COP: ministers start negotiations + Spyware scandal in Greece + Scholz in Asia
EU at COP: middle field instead of top
Second COP week: the sticking points
EU looks on: spyware scandal in Greece
Scholz seeks closer economic ties with Vietnam
Pirc Musar wins presidential election in Slovenia
Autumn forecast: Commission expects hardly any growth in 2023
EU mobilizes €1 billion for solidarity corridors
Weak methane declaration – UN puts pressure with database
Germany withdraws from the Energy Charter
Heads: Werner Stengg – co-creator of the digital agenda
Dear reader,
As of today, the EU’s environment ministers and Climate Commissioner Frans Timmermans are sitting at the table at the climate conference in Sharm el-Sheikh. Brussels always praises itself for its ambitious plans, but the Europeans do not only have good news for the global community. The pressure on Timmermans and his team is great. The other participants are asking when and how the EU willincrease its climate target. My colleague Lukas Scheid is on the scene. He analyzed what Europe could propose and also gives an outlook on the second week of COP27.
In Greece, the public is discussing a different topic. Here, Prime Minister Kyriakos Mitsotakis is coming under increasing pressure in the scandal surrounding the use of spyware. Ministers, members of the Prime Minister’s staff, journalists and opposition politicians are alleged to have been spied on. But the EU continues to look the other way – much to the annoyance of the PEGA investigative committee, as Panajotis Gavrilis reports.
Meanwhile, German Chancellor Olaf Scholz is travelingin Asia and will arrive in Singapore today following his visit to Vietnam. There, Vice Chancellor Robert Habeck agreed on Sunday on a joint framework between the Federal Ministry of Economics and Climate Protection, and the Singaporean Ministry of Trade and Industry. Read more in our News.
There you can also read the EU’s fall forecast: In view of the consequences of the Ukraine war, the EU Commission expects only minimal economic growth in the euro zone in 2023. It even expects a recession at the end of the year. At the same time, the inflation rate is likely to rise even more sharply in 2023 than already assumed. This is not good news for the citizens of the EU.
In today’s profile, I introduce you to Werner Stengg. He has worked for the EU for 27 years, currently in the cabinet of Commission Vice President Margrethe Vestager, where he coordinates digital policy and deals with artificial intelligence, the data economy, the platform economy, and disinformation. Important legal acts such as the Digital Services Act and the Digital Markets Act bear his signature.
The most common question this week will be: When and how will the EU increase its climate target? With the trilogue agreement on the LULUCF regulation, Europe is on track to cut more emissions than envisaged in the EU climate law. This would allow EU negotiators at COP27 to implement what they themselves are asking others to do: raise the Nationally Determined Contributions (NDC) deposited with the UN. The EU will certainly not officially announce an NDC increase in Sharm el-Sheikh. But it is likely to put this proposal on the table in negotiations with other countries.
The member states alone would be responsible for a higher climate target. The Commission and Parliament have no influence on this. There are three scenarios for how the EU can deal with the leeway gained from the LULUCF agreement for a higher NDC, a senior EU official told Table.Media.
Scenario 1: no NDC increase
The EU’s Climate Change Act and NDC call for greenhouse gas emissions to be reduced by “at least” 55 percent from 1990 levels by 2030. The word “at least” does not exclude a higher reduction.
A few EU states prefer this scenario. It leaves room for maneuver if the goals of the individual pieces of legislation in the Fit for 55 package are not achieved. However, this is unlikely to go down well internationally. Europe itself is insisting on NDC increases in climate negotiations with other countries. Therefore, this scenario is also considered unlikely.
Scenario 2: only the declaration of the NDC is adjusted
The climate target remains at “at least 55 percent,” but the attached statements to the EU NDC, i.e. the implementation guidance, describe a higher target.
This would be the compromise. However, the political clout of this step in international negotiations would be significantly less than a de facto NDC increase.
Scenario 3: the EU increases its NDC
Europe would thus fulfill a crucial part of the Glasgow Climate Pact and could buildpressure on other nations. The increase is controversial among member states, however, as it would entail even greater commitments.
However, the EU agreed in Glasgow that all countries should revise their NDCs. If Europe takes its role as a self-proclaimed pioneer seriously, it must raise its own target.
