Dear reader,
In many areas, the only thing we can learn from Germany today is how not to do it. It is therefore worthwhile for this country, which is unwilling to reform, to look beyond its own borders and see how things could be done better. In terms of digitalization, for example. In principle, you can look in almost all directions, but the Baltic states are particularly worth a look.
The model country is Estonia, where basically all state services are digitalized – the only thing they can’t do online is get married or divorced.
The knock-down argument against the instructive view to the north is always that it is easy to implement something like this in Estonia with its 1.4 million inhabitants. That may be true. But the fact that there is practically always someone in our digitalization projects who insists on an analog solution for a convincing digital solution at the same time, which destroys all efficiency gains, is not a question of the more complex structures in Germany. It’s a question of mindset. That is our biggest problem.
In February, Minister Volker Wissing traveled to the Baltic States to learn about and be inspired by digitalization – and to establish an innovation club with Estonia, Latvia, and Lithuania. The club aims to create attractive framework conditions in Europe and promote innovation. What it does not want: excessive bureaucracy and regulation. Europe needs to catch up and become faster, said the Minister. And we need the courage to innovate, and countries that lead the way.
This Friday, Wissing and his three counterparts from the Baltic states will present initial proposals for such an innovation-friendly digital policy. Hopefully, something will come of it!
Feature
The consequences of the German budget deficit for the EU
The other governments and the EU Commission have so far done their best to avoid interfering in the German budget deficit crisis. But they are watching very closely to see what consequences the German government draws from the Federal Constitutional Court’s KTF ruling. After all, the response of the coalition with the traffic light system will determine the extent of the impact on the rest of Europe.
State Secretary for Economic Affairs Sven Giegold attempted to calm the situation during an appearance on Wednesday: The consequences of the Karlsruhe ruling would be “far less far-reaching than many believe” when measured against the overall federal budget, said the Green politician. Provided that there is the necessary political will in the coalition. However, the coalition had “always found compromises, even if it wasn’t always easy”.
Lindner announces supplementary budget
The Constitutional Court’s ruling directly affects €60 billion from the Climate and Transformation Fund (KTF), which had been budgeted over four years. In addition, there are further billions from the Economic Stabilization Fund (WSF). Finance Minister Christian Lindner announced yesterday that he wanted to put loans amounting to around €45 billion, particularly from the WSF, on a constitutionally secure footing via a supplementary budget for 2023.
At EU level, the Karlsruhe ruling could have consequences for these areas:
- the increase in the current multiannual financial framework (MFF);
- the next MFF and possible new debt programs;
- the ongoing reform of the debt rules;
- the common industrial policy;
- the economy;
- the European climate targets.
Little enthusiasm for spending
The EU Commission is demanding an additional €100 billion from the member states at the halfway point of the 2021-2027 financial period in response to the war in Ukraine, inflation, and the refugee crisis. Chancellor Olaf Scholz already made it clear at the EU summit in mid-October that the German government would only support one item: financial support for Ukraine, which is to amount to €50 billion in grants and loans over the next four years. The other half of the sum should be raised by the Commission and member states through savings and reallocations in the EU budget, Scholz demanded.
The newly created budget gap cements this attitude of the German government, as the German representative Michael Clauß made clear in the circle of EU ambassadors: The German government does not want to shake the €50 billion for Ukraine now either – but that’s it.
However, the MFF negotiations had already made little progress beforehand. Berlin is demanding proposals from the Commission and the Spanish Council Presidency on where savings can be made and reallocated. Including in the agricultural and cohesion funds, which make up the lion’s share of the EU budget. However, the net beneficiary countries are resisting this. However, initial ideas were discussed at yesterday’s meeting of EU ambassadors, according to reports in Brussels.
Scope for the next financial framework is shrinking
The impact on the negotiations on the financial framework for the years 2028 to 2035 is likely to be greater than on the current MFF. The talks are expected to begin in 2025. The new German government is likely to be much more reluctant to transfer more money to Brussels: Due to Germany’s reduced budgetary leeway, “the trade-offs would become much more visible”, says Nils Redeker, Vice-Director of the Jacques Delors Center at the Berlin Hertie School. The upcoming discussion on EU enlargement and reform will open up new opportunities for package deals among the EU states. “But before that, we will see a very German discussion about reforming the debt brake.”
New EU debt program?
In Paris and other capitals, the ruling has raised hopes that Berlin could possibly be more open to a new edition of Next Generation EU. The idea is that if the German government can no longer draw on its full resources, it may have more understanding for the idea of launching another spending program financed by EU debt.
However, there is little to suggest this at the moment – at least as long as Europe is not hit by another serious crisis. During the coronavirus pandemic, Scholz was one of the driving forces behind the launch of NextGenEU. The Chancellor has made it clear that Germany will continue to show solidarity in a new crisis.
But only then. In its KTF ruling, the Federal Constitutional Court also made it clear that crises that were foreseeable for a long time, such as the climate crisis, did not justify the EU bailing out the member states with emergency loans in accordance with Article 122 of the Treaty on the Functioning of the EU (TFEU). This further narrows the scope, even though Karlsruhe is not primarily responsible for interpreting EU law – the European Court of Justice is.
Setback for reform of debt rules?
The EU states are currently negotiating the reform of the Stability and Growth Pact at full speed. In other capitals, there are fears that the strict interpretation of the debt brake by the Constitutional Court could prompt Finance Minister Lindner to insist even more strongly than before on fixed rules for debt reduction at EU level and thus make the search for a compromise more difficult.
The SPD and Greens are also watching nervously to see whether the FDP leader will now put on the brakes. However, during a visit from Italian Prime Minister Giorgia Meloni on Wednesday, Scholz appeared confident. There has recently been great progress in the negotiations: “In this respect, I assume that we will be able to reach an agreement soon“.
Less industrial policy
Minister Robert Habeck warns that the lack of funds from the KTF is jeopardizing the transformation of domestic industry. Other countries provide massive support for their industry, such as the USA in the Inflation Reduction Act (IRA). In light of the ruling and the inconsistent reaction of the traffic light, BDI Managing Director Tanja Gönner also warns in an interview with Table.Media: “Companies and decision-makers are unsettled”.
A significant proportion of the funds in the KTF were reserved for projects that are also relevant to the EU. These include the billions for Intel and TSMC on the basis of the European Chips Act, the 31 projects under the second microelectronics IPCEI, and Northvolt’s planned battery cell factory in Schleswig-Holstein.
Redeker sees possible effects on neighboring countries if the projects fall through due to a lack of subsidies. Intel, for example, is also planning investments in Poland and Italy. “These could be called into question if the subsidies for the plants in Magdeburg are shaky,” says the economist. However, fewer German subsidies could have the advantage of limiting the risk of distortions in the internal market. “The new MFF will raise the question of how much industrial policy should be financed nationally and how much at European level.”
