Chaos vote + Protective tariffs for EVs + Digital euro

Renaturation: ENVI vote postponed

By

Claire Stam

The number of the day is 44. In an electrifying vote in the ENVI Committee, 44 members voted in favor of the rejection motion proposed by the Christian Democrats, Conservatives and Right-wing extremists regarding the Commission’s proposal for nature restoration, while 44 voted against. This means that the rejection of the entire law did not receive the necessary majority; one vote was missing.

And so, the voting continued. After the rejection motion was rejected, the vote began on the approximately 3,500 amendments. Most of the compromise proposals negotiated between the S&D, Renew, Greens and Left parties also did not receive a majority, resulting in a painstaking vote on each individual amendment. The result often stood at 44 to 44 – “rejected”.

“All key compromises were rejected,” confirmed Pascal Canfin, the Chair of the ENVI Committee (Renew) afterwards. These include compromises related to greening cities, targets for wetland restoration and restoration of the forest ecosystem.

“This is a slap in the face for the Commission and Vice President Timmermans,” commented Christine Schneider, the EPP’s shadow rapporteur. Such a close result is a clear signal for the final vote and the plenary vote. “It shows that our concerns and criticisms are shared by a large part of the Environment Committee,” said Schneider.

Text has become ‘completely confusing’

After more than three hours of extremely tight voting, the session had to be interrupted due to lack of time. A plenary session was scheduled, which could not be further delayed. Some amendments are still pending, and the final vote has been postponed until June 27.

Due to the diffuse voting behavior, the current version of the text has become “completely confusing,” according to Canfin. He will analyze the adopted amendments and expects “numerous inconsistencies”. According to Green MEP Michael Bloss, it is also possible that the original supporters of the proposed law may vote against it in the final vote because the adopted amendments may have weakened the law too much. In that case, it would still go to the plenary – first with a vote to reject the entire bill and then, if necessary, on all the other amendments tabled by the deputies.

Therefore, Canfin relies on the “decisive vote” in the plenary, which is still scheduled for the second week of July. However, the vote there could be even more difficult for the supporters of the renaturation law, as the deputies in the ENVI are usually more ambitious on environmental issues than the entire parliament. Until then, he wants to find an alternative text that could also align with the general direction of the Council.

It’s the turn of the Environmental Council

EU environment ministers will meet on June 20. Canfin believes member states will show “a clear majority” in favor of the text, which will allow for “more objective and less polarized discussions” in Parliament as well. “The EPP will have a harder time defending its hard line.”

German Environment Minister Steffi Lemke (Greens) is also counting on a “clear positive vote” that will ensure “that this dossier, which is so important for the credibility of the EU, does not fail”. Germany will work hard to achieve this, she said.

Meanwhile, the majority of countries are calling on the Swedish presidency to keep the renaturation law on track despite their skepticism. They expressed their support for the proposal at the meeting of deputy ambassadors on June 14. Sweden had recently failed to convince the ambassadors of its latest compromise proposal and was subsequently reluctant to continue its efforts. Now the Council Presidency must present a new compromise proposal at this Friday’s meeting so that environment ministers can decide on their general approach next week. With Lukas Scheid

EVs from China: discussion about protective tariffs

The EU Commission could use its anti-dumping tools against the import of cheap EVs from China. The rapid rise of imports is becoming a problem for the EU’s industry, Internal Market Commissioner Thierry Breton told Politico. The responsible Directorate-General for Trade, Denis Redonnet, reportedly discusses launching proceedings against suppliers that can be accused of selling products at excessively low prices. A spokeswoman of the EU Commission refused to comment on the matter.

The French government, in particular, is putting pressure on the Commission, it is heard from Brussels. Paris fears competition for its volume manufacturers, Stellantis and Renault. However, French government circles contradict this: “We have not pressed for proceedings in any particular case,” they say.

