments. Now that the excitement has died down a little, where do we stand?
It is a very difficult COP. We have to make sure that the Paris mechanism is finalized and the next steps are set in motion. We left Sharm el-Sheikh last year with mixed feelings. For the first time, there was a conviction that we need to work on loss and damage, but at the same time there was not a single word on reducing emissions. The most important measure to reduce the cost of damage and to reduce losses is to reduce emissions.
One measure would be to phase out fossil fuels?
Yes, we need to implement the package of tripling renewable energies, doubling energy efficiency, and phasing out fossil fuels. But what does the phase-out mean? Some say it’s not about energy, but about emissions. But we need to be coherent and not say we need to reduce emissions when in fact we are talking about fossil fuels. We need to make the fossil fuel-related aspects of the energy transition very clear. We need a strong reduction in supply and demand – both are important.
Where can you find allies for this when even the USA is in favor of CCS?
The EU mandate is very clear in this respect. When we talk about emissions capture, we say that these technologies should only be used in sectors that are difficult to reduce. When it comes to energy systems, we know that there are much smarter and faster solutions.
We believe that there are many more countries calling for clear language on fossil fuels. The absolute minimum should be the Glasgow wording or the G20 wording. Some of the countries that are now most strongly opposed have signed up to the G20 language.
But it was really difficult to achieve this formulation and the G20 energy ministers did not even include it.
But the heads of state and government did. I don’t care what the negotiators or the presidency personally think about any of the elements discussed here. It is about negotiating in good faith and creating the conditions for negotiations. The COP28 Chair has the role of the honest broker.
Is he the honest broker he claims to be?
I hope so. We will be vigilant and demand this. It is good that the President knows what fossil fuels mean, what renewables mean, what finance means, and what role these issues play for Africa or the OPEC countries. He is a very experienced man in this area and has learned a lot in the last year about how we have to make decisions. He is not biased towards one side or the other. We missed that a little in Sharm el-Sheikh. You got the impression that the result was not very balanced. We focused so much on the losses and damage that we forgot about damage limitation.
What about the G77+China? We have seen a funding commitment from the United Arab Emirates here in Dubai. It is the first time that a non-Annex I country has made such a pledge. Do you see discussions in the group that could change the blocs of industrialized countries against non-industrialized countries?
In Paris, we agreed that it is not only historical responsibility that counts – even if it is very important. The current share of environmental pollution and the current share of per capita income and per capita emissions also count. This debate is also taking place in the G77. The G77 countries are well aware that China, the Emirates, or Saudi Arabia are not the same as Rwanda, Cuba, or the Philippines. Who contributes to climate finance will be one of the thorniest issues in the negotiations. And our door is wide open for an updated understanding of fairness and equity in emissions reductions and participation in financing.
Would it be easier for you to negotiate if the G77 bloc were to dissolve? If China and the developing countries were separate?
We as Europeans need to be mindful of the different sensitivities and respect their own governance platform. We should not torpedo their own governance considerations in a dirty way. To understand what is going on, we need to talk to each regional group and alliance within the G77. We are making a mistake if we assume that they all think the same way.
There are also very different opinions within Europe and not every country thinks the same way. How does Team Europe stick together here in Dubai?
That is our task as Council Presidency. Even though there may be differences from country to country, on the whole, we are on the same wavelength. Because we know that we are much more effective when we work together and send the same message with different emphases. This is something we have failed to do in recent years and we need to learn again.
You are talking about the time under the leadership of former Climate Commissioner Frans Timmermans. How is his successor Wopke Hoekstra doing?
Well, he has just started and has traveled the world with the common message of our mandate. He works very honestly and constructively, understands that we have to work as Team Europe and he is very happy to do so. I am sure it will go very well.
There have been attempts within Europe to water down the green agenda and the laws of the Green Deal. Are you sure that Europe still speaks with one voice on green policy?