Weakening economy
It is still unclear how many billions will be missing from the federal budget in which year. However, the hole is likely to be large enough to put further pressure on the already weakening economy in Europe’s most important economy. In Berlin, it is therefore expected that Lindner will have to face the corresponding questions at the next meeting of EU finance ministers on Dec. 8.
Climate protection suffers
A large part of the money in the KTF should be used to decarbonize industry and households. With an amount of €60 billion, the entire EU will also be set back in terms of its climate targets, says Redeker. “I think it is unrealistic for other instruments such as emissions trading to be tightened up in the short term to compensate for this.”
- Climate policy
- Climate protection
- EU Budget
- Haushaltskrise
- Household
- Industrial policy
Lessons from the Wilders election victory
Conspicuous silence in Brussels – jubilation in Budapest, Paris, and Rome: Geert Wilders’ election success was mainly commented on by the right-wing parties in Europe. EU politicians, on the other hand, kept a low profile, even in the usually talkative European Parliament it took a long time to recover from the election shock in the Netherlands.
“If the far right manages to dominate the election campaign with one issue, voters will go to the original“, said SPD MEP and law professor René Repasi. Nevertheless, Frans Timmermans‘ clear course has paid off and made the former EU Climate Commissioner the “leader of the democratic center”, according to Repasi.
PVV wants to stop payments to the EU
It remains to be seen whether Wilders will now take on government responsibility. “I can’t really imagine forming a coalition with Mr. Wilders and his ideas“, says Repasi. Because his program still includes such bizarre demands as leaving the EU or banning the Koran.
The list of impositions for his potential coalition partners is long, with the actual consultations starting today and likely to last several months. The election manifesto of Wilders’ Freedom Party (PVV) includes the demand for a referendum on leaving the EU. Until this has taken place, the country should withhold its billions for Brussels. Wilders is also in favor of stopping EU enlargement and wants to end the free movement of people in the Single Market. Ukraine should not receive any F-16 fighter jets or any other weapons. The Islamophobe would like to exclude Turkey from NATO.
Schirdewan appeals to Merz
The leader of the Left Party, Martin Schirdewan, draws a parallel with Germany. “I hope that Friedrich Merz will learn his lesson from the election defeat of the Christian Democrats there: You don’t weaken the right-wing extremists by adopting their demands and their slogans. Instead, you make right-wing extremism acceptable.” Wilders’ election victory shows in a frightening way how poisoned the political climate in the Netherlands is, Schirdewan continued.
Critical voices in The Hague see outgoing head of government Mark Rutte and his successor as the leading candidate of the right-wing liberal VVD, Dilan Yesilgöz, as partly responsible for Wilders’ success. The rise of Wilders is the “direct result” of years of erosion of trust, commented the conservative NRC Handelsblad. Citizens had no trust in a government whose trademark over the last 13 years had been the dogmatic pragmatism of Mark Rutte.
Government adopts right-wing narrative
The previous government had also partially adopted the right-wing narrative that problems in the healthcare system, the housing market, and social security were caused by migration. Unlike Mark Rutte in previous years, Dilan Yesilgöz had also not strictly ruled out working with the far-right Freedom Party – and made Wilders politically relevant again after years of exclusion.
To make matters worse, the former justice minister and daughter of a Turkish human rights activist who found refuge in the Netherlands placed the issue of migration at the center of her election campaign. According to NRC Handelsblad, all those who are against migration and Europe would have preferred to turn to the Wilders party, which has been cultivating these issues for almost two decades.
Rutte wants to lead NATO
The election result is likely to be bitter for Mark Rutte. After all, his legacy is in tatters after 13 years as head of government at the head of changing coalitions. Traditionally, the Prime Minister remains in office until the parties have agreed on a new coalition.
Rutte has also expressed an interest in succeeding NATO Secretary General Jens Stoltenberg next spring. It is unclear whether the election disaster will now affect his chances. The change at the head of the military alliance is due to take place at the summit in April. If Geert Wilders is in office as Prime Minister by then, he would have to agree to Rutte’s candidacy.
Orbán and Le Pen celebrate Wilders’ election victory
Wilders’ success is being celebrated in the right-wing and nationalist camps. “The winds of change are here!”, wrote Hungary’s head of government Viktor Orbán on X. Marine Le Pen, the leader of the French nationalists, spoke of a “spectacular achievement that confirms the growing commitment to the defense of national identities”. The leader of the far-right Lega, Matteo Salvini from Rome, and AfD politician Alice Weidel in Berlin expressed similar sentiments.
Europe’s right-wing, which is actually only united by its hatred of “Brussels” and the EU, is sniffing the morning air. After the PiS’s election defeat in Poland, it finally has something to celebrate again. Eric Bonse and Stephan Israel
Greens’ BDK: Crises dominate European party conference
The situation with the Greens is bad to miserable. And the prospects are hardly any better. It is in this atmosphere that they have been meeting since Thursday evening for the Federal Delegates’ Conference (BDK) in Karlsruhe. It is a BDK of superlatives: 825 delegates, 1700 guests, a four-day marathon with a total of 5000 people. And in the middle of it all: Europe. In Karlsruhe on Friday and Saturday, the party will vote on its list for the 2024 European elections and then define its European election program. There are some difficult votes to be had, especially when it comes to personnel.
But other topics dominate the agenda at the start of the party conference: the budget crisis, the “traffic light” dispute, major uncertainties about the future, and the justification for sticking with a delicate and very laborious coalition. The first to take the floor on Thursday is the party leader. And Omid Nouripour quickly shows what he has planned for this evening: He wants to call on his unsettled team, his doubting family, to regain courage and confidence. “Times are tense, the crises are huge,” says Nouripour. And although there are now massive attacks against the Greens, he will not pull the blanket over his head. “The attacks are coming because we are effective”, says Nouripour. “They are coming because they want to push us into a niche. But we won’t let that happen.”
Suspension of the debt brake is not enough
Nouripour talks a lot about the current crises in the world and about the duty to protect Jewish people today. He talks about the terror of Hamas, and the suffering of the Palestinians and desperately asks not to forget the people in Ukraine. But his real point is the effort to reassure the delegates.
Commenting on the election victory of right-wing populist Geert Wilders in the Netherlands, Nouripour says it is “painful to see what is happening there”. He also calls for investment in future technologies and more social justice. He is very grateful to Federal Finance Minister Christian Lindner (FDP) for announcing the suspension of the debt brake for 2023. “Thank you very much for that!”, said the Co-Chairman. However, this is not enough for the necessary modernization of the country.