Lange does not see enough clues

The German government, on the other hand, is acting more cautiously. A spokesperson for Economy Minister Robert Habeck referred to the EU regulations for anti-dumping procedures, which provide for “a regulated decision-making and implementation procedure.” The EU modernized its methodology in 2017 precisely because of the challenges posed by China’s state capitalism.

Without well-founded complaints from the European manufacturers, the Directorate-General for Trade will hardly initiate proceedings against the Chinese manufacturers. The Chair of the European Parliament’s committee on International Trade, Bernd Lange, does not see “sufficient evidence for this at the moment. A large part of the added value is created by the batteries, which are used almost identically by European manufacturers,” the social democrat told Table.Media. Moreover, hardly any reliable figures show that Chinese EV prices are significantly lower than those of European suppliers. In addition, their market penetration in Europe has been low so far, he added.

France as a gateway

In contrast, industry observers report that Chinese EV manufacturers have been targeting the French market for about one to two years. Especially the volume manufacturers with brands such as Peugeot, Renault, Fiat and Seat registered that Chinese manufacturers were calling for “predatory pricing.” The MG4 Electric – a family-friendly four-seater by the Chinese manufacturer SAIC with a range of more than 400 kilometers – is being sold in France for prices comparable to the smaller Renault Zoe. The equivalent all-electric Mégane from Renault costs 5,000 to 10,000 euros more.

The French government is already discussing plans to change the EV subsidy. For example, a premium of up to 6,000 euros could only be granted if the steel was processed using sustainable methods and the electricity used to produce the car had a demonstrably low CO2 footprint. Ecological standards should also apply to the production of batteries. The idea is not to openly discriminate against Chinese-made cars and, at the same time, reward European manufacturers’ more ecologically demanding methods.

Manufacturers refrain from making any official comments. But this cannot hide the fact that French and German manufacturers have different interests. German premium brands are still reaping high profits from sales of internal combustion vehicles in Asia. They fear that China would immediately retaliate if EU punitive tariffs were imposed. On the other hand, they would hardly benefit from protective tariffs on the European market because Chinese EVs are no competition for them. At Renault or Stellantis, the opposite is true.

Low costs not only because of subsidies

Concerns about a glut of cheap Chinese cars are justified. There are several reasons for the Chinese cost advantages:

• Lower labor costs. Although wages in China have increased, the average minimum wage is still low, at just under 400 euros a month, even in tech regions. More importantly, the comparatively cheap labor force is well-educated.
• Low site costs. Manufacturers benefit from subsidized electricity, land, water and sewage prices. After all, every province wants to retain its car champion.
• Stable supply chains. Companies that produce in China do not have to fear bottlenecks in the supply of parts from China. In addition, almost every imaginable part is available in China, usually even in the neighborhood of technology clusters.
• Good infrastructure. Rail lines and ports ensure seamless connections to target markets.
• Production volume. Production volume. Because China supplies the whole world from central factories, enormous economies of scale are created.
• Subsidies. Key industries receive direct and indirect subsidies. This can also involve the provincial government locating a brand-new technical college for photovoltaics next to the plant of a large solar manufacturer like Yingli.
• Industrial metals. Access to raw materials such as rare earths, cobalt or manganese is comparatively easy and cheap because they also come from China.

The biggest concern: good products

Moreover, China produces very decent cars for a reasonable price. Domestic manufacturers have recently not only caught up with German carmakers in terms of technology but have even overtaken them in some cases. This is especially true for the digital technology of cars. While Germany’s engineers were still fine-tuning connecting rods and pistons, the focus in China was already on integrating apps into the four-wheeled smart device.

As far as passenger safety and a smooth driving experience are concerned, China’s manufacturers had several decades to pick up all the tricks from leaders in Germany, Japan or the USA. After all, they were required to manufacture in joint ventures with Chinese partners, which allowed for a regulated technology transfer.

BYD is already outpacing Volkswagen

A study by Allianz sees the Chinese challengers as the greatest risk to European carmakers. Stellantis CEO Carlos Tavares expects a “terrible fight” with the Chinese competition and calls for state aid against their aggressive prices.

