Table.Briefing: Europe

Chinese EVs + Brazil + Glyphosate criticism

Dear reader,

Work on the reforms to be implemented as a consequence of the Qatargate affair continues: The first round of negotiations on the Commission’s proposal for the interinstitutional ethics body is scheduled for today. All seven institutions are involved: the Commission, the Parliament, the European Council, the Council of the European Union, as well as the Court of Justice, the Court of Auditors and the ECB.

The President of the Parliament, Roberta Metsola, wants to coordinate the negotiations on the Ethics Committee on the part of the Parliament. This is what she told the heads of the parliamentary groups on Thursday. She wants to involve Parliament through a negotiating group. The group will include Katarina Barley (SPD) as Vice-President responsible for transparency, rapporteur Daniel Freund (Greens) and Salvatore De Meo (EPP) as chairman of the Constitutional Affairs Committee (AFCO).

The Greens have already voiced their criticism of the toothless proposal. And the liberal group has already said goodbye to it altogether. It is in favor of rejecting the Commission’s proposal. Once again, a group that is part of the informal “Von der Leyen coalition” is making a name for itself by rejecting a proposal from the Berlaymont. The factions are still fine-tuning a resolution on the Ethics Committee, which is to be voted on Wednesday.

Further transparency reforms will continue late Monday afternoon in the Parliamentary Bureau: The 14 EP Vice-Presidents and the President will discuss for the first time the proposal for better protection of whistleblowers in the EP. Stricter measures against harassment and bullying in the EP are also to be decided. Among other things, all MEPs are to take anti-harassment courses in the future.

I hope you have a wonderful Friday!

Your
Markus Grabitz
Image of Markus  Grabitz

Feature

China’s SAIC wants to build EVs in Europe

Shanghai state-owned automaker SAIC has started the search for a manufacturing site in Europe. Caixin reported this, citing a press meeting with company CEO Yu De. Yu has plans for Europe because his company sold 115,000 cars in the EU in the first half of the year, an increase of 143 percent, the report says. Overall, a sales boom of good and affordable Chinese EVs is emerging in the EU.

This would make SAIC the first Chinese carmaker to set up production in the EU without taking over an entire European brand. Geely did acquire Volvo in 2010 and thus operates factories in Sweden, Belgium and the Netherlands. But what SAIC is now planning is closer to the first steps of Japanese supplier Toyota into the EU, which has been manufacturing locally since 1992 and currently operates eight European plants.

Benefit for image, customs and logistics

SAIC is already sounding out the region. Chen Hong, Chairman of SAIC, and Wang Xiaoqiu, President of the company, reportedly made initial exploratory trips to Europe.

Manufacturing in the EU would benefit SAIC in a number of ways.

  • Goods produced locally are immune to trade disputes and tariffs. The higher the share of local production, the less the business is affected by political disputes.
  • Society is more accepting of companies when they create local jobs.
  • Supply routes are shorter.

Taking the wind out of critics’ sails

Overall, China has a better position as a global economic citizen if it not only produces domestically and floods foreign markets, but is willing to be involved on the ground. It has now acquired the necessary capital strength and experience to climb to this new level of global involvement.

Investments in production facilities in other countries would also be perceived as fair because European, American, Japanese and Taiwanese industries have built up many structures in China over the decades. The plants of international manufacturers have helped entire cities and regions grow.

SAIC’s plan also reveals a long-term focus on the European market. “The plan shows that Chinese automakers are coming to stay,” says Stefan Bratzel of the Center of Automotive Management (CAM). They have learned that success on the international stage is not achieved in the short term, but requires perseverance. “From a Chinese perspective, I think this is an important step in the right direction,” says Bratzel.

Sales in Germany rise rapidly

In 2020, SAIC did not even appear as a manufacturer in Germany’s Federal Motor Transport Authority (KBA) registration statistics. In 2021, the company sold 3,239 vehicles in Germany; in 2022, the company had already sold 15,684 – an increase of 480 percent. All of them are electric cars.

SAICS’ main bridgehead in Europe is the British MG brand, which the Shanghai-based company acquired in 2007. Its cars have been built entirely in China since 2016 and are exported ready for sale. In May, SAIC sold 21,000 MG brand cars in Europe, representing a 170 percent year-on-year increase.

According to the BBC, the new European plant will not primarily produce MG-branded cars. It has not yet been decided which brands will roll off the production line. Other SAIC brands include Roewe, Maxus, Rising and Yue Jin.

Germny as potential site

It is also still open whether SAIC will build a new factory on a greenfield site or buy and adapt an existing plant. The Ford plant in the German town of Saarlouis is a prime candidate. Shortly after the Sino-German government consultations in Berlin in June, it was announced that a buyer for the plant had been found.

Ford will cease production at the plant in 2025. All parties involved are interested in retaining as many of the 5,700 employees at the Ford plant and neighboring suppliers as possible. This would make an acquisition by SAIC a perfect fit.

SAIC is an important VW partner

SAIC has long been a household name in the German automotive community. It is an important partner of Volkswagen in China. The collaboration started in 1984 with the joint production of the Santana, which is legendary in China. An unusually successful joint venture has existed since 1988.

Like everywhere else in China’s automotive industry, SAIC is consistently pursuing the switch to e-mobility. The International Council on Clean Transportation (ICCT) ranking places SAIC, along with many other Chinese manufacturers and German companies, in the mid-range of companies rapidly advancing the transition. Tesla and BYD are at the top.

‘We are not schoolboys to be sanctioned by old colonial powers’

Mr. Simonsen Leal, Commission President von der Leyen wants to sign the trade agreement between the EU and Mercosur by the end of the year. Do you think that’s realistic?

I assume that my country wants an agreement – provided it is the one signed in 2019. If the EU now imposes other conditions, that will have to be examined. My question is: Will these additional things be more important than the goal of the agreement itself? What we are really discussing here is the relative importance of different issues. You should keep in mind that we have options. Good options.

The EU is demanding an additional commitment to climate protection and workers’ rights from Brazil. Is Europe talking too much about human rights and sustainability?

No, I think that’s right and important. We see Europe as a stabilizing factor in a crazy world. But at the moment we are experiencing a major geopolitical shift.