Habeck: coalition ‘blind to reality’ towards Putin and China
Robert Habeck appears a little later. Over the past few days, he has appeared to be in a bad way on television and radio due to the difficulties that the Karlsruhe budget ruling has recently caused him. Not so in Karlsruhe! This evening, he no longer minces his words. “What we are experiencing now is not a game and there is no room for playing around”, said the Vice-Chancellor. “It’s serious and everyone needs to take it seriously.”
For Habeck, the big question is whether Europe and Germany can hold their own in the world – in the face of fierce economic competition, in a fierce battle over the benefits of climate policy. The budget crisis, the ruling from Karlsruhe – none of this is really a crisis anymore, but suddenly and finally poses the decisive question for the whole country: whether Germany will be able to assert itself, whether it will succeed in securing its prosperity and regaining its own sovereignty. This is precisely what the grand coalition has gambled away over many years: “blind to reality in the face of Putin, blind to reality in the face of China, blind to reality in the face of the climate crisis”.
The name ‘Merz’ comes up more often than the word ‘Europe’
In Nouripour’s and Habeck’s speeches, Europe, today’s upcoming list election and the vote on the European election program do not yet play a role – the current political crises are too urgent. The Green leadership is aware that Europe will be an important topic at this party conference, but undoubtedly not the most important one. Instead, however, they are working their way through Friedrich Merz. The CDU chairman’s name is mentioned several times in the speeches this evening.
His exultation that transformation is now only taking place through technology is simply wrong, says Habeck. “That is unrealistic, jeopardizes prosperity, jeopardizes the fighting power of this republic.” Other countries care. German politicians, however, are still wondering whether this will perhaps take care of itself. “No”, shouts Habeck. If you want, you can also read this as a speech from someone who wants to fight from the front in the next election – not the European elections. Stefan Braun and Lukas Scheid
AI Act: ‘We should limit strict rules to the strongest AI models’
Mr. Privitera, the dispute over whether Foundation Models (FM) and General-Purpose AI (GPAI) should be regulated in the AI Act has caused negotiations in the trilogue to break off in the meantime. What exactly is a Foundation Model or General-Purpose AI?
Unfortunately, there are different ways of using these terms. There are parties in this trilogue who, roughly speaking, distinguish between foundation models on the one hand and general-purpose AI systems on the other. The models themselves are not applications, and no user comes into contact with them. The system is then what interacts with users. For example, GPT-4 would be the foundation model, and ChatGPT the system or application that is based on it.
And the other point of view?
Others use a broader term of general-purpose AI. In simple terms, these are all AI models that are large, have been trained on a broad database, and, above all, have many different capabilities and can be used for many purposes. According to this definition, it does not matter whether the model stands alone or is integrated into an application. It is simply always general-purpose AI. A foundation model would therefore be a subtype of this.
How important is this distinction?
I think the distinction is unfortunate because something else is actually relevant: there are kinds of artificial intelligence that are very good in many areas of application. That’s why they can create great added value in many areas – but they can also cause great economic damage or pose a security risk if something doesn’t work properly or they are misused.
‘We can now help shape the new age’
The AI Act is risk-based: It only regulates the applications that are classified as high-risk and not the technology. Accordingly, by definition, general-purpose AI does not fit into this system at all.
The structure of the law comes from a time when general-purpose AI was not yet on the radar, at least in the Brussels political scene. Then, with the advent of ChatGPT, there was this moment of awakening. We should pragmatically try to do justice to this new reality in the field of AI. Otherwise, we may miss a huge opportunity: we can now be the first region in the world to help shape how this new era of general-purpose AI is shaped and how we deal with it.
So it is necessary to regulate general-purpose AI?
Yes, it is necessary, for economic and safety reasons. In the end, there will only be a handful of particularly strong general-purpose AI models. Only the really big tech companies can afford to develop these models. Many people assume that the first training runs will start next year, with the development of a model costing around one billion dollars. In other words, we are heading towards an oligopoly.
In the future, however, many downstream products that use these few, particularly strong general-purpose AIs will depend on them. And now, of course, we could let the developers of these general-purpose AIs write their own rules. But that means that thousands of start-ups and SMEs that build on these AIs will then have to struggle with the problems. Some problems that are inherent in a model cannot be fixed retrospectively, especially not by a small team.
‘The biggest risks come from the most powerful models’
However, France, Germany, and Italy fear that regulation would be a burden on European start-ups and SMEs in particular.
I think a smart European approach to the issue would be to say that the biggest risks come from the most powerful models. If they fall into the wrong hands, they can become the strongest and most destructive weapons. So we should restrict ourselves to the biggest and strongest models with strict rules. This makes sense from a risk perspective, and it has the very pleasant and pro-European side effect that our start-ups, which we hope will now catch up, are not unduly burdened.
At the digital summit in Jena, Minister Robert Habeck said that even small models pose major risks.
Of course, all models have their flaws and weaknesses, and also their risks. But risks related to cyberterrorism or the development of bioweapons correlate strongly with the size of a model. Smaller models such as Luminous from Aleph Alpha will not successfully help a terrorist organization to build a bioweapon. I also doubt that GPT-4, currently the most powerful general-purpose AI, could. In the next generations of these models, however, things may look very different. For these kinds of public safety risks, size does matter.
‘Providing European companies with a ladder’
So a regulation limited to the largest models could already achieve a lot?
Yes, and it could put a ladder in front of the European companies that are catching up because they would not have the constraints that the big ones have. However, it is also important to note that size alone is not a sufficient indicator. It is one of several important indicators that can help us to ensure that regulation is targeted.
What should such regulation look like?
I think a minimum goal on the risk side should be to minimize threats to public safety posed by AI, so there is room for a sensible compromise between Parliament’s comprehensive proposals and a naturally lax regulation that would emerge if the industry were allowed to do it itself. Precautions would be needed to ensure the security of the model so that it does not produce false or undesirable results. And also to ensure cyber security so that the model cannot simply be hacked or stolen by terrorist organizations. In the coming years, the models could become dangerous weapons in the wrong hands. There should be democratic control over whose hands they fall into.
What else is important?
Other measures include red teaming, i.e. repeatedly testing the model during the development process to see what it is capable of doing that we don’t want it to do. Then there is auditing, in which external experts repeatedly evaluate the impact of the model over its entire life cycle. And other standard procedures that already exist in other high-risk sectors but are not currently prescribed for AI.
If you are in favor of regulating the strongest models, how do you find them?
There are a number of indicators, such as the computing power used to train the model. How many modalities does the model have, i.e. can it only recognize speech or also images? How good is the performance? There are other benchmarks that you can look at.
‘I think a strong AI Office is absolutely essential’
That sounds similar to what Parliament had proposed as criteria …
Its proposals go further. Germany had already proposed changes to this in order not to place all foundation models under general suspicion. It would be very important for us to find a sensible compromise that protects European companies and at the same time ensures that we don’t let Microsoft and Elon Musk do as they please here. Because their models can cause real economic and social damage. Self-regulation is not the only way, nor is it the best way.