But even tariffs will not change the fundamental problem that China can exploit numerous price advantages on its domestic market and the world market. Even if the US follows suit, Germany and Europe’s industries have a price problem in large parts of the world. Markus Grabitz/Till Hoppe/Finn Mayer-Kuckuk

NATO meeting: consolation instead of membership for Ukraine?

By

Stephan Israel

NATO wants to demonstrate unity at its summit in Vilnius in a month. To ensure that it actually works, there is still a lot for the NATO defense ministers to do at their meeting yesterday and today. The elephant in the room at the preparatory meeting in Brussels is also the question of how the alliance will deal with Ukraine’s demand to join as soon as possible. Ukrainian President Volodymyr Zelenskiy is expected to attend the summit on July 11. Poland and the Baltic countries are likely to support his demand or at least call for a clear roadmap for membership.

NATO’s door is open, Ukraine will become a member, but the timing will be decided jointly, stressed NATO Secretary General Jens Stoltenberg. It is interesting that France’s President Emmanuel Macron has recently moved closer to the position of the Central and Eastern Europeans and, with a view to the summit, is calling for a clear path for Ukraine into NATO.

Talks about security guarantees

For the German government and US President Joe Biden, however, the discussion in the middle of the war comes at an inopportune time. In Brussels, Defense Minister Boris Pistorius rejected criticism from Central and Eastern Europe that Germany and the United States were dragging their feet on the accession issue. He said he did not understand the criticism; at the moment, the focus was on continued support for Ukraine.

Defense ministers also met Thursday in the so-called Ramstein format. The US, the UK, Denmark and the Netherlands announced they would provide Ukraine with several hundred short- and medium-range missiles for air defense in the short term. At the summit, Zelenskiy can expect another package of support, and a number of allies also want to talk about security guarantees for Ukraine for the period after the war.

The offer to set up a NATO-Ukraine Council in the future is seen as a consolation. In contrast to the format of NATO’s current Ukraine Commission, this council will discuss security policy issues as well as reforms on an equal footing.

New defense plan

NATO’s new disposition with regional plans is well on its way. Stoltenberg speaks of 300,000 soldiers who can be mobilized at short notice and fend off attacks on the alliance. A new defense plan focuses on better troop mobility, more exercises and more air defense. Russia’s airstrikes on civilian targets in Ukraine have shown the allies their own shortcomings here.

The alliance defines Russia and international terrorism as the greatest threats. In order to be able to fulfill the new tasks, the member states are to spend two percent of economic output on defense, with the mark no longer being a target but a lower limit.

President Recep Tayyip Erdoğan could cause dissonance at the summit. In any case, hopes are just fading that Sweden will be able to attend Vilnius as the 32nd member. Sweden must first destroy all activities of “terrorist organizations”, the Turkish leader said again this week as delegations from Stockholm, Finland and Brussels negotiated in Ankara. Sweden’s government has already gone a long way toward accommodating Erdoğan, including with a new anti-terror law. But that is apparently not enough for the Turkish president. The hope that he might be more flexible after his reelection has not yet been fulfilled.

Who will succeed Stoltenberg?

One month before the summit, the question of Jens Stoltenberg’s successor as NATO Secretary General is also unresolved. The Norwegian’s term of office expires at the end of September. British Defense Minister Ben Wallace is the only candidate who has officially applied. However, he has little chance because the EU states do not want to give London the post.

A majority in the military alliance also thinks it is time for a woman. Estonia’s Kaja Kallas is too polarizing with her firm stance on Russia. The Danish head of government, Mette Frederiksen, is considered to have a good chance. However, the Dutchman Mark Rutte and the Spaniard Pedro Sánchez are also repeatedly mentioned.

Because time is running out and there is no consensus in sight, Stoltenberg could be pressured into a third extension, namely by one year, until the next summit in Washington in July 2024. That would not necessarily cast NATO in a good light. But a postponement would suit the Europeans because after next year’s European elections, there would be more room for maneuvering for a larger personnel package in Brussels.