You mean the great power duel between the USA and China?

Exactly. The biggest point of discussion is the role of the US dollar as a reserve currency. Because that’s where all the leverage of the US lies. It’s how they can maintain their current account deficit of $800 billion, which is the cost of their armed forces, which they use to control the oil and energy routes in the world.

Duel for supremacy in the South China Sea

China is also upgrading its military.

China has increased its military spending, but only enough to be a burden on the US, not a real threat. That’s very smart. The second point is the Belt and Road Initiative (article in German), which is incomplete without China’s military dominance in the South China Sea – it’s the link to world markets. There could be a military confrontation between China and the United States for dominance in the South China Sea. It is not Taiwan that is important, but the oil links to Japan and South Korea.

Why?

If the Chinese dominated this region, these countries would turn to Beijing, and the US dollar might lose its role as a reserve currency. The Americans cannot allow that to happen. So the point of contention is not Ukraine. The real point of contention is China, the South China Sea. That will be an issue for the next 20, 30, maybe 50 years.

Where do you see Europe here?

In view of the war in Ukraine, the Americans are indispensable to Europe. But geopolitics in Europe poses some dilemmas. One of them is: Can either side win the war without provoking an even bigger problem? If Ukraine wins the war, could that lead to a fragmentation of the Russian Federation or a weakening of Russia that is not good for Europe?

‘Russia and Europe are being cannibalized’

Is this concern the reason why Brazil does not fully support the Western stance?

No, Brazil needs phosphate. 70 percent of our phosphate comes from Russia. But we are against any war. We don’t like to see people killed, and we don’t say who is right or wrong. We see a problem there, first of all. And we see that Russia is being cannibalized at the moment.

What do you mean?

China and the USA are preparing for a major exchange of blows. Of course, given the opportunity, they will cannibalize their weaker partners. Russia has to sell its oil at 60 percent of the price to China and India. Europe is also cannibalized because it has to buy a lot of weapons that do not come from Europe. This can be seen, for example, in the competition between the Patriot missiles from the US and the French SAMP/T missile defense system. Germany wants the Patriots because it has seen how well they work against Russian hypersonic missiles. In a sense, the world today resembles the world of 1910 or 1955: Germany is in a quandary.

What is the Brazilian interest in this geopolitical game?

We would like to be far away, on Mars. Together with Germany, because we have similar values. I hope you see that our institutions are very strong. For example, the reaction (editor’s note: reaction to the attack on Congress by supporters of ex-President Bolsonaro) was much faster than in the US to a similar situation.

‘You don’t consider us part of the Western world’

In the local perception, Brazil has recently moved closer to Beijing, driven by economic interests.

Brazil is basically non-aligned. We want to trade and exchange with everyone. We have a cultural preference for Europe and think that we are part of the Western world. But you don’t consider us part of the Western world. Maybe we should do more to be part of the Western world. But given history, that certainly doesn’t mean we do what others want.

The first summit between EU and Latin American states since 2015 will take place in mid-July. It seems that Europe is rediscovering Latin America.

It’s about Europe’s standing: For the US, Germany comes in third or fourth – after the Americans, the British and the Japanese. As an investor in Asia, you’re not number one either. Where Europe has real dominance as an investor is in Latin America – especially Mexico and Brazil. But the Asians are pushing into the Brazilian automotive market and will try to take the market away from the German and Italian companies. And they sell very good products.

Which brings us back to the free trade agreement between the EU and Mercosur, and the EU Commission’s call to commit Brazil in particular to sustainability.

Brazil does not handle its image problems very well. We don’t understand how people in Europe perceive us. They don’t see us as a country that generates 85 percent of its electricity from hydropower, where most cars run on ethanol and are CO2-neutral. Of course there are fires in the Amazon forest. We have problems, but the destruction of the forest is probably under control at the moment.

‘There has to be a certain amount of trust’

Thanks to the new government of President Lula da Silva?

Thanks to the protective mechanisms that were not completely destroyed by the last government. Of course, the question is how to repair the damage done. That is another question. But look: we are a country that has preserved its forests more than any other country. Where is the Black Forest? It’s not so black anymore, is it?

So what’s the problem with signing the additional declaration on sustainability that the EU would like to see?

The individual countries in the EU are making different demands. There is a certain cacophony. The problem is: something was agreed, something was signed. And now new rules are being proposed that, at least for the moment, I don’t think are clear enough. Our president has said something that I think is very wise. When you make a contract, can you regulate all possible eventualities? Hardly. So there has to be a certain amount of trust.

The Greens in Germany in particular want to be able to impose sanctions if Brazil or the other three countries fail to meet their sustainability commitments. Is that a red line in your view?

I am not the government, but if I were in the position of a government, I would say, well, let’s be more specific. We are not schoolboys who are going to be sanctioned by old colonial powers. We have other options. If we don’t act in good faith, it’s better not to enter into the agreement. Some people in Europe do not want an agreement for reasons that are only pretexts.

President Macron has called for farmers in Latin America to work to comparable sustainability standards to those in Europe. Is that protectionism in disguise in your eyes?

Let me put it another way: Do you really understand our conditions so well that you can say we are managing less sustainably than you?

  • Mercosur

EU-Monitoring

July 10-11, 2023
Informal meeting of environment ministers
Topics: Biodiversity, improving water management, reducing pollution, and promoting the circular economy. Info

July 10, 2023; 10 a.m.
Council of the EU: General Affairs
Topics: Policy debate on the mid-term review of the Multiannual Financial Framework 2021-2027, exchange of views on the priorities of the Spanish Presidency, exchange of views on the Annual Rule of Law Report 2023. Draft agenda

July 10, 2023; 5-11 p.m.
Plenary Session of the EU Parliament: Industrial Emissions, Alternative Fuels, FuelEU Maritime
Topics: Debate on the Industrial Emissions Directive, debate on the development of alternative fuels infrastructure, debate on sustainable marine fuels (FuelEU Maritime initiative). Draft agenda