The proposal for a European AI Office came from Parliament. What do you think of this?
I believe that a strong AI Office, in which the competencies are bundled, is absolutely essential. It makes no sense to distribute the competencies among 27 member states, there are not that many AI experts. It will be difficult enough to find the best people for this task. But it would be important. The UK is currently investing heavily in its AI Safety Institute. 200 full-time employees will soon be working there, all of whom have a great deal of technical expertise. The USA is also taking steps in this direction. We have to be careful not to be left behind.
Daniel Privitera is the founder and managing director of KIRA. The Center for AI Risks and Impacts is an independent think tank based in Berlin. Privitera is currently a PhD student at the University of Oxford.
News
European Parliament Reform Commission completes its work
The Parliament 2024 working group, which is preparing reforms to the internal work of the European Parliament, held its final meeting on Wednesday. Shortly before the meeting, a new paper summarizing the proposals was distributed. According to reports, some participants expressed reservations about some of the proposals. However, the overall will to reform was evident.
The parliamentary groups have until Monday to define their red lines for reforms to internal processes, external relations, and work in plenary and other areas. The report will then be submitted to the conference of group leaders, which will decide on the steps for implementation on December 7. The working group was convened by Parliament President Roberta Metsola in the spring and met a total of 20 times. The aim is to adopt the reforms before the European elections. mgr
Hungary can hope for millions
Following a controversial decision by the European Commission, Hungary can hope for the swift disbursement of EU funding amounting to around €900 million. The Brussels authority announced on Thursday that it had approved Hungarian plans for the use of EU corona aid. This would make it possible to make advance payments of the aforementioned amount from a program to transform the European energy system. This program is intended to make the EU independent of fossil fuels from Russia as quickly as possible.
According to the Commission, the Council of Member States must now give its approval before the transfer of 900 million euros can be initiated. A spokeswoman emphasized that other payments are still dependent on the implementation of reform requirements. These are intended to ensure that Hungary does not violate the EU’s rule of law standards.
Hungary could receive a total of €10.4 billion in Covid aid, €6.5 billion in the form of grants, and €3.9 billion in loans. German Green politician Daniel Freund called on the governments of the EU member states to block the disbursement of almost €1 billion by vetoing the Commission’s decision. He criticized that nothing had improved in the situation of the rule of law in Hungary. dpa
Hydrogen: Coreper advises on unbundling
Ahead of the final trilogue on the gas market package next Monday, the Permanent Representatives of the Member States are today discussing a still controversial point of the Gas Market Directive. Several states are siding with the Commission and want to enforce horizontal unbundling of natural gas and hydrogen networks. However, the Parliament and states such as Germany, Austria, and others are opposed to this, said rapporteur Jens Geier (SPD) yesterday. Both sides currently still have a blocking minority.
Municipal utilities as operators of distribution networks would be particularly affected by horizontal unbundling. They would have to separate the operation of natural gas and hydrogen networks. The Commission proposal had demanded at least corporate and accounting unbundling. According to Geier, several states still have reservations due to tax issues if plants were to be transferred to another company.
The German Association of Local Utilities (VKU) has repeatedly spoken out against horizontal unbundling. “Who, if not the gas network operators, should be able to operate hydrogen networks?”, asked Managing Director Ingbert Liebing yesterday. “They have the know-how and they already have the infrastructure in the streets. It must be made attractive for gas network operators to shape the transition to the future, CO2-free hydrogen economy themselves.” The EU Commission, on the other hand, argues that the separate operation of different networks would increase cost transparency. ber
Opinion
What’s cooking in Brussels? The implementation of a UN idea at EU level
“It is the beginning of an idea that we have been working on for the last six months”, said MEP Mohammed Chahim from the S&D Group at a meeting in the EU Parliament in Strasbourg. The Moroccan-born Dutch politician from the Labor Party has been a Member of the European Parliament since 2019. He is Vice-President of the Socialists and Democrats in the EU and made a name for himself when he was rapporteur for the Carbon Border Adjustment Mechanism – “CBAM” in EU jargon.
“We believe that adaptation is no longer a plan B. We see that extreme weather events are becoming more frequent in the EU. Therefore, I think that adaptation must be at the forefront, and for us, the S&D Group, loss and damage mean that we need to create a European body where we help vulnerable communities”, he continues.
Climate justice at EU level
Dear reader, now you’re getting into the depths of the UN climate negotiations, here’s an explanation: the MEP is referring to Article 8 of the Paris Agreement, which is about the “Loss and Damage” mechanism. “Loss and Damage” is a term used in the UN climate negotiations to refer to the consequences of climate change that go beyond what people can adapt to, or when there are options but a community does not have the resources to take advantage of them.
“The framework around loss and damage is basically an instrument of the global North for the global South”, summarizes Chahim. This is because the global South argues that the global North has a historical debt, as its industrialization and prosperity are based on fossil fuels. And now the countries of the global South are the hardest hit by the effects of climate change. All in all, it’s about climate justice and climate finance – and that’s why the issue of loss and damage has been a lively and contentious topic in UN climate negotiations for more than three decades.
Forest fires and heavy rain threaten Europe’s citizens
So much for the discussion within the UN. What does this idea have to do with the EU? “At EU level, it means that the European Union must have instruments in place to ensure that EU citizens are well protected from the increasing effects of climate change, especially vulnerable groups”, he continues. The MEP refers to the forest fires in Spain, Greece, or France, and the heavy rainfalls in Slovenia or Belgium.
But what should such instruments look like? Doesn’t the EU already have such supporting measures? Yes, there are already a number of mechanisms in the EU, replies the MEP, such as the legislation on land use, land-use change, and forestry (LULUCF). “We are now at a stage where we are identifying the instruments we already have and the instruments we need”, adds Chahim.
Farmers could benefit
The idea has reached ministerial level, Chahim continued. “At the PES Congress, we had a working group on this idea with (Spanish Environment Minister) Teresa Ribera, (Commissioner for Labor and Social Rights) Nicolas Schmidt, and (Commissioner for the European Green Deal, Interinstitutional Relations and Foresight) Maroš Šefčovič. They all supported the approach and said we should be able to come up with a good proposal to convince the other political groups”, he says.
The discussion about the introduction of such a compensation mechanism comes – a coincidence? – a few months before the EU elections. This is perhaps the reason why Mohammed Chahim refers during our conversation to farmers who have suffered crop losses due to floods or droughts – and would therefore fall into the categories that could benefit from such an EU compensation mechanism. But no, says the MEP, the discussion has nothing to do with the upcoming elections. “I come from a rural area, I know the reality that farmers are facing”, he emphasizes.