There were many occasions when things could have exploded due to the different sensitivities. But we overcame that in a sensible way. Sometimes it is difficult because we feel the tensions that exist in Europe. The Spanish presidency had solved various problems within the legislative proposals that nobody thought we could solve. But it’s true, sometimes the problems come from countries that we didn’t expect.
They look at us Germans …
(laughs) The important lesson to be learned from this is that change is so important and so necessary that it cannot be postponed. You have to speed it up. But it can only work if public opinion if citizens feel the benefits of the green agenda and understand what and why we are doing what we are doing.
That sounds a lot like self-criticism.
In too many cases, we have not paid attention to the social and cultural aspects of change. We need to do a better job of explaining and anticipating who will be threatened by change. We need to avoid situations where new political parties use short-term uncertainty to increase uncertainty and noise around the Green Deal. Because in reality, the equation works the other way around: if there is a healthy alliance between social and environmental aspects, we promote economic prosperity. If we understand economics in the traditional way, without paying attention to the social and environmental aspects, it will not last. So we cannot let it stand that anyone says that the institutions have no answer to the problems.
But if you look at Italy, Hungary, Sweden and now the Netherlands, the right-wing populists are already in many governments. How do you intend to change that?
The non-populists should make great efforts to tackle this problem. The biggest defeat is that we have seen parties that used to be serious behave in a very demagogic and populist way. Because when conservative parties move towards the far right, the far right wins, not the center.
Does it look bleak for next year’s European elections?
We will have to do a lot of campaigning and explain what we are doing and why. Because in a more populist parliament, it will be much more difficult for the citizens and the European project. We need to take to the streets and pay much more attention to the people and their concerns. We only have six months. That’s not a lot and we have to use it every single day.
Lenka de Mauro remembers the images she saw on television as a 9-year-old: In the winter of 1989, students rattling bunches of keys symbolically heralded the end of socialism in Czechoslovakia and opened the way to Europe. Today, 34 years later, de Mauro herself works in Brussels, the heart of European politics. She represents the interests of the German insurance industry in the European Union; her official title is Head of European and International Affairs. She sees herself as an “EU mediator”: in Brussels, she makes it clear what the German insurers want when it comes to new laws. In Berlin, she makes it clear what European institutions expect from German insurers.
Back then, in front of the television, she felt: “Something very important is happening.” She soon felt at home not only in her home country in north-eastern Slovakia but throughout Europe. She had already attended a German-Slovak grammar school, then studied translation and law in Heidelberg and passed her state examination. She met her husband, an Italian, with whom she lived for a time in San Sebastián, Spain. In addition to Slovakian and German, De Mauro speaks five other languages: English, Italian, French, Spanish, and Russian.
She worked briefly as a translator in Brussels. In 2015, she took up her first position at the European office of the German Insurance Association (GDV), which she has headed since 2019. There, she learned the very specific language and culture of European legislation: how the stakeholders, authorities, and institutions involved communicate with each other so that a directive is ultimately produced. De Mauro translates corporate interests from German to European – and vice versa.
This year, the Commission presented a proposal to attract more people to the capital markets: the EU Retail Investment Strategy. It envisages banning commissions for certain distribution channels when investment advisors broker insurance policies. De Mauro’s association wants to keep all distribution channels open. This is probably the issue that concerns her the most at the moment, she says. And it is an example of how complex it is to influence European legislation.
Lenka de Mauro is “talking to everyone who has anything to do with it”: she is talking to the European Insurance and Occupational Pensions Authority (EIOPA). She sits down with the cabinet of the responsible Commissioner, as well as with the cabinet of the Commission President and representatives of the Parliament. Her office writes statements and organizes conferences.
She also talks to her colleagues from other countries, because German industry alone cannot assert its interests, says de Mauro. This is how the entire European project works: Germany, Slovakia, and Italy cannot tackle the major tasks, above all the fight against global warming, on their own. It can only be done together. Maximilian Münster
There had long been speculation in Brussels as to whether the Spanish Presidency would convene a special meeting of EU finance ministers to get the stalled negotiations on the new European debt rules off the ice. Now the time has come today. Spain’s minister Nadia Calviño has invited her colleagues in Brussels to a dinner – with an open end. If things don’t work out in the night session, negotiations can continue on Friday at the regular Ecofin meeting. According to diplomats, the chances of reaching an agreement are good. However, the agreement is not guaranteed.