July 10, 2023; 7-9 p.m.
Joint meeting of the Budget Committee (BUDG) and the Committee on Economic and Monetary Affairs (ECON)
Topics: Dialogue on reconstruction and resilience with Valdis Dombrovskis (Vice President for an economy that benefits people) and Paolo Gentiloni (Commissioner for Economic Affairs). Draft agenda

July 11-12, 2023
Informal meeting of energy ministers
Topics: Challenges in achieving an integrated and digitalized internal energy market, legislative proposals on energy in the Fit for 55 package, development of a competitive market for hydrogen and renewable gases. Info

July 11, 2023
Weekly commission meeting
Topics: Greening Transport Package, Virtual Worlds Initiative, Revision of Victims’ Rights Directive. Draft agenda

July 11, 2023; 9 a.m.-10 p.m.
EU Parliament plenary session: chip law, adaptation to globalization, EU-Japan
Topics: Debate on the European chip bill, vote on the mobilization of the European Globalization Adjustment Fund, vote on the EU-Japan agreement on air services. Draft agenda

July 12, 2023; 9 a.m.-10 p.m.
Plenary session of the EU Parliament: European Council, Ecodesign Regulation, Digital Information Exchange
Topics: Debate on the conclusions of the June 29-30, 2023 European Council, vote on the Ecodesign Regulation, vote on digital information sharing in terrorism cases. Draft agenda

July 13-14, 2023
Informal meeting of ministers for employment and social policy
Topics: The ministers for employment and social policy meet for consultations. Info

July 13, 2023
EU-Japan Summit
Topics: European Council President Charles Michel and European Commission President Ursula von der Leyen, representing the Union, meet with Japanese Prime Minister Fumio Kishida at the 29th EU-Japan Summit in Brussels. Info

July 13, 2023; 9 a.m.-4 p.m.
EU Parliament plenary session: access to documents, major questions
Topics: Debate on annual report for 2019-2021 on public access to documents, debate on major questions. Draft agenda

July 13, 2023; 9-11 a.m.
Public Health Committee Meeting (SANT).
Topics: Hearing on drug shortage. Draft agenda

July 13, 2023; 9-10 a.m.
Meeting of the Development Committee (DEVE)
Topics: Draft position statement on establishing a framework to ensure a secure and sustainable supply of critical raw materials. Draft agenda

July 13, 2023; 3 p.m.
Euro Group
Topics: Fiscal stance of the euro area (agreement on a statement), International role of the euro (stocktaking). Draft agenda

July 14, 2023; 10 a.m.
Council of the EU: Economy and Finance
Topics: Policy debate on financial assistance to Ukraine in the context of the mid-term revision of the MFF, policy debate on the review of economic governance, guidelines for further discussions in preparation for the meeting of G20 Finance Ministers and Central Bank Governors on October 11-12, 2023 and the IMF Annual Meetings. Draft agenda

News

Glyphosate: criticism of EFSA recommendation

Table.Media announced it yesterday, followed a little later by official confirmation: The European Food Agency EFSA recommends an extension of the controversial herbicide glyphosate. With regard to the effects of the herbicide on humans, animals and the environment, the experts have not identified any critical areas of concern. Such a critical area (of concern) is claimed when all uses of a product are affected.

However, EFSA scientists also conclude that there is a high, long-term risk to mammals from 12 of glyphosate’s 23 uses. As for glyphosate’s impact on biodiversity, the researchers acknowledge that the risks are “complex”.

In EFSA’s view, there are also still some open questions. They concern:

  • Information gaps regarding the toxicity of any of the glyphosate components;
  • data gaps on potential contamination of glyphosate, assessment of risks to consumer diets, and assessment of risks to aquatic plants;
  • a lack of harmonized methods and specific protection goals regarding the use of glyphosate.

Based on the assessments by EFSA, the EU Chemicals Agency and the glyphosate evaluation group, the EU Commission will submit a recommendation in the form of a delegated act. The 27 governments will then decide by qualified majority. Parliament can reject the act by simple majority.

Ministry of Agriculture rejects extension

The German Federal Ministry of Food and Agriculture (BMEL) criticized EFSA’s positive ruling. Effects on biodiversity had not been taken into account by the authority, according to Minister Cem Özdemir (Greens). Total herbicides such as glyphosate kill “all plants across the board, unless they are genetically modified”. Entire ecosystems or food webs – from plants to insects to small animals – are thus being damaged.

The total herbicide, which is by far the most widely used, is damaging the foundations of sustainable and crisis-resistant agriculture, the BMEL continues. “We have already clearly presented this to the European Commission and the other member states.” The BMEL does not consider an extension of the approval at EU level to be justified. The coalition agreement also advocates a ban on glyphosate, which the previous government had already imposed by Jan. 1, 2024, as part of the Plant Protection Application Ordinance.

NGOs also sharply criticized the EFSA decision. Corporate Europe Observatory, for example, questioned the approval procedure. The EFSA assessment was mainly based on studies commissioned by the industry. Greenpeace criticized EFSA for ignoring the overwhelming scientific evidence linking glyphosate to cancer and other health damage and called on the EU Commission not to recommend the extension of glyphosate. cw/ab

  • Agricultural Policy
  • Climate & Environment

Electricity market: ITRE against revenue skimming

Yesterday, the negotiators in the Industry Committee reached a political agreement on electricity market reform. The possibility of skimming off excess revenues in energy crises, as the Spanish rapporteur Nicolás Casares (S&D) wanted to push through, is off the table. This was tweeted by both the shadow rapporteurs from the EPP, Maria Graça Carvalho, and from Renew, Morten Petersen.

Petersen also indicated that the restriction of direct price support systems to two-way Contracts for Difference (CfDs) will be dropped and equivalent support options will remain allowed. The Commission wants to use CfDs to allow member states to limit revenues from new installations. Critics, however, see this as a threat to investment in new generation capacity.

European tenders for renewable energies

According to Petersen, there should also be joint European tenders for renewable energies. This was advocated by the Green Michael Bloss. On July 19, the ITRE is to adopt the position.