- EU Parliament
- European election 2024
- Klimafinanzierung
Dear reader,
In many areas, the only thing we can learn from Germany today is how not to do it. It is therefore worthwhile for this country, which is unwilling to reform, to look beyond its own borders and see how things could be done better. In terms of digitalization, for example. In principle, you can look in almost all directions, but the Baltic states are particularly worth a look.
The model country is Estonia, where basically all state services are digitalized – the only thing they can’t do online is get married or divorced.
The knock-down argument against the instructive view to the north is always that it is easy to implement something like this in Estonia with its 1.4 million inhabitants. That may be true. But the fact that there is practically always someone in our digitalization projects who insists on an analog solution for a convincing digital solution at the same time, which destroys all efficiency gains, is not a question of the more complex structures in Germany. It’s a question of mindset. That is our biggest problem.
In February, Minister Volker Wissing traveled to the Baltic States to learn about and be inspired by digitalization – and to establish an innovation club with Estonia, Latvia, and Lithuania. The club aims to create attractive framework conditions in Europe and promote innovation. What it does not want: excessive bureaucracy and regulation. Europe needs to catch up and become faster, said the Minister. And we need the courage to innovate, and countries that lead the way.
This Friday, Wissing and his three counterparts from the Baltic states will present initial proposals for such an innovation-friendly digital policy. Hopefully, something will come of it!
Feature
The consequences of the German budget deficit for the EU
The other governments and the EU Commission have so far done their best to avoid interfering in the German budget deficit crisis. But they are watching very closely to see what consequences the German government draws from the Federal Constitutional Court’s KTF ruling. After all, the response of the coalition with the traffic light system will determine the extent of the impact on the rest of Europe.
State Secretary for Economic Affairs Sven Giegold attempted to calm the situation during an appearance on Wednesday: The consequences of the Karlsruhe ruling would be “far less far-reaching than many believe” when measured against the overall federal budget, said the Green politician. Provided that there is the necessary political will in the coalition. However, the coalition had “always found compromises, even if it wasn’t always easy”.
Lindner announces supplementary budget
The Constitutional Court’s ruling directly affects €60 billion from the Climate and Transformation Fund (KTF), which had been budgeted over four years. In addition, there are further billions from the Economic Stabilization Fund (WSF). Finance Minister Christian Lindner announced yesterday that he wanted to put loans amounting to around €45 billion, particularly from the WSF, on a constitutionally secure footing via a supplementary budget for 2023.
At EU level, the Karlsruhe ruling could have consequences for these areas:
- the increase in the current multiannual financial framework (MFF);
- the next MFF and possible new debt programs;
- the ongoing reform of the debt rules;
- the common industrial policy;
- the economy;
- the European climate targets.
Little enthusiasm for spending
The EU Commission is demanding an additional €100 billion from the member states at the halfway point of the 2021-2027 financial period in response to the war in Ukraine, inflation, and the refugee crisis. Chancellor Olaf Scholz already made it clear at the EU summit in mid-October that the German government would only support one item: financial support for Ukraine, which is to amount to €50 billion in grants and loans over the next four years. The other half of the sum should be raised by the Commission and member states through savings and reallocations in the EU budget, Scholz demanded.
The newly created budget gap cements this attitude of the German government, as the German representative Michael Clauß made clear in the circle of EU ambassadors: The German government does not want to shake the €50 billion for Ukraine now either – but that’s it.
However, the MFF negotiations had already made little progress beforehand. Berlin is demanding proposals from the Commission and the Spanish Council Presidency on where savings can be made and reallocated. Including in the agricultural and cohesion funds, which make up the lion’s share of the EU budget. However, the net beneficiary countries are resisting this. However, initial ideas were discussed at yesterday’s meeting of EU ambassadors, according to reports in Brussels.
Scope for the next financial framework is shrinking
The impact on the negotiations on the financial framework for the years 2028 to 2035 is likely to be greater than on the current MFF. The talks are expected to begin in 2025. The new German government is likely to be much more reluctant to transfer more money to Brussels: Due to Germany’s reduced budgetary leeway, “the trade-offs would become much more visible”, says Nils Redeker, Vice-Director of the Jacques Delors Center at the Berlin Hertie School. The upcoming discussion on EU enlargement and reform will open up new opportunities for package deals among the EU states. “But before that, we will see a very German discussion about reforming the debt brake.”
New EU debt program?
In Paris and other capitals, the ruling has raised hopes that Berlin could possibly be more open to a new edition of Next Generation EU. The idea is that if the German government can no longer draw on its full resources, it may have more understanding for the idea of launching another spending program financed by EU debt.
However, there is little to suggest this at the moment – at least as long as Europe is not hit by another serious crisis. During the coronavirus pandemic, Scholz was one of the driving forces behind the launch of NextGenEU. The Chancellor has made it clear that Germany will continue to show solidarity in a new crisis.
But only then. In its KTF ruling, the Federal Constitutional Court also made it clear that crises that were foreseeable for a long time, such as the climate crisis, did not justify the EU bailing out the member states with emergency loans in accordance with Article 122 of the Treaty on the Functioning of the EU (TFEU). This further narrows the scope, even though Karlsruhe is not primarily responsible for interpreting EU law – the European Court of Justice is.
Setback for reform of debt rules?
The EU states are currently negotiating the reform of the Stability and Growth Pact at full speed. In other capitals, there are fears that the strict interpretation of the debt brake by the Constitutional Court could prompt Finance Minister Lindner to insist even more strongly than before on fixed rules for debt reduction at EU level and thus make the search for a compromise more difficult.
The SPD and Greens are also watching nervously to see whether the FDP leader will now put on the brakes. However, during a visit from Italian Prime Minister Giorgia Meloni on Wednesday, Scholz appeared confident. There has recently been great progress in the negotiations: “In this respect, I assume that we will be able to reach an agreement soon“.
Less industrial policy
Minister Robert Habeck warns that the lack of funds from the KTF is jeopardizing the transformation of domestic industry. Other countries provide massive support for their industry, such as the USA in the Inflation Reduction Act (IRA). In light of the ruling and the inconsistent reaction of the traffic light, BDI Managing Director Tanja Gönner also warns in an interview with Table.Media: “Companies and decision-makers are unsettled”.
A significant proportion of the funds in the KTF were reserved for projects that are also relevant to the EU. These include the billions for Intel and TSMC on the basis of the European Chips Act, the 31 projects under the second microelectronics IPCEI, and Northvolt’s planned battery cell factory in Schleswig-Holstein.
Redeker sees possible effects on neighboring countries if the projects fall through due to a lack of subsidies. Intel, for example, is also planning investments in Poland and Italy. “These could be called into question if the subsidies for the plants in Magdeburg are shaky,” says the economist. However, fewer German subsidies could have the advantage of limiting the risk of distortions in the internal market. “The new MFF will raise the question of how much industrial policy should be financed nationally and how much at European level.”