Key points of the new fiscal rules are still open. As a safeguard for debt reduction, as demanded by Germany, Spain proposes that countries with a debt ratio of more than 90 percent of gross domestic product (GDP) should reduce their debt by an average of one percent annually. For countries with a debt ratio of 60 to 90 percent of GDP, the figure is 0.5 percent. Spain is also proposing a guarantee with regard to new debt. Existing structural deficits are to be reduced by up to 1.5 percent of GDP.
To this end, fixed annual reduction targets are to apply, albeit based on the structural primary deficit. However, this is bound to cause stress between the northern and southern EU partners. Reducing the deficit on the basis of the primary balance – which does not include interest payments – would achieve significantly less than on the basis of the structural balance. In other words, consolidation would take considerably longer.
Not surprisingly, Italy, one of the EU countries with the highest debt and interest expenditure, is celebrating the Spanish proposal. Germany and the Netherlands, on the other hand, which stand for a stability-oriented budgetary policy, reject it. It therefore remains exciting for today’s special meeting. Calviño has at least chosen the setting for the dinner so that the ministers can concentrate on the essentials – no culinary feast, just cold cuisine.
On the home stretch to the Buildings Directive, the German government wants to fall behind the Council’s general approach on several points. The member states had already adopted it in October 2022. The current German push revolves around the renovation pathways and the energy-saving targets for 2030, 2040, and 2050.
In addition to the controversial minimum energy performance standards (MEPS) for buildings, national governments should also be allowed to consider “other measures such as subsidies or financial incentives” to achieve the targets. This is what the German government writes in a non-paper for the Council from the end of November, which is available to Table.Media.
“Just last week, the Federal Constitutional Court warned that more needs to be done in the building sector. Without ambitious minimum efficiency standards, it will not be possible to meet the climate targets in the building sector”, says Sebastian Breer from WWF.
The German government is also questioning another point from the joint Council position that was agreed long ago: the renovation requirements for non-residential buildings. “Germany must discuss the options further to ensure that the general approach or a possible compromise solution with the EP does not lead to unreasonable challenges for those affected“, the non-paper states.
The Council and Parliament recently reached a provisional agreement to phase out subsidies for gas-only heating systems from 2025, which the German government is now trying to reconcile with the painstakingly reached agreement on the Building Energy Act. Boilers that are hydrogen-ready are also to continue to be subsidized.
For clarification, the German government proposes a new recital: “It should continue to be possible […] to grant financial incentives in relation to the additional costs for boilers arising from the ability of boilers to run on renewable fuels during a certain transitional period.”
“International efforts to move away from fossil fuels at the COP are coming up against contradictory actions by the German government in Europe”, says WWF employee Breer.
One day before the decisive trilogue, the Permanent Representatives of the Council Presidency yesterday imposed tight constraints. Last Friday, the Spanish presented a compromise proposal on the outstanding energy savings. According to the proposal, residential buildings should save 15 to 20 percent primary energy by 2030 and then 20 to 25 percent by 2035.
However, there were strong signals in Coreper yesterday to aim for the lower values, it was said. The situation is probably similar for the threshold values for non-residential buildings.
Meanwhile, support for the renovation of public buildings came yesterday from a broad alliance of NGOs. The focus is on a segment that has received little attention to date: schools. “We often overlook the importance of the necessary insulation and ventilation of buildings for children’s health“, said Dr. Heinz Fuchsig, occupational physician at the German Climate Change and Health Alliance (KLUG).
As a result of the renovation backlog, 200,000 days of school absences are recorded in Germany every year due to exposure to dampness and mold indoors. Summer heat in school buildings also puts a strain on children and young people.