For Bloss, the quick agreement has a signal effect for other legislative projects: “We negotiated with the EPP and found a compromise in the middle. We expect the EPP to show this political will in the plenum next week and vote for more climate protection in nature.” ber

  • Electricity market
  • Electricity price
  • ITRE
  • Power
  • Renewable energies

Green Deal: additional investments of €700 billion are needed annually

According to a Commission estimate, the EU needs additional annual investments of more than €700 billion to meet the targets of the Green Deal and RePowerEU. The Commission’s new Strategic Perspective shows: From 2023 to 2030, additional annual investments of €620 billion are needed to meet the targets of the Green Deal and RePowerEU.

In addition, investments of €92 billion per year are still needed for the Net-Zero Industry Act. The Strategic Perspective is designed to help the Commission achieve its goals.

More support for cutting-edge projects

Commission Vice-President Maroš Šefčovič said Europe must become a “Europe of investment” to achieve its goals and ensure that the community of nations can compete globally. “The European Investment Bank should provide more support for strategic investments in key areas such as environmental and biotechnology and raw materials, especially for cutting-edge projects.”

Šefčovič also called for targeted investments from the public sector, including national budgets and EU funds. rtr

  • European Commission
  • REPowerEU

Horizon Europe: UK wants to join again, but pay less

The UK is seeking financial concessions from the EU in negotiations on a return to the EU’s Horizon Europe research program. A British government spokesman said on Thursday that there were constructive talks. However, no deal has yet been agreed with Brussels, he explained.

Prime Minister Rishi Sunak wants to achieve value for money. If no deal is reached, London will push ahead with its own research project called Pioneer and use the money earmarked for Horizon for this purpose.

Previously, the Daily Express, among others, had reported that there was a preliminary agreement between the EU and the UK on re-entry. After Sunak is to present the agreement paper over the weekend, the final confirmation is planned for next Tuesday. A meeting between Sunak and Commission President Ursula von der Leyen, which had been planned anyway, will then take place as part of the NATO summit. Officially, however, neither the British government nor the Commission wanted to confirm an agreement.

Rejoining the Copernicus program

According to the statements of a British government official, Great Britain will also rejoin the earth observation program Copernicus, as stated in the media reports. It is only the nuclear research and development program Euratom that the British side apparently does not want to rejoin. The British government and the British nuclear sector are critical of such a commitment because of the “poor price-performance ratio”.

In the wake of its exit from the EU in January 2020, the UK left all three programs. Negotiations on re-entry as a third country had stalled due to the bitter dispute over trade rules in Northern Ireland.

After London and Brussels concluded the Windsor Framework agreement, negotiations resumed in March. Financial details of the agreement were not disclosed, but the British Treasury reportedly supports the proposal.

The British research community expressed relief at the presumed agreement. Sarah Main, Executive Director of the Campaign for Science and Engineering (CaSE), spoke of an “encouraging development”. An agreement within a few days would be “the best news for science in the UK”. mw/dpa

Column

What’s cooking in Strasbourg? It’s getting tight for the NRL

By Claire Stam
Schwarz-weiß Portrait von Claire Stam

For weeks, the Brussels Bubble has been living in the political rhythm of the “Nature Restoration Law” or NRL, to use the jargon of insiders. In fact, the European People’s Party (EPP) has so far failed to prevent the law from passing. But it has managed to win enough MEPs to reject the text in the Parliament’s Agriculture, Fisheries and Environment Committees. That is no small feat.

The political battle had so far been fought by the EPP, led by Manfred Weber, the Vice-President of the Commission and head of the Green Deal, Frans Timmermans, and Pascal Canfin (Renew), the chairman of the parliamentary ENVI committee, which supports the regulation. In this political escalation, in which accusations of “fake news” and “political manipulation” surfaced, one voice was missing: that of the Commission President and great helmswoman of the Green Deal, Ursula von der Leyen, known to be a member of the EPP.

Luena appeals to von der Leyen

Supporters of the Nature Restoration Law have recognized this and have appealed to von der Leyen in search of support. “My group has supported her to become president with a key policy: the European Green Deal”, César Luena (S&D), rapporteur for the NRL, told members of the press. “Today, her political family is moving away from this deal and she has said nothing. Before the plenary session in Strasbourg, Ms. von der Leyen should react.”

The EPP is unimpressed and emphasizes that there is a regular exchange between the Commission President and the members of her party anyway. However, according to reports, this also includes a number of talks between her and leading Christian Democrats, the aim of which is to cool down the heated atmosphere.

EPP sticks with the ‘No’

But it remains the same: The EPP is not moving, despite new proposals from the Commission on the de-regulation of genetic engineering law and soil monitoring, which are in the interests of the Christian Democrats. The Christian Democrat group plans to vote almost unanimously against the NRL on Wednesday. According to its own statements, it expects only 10 percent dissenters.

Worse, the new proposals are being interpreted as a defeat for Timmermans. “Vice-President Timmermans was obviously bluffing”, said Peter Liese, the EPP Group’s environment and climate policy spokesman. His “threat” that the proposal on genetic engineering would not be presented by the Commission if the Environment Committee rejected the NRL was “obviously not” covered by the entire Commission and the Commission President, Liese believes. He expressly thanked von der Leyen and Health Commissioner Stella Kyriakides “for putting forward this important proposal”.

Renew’s proposal

The EPP is also stubborn about a plan announced by Canfin on Wednesday. Renew wants to draft a proposal closer to the common position that EU countries have adopted on the issue. It contains several additional amendments that include more generous funding for biodiversity restoration. “Our analysis is that a number of EPP delegations (…) might be interested in voting in favor of the general approach in line with their government’s vote in the Council”, he said. By doing so, proponents “give themselves a chance to win in the plenary“.

Renew’s strategy is “a good decision”, Luena said. “Yes, it’s very pragmatic, but we need a position from the parliament to start negotiations with the council.” Luena also expressed confidence that the coalition of Renew, the Greens, the Left and S&D has the means to win the vote next week. “We are very united on strategy and negotiations.”

The signs for the vote are therefore still confrontational. A very close result is expected.