Weakening economy
It is still unclear how many billions will be missing from the federal budget in which year. However, the hole is likely to be large enough to put further pressure on the already weakening economy in Europe’s most important economy. In Berlin, it is therefore expected that Lindner will have to face the corresponding questions at the next meeting of EU finance ministers on Dec. 8.
Climate protection suffers
A large part of the money in the KTF should be used to decarbonize industry and households. With an amount of €60 billion, the entire EU will also be set back in terms of its climate targets, says Redeker. “I think it is unrealistic for other instruments such as emissions trading to be tightened up in the short term to compensate for this.”
- Climate policy
- Climate protection
- EU Budget
- Haushaltskrise
- Household
- Industrial policy
Lessons from the Wilders election victory
Conspicuous silence in Brussels – jubilation in Budapest, Paris, and Rome: Geert Wilders’ election success was mainly commented on by the right-wing parties in Europe. EU politicians, on the other hand, kept a low profile, even in the usually talkative European Parliament it took a long time to recover from the election shock in the Netherlands.
“If the far right manages to dominate the election campaign with one issue, voters will go to the original“, said SPD MEP and law professor René Repasi. Nevertheless, Frans Timmermans‘ clear course has paid off and made the former EU Climate Commissioner the “leader of the democratic center”, according to Repasi.
PVV wants to stop payments to the EU
It remains to be seen whether Wilders will now take on government responsibility. “I can’t really imagine forming a coalition with Mr. Wilders and his ideas“, says Repasi. Because his program still includes such bizarre demands as leaving the EU or banning the Koran.
The list of impositions for his potential coalition partners is long, with the actual consultations starting today and likely to last several months. The election manifesto of Wilders’ Freedom Party (PVV) includes the demand for a referendum on leaving the EU. Until this has taken place, the country should withhold its billions for Brussels. Wilders is also in favor of stopping EU enlargement and wants to end the free movement of people in the Single Market. Ukraine should not receive any F-16 fighter jets or any other weapons. The Islamophobe would like to exclude Turkey from NATO.
Schirdewan appeals to Merz
The leader of the Left Party, Martin Schirdewan, draws a parallel with Germany. “I hope that Friedrich Merz will learn his lesson from the election defeat of the Christian Democrats there: You don’t weaken the right-wing extremists by adopting their demands and their slogans. Instead, you make right-wing extremism acceptable.” Wilders’ election victory shows in a frightening way how poisoned the political climate in the Netherlands is, Schirdewan continued.
Critical voices in The Hague see outgoing head of government Mark Rutte and his successor as the leading candidate of the right-wing liberal VVD, Dilan Yesilgöz, as partly responsible for Wilders’ success. The rise of Wilders is the “direct result” of years of erosion of trust, commented the conservative NRC Handelsblad. Citizens had no trust in a government whose trademark over the last 13 years had been the dogmatic pragmatism of Mark Rutte.
Government adopts right-wing narrative
The previous government had also partially adopted the right-wing narrative that problems in the healthcare system, the housing market, and social security were caused by migration. Unlike Mark Rutte in previous years, Dilan Yesilgöz had also not strictly ruled out working with the far-right Freedom Party – and made Wilders politically relevant again after years of exclusion.
To make matters worse, the former justice minister and daughter of a Turkish human rights activist who found refuge in the Netherlands placed the issue of migration at the center of her election campaign. According to NRC Handelsblad, all those who are against migration and Europe would have preferred to turn to the Wilders party, which has been cultivating these issues for almost two decades.
Rutte wants to lead NATO
The election result is likely to be bitter for Mark Rutte. After all, his legacy is in tatters after 13 years as head of government at the head of changing coalitions. Traditionally, the Prime Minister remains in office until the parties have agreed on a new coalition.
Rutte has also expressed an interest in succeeding NATO Secretary General Jens Stoltenberg next spring. It is unclear whether the election disaster will now affect his chances. The change at the head of the military alliance is due to take place at the summit in April. If Geert Wilders is in office as Prime Minister by then, he would have to agree to Rutte’s candidacy.
Orbán and Le Pen celebrate Wilders’ election victory
Wilders’ success is being celebrated in the right-wing and nationalist camps. “The winds of change are here!”, wrote Hungary’s head of government Viktor Orbán on X. Marine Le Pen, the leader of the French nationalists, spoke of a “spectacular achievement that confirms the growing commitment to the defense of national identities”. The leader of the far-right Lega, Matteo Salvini from Rome, and AfD politician Alice Weidel in Berlin expressed similar sentiments.
Europe’s right-wing, which is actually only united by its hatred of “Brussels” and the EU, is sniffing the morning air. After the PiS’s election defeat in Poland, it finally has something to celebrate again. Eric Bonse and Stephan Israel
Greens’ BDK: Crises dominate European party conference
The situation with the Greens is bad to miserable. And the prospects are hardly any better. It is in this atmosphere that they have been meeting since Thursday evening for the Federal Delegates’ Conference (BDK) in Karlsruhe. It is a BDK of superlatives: 825 delegates, 1700 guests, a four-day marathon with a total of 5000 people. And in the middle of it all: Europe. In Karlsruhe on Friday and Saturday, the party will vote on its list for the 2024 European elections and then define its European election program. There are some difficult votes to be had, especially when it comes to personnel.
But other topics dominate the agenda at the start of the party conference: the budget crisis, the “traffic light” dispute, major uncertainties about the future, and the justification for sticking with a delicate and very laborious coalition. The first to take the floor on Thursday is the party leader. And Omid Nouripour quickly shows what he has planned for this evening: He wants to call on his unsettled team, his doubting family, to regain courage and confidence. “Times are tense, the crises are huge,” says Nouripour. And although there are now massive attacks against the Greens, he will not pull the blanket over his head. “The attacks are coming because we are effective”, says Nouripour. “They are coming because they want to push us into a niche. But we won’t let that happen.”
Suspension of the debt brake is not enough
Nouripour talks a lot about the current crises in the world and about the duty to protect Jewish people today. He talks about the terror of Hamas, and the suffering of the Palestinians and desperately asks not to forget the people in Ukraine. But his real point is the effort to reassure the delegates.
Commenting on the election victory of right-wing populist Geert Wilders in the Netherlands, Nouripour says it is “painful to see what is happening there”. He also calls for investment in future technologies and more social justice. He is very grateful to Federal Finance Minister Christian Lindner (FDP) for announcing the suspension of the debt brake for 2023. “Thank you very much for that!”, said the Co-Chairman. However, this is not enough for the necessary modernization of the country.