No ETS money for international matters
However, another agreement in the trilogue on reforming the EU Emissions Trading System (ETS) is likely to go down less well in Sharm el-Sheikh, if it makes the rounds at all. Barely noticed, the EU Commission, Parliament and Council have dropped an important demand of the Parliament on international climate financing under the table:
The parliamentarians wanted member states to reserve at least 10 percent of their revenues from the ETS for climate protection measures in third countries particularly affected by climate protection. The parliamentarians reduced this to 7.5 percent. Nevertheless, the proposal did not stand a chance in the Council. The trilogue on ETS reform found the woolly wording: “Member states shall take into account the need tofurther increase international climate finance in vulnerable third countries.”
A fixed climate financing quota for ETS revenues would have strengthened the EU position at the COP. Finally, the heated debate on the broken promise of $100 billion annually dominates the discussions. In addition to the compromise-averse member states, EU Climate Commissioner Frans Timmermans is held responsible for this weakened deal.
How well do the Europeans negotiate?
Both the EPP and the Greens criticize the Dutchman for not exerting sufficient pressure on the Council. Timmermans is doing too much at once and is not focused on the important things, said the ETS rapporteur and environmental spokesman of the EPP, Peter Liese.
In addition to European climate legislation, Timmermans is also responsible for international climate negotiations. Liese fears that the commissioner, who is known for taking everything into his own hands, could be overwhelmed with his tasks. With a view to COP27, he is therefore calling for an EU climate ambassador like China or the USA.
Michael Bloss (Greens) also recently expressed disappointment with the EU climate czar on several occasions. “If this climate conference fails, then you are also responsible for it,” Bloss said during a speech in the EU Parliament at the end of October.
Timmermans is, therefore, under enormous pressure this week. It is true that the Commission is not negotiating alone in Sharm el-Sheikh – in fact, the Council is theoretically primarily responsible. But the Czech Environment Minister, Marian Jurečka, has only been in office for two weeks and only temporarily. He is actually Minister of Labor, presumably, therefore, had little time to read up on the issues and will only be in Sharm el-Sheikh for one day. German Foreign Minister Annalena Baerbock could therefore take on a more formative role at the ministerial level. In any case, the Green politician is one of Europe’s most ambitious ministers when it comes to international climate protection.
The euphoria over the new agenda item “loss and damage” has long since faded. After a week of sometimes tough negotiations, disillusionment has now set in at COP27. The negotiating teams are glad that they are now getting a new dynamic with the arrival of the ministers.
Dispute in compensation for loss and damage
In the second week of COP, the following issues will dominate the debate:
Loss and damage financing
Climate finance after 2025
Global climate adaptation target and adaptation fund
Finalization of climate change mitigation work program
Global energy transition
Cover decision of COP27
New momentum is needed, especially on loss and damage financing, because the discussions have become slow. The global South continues to call for a compensation mechanism for loss and damage in the most vulnerable countries as quickly as possible. For the Europeans, however, it is now out of the question that this will be set up or decided in principle as early as Sharm el-Sheikh.
Particularly controversial is the question of whether such financial flows will be organized within existing instruments, such as the Green Climate Fund – or whether a separate structure (facility) will be set up. This is a political question that ministers must clarify, says Jacob Werksman, chief negotiator for the EU Commission. For the time being, Germany and the EU only want to push ahead with the further process of financing loss and damage, they say, in other words, to clarify details: When is there to be a decision, in what format will negotiations take place, how will loss and damage be recorded?
Agreement on loss and damage in the distant future
The person responsible for defining this process is Jennifer Morgan, Climate Commissioner and State Secretary at the German Foreign Office, but above all a mediator on loss and damage. Together with her co-mediator, Chilean Environment Minister Maisa Rojas, she will explore the margins between developed and developing countries this week. The negotiating texts on loss and damage funding are still full of brackets and controversial options. There’s a lot of nagging detail work waiting.
The most vulnerable countries continue to call for concrete action this year. “What vulnerable countries need is a clear outcome that includes the provision of finance through a separate facility. We cannot pretend that procedural outcomes offer hope,” says Eddie Perez of Climate Action Network (CAN).
The Europeans, on the other hand, are positioning themselves as obstacles on that path: Jan Dusík, head of the delegation of the Czech Republic and the EU Council Presidency, did not even rule out the possibility that there will still be no agreement at COP28 next year in an interview with Table.Media. He said that it would first be necessary to clarify what scope and function such an instrument would have to have. Only then could one talk about the form of a facility. “Form follows function.” Providing only a new structure like a facility does not necessarily implement the loss and damage finances effectively. But all of this is a top priority for the EU, Dusík said.