  • European Commission

Europe.Table Editorial Office

EUROPE.TABLE EDITORS

Licenses:
    Dear reader,

    Work on the reforms to be implemented as a consequence of the Qatargate affair continues: The first round of negotiations on the Commission’s proposal for the interinstitutional ethics body is scheduled for today. All seven institutions are involved: the Commission, the Parliament, the European Council, the Council of the European Union, as well as the Court of Justice, the Court of Auditors and the ECB.

    The President of the Parliament, Roberta Metsola, wants to coordinate the negotiations on the Ethics Committee on the part of the Parliament. This is what she told the heads of the parliamentary groups on Thursday. She wants to involve Parliament through a negotiating group. The group will include Katarina Barley (SPD) as Vice-President responsible for transparency, rapporteur Daniel Freund (Greens) and Salvatore De Meo (EPP) as chairman of the Constitutional Affairs Committee (AFCO).

    The Greens have already voiced their criticism of the toothless proposal. And the liberal group has already said goodbye to it altogether. It is in favor of rejecting the Commission’s proposal. Once again, a group that is part of the informal “Von der Leyen coalition” is making a name for itself by rejecting a proposal from the Berlaymont. The factions are still fine-tuning a resolution on the Ethics Committee, which is to be voted on Wednesday.

    Further transparency reforms will continue late Monday afternoon in the Parliamentary Bureau: The 14 EP Vice-Presidents and the President will discuss for the first time the proposal for better protection of whistleblowers in the EP. Stricter measures against harassment and bullying in the EP are also to be decided. Among other things, all MEPs are to take anti-harassment courses in the future.

    I hope you have a wonderful Friday!

    Your
    Markus Grabitz
    Image of Markus  Grabitz

    Feature

    China’s SAIC wants to build EVs in Europe

    Shanghai state-owned automaker SAIC has started the search for a manufacturing site in Europe. Caixin reported this, citing a press meeting with company CEO Yu De. Yu has plans for Europe because his company sold 115,000 cars in the EU in the first half of the year, an increase of 143 percent, the report says. Overall, a sales boom of good and affordable Chinese EVs is emerging in the EU.

    This would make SAIC the first Chinese carmaker to set up production in the EU without taking over an entire European brand. Geely did acquire Volvo in 2010 and thus operates factories in Sweden, Belgium and the Netherlands. But what SAIC is now planning is closer to the first steps of Japanese supplier Toyota into the EU, which has been manufacturing locally since 1992 and currently operates eight European plants.

    Benefit for image, customs and logistics

    SAIC is already sounding out the region. Chen Hong, Chairman of SAIC, and Wang Xiaoqiu, President of the company, reportedly made initial exploratory trips to Europe.

    Manufacturing in the EU would benefit SAIC in a number of ways.

    • Goods produced locally are immune to trade disputes and tariffs. The higher the share of local production, the less the business is affected by political disputes.
    • Society is more accepting of companies when they create local jobs.
    • Supply routes are shorter.

    Taking the wind out of critics’ sails

    Overall, China has a better position as a global economic citizen if it not only produces domestically and floods foreign markets, but is willing to be involved on the ground. It has now acquired the necessary capital strength and experience to climb to this new level of global involvement.

    Investments in production facilities in other countries would also be perceived as fair because European, American, Japanese and Taiwanese industries have built up many structures in China over the decades. The plants of international manufacturers have helped entire cities and regions grow.

    SAIC’s plan also reveals a long-term focus on the European market. “The plan shows that Chinese automakers are coming to stay,” says Stefan Bratzel of the Center of Automotive Management (CAM). They have learned that success on the international stage is not achieved in the short term, but requires perseverance. “From a Chinese perspective, I think this is an important step in the right direction,” says Bratzel.

    Sales in Germany rise rapidly

    In 2020, SAIC did not even appear as a manufacturer in Germany’s Federal Motor Transport Authority (KBA) registration statistics. In 2021, the company sold 3,239 vehicles in Germany; in 2022, the company had already sold 15,684 – an increase of 480 percent. All of them are electric cars.

    SAICS’ main bridgehead in Europe is the British MG brand, which the Shanghai-based company acquired in 2007. Its cars have been built entirely in China since 2016 and are exported ready for sale. In May, SAIC sold 21,000 MG brand cars in Europe, representing a 170 percent year-on-year increase.

    According to the BBC, the new European plant will not primarily produce MG-branded cars. It has not yet been decided which brands will roll off the production line. Other SAIC brands include Roewe, Maxus, Rising and Yue Jin.

    Germny as potential site

    It is also still open whether SAIC will build a new factory on a greenfield site or buy and adapt an existing plant. The Ford plant in the German town of Saarlouis is a prime candidate. Shortly after the Sino-German government consultations in Berlin in June, it was announced that a buyer for the plant had been found.

    Ford will cease production at the plant in 2025. All parties involved are interested in retaining as many of the 5,700 employees at the Ford plant and neighboring suppliers as possible. This would make an acquisition by SAIC a perfect fit.

    SAIC is an important VW partner

    SAIC has long been a household name in the German automotive community. It is an important partner of Volkswagen in China. The collaboration started in 1984 with the joint production of the Santana, which is legendary in China. An unusually successful joint venture has existed since 1988.

    Like everywhere else in China’s automotive industry, SAIC is consistently pursuing the switch to e-mobility. The International Council on Clean Transportation (ICCT) ranking places SAIC, along with many other Chinese manufacturers and German companies, in the mid-range of companies rapidly advancing the transition. Tesla and BYD are at the top.

    ‘We are not schoolboys to be sanctioned by old colonial powers’

    Mr. Simonsen Leal, Commission President von der Leyen wants to sign the trade agreement between the EU and Mercosur by the end of the year. Do you think that’s realistic?

    I assume that my country wants an agreement – provided it is the one signed in 2019. If the EU now imposes other conditions, that will have to be examined. My question is: Will these additional things be more important than the goal of the agreement itself? What we are really discussing here is the relative importance of different issues. You should keep in mind that we have options. Good options.

    The EU is demanding an additional commitment to climate protection and workers’ rights from Brazil. Is Europe talking too much about human rights and sustainability?

    No, I think that’s right and important. We see Europe as a stabilizing factor in a crazy world. But at the moment we are experiencing a major geopolitical shift.

    You mean the great power duel between the USA and China?