Habeck: coalition ‘blind to reality’ towards Putin and China
Robert Habeck appears a little later. Over the past few days, he has appeared to be in a bad way on television and radio due to the difficulties that the Karlsruhe budget ruling has recently caused him. Not so in Karlsruhe! This evening, he no longer minces his words. “What we are experiencing now is not a game and there is no room for playing around”, said the Vice-Chancellor. “It’s serious and everyone needs to take it seriously.”
For Habeck, the big question is whether Europe and Germany can hold their own in the world – in the face of fierce economic competition, in a fierce battle over the benefits of climate policy. The budget crisis, the ruling from Karlsruhe – none of this is really a crisis anymore, but suddenly and finally poses the decisive question for the whole country: whether Germany will be able to assert itself, whether it will succeed in securing its prosperity and regaining its own sovereignty. This is precisely what the grand coalition has gambled away over many years: “blind to reality in the face of Putin, blind to reality in the face of China, blind to reality in the face of the climate crisis”.
The name ‘Merz’ comes up more often than the word ‘Europe’
In Nouripour’s and Habeck’s speeches, Europe, today’s upcoming list election and the vote on the European election program do not yet play a role – the current political crises are too urgent. The Green leadership is aware that Europe will be an important topic at this party conference, but undoubtedly not the most important one. Instead, however, they are working their way through Friedrich Merz. The CDU chairman’s name is mentioned several times in the speeches this evening.
His exultation that transformation is now only taking place through technology is simply wrong, says Habeck. “That is unrealistic, jeopardizes prosperity, jeopardizes the fighting power of this republic.” Other countries care. German politicians, however, are still wondering whether this will perhaps take care of itself. “No”, shouts Habeck. If you want, you can also read this as a speech from someone who wants to fight from the front in the next election – not the European elections. Stefan Braun and Lukas Scheid
AI Act: ‘We should limit strict rules to the strongest AI models’
Mr. Privitera, the dispute over whether Foundation Models (FM) and General-Purpose AI (GPAI) should be regulated in the AI Act has caused negotiations in the trilogue to break off in the meantime. What exactly is a Foundation Model or General-Purpose AI?
Unfortunately, there are different ways of using these terms. There are parties in this trilogue who, roughly speaking, distinguish between foundation models on the one hand and general-purpose AI systems on the other. The models themselves are not applications, and no user comes into contact with them. The system is then what interacts with users. For example, GPT-4 would be the foundation model, and ChatGPT the system or application that is based on it.
And the other point of view?
Others use a broader term of general-purpose AI. In simple terms, these are all AI models that are large, have been trained on a broad database, and, above all, have many different capabilities and can be used for many purposes. According to this definition, it does not matter whether the model stands alone or is integrated into an application. It is simply always general-purpose AI. A foundation model would therefore be a subtype of this.
How important is this distinction?
I think the distinction is unfortunate because something else is actually relevant: there are kinds of artificial intelligence that are very good in many areas of application. That’s why they can create great added value in many areas – but they can also cause great economic damage or pose a security risk if something doesn’t work properly or they are misused.
‘We can now help shape the new age’
The AI Act is risk-based: It only regulates the applications that are classified as high-risk and not the technology. Accordingly, by definition, general-purpose AI does not fit into this system at all.
The structure of the law comes from a time when general-purpose AI was not yet on the radar, at least in the Brussels political scene. Then, with the advent of ChatGPT, there was this moment of awakening. We should pragmatically try to do justice to this new reality in the field of AI. Otherwise, we may miss a huge opportunity: we can now be the first region in the world to help shape how this new era of general-purpose AI is shaped and how we deal with it.
So it is necessary to regulate general-purpose AI?
Yes, it is necessary, for economic and safety reasons. In the end, there will only be a handful of particularly strong general-purpose AI models. Only the really big tech companies can afford to develop these models. Many people assume that the first training runs will start next year, with the development of a model costing around one billion dollars. In other words, we are heading towards an oligopoly.
In the future, however, many downstream products that use these few, particularly strong general-purpose AIs will depend on them. And now, of course, we could let the developers of these general-purpose AIs write their own rules. But that means that thousands of start-ups and SMEs that build on these AIs will then have to struggle with the problems. Some problems that are inherent in a model cannot be fixed retrospectively, especially not by a small team.
‘The biggest risks come from the most powerful models’
However, France, Germany, and Italy fear that regulation would be a burden on European start-ups and SMEs in particular.
I think a smart European approach to the issue would be to say that the biggest risks come from the most powerful models. If they fall into the wrong hands, they can become the strongest and most destructive weapons. So we should restrict ourselves to the biggest and strongest models with strict rules. This makes sense from a risk perspective, and it has the very pleasant and pro-European side effect that our start-ups, which we hope will now catch up, are not unduly burdened.
At the digital summit in Jena, Minister Robert Habeck said that even small models pose major risks.
Of course, all models have their flaws and weaknesses, and also their risks. But risks related to cyberterrorism or the development of bioweapons correlate strongly with the size of a model. Smaller models such as Luminous from Aleph Alpha will not successfully help a terrorist organization to build a bioweapon. I also doubt that GPT-4, currently the most powerful general-purpose AI, could. In the next generations of these models, however, things may look very different. For these kinds of public safety risks, size does matter.
‘Providing European companies with a ladder’
So a regulation limited to the largest models could already achieve a lot?
Yes, and it could put a ladder in front of the European companies that are catching up because they would not have the constraints that the big ones have. However, it is also important to note that size alone is not a sufficient indicator. It is one of several important indicators that can help us to ensure that regulation is targeted.
What should such regulation look like?
I think a minimum goal on the risk side should be to minimize threats to public safety posed by AI, so there is room for a sensible compromise between Parliament’s comprehensive proposals and a naturally lax regulation that would emerge if the industry were allowed to do it itself. Precautions would be needed to ensure the security of the model so that it does not produce false or undesirable results. And also to ensure cyber security so that the model cannot simply be hacked or stolen by terrorist organizations. In the coming years, the models could become dangerous weapons in the wrong hands. There should be democratic control over whose hands they fall into.
What else is important?
Other measures include red teaming, i.e. repeatedly testing the model during the development process to see what it is capable of doing that we don’t want it to do. Then there is auditing, in which external experts repeatedly evaluate the impact of the model over its entire life cycle. And other standard procedures that already exist in other high-risk sectors but are not currently prescribed for AI.
If you are in favor of regulating the strongest models, how do you find them?
There are a number of indicators, such as the computing power used to train the model. How many modalities does the model have, i.e. can it only recognize speech or also images? How good is the performance? There are other benchmarks that you can look at.
‘I think a strong AI Office is absolutely essential’
That sounds similar to what Parliament had proposed as criteria …
Its proposals go further. Germany had already proposed changes to this in order not to place all foundation models under general suspicion. It would be very important for us to find a sensible compromise that protects European companies and at the same time ensures that we don’t let Microsoft and Elon Musk do as they please here. Because their models can cause real economic and social damage. Self-regulation is not the only way, nor is it the best way.