Ms. Ribera, we have experienced a brilliant start to this COP28. Numerous announcements, the agreement on the Loss and Damage Fund, and the first financing commitments. Now that the excitement has died down a little, where do we stand?
It is a very difficult COP. We have to make sure that the Paris mechanism is finalized and the next steps are set in motion. We left Sharm el-Sheikh last year with mixed feelings. For the first time, there was a conviction that we need to work on loss and damage, but at the same time there was not a single word on reducing emissions. The most important measure to reduce the cost of damage and to reduce losses is to reduce emissions.
One measure would be to phase out fossil fuels?
Yes, we need to implement the package of tripling renewable energies, doubling energy efficiency, and phasing out fossil fuels. But what does the phase-out mean? Some say it’s not about energy, but about emissions. But we need to be coherent and not say we need to reduce emissions when in fact we are talking about fossil fuels. We need to make the fossil fuel-related aspects of the energy transition very clear. We need a strong reduction in supply and demand – both are important.
Where can you find allies for this when even the USA is in favor of CCS?
The EU mandate is very clear in this respect. When we talk about emissions capture, we say that these technologies should only be used in sectors that are difficult to reduce. When it comes to energy systems, we know that there are much smarter and faster solutions.
We believe that there are many more countries calling for clear language on fossil fuels. The absolute minimum should be the Glasgow wording or the G20 wording. Some of the countries that are now most strongly opposed have signed up to the G20 language.
But it was really difficult to achieve this formulation and the G20 energy ministers did not even include it.
But the heads of state and government did. I don’t care what the negotiators or the presidency personally think about any of the elements discussed here. It is about negotiating in good faith and creating the conditions for negotiations. The COP28 Chair has the role of the honest broker.
Is he the honest broker he claims to be?
I hope so. We will be vigilant and demand this. It is good that the President knows what fossil fuels mean, what renewables mean, what finance means, and what role these issues play for Africa or the OPEC countries. He is a very experienced man in this area and has learned a lot in the last year about how we have to make decisions. He is not biased towards one side or the other. We missed that a little in Sharm el-Sheikh. You got the impression that the result was not very balanced. We focused so much on the losses and damage that we forgot about damage limitation.
What about the G77+China? We have seen a funding commitment from the United Arab Emirates here in Dubai. It is the first time that a non-Annex I country has made such a pledge. Do you see discussions in the group that could change the blocs of industrialized countries against non-industrialized countries?
In Paris, we agreed that it is not only historical responsibility that counts – even if it is very important. The current share of environmental pollution and the current share of per capita income and per capita emissions also count. This debate is also taking place in the G77. The G77 countries are well aware that China, the Emirates, or Saudi Arabia are not the same as Rwanda, Cuba, or the Philippines. Who contributes to climate finance will be one of the thorniest issues in the negotiations. And our door is wide open for an updated understanding of fairness and equity in emissions reductions and participation in financing.
Would it be easier for you to negotiate if the G77 bloc were to dissolve? If China and the developing countries were separate?
We as Europeans need to be mindful of the different sensitivities and respect their own governance platform. We should not torpedo their own governance considerations in a dirty way. To understand what is going on, we need to talk to each regional group and alliance within the G77. We are making a mistake if we assume that they all think the same way.
There are also very different opinions within Europe and not every country thinks the same way. How does Team Europe stick together here in Dubai?
That is our task as Council Presidency. Even though there may be differences from country to country, on the whole, we are on the same wavelength. Because we know that we are much more effective when we work together and send the same message with different emphases. This is something we have failed to do in recent years and we need to learn again.
You are talking about the time under the leadership of former Climate Commissioner Frans Timmermans. How is his successor Wopke Hoekstra doing?
Well, he has just started and has traveled the world with the common message of our mandate. He works very honestly and constructively, understands that we have to work as Team Europe and he is very happy to do so. I am sure it will go very well.
There have been attempts within Europe to water down the green agenda and the laws of the Green Deal. Are you sure that Europe still speaks with one voice on green policy?