    Exactly. The biggest point of discussion is the role of the US dollar as a reserve currency. Because that’s where all the leverage of the US lies. It’s how they can maintain their current account deficit of $800 billion, which is the cost of their armed forces, which they use to control the oil and energy routes in the world.

    Duel for supremacy in the South China Sea

    China is also upgrading its military.

    China has increased its military spending, but only enough to be a burden on the US, not a real threat. That’s very smart. The second point is the Belt and Road Initiative (article in German), which is incomplete without China’s military dominance in the South China Sea – it’s the link to world markets. There could be a military confrontation between China and the United States for dominance in the South China Sea. It is not Taiwan that is important, but the oil links to Japan and South Korea.

    Why?

    If the Chinese dominated this region, these countries would turn to Beijing, and the US dollar might lose its role as a reserve currency. The Americans cannot allow that to happen. So the point of contention is not Ukraine. The real point of contention is China, the South China Sea. That will be an issue for the next 20, 30, maybe 50 years.

    Where do you see Europe here?

    In view of the war in Ukraine, the Americans are indispensable to Europe. But geopolitics in Europe poses some dilemmas. One of them is: Can either side win the war without provoking an even bigger problem? If Ukraine wins the war, could that lead to a fragmentation of the Russian Federation or a weakening of Russia that is not good for Europe?

    ‘Russia and Europe are being cannibalized’

    Is this concern the reason why Brazil does not fully support the Western stance?

    No, Brazil needs phosphate. 70 percent of our phosphate comes from Russia. But we are against any war. We don’t like to see people killed, and we don’t say who is right or wrong. We see a problem there, first of all. And we see that Russia is being cannibalized at the moment.

    What do you mean?

    China and the USA are preparing for a major exchange of blows. Of course, given the opportunity, they will cannibalize their weaker partners. Russia has to sell its oil at 60 percent of the price to China and India. Europe is also cannibalized because it has to buy a lot of weapons that do not come from Europe. This can be seen, for example, in the competition between the Patriot missiles from the US and the French SAMP/T missile defense system. Germany wants the Patriots because it has seen how well they work against Russian hypersonic missiles. In a sense, the world today resembles the world of 1910 or 1955: Germany is in a quandary.

    What is the Brazilian interest in this geopolitical game?

    We would like to be far away, on Mars. Together with Germany, because we have similar values. I hope you see that our institutions are very strong. For example, the reaction (editor’s note: reaction to the attack on Congress by supporters of ex-President Bolsonaro) was much faster than in the US to a similar situation.

    ‘You don’t consider us part of the Western world’

    In the local perception, Brazil has recently moved closer to Beijing, driven by economic interests.

    Brazil is basically non-aligned. We want to trade and exchange with everyone. We have a cultural preference for Europe and think that we are part of the Western world. But you don’t consider us part of the Western world. Maybe we should do more to be part of the Western world. But given history, that certainly doesn’t mean we do what others want.

    The first summit between EU and Latin American states since 2015 will take place in mid-July. It seems that Europe is rediscovering Latin America.

    It’s about Europe’s standing: For the US, Germany comes in third or fourth – after the Americans, the British and the Japanese. As an investor in Asia, you’re not number one either. Where Europe has real dominance as an investor is in Latin America – especially Mexico and Brazil. But the Asians are pushing into the Brazilian automotive market and will try to take the market away from the German and Italian companies. And they sell very good products.

    Which brings us back to the free trade agreement between the EU and Mercosur, and the EU Commission’s call to commit Brazil in particular to sustainability.

    Brazil does not handle its image problems very well. We don’t understand how people in Europe perceive us. They don’t see us as a country that generates 85 percent of its electricity from hydropower, where most cars run on ethanol and are CO2-neutral. Of course there are fires in the Amazon forest. We have problems, but the destruction of the forest is probably under control at the moment.

    ‘There has to be a certain amount of trust’

    Thanks to the new government of President Lula da Silva?

    Thanks to the protective mechanisms that were not completely destroyed by the last government. Of course, the question is how to repair the damage done. That is another question. But look: we are a country that has preserved its forests more than any other country. Where is the Black Forest? It’s not so black anymore, is it?

    So what’s the problem with signing the additional declaration on sustainability that the EU would like to see?

    The individual countries in the EU are making different demands. There is a certain cacophony. The problem is: something was agreed, something was signed. And now new rules are being proposed that, at least for the moment, I don’t think are clear enough. Our president has said something that I think is very wise. When you make a contract, can you regulate all possible eventualities? Hardly. So there has to be a certain amount of trust.

    The Greens in Germany in particular want to be able to impose sanctions if Brazil or the other three countries fail to meet their sustainability commitments. Is that a red line in your view?

    I am not the government, but if I were in the position of a government, I would say, well, let’s be more specific. We are not schoolboys who are going to be sanctioned by old colonial powers. We have other options. If we don’t act in good faith, it’s better not to enter into the agreement. Some people in Europe do not want an agreement for reasons that are only pretexts.

    President Macron has called for farmers in Latin America to work to comparable sustainability standards to those in Europe. Is that protectionism in disguise in your eyes?

    Let me put it another way: Do you really understand our conditions so well that you can say we are managing less sustainably than you?

    • Mercosur

    EU-Monitoring

    July 10-11, 2023
    Informal meeting of environment ministers
    Topics: Biodiversity, improving water management, reducing pollution, and promoting the circular economy. Info

    July 10, 2023; 10 a.m.
    Council of the EU: General Affairs
    Topics: Policy debate on the mid-term review of the Multiannual Financial Framework 2021-2027, exchange of views on the priorities of the Spanish Presidency, exchange of views on the Annual Rule of Law Report 2023. Draft agenda

    July 10, 2023; 5-11 p.m.
    Plenary Session of the EU Parliament: Industrial Emissions, Alternative Fuels, FuelEU Maritime
    Topics: Debate on the Industrial Emissions Directive, debate on the development of alternative fuels infrastructure, debate on sustainable marine fuels (FuelEU Maritime initiative). Draft agenda