The proposal for a European AI Office came from Parliament. What do you think of this?
I believe that a strong AI Office, in which the competencies are bundled, is absolutely essential. It makes no sense to distribute the competencies among 27 member states, there are not that many AI experts. It will be difficult enough to find the best people for this task. But it would be important. The UK is currently investing heavily in its AI Safety Institute. 200 full-time employees will soon be working there, all of whom have a great deal of technical expertise. The USA is also taking steps in this direction. We have to be careful not to be left behind.
Daniel Privitera is the founder and managing director of KIRA. The Center for AI Risks and Impacts is an independent think tank based in Berlin. Privitera is currently a PhD student at the University of Oxford.
News
European Parliament Reform Commission completes its work
The Parliament 2024 working group, which is preparing reforms to the internal work of the European Parliament, held its final meeting on Wednesday. Shortly before the meeting, a new paper summarizing the proposals was distributed. According to reports, some participants expressed reservations about some of the proposals. However, the overall will to reform was evident.
The parliamentary groups have until Monday to define their red lines for reforms to internal processes, external relations, and work in plenary and other areas. The report will then be submitted to the conference of group leaders, which will decide on the steps for implementation on December 7. The working group was convened by Parliament President Roberta Metsola in the spring and met a total of 20 times. The aim is to adopt the reforms before the European elections. mgr
Hungary can hope for millions
Following a controversial decision by the European Commission, Hungary can hope for the swift disbursement of EU funding amounting to around €900 million. The Brussels authority announced on Thursday that it had approved Hungarian plans for the use of EU corona aid. This would make it possible to make advance payments of the aforementioned amount from a program to transform the European energy system. This program is intended to make the EU independent of fossil fuels from Russia as quickly as possible.
According to the Commission, the Council of Member States must now give its approval before the transfer of 900 million euros can be initiated. A spokeswoman emphasized that other payments are still dependent on the implementation of reform requirements. These are intended to ensure that Hungary does not violate the EU’s rule of law standards.
Hungary could receive a total of €10.4 billion in Covid aid, €6.5 billion in the form of grants, and €3.9 billion in loans. German Green politician Daniel Freund called on the governments of the EU member states to block the disbursement of almost €1 billion by vetoing the Commission’s decision. He criticized that nothing had improved in the situation of the rule of law in Hungary. dpa
Hydrogen: Coreper advises on unbundling
Ahead of the final trilogue on the gas market package next Monday, the Permanent Representatives of the Member States are today discussing a still controversial point of the Gas Market Directive. Several states are siding with the Commission and want to enforce horizontal unbundling of natural gas and hydrogen networks. However, the Parliament and states such as Germany, Austria, and others are opposed to this, said rapporteur Jens Geier (SPD) yesterday. Both sides currently still have a blocking minority.
Municipal utilities as operators of distribution networks would be particularly affected by horizontal unbundling. They would have to separate the operation of natural gas and hydrogen networks. The Commission proposal had demanded at least corporate and accounting unbundling. According to Geier, several states still have reservations due to tax issues if plants were to be transferred to another company.
The German Association of Local Utilities (VKU) has repeatedly spoken out against horizontal unbundling. “Who, if not the gas network operators, should be able to operate hydrogen networks?”, asked Managing Director Ingbert Liebing yesterday. “They have the know-how and they already have the infrastructure in the streets. It must be made attractive for gas network operators to shape the transition to the future, CO2-free hydrogen economy themselves.” The EU Commission, on the other hand, argues that the separate operation of different networks would increase cost transparency. ber
Opinion
What’s cooking in Brussels? The implementation of a UN idea at EU level
“It is the beginning of an idea that we have been working on for the last six months”, said MEP Mohammed Chahim from the S&D Group at a meeting in the EU Parliament in Strasbourg. The Moroccan-born Dutch politician from the Labor Party has been a Member of the European Parliament since 2019. He is Vice-President of the Socialists and Democrats in the EU and made a name for himself when he was rapporteur for the Carbon Border Adjustment Mechanism – “CBAM” in EU jargon.
“We believe that adaptation is no longer a plan B. We see that extreme weather events are becoming more frequent in the EU. Therefore, I think that adaptation must be at the forefront, and for us, the S&D Group, loss and damage mean that we need to create a European body where we help vulnerable communities”, he continues.
Climate justice at EU level
Dear reader, now you’re getting into the depths of the UN climate negotiations, here’s an explanation: the MEP is referring to Article 8 of the Paris Agreement, which is about the “Loss and Damage” mechanism. “Loss and Damage” is a term used in the UN climate negotiations to refer to the consequences of climate change that go beyond what people can adapt to, or when there are options but a community does not have the resources to take advantage of them.
“The framework around loss and damage is basically an instrument of the global North for the global South”, summarizes Chahim. This is because the global South argues that the global North has a historical debt, as its industrialization and prosperity are based on fossil fuels. And now the countries of the global South are the hardest hit by the effects of climate change. All in all, it’s about climate justice and climate finance – and that’s why the issue of loss and damage has been a lively and contentious topic in UN climate negotiations for more than three decades.
Forest fires and heavy rain threaten Europe’s citizens
So much for the discussion within the UN. What does this idea have to do with the EU? “At EU level, it means that the European Union must have instruments in place to ensure that EU citizens are well protected from the increasing effects of climate change, especially vulnerable groups”, he continues. The MEP refers to the forest fires in Spain, Greece, or France, and the heavy rainfalls in Slovenia or Belgium.
But what should such instruments look like? Doesn’t the EU already have such supporting measures? Yes, there are already a number of mechanisms in the EU, replies the MEP, such as the legislation on land use, land-use change, and forestry (LULUCF). “We are now at a stage where we are identifying the instruments we already have and the instruments we need”, adds Chahim.
Farmers could benefit
The idea has reached ministerial level, Chahim continued. “At the PES Congress, we had a working group on this idea with (Spanish Environment Minister) Teresa Ribera, (Commissioner for Labor and Social Rights) Nicolas Schmidt, and (Commissioner for the European Green Deal, Interinstitutional Relations and Foresight) Maroš Šefčovič. They all supported the approach and said we should be able to come up with a good proposal to convince the other political groups”, he says.
The discussion about the introduction of such a compensation mechanism comes – a coincidence? – a few months before the EU elections. This is perhaps the reason why Mohammed Chahim refers during our conversation to farmers who have suffered crop losses due to floods or droughts – and would therefore fall into the categories that could benefit from such an EU compensation mechanism. But no, says the MEP, the discussion has nothing to do with the upcoming elections. “I come from a rural area, I know the reality that farmers are facing”, he emphasizes.
- EU Parliament
- European election 2024
- Klimafinanzierung