Making good weather: Germany introduces Global Shield
On the other hand, Europeans are sending signals that they are ready to help: The G7, together with the most vulnerable 20 nations (V20), will present the “Global Shield” at COP on Monday. The shield, designed under the German G7 presidency (Table.Media reported), is intended to take effect in the event of climate disasters to pay for damages. The German government is making €170 million available for this purpose. The presentation in Sharm el-Sheikh is intended to win over further supporting countries.
In addition to loss and damage financing issues, other financial topics will also accompany the negotiators until the end of COP27, estimates David Ryfisch, team leader for international climate policy at Germanwatch. The New Collective Quantified Goal on Climate Finance aims to find a successor to the $100 billion promised to developing countries from 2020. How much should it now be from 2025 onwards?
The developing countries already want concrete commitments on sums or, for example, percentage sub-targets for climate adaptation. The industrialized countries are putting on the brakes and would prefer to clarify only formal issues here as well, Ryfisch reports. One open question is: Must all funds be compatible with the 1.5-degree target? The EU has not been able to get the issue of how global financial flows must be redirected for the Paris Agreement under Article 2.1c on the agenda. Now it should at least feature prominently in the political cover decision, Europeans hope.
According to Ryfisch, however, the Latin American countries have already presented a compromise. Although there are to be no concrete commitments for climate financing after 2025 this year, there will be binding commitments next year. The ministers must now negotiate this at the political level.
China: recipient or donor country?
In addition, the industrialized nations would like to expand the circle of donor countries in climate financing. This would mean that not only the richest countries in Europe, North America and East Asia would participate in global climate financing, but also those that already cause a large share of greenhouse gas emissions. “However, they are hitting a snag with China,” says Ryfisch.
The discussion of whether China is a donor or recipient country for financial support comes up again and again at COP27. “Recognizing one’s own polluter role is the hardest part,” says Susanne Dröge, head of the Climate Protection and Energy Department at the Federal Environment Agency. Climate finance, she says, is therefore the most politically charged issue. China is investing money in the form of the “New Silk Road,” but it does not want to give up its status as a G77 country just yet, she says. “And China has a lot of stamina in that regard,” Dröge estimates.
This is also evident in the negotiations on reducing greenhouse gases to a 1.5-degree level (mitigation). The work program is one of the most important issues for the industrialized countries at COP27, because it is about whether the Paris target remains within reach. The industrialized countries want all major emitters to be obliged to reduce their emissions – including the “major emitters” such as China, India and Indonesia. The G77 is facing a strong headwind. This promises to be one of the sticking points of the second week.
Climate & Environment
Climate Policy
EU looks on: spyware scandal in Greece
The reporter Sophie in ‘t Veld (Renew) is disappointed by the clarification efforts so far. On Sunday she demanded: “All evidence must be secured and examined, in Greece, Cyprus and beyond. No stone must be left unturned.” For the liberal, there is no doubt that the use of spyware such as NSO’s Pegasus or Intellexa’s Predator in EU member states is politically motivated. The surveillance scandals are a pan-European problem, she said: “It directly affects the EU institutions. MEPs, Commissioners, Commission staff and ministers have been targets. And at the same time, perpetrators sit in the European Council,” says in ‘t Veld.
She doesn’t speak their names: Government leaders ViktorOrban, KyriakosMitsotakis and AndrzejDuda are suspected of having promoted, ordered or at least tolerated the use of spyware against critics. The European Parliament’s PEGA Special Committee has not yet been able to find a “smoking gun,” but it has been able to connect many individual dots, says in ‘t Veld.
National security, which is regularly used to justify spyware operations, is the responsibility of the member states – and so far the EU has shied away from interfering: For months, the Commission has been answering all questions from MEPs in the same way – with the General Data Protection Regulation and the E-Privacy Directive, there already are strong European rights, the enforcement of which is the responsibility of national authorities. The events in Greece show that both sets of laws have little effect.
Greece: Predator puts Mitsotakis in trouble
In Greece, Prime Minister Mitsotakis (EPP) is coming under increasing pressure. The New Democracy party leader has brought the National Intelligence Service (EYP) under his control at the start of his term in 2019: “The National Intelligence Service will be transferred to the Prime Minister with all its powers, positions and personnel,” the law states. But Mitsotakis claims to have known nothing about it.