Renaturation: ENVI vote postponed

By

Claire Stam

The number of the day is 44. In an electrifying vote in the ENVI Committee, 44 members voted in favor of the rejection motion proposed by the Christian Democrats, Conservatives and Right-wing extremists regarding the Commission’s proposal for nature restoration, while 44 voted against. This means that the rejection of the entire law did not receive the necessary majority; one vote was missing.

And so, the voting continued. After the rejection motion was rejected, the vote began on the approximately 3,500 amendments. Most of the compromise proposals negotiated between the S&D, Renew, Greens and Left parties also did not receive a majority, resulting in a painstaking vote on each individual amendment. The result often stood at 44 to 44 – “rejected”.

“All key compromises were rejected,” confirmed Pascal Canfin, the Chair of the ENVI Committee (Renew) afterwards. These include compromises related to greening cities, targets for wetland restoration and restoration of the forest ecosystem.

“This is a slap in the face for the Commission and Vice President Timmermans,” commented Christine Schneider, the EPP’s shadow rapporteur. Such a close result is a clear signal for the final vote and the plenary vote. “It shows that our concerns and criticisms are shared by a large part of the Environment Committee,” said Schneider.

Text has become ‘completely confusing’

After more than three hours of extremely tight voting, the session had to be interrupted due to lack of time. A plenary session was scheduled, which could not be further delayed. Some amendments are still pending, and the final vote has been postponed until June 27.

Due to the diffuse voting behavior, the current version of the text has become “completely confusing,” according to Canfin. He will analyze the adopted amendments and expects “numerous inconsistencies”. According to Green MEP Michael Bloss, it is also possible that the original supporters of the proposed law may vote against it in the final vote because the adopted amendments may have weakened the law too much. In that case, it would still go to the plenary – first with a vote to reject the entire bill and then, if necessary, on all the other amendments tabled by the deputies.

Therefore, Canfin relies on the “decisive vote” in the plenary, which is still scheduled for the second week of July. However, the vote there could be even more difficult for the supporters of the renaturation law, as the deputies in the ENVI are usually more ambitious on environmental issues than the entire parliament. Until then, he wants to find an alternative text that could also align with the general direction of the Council.

It’s the turn of the Environmental Council

EU environment ministers will meet on June 20. Canfin believes member states will show “a clear majority” in favor of the text, which will allow for “more objective and less polarized discussions” in Parliament as well. “The EPP will have a harder time defending its hard line.”

German Environment Minister Steffi Lemke (Greens) is also counting on a “clear positive vote” that will ensure “that this dossier, which is so important for the credibility of the EU, does not fail”. Germany will work hard to achieve this, she said.

Meanwhile, the majority of countries are calling on the Swedish presidency to keep the renaturation law on track despite their skepticism. They expressed their support for the proposal at the meeting of deputy ambassadors on June 14. Sweden had recently failed to convince the ambassadors of its latest compromise proposal and was subsequently reluctant to continue its efforts. Now the Council Presidency must present a new compromise proposal at this Friday’s meeting so that environment ministers can decide on their general approach next week. With Lukas Scheid

EVs from China: discussion about protective tariffs

The EU Commission could use its anti-dumping tools against the import of cheap EVs from China. The rapid rise of imports is becoming a problem for the EU’s industry, Internal Market Commissioner Thierry Breton told Politico. The responsible Directorate-General for Trade, Denis Redonnet, reportedly discusses launching proceedings against suppliers that can be accused of selling products at excessively low prices. A spokeswoman of the EU Commission refused to comment on the matter.

The French government, in particular, is putting pressure on the Commission, it is heard from Brussels. Paris fears competition for its volume manufacturers, Stellantis and Renault. However, French government circles contradict this: “We have not pressed for proceedings in any particular case,” they say.

Lange does not see enough clues

The German government, on the other hand, is acting more cautiously. A spokesperson for Economy Minister Robert Habeck referred to the EU regulations for anti-dumping procedures, which provide for “a regulated decision-making and implementation procedure.” The EU modernized its methodology in 2017 precisely because of the challenges posed by China’s state capitalism.