There were many occasions when things could have exploded due to the different sensitivities. But we overcame that in a sensible way. Sometimes it is difficult because we feel the tensions that exist in Europe. The Spanish presidency had solved various problems within the legislative proposals that nobody thought we could solve. But it’s true, sometimes the problems come from countries that we didn’t expect.
They look at us Germans …
(laughs) The important lesson to be learned from this is that change is so important and so necessary that it cannot be postponed. You have to speed it up. But it can only work if public opinion if citizens feel the benefits of the green agenda and understand what and why we are doing what we are doing.
That sounds a lot like self-criticism.
In too many cases, we have not paid attention to the social and cultural aspects of change. We need to do a better job of explaining and anticipating who will be threatened by change. We need to avoid situations where new political parties use short-term uncertainty to increase uncertainty and noise around the Green Deal. Because in reality, the equation works the other way around: if there is a healthy alliance between social and environmental aspects, we promote economic prosperity. If we understand economics in the traditional way, without paying attention to the social and environmental aspects, it will not last. So we cannot let it stand that anyone says that the institutions have no answer to the problems.
But if you look at Italy, Hungary, Sweden and now the Netherlands, the right-wing populists are already in many governments. How do you intend to change that?
The non-populists should make great efforts to tackle this problem. The biggest defeat is that we have seen parties that used to be serious behave in a very demagogic and populist way. Because when conservative parties move towards the far right, the far right wins, not the center.
Does it look bleak for next year’s European elections?
We will have to do a lot of campaigning and explain what we are doing and why. Because in a more populist parliament, it will be much more difficult for the citizens and the European project. We need to take to the streets and pay much more attention to the people and their concerns. We only have six months. That’s not a lot and we have to use it every single day.
Lenka de Mauro remembers the images she saw on television as a 9-year-old: In the winter of 1989, students rattling bunches of keys symbolically heralded the end of socialism in Czechoslovakia and opened the way to Europe. Today, 34 years later, de Mauro herself works in Brussels, the heart of European politics. She represents the interests of the German insurance industry in the European Union; her official title is Head of European and International Affairs. She sees herself as an “EU mediator”: in Brussels, she makes it clear what the German insurers want when it comes to new laws. In Berlin, she makes it clear what European institutions expect from German insurers.
Back then, in front of the television, she felt: “Something very important is happening.” She soon felt at home not only in her home country in north-eastern Slovakia but throughout Europe. She had already attended a German-Slovak grammar school, then studied translation and law in Heidelberg and passed her state examination. She met her husband, an Italian, with whom she lived for a time in San Sebastián, Spain. In addition to Slovakian and German, De Mauro speaks five other languages: English, Italian, French, Spanish, and Russian.
She worked briefly as a translator in Brussels. In 2015, she took up her first position at the European office of the German Insurance Association (GDV), which she has headed since 2019. There, she learned the very specific language and culture of European legislation: how the stakeholders, authorities, and institutions involved communicate with each other so that a directive is ultimately produced. De Mauro translates corporate interests from German to European – and vice versa.
This year, the Commission presented a proposal to attract more people to the capital markets: the EU Retail Investment Strategy. It envisages banning commissions for certain distribution channels when investment advisors broker insurance policies. De Mauro’s association wants to keep all distribution channels open. This is probably the issue that concerns her the most at the moment, she says. And it is an example of how complex it is to influence European legislation.
Lenka de Mauro is “talking to everyone who has anything to do with it”: she is talking to the European Insurance and Occupational Pensions Authority (EIOPA). She sits down with the cabinet of the responsible Commissioner, as well as with the cabinet of the Commission President and representatives of the Parliament. Her office writes statements and organizes conferences.
She also talks to her colleagues from other countries, because German industry alone cannot assert its interests, says de Mauro. This is how the entire European project works: Germany, Slovakia, and Italy cannot tackle the major tasks, above all the fight against global warming, on their own. It can only be done together. Maximilian Münster