    July 10, 2023; 7-9 p.m.
    Joint meeting of the Budget Committee (BUDG) and the Committee on Economic and Monetary Affairs (ECON)
    Topics: Dialogue on reconstruction and resilience with Valdis Dombrovskis (Vice President for an economy that benefits people) and Paolo Gentiloni (Commissioner for Economic Affairs). Draft agenda

    July 11-12, 2023
    Informal meeting of energy ministers
    Topics: Challenges in achieving an integrated and digitalized internal energy market, legislative proposals on energy in the Fit for 55 package, development of a competitive market for hydrogen and renewable gases. Info

    July 11, 2023
    Weekly commission meeting
    Topics: Greening Transport Package, Virtual Worlds Initiative, Revision of Victims’ Rights Directive. Draft agenda

    July 11, 2023; 9 a.m.-10 p.m.
    EU Parliament plenary session: chip law, adaptation to globalization, EU-Japan
    Topics: Debate on the European chip bill, vote on the mobilization of the European Globalization Adjustment Fund, vote on the EU-Japan agreement on air services. Draft agenda

    July 12, 2023; 9 a.m.-10 p.m.
    Plenary session of the EU Parliament: European Council, Ecodesign Regulation, Digital Information Exchange
    Topics: Debate on the conclusions of the June 29-30, 2023 European Council, vote on the Ecodesign Regulation, vote on digital information sharing in terrorism cases. Draft agenda

    July 13-14, 2023
    Informal meeting of ministers for employment and social policy
    Topics: The ministers for employment and social policy meet for consultations. Info

    July 13, 2023
    EU-Japan Summit
    Topics: European Council President Charles Michel and European Commission President Ursula von der Leyen, representing the Union, meet with Japanese Prime Minister Fumio Kishida at the 29th EU-Japan Summit in Brussels. Info

    July 13, 2023; 9 a.m.-4 p.m.
    EU Parliament plenary session: access to documents, major questions
    Topics: Debate on annual report for 2019-2021 on public access to documents, debate on major questions. Draft agenda

    July 13, 2023; 9-11 a.m.
    Public Health Committee Meeting (SANT).
    Topics: Hearing on drug shortage. Draft agenda

    July 13, 2023; 9-10 a.m.
    Meeting of the Development Committee (DEVE)
    Topics: Draft position statement on establishing a framework to ensure a secure and sustainable supply of critical raw materials. Draft agenda

    July 13, 2023; 3 p.m.
    Euro Group
    Topics: Fiscal stance of the euro area (agreement on a statement), International role of the euro (stocktaking). Draft agenda

    July 14, 2023; 10 a.m.
    Council of the EU: Economy and Finance
    Topics: Policy debate on financial assistance to Ukraine in the context of the mid-term revision of the MFF, policy debate on the review of economic governance, guidelines for further discussions in preparation for the meeting of G20 Finance Ministers and Central Bank Governors on October 11-12, 2023 and the IMF Annual Meetings. Draft agenda

    News

    Glyphosate: criticism of EFSA recommendation

    Table.Media announced it yesterday, followed a little later by official confirmation: The European Food Agency EFSA recommends an extension of the controversial herbicide glyphosate. With regard to the effects of the herbicide on humans, animals and the environment, the experts have not identified any critical areas of concern. Such a critical area (of concern) is claimed when all uses of a product are affected.

    However, EFSA scientists also conclude that there is a high, long-term risk to mammals from 12 of glyphosate’s 23 uses. As for glyphosate’s impact on biodiversity, the researchers acknowledge that the risks are “complex”.

    In EFSA’s view, there are also still some open questions. They concern:

    • Information gaps regarding the toxicity of any of the glyphosate components;
    • data gaps on potential contamination of glyphosate, assessment of risks to consumer diets, and assessment of risks to aquatic plants;
    • a lack of harmonized methods and specific protection goals regarding the use of glyphosate.

    Based on the assessments by EFSA, the EU Chemicals Agency and the glyphosate evaluation group, the EU Commission will submit a recommendation in the form of a delegated act. The 27 governments will then decide by qualified majority. Parliament can reject the act by simple majority.

    Ministry of Agriculture rejects extension

    The German Federal Ministry of Food and Agriculture (BMEL) criticized EFSA’s positive ruling. Effects on biodiversity had not been taken into account by the authority, according to Minister Cem Özdemir (Greens). Total herbicides such as glyphosate kill “all plants across the board, unless they are genetically modified”. Entire ecosystems or food webs – from plants to insects to small animals – are thus being damaged.

    The total herbicide, which is by far the most widely used, is damaging the foundations of sustainable and crisis-resistant agriculture, the BMEL continues. “We have already clearly presented this to the European Commission and the other member states.” The BMEL does not consider an extension of the approval at EU level to be justified. The coalition agreement also advocates a ban on glyphosate, which the previous government had already imposed by Jan. 1, 2024, as part of the Plant Protection Application Ordinance.

    NGOs also sharply criticized the EFSA decision. Corporate Europe Observatory, for example, questioned the approval procedure. The EFSA assessment was mainly based on studies commissioned by the industry. Greenpeace criticized EFSA for ignoring the overwhelming scientific evidence linking glyphosate to cancer and other health damage and called on the EU Commission not to recommend the extension of glyphosate. cw/ab

    • Agricultural Policy
    • Climate & Environment

    Electricity market: ITRE against revenue skimming

    Yesterday, the negotiators in the Industry Committee reached a political agreement on electricity market reform. The possibility of skimming off excess revenues in energy crises, as the Spanish rapporteur Nicolás Casares (S&D) wanted to push through, is off the table. This was tweeted by both the shadow rapporteurs from the EPP, Maria Graça Carvalho, and from Renew, Morten Petersen.

    Petersen also indicated that the restriction of direct price support systems to two-way Contracts for Difference (CfDs) will be dropped and equivalent support options will remain allowed. The Commission wants to use CfDs to allow member states to limit revenues from new installations. Critics, however, see this as a threat to investment in new generation capacity.

    European tenders for renewable energies

    According to Petersen, there should also be joint European tenders for renewable energies. This was advocated by the Green Michael Bloss. On July 19, the ITRE is to adopt the position.