Without well-founded complaints from the European manufacturers, the Directorate-General for Trade will hardly initiate proceedings against the Chinese manufacturers. The Chair of the European Parliament’s committee on International Trade, Bernd Lange, does not see “sufficient evidence for this at the moment. A large part of the added value is created by the batteries, which are used almost identically by European manufacturers,” the social democrat told Table.Media. Moreover, hardly any reliable figures show that Chinese EV prices are significantly lower than those of European suppliers. In addition, their market penetration in Europe has been low so far, he added.

France as a gateway

In contrast, industry observers report that Chinese EV manufacturers have been targeting the French market for about one to two years. Especially the volume manufacturers with brands such as Peugeot, Renault, Fiat and Seat registered that Chinese manufacturers were calling for “predatory pricing.” The MG4 Electric – a family-friendly four-seater by the Chinese manufacturer SAIC with a range of more than 400 kilometers – is being sold in France for prices comparable to the smaller Renault Zoe. The equivalent all-electric Mégane from Renault costs 5,000 to 10,000 euros more.

The French government is already discussing plans to change the EV subsidy. For example, a premium of up to 6,000 euros could only be granted if the steel was processed using sustainable methods and the electricity used to produce the car had a demonstrably low CO2 footprint. Ecological standards should also apply to the production of batteries. The idea is not to openly discriminate against Chinese-made cars and, at the same time, reward European manufacturers’ more ecologically demanding methods.

Manufacturers refrain from making any official comments. But this cannot hide the fact that French and German manufacturers have different interests. German premium brands are still reaping high profits from sales of internal combustion vehicles in Asia. They fear that China would immediately retaliate if EU punitive tariffs were imposed. On the other hand, they would hardly benefit from protective tariffs on the European market because Chinese EVs are no competition for them. At Renault or Stellantis, the opposite is true.

Low costs not only because of subsidies

Concerns about a glut of cheap Chinese cars are justified. There are several reasons for the Chinese cost advantages:

• Lower labor costs. Although wages in China have increased, the average minimum wage is still low, at just under 400 euros a month, even in tech regions. More importantly, the comparatively cheap labor force is well-educated.
• Low site costs. Manufacturers benefit from subsidized electricity, land, water and sewage prices. After all, every province wants to retain its car champion.
• Stable supply chains. Companies that produce in China do not have to fear bottlenecks in the supply of parts from China. In addition, almost every imaginable part is available in China, usually even in the neighborhood of technology clusters.
• Good infrastructure. Rail lines and ports ensure seamless connections to target markets.
• Production volume. Production volume. Because China supplies the whole world from central factories, enormous economies of scale are created.
• Subsidies. Key industries receive direct and indirect subsidies. This can also involve the provincial government locating a brand-new technical college for photovoltaics next to the plant of a large solar manufacturer like Yingli.
• Industrial metals. Access to raw materials such as rare earths, cobalt or manganese is comparatively easy and cheap because they also come from China.

The biggest concern: good products

Moreover, China produces very decent cars for a reasonable price. Domestic manufacturers have recently not only caught up with German carmakers in terms of technology but have even overtaken them in some cases. This is especially true for the digital technology of cars. While Germany’s engineers were still fine-tuning connecting rods and pistons, the focus in China was already on integrating apps into the four-wheeled smart device.

As far as passenger safety and a smooth driving experience are concerned, China’s manufacturers had several decades to pick up all the tricks from leaders in Germany, Japan or the USA. After all, they were required to manufacture in joint ventures with Chinese partners, which allowed for a regulated technology transfer.

BYD is already outpacing Volkswagen

A study by Allianz sees the Chinese challengers as the greatest risk to European carmakers. Stellantis CEO Carlos Tavares expects a “terrible fight” with the Chinese competition and calls for state aid against their aggressive prices.