    For Bloss, the quick agreement has a signal effect for other legislative projects: “We negotiated with the EPP and found a compromise in the middle. We expect the EPP to show this political will in the plenum next week and vote for more climate protection in nature.” ber

    • Electricity market
    • Electricity price
    • ITRE
    • Power
    • Renewable energies

    Green Deal: additional investments of €700 billion are needed annually

    According to a Commission estimate, the EU needs additional annual investments of more than €700 billion to meet the targets of the Green Deal and RePowerEU. The Commission’s new Strategic Perspective shows: From 2023 to 2030, additional annual investments of €620 billion are needed to meet the targets of the Green Deal and RePowerEU.

    In addition, investments of €92 billion per year are still needed for the Net-Zero Industry Act. The Strategic Perspective is designed to help the Commission achieve its goals.

    More support for cutting-edge projects

    Commission Vice-President Maroš Šefčovič said Europe must become a “Europe of investment” to achieve its goals and ensure that the community of nations can compete globally. “The European Investment Bank should provide more support for strategic investments in key areas such as environmental and biotechnology and raw materials, especially for cutting-edge projects.”

    Šefčovič also called for targeted investments from the public sector, including national budgets and EU funds. rtr

    • European Commission
    • REPowerEU

    Horizon Europe: UK wants to join again, but pay less

    The UK is seeking financial concessions from the EU in negotiations on a return to the EU’s Horizon Europe research program. A British government spokesman said on Thursday that there were constructive talks. However, no deal has yet been agreed with Brussels, he explained.

    Prime Minister Rishi Sunak wants to achieve value for money. If no deal is reached, London will push ahead with its own research project called Pioneer and use the money earmarked for Horizon for this purpose.

    Previously, the Daily Express, among others, had reported that there was a preliminary agreement between the EU and the UK on re-entry. After Sunak is to present the agreement paper over the weekend, the final confirmation is planned for next Tuesday. A meeting between Sunak and Commission President Ursula von der Leyen, which had been planned anyway, will then take place as part of the NATO summit. Officially, however, neither the British government nor the Commission wanted to confirm an agreement.

    Rejoining the Copernicus program

    According to the statements of a British government official, Great Britain will also rejoin the earth observation program Copernicus, as stated in the media reports. It is only the nuclear research and development program Euratom that the British side apparently does not want to rejoin. The British government and the British nuclear sector are critical of such a commitment because of the “poor price-performance ratio”.

    In the wake of its exit from the EU in January 2020, the UK left all three programs. Negotiations on re-entry as a third country had stalled due to the bitter dispute over trade rules in Northern Ireland.

    After London and Brussels concluded the Windsor Framework agreement, negotiations resumed in March. Financial details of the agreement were not disclosed, but the British Treasury reportedly supports the proposal.

    The British research community expressed relief at the presumed agreement. Sarah Main, Executive Director of the Campaign for Science and Engineering (CaSE), spoke of an “encouraging development”. An agreement within a few days would be “the best news for science in the UK”. mw/dpa

    Column

    What’s cooking in Strasbourg? It’s getting tight for the NRL

    By Claire Stam
    Schwarz-weiß Portrait von Claire Stam

    For weeks, the Brussels Bubble has been living in the political rhythm of the “Nature Restoration Law” or NRL, to use the jargon of insiders. In fact, the European People’s Party (EPP) has so far failed to prevent the law from passing. But it has managed to win enough MEPs to reject the text in the Parliament’s Agriculture, Fisheries and Environment Committees. That is no small feat.

    The political battle had so far been fought by the EPP, led by Manfred Weber, the Vice-President of the Commission and head of the Green Deal, Frans Timmermans, and Pascal Canfin (Renew), the chairman of the parliamentary ENVI committee, which supports the regulation. In this political escalation, in which accusations of “fake news” and “political manipulation” surfaced, one voice was missing: that of the Commission President and great helmswoman of the Green Deal, Ursula von der Leyen, known to be a member of the EPP.

    Luena appeals to von der Leyen

    Supporters of the Nature Restoration Law have recognized this and have appealed to von der Leyen in search of support. “My group has supported her to become president with a key policy: the European Green Deal”, César Luena (S&D), rapporteur for the NRL, told members of the press. “Today, her political family is moving away from this deal and she has said nothing. Before the plenary session in Strasbourg, Ms. von der Leyen should react.”

    The EPP is unimpressed and emphasizes that there is a regular exchange between the Commission President and the members of her party anyway. However, according to reports, this also includes a number of talks between her and leading Christian Democrats, the aim of which is to cool down the heated atmosphere.

    EPP sticks with the ‘No’

    But it remains the same: The EPP is not moving, despite new proposals from the Commission on the de-regulation of genetic engineering law and soil monitoring, which are in the interests of the Christian Democrats. The Christian Democrat group plans to vote almost unanimously against the NRL on Wednesday. According to its own statements, it expects only 10 percent dissenters.

    Worse, the new proposals are being interpreted as a defeat for Timmermans. “Vice-President Timmermans was obviously bluffing”, said Peter Liese, the EPP Group’s environment and climate policy spokesman. His “threat” that the proposal on genetic engineering would not be presented by the Commission if the Environment Committee rejected the NRL was “obviously not” covered by the entire Commission and the Commission President, Liese believes. He expressly thanked von der Leyen and Health Commissioner Stella Kyriakides “for putting forward this important proposal”.

    Renew’s proposal

    The EPP is also stubborn about a plan announced by Canfin on Wednesday. Renew wants to draft a proposal closer to the common position that EU countries have adopted on the issue. It contains several additional amendments that include more generous funding for biodiversity restoration. “Our analysis is that a number of EPP delegations (…) might be interested in voting in favor of the general approach in line with their government’s vote in the Council”, he said. By doing so, proponents “give themselves a chance to win in the plenary“.

    Renew’s strategy is “a good decision”, Luena said. “Yes, it’s very pragmatic, but we need a position from the parliament to start negotiations with the council.” Luena also expressed confidence that the coalition of Renew, the Greens, the Left and S&D has the means to win the vote next week. “We are very united on strategy and negotiations.”

    The signs for the vote are therefore still confrontational. A very close result is expected.

    • European Commission

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