But even tariffs will not change the fundamental problem that China can exploit numerous price advantages on its domestic market and the world market. Even if the US follows suit, Germany and Europe’s industries have a price problem in large parts of the world. Markus Grabitz/Till Hoppe/Finn Mayer-Kuckuk

NATO meeting: consolation instead of membership for Ukraine?

By

Stephan Israel

NATO wants to demonstrate unity at its summit in Vilnius in a month. To ensure that it actually works, there is still a lot for the NATO defense ministers to do at their meeting yesterday and today. The elephant in the room at the preparatory meeting in Brussels is also the question of how the alliance will deal with Ukraine’s demand to join as soon as possible. Ukrainian President Volodymyr Zelenskiy is expected to attend the summit on July 11. Poland and the Baltic countries are likely to support his demand or at least call for a clear roadmap for membership.

NATO’s door is open, Ukraine will become a member, but the timing will be decided jointly, stressed NATO Secretary General Jens Stoltenberg. It is interesting that France’s President Emmanuel Macron has recently moved closer to the position of the Central and Eastern Europeans and, with a view to the summit, is calling for a clear path for Ukraine into NATO.

Talks about security guarantees

For the German government and US President Joe Biden, however, the discussion in the middle of the war comes at an inopportune time. In Brussels, Defense Minister Boris Pistorius rejected criticism from Central and Eastern Europe that Germany and the United States were dragging their feet on the accession issue. He said he did not understand the criticism; at the moment, the focus was on continued support for Ukraine.

Defense ministers also met Thursday in the so-called Ramstein format. The US, the UK, Denmark and the Netherlands announced they would provide Ukraine with several hundred short- and medium-range missiles for air defense in the short term. At the summit, Zelenskiy can expect another package of support, and a number of allies also want to talk about security guarantees for Ukraine for the period after the war.

The offer to set up a NATO-Ukraine Council in the future is seen as a consolation. In contrast to the format of NATO’s current Ukraine Commission, this council will discuss security policy issues as well as reforms on an equal footing.

New defense plan

NATO’s new disposition with regional plans is well on its way. Stoltenberg speaks of 300,000 soldiers who can be mobilized at short notice and fend off attacks on the alliance. A new defense plan focuses on better troop mobility, more exercises and more air defense. Russia’s airstrikes on civilian targets in Ukraine have shown the allies their own shortcomings here.

The alliance defines Russia and international terrorism as the greatest threats. In order to be able to fulfill the new tasks, the member states are to spend two percent of economic output on defense, with the mark no longer being a target but a lower limit.

President Recep Tayyip Erdoğan could cause dissonance at the summit. In any case, hopes are just fading that Sweden will be able to attend Vilnius as the 32nd member. Sweden must first destroy all activities of “terrorist organizations”, the Turkish leader said again this week as delegations from Stockholm, Finland and Brussels negotiated in Ankara. Sweden’s government has already gone a long way toward accommodating Erdoğan, including with a new anti-terror law. But that is apparently not enough for the Turkish president. The hope that he might be more flexible after his reelection has not yet been fulfilled.

Who will succeed Stoltenberg?

One month before the summit, the question of Jens Stoltenberg’s successor as NATO Secretary General is also unresolved. The Norwegian’s term of office expires at the end of September. British Defense Minister Ben Wallace is the only candidate who has officially applied. However, he has little chance because the EU states do not want to give London the post.

A majority in the military alliance also thinks it is time for a woman. Estonia’s Kaja Kallas is too polarizing with her firm stance on Russia. The Danish head of government, Mette Frederiksen, is considered to have a good chance. However, the Dutchman Mark Rutte and the Spaniard Pedro Sánchez are also repeatedly mentioned.

Because time is running out and there is no consensus in sight, Stoltenberg could be pressured into a third extension, namely by one year, until the next summit in Washington in July 2024. That would not necessarily cast NATO in a good light. But a postponement would suit the Europeans because after next year’s European elections, there would be more room for maneuvering for a larger personnel package in Brussels.