Two cases presented themselves at the beginning of the scandal: Opposition politician and MEP Nikos Androulakis (S&D) and financial journalist Thanasis Koukakis became targets of surveillance measures. In both cases, telecommunication providers were ordered to monitor, authorized by a prosecutor. But traces of the Predator spyware were also found on the smartphones of the two victims. It is considered to be similarly aggressive to the better-known Pegasus spyware. As a result of the wiretapping scandal, intelligence chief Panagiotis Kontoleon had to resign at the beginning of August. And Grigoris Dimitriadis, the Prime Minister’s Secretary General, political strategist and Mitsotakis’ nephew, also resigns. He is said to have been in contact with Intellexa – the company that offers the Predator spyware to intelligence services – through several contacts and a complicated corporate network.
But the spyware scandal is spreading from week to week. The left-leaning weekly Documento News first reported that ministers of the current conservative government and prominent party colleagues of Mitsotakis, in some cases even their wives, were attacked with Predator. Documento lists 33 names, citing two informants who are said to have played key roles in the surveillance operations. Among these 33 are said to be ex-Prime Minister Antonis Samaras, acting Foreign Minister Nikos Dendias, and Development Minister Adonis Georgiadis.
The monitoring of Foreign Minister Dendias with Predator is seen as proven by the newspaper To Vima. And the newspaper Ta Nea reported that the 33 names were only the tip of the iceberg: According to the paper, 106 people are said to have been monitored. Documento also adds: Even Mitsotakis employees are said to be among those monitored.
Mitsotakis sees himself as a victim
Greece’s Prime Minister rejects the initial Documento allegations as “unbelievable lies” in an interview with the ANT1 television channel. There is not the “slightest evidence” for the accusations made. Mitsotakis accuses his predecessor and Syriza party leader Alexis Tsipras of being behind the reports and rejects any responsibility: He does not know who carried out the surveillance. Indirectly, however, he admits that the use of Predator did occur: “I never claimed – and neither did the government – that there was no surveillance or that an institution operating the Predator software did not exist.” But in any case, he said, it was not the intelligence agency EYP that was using Predator. And “of course there was no involvement on my part,” he states.
As a consequence, Mitsotakis announced that he will ban the sale of all spyware. Greece will be “the first country to untangle this tangle and vote for a regulation that explicitly bans the sale of such software in our country.” All countries have such problems, Mitsotakis says. Products such as Predator and Pegasus, however, are not sold freely: Vendors provide their software directly and exclusively to intelligence and law enforcement agencies.
No danger from Europe
The Greek opposition, such as the Syriza party, is calling for the Prime Minister’s resignation and early elections. The regular election date would be in summer of 2023. Mitsotakis wants to stick to this, but the pressure is growing.
At the moment, there is no involvement from Europe, as the EU only says that NIS2 and the Cyber Resilience Act will strengthen the security of end devices. And the Media Freedom Act is intended to introduce minimum standards into European law, at least with regard to the monitoring of journalists. Brussels is not resorting to measures like infringement proceedings because of the spyware operations, even if there is much evidence that fundamental principles of the rule of law are being disregarded. For the foreseeable future, the Predator-Pegasus phalanx in the Council must fear the national public more than Brussels. Panajotis Gavrilis, Contributor: Falk Steiner
Cybersecurity
Digital policy
Digitalpolitik
Digitization
Greece
Pegasus
Sophie in 't Veld
News
Scholz seeks closer economic relations with Vietnam
During his visit to Vietnam, German Chancellor Olaf Scholz (SPD) announced his intention to seek closer economic relations with the Asian country. In addition, the transition towards climate neutrality is to be supported, for example through the expansion of metro connections in the metropolis of Hanoi, the SPD politician said on Sunday in the capital of Vietnam. Stronger cooperation in the field of energy was also discussed with Prime Minister Pham Minh Chinh, he said.
Vietnam is playing a role for more and more German industrial groups, because the dependence on China is to be reduced and supply chains are to be placed on a broader foundation. From Vietnam, Scholz will travel on to Singapore. On Tuesday and Wednesday, the chancellor will then attend the G20 summit of leading industrialized and emerging countries on the Indonesian island of Bali.
Habeck signs agreement with Singapore
Vice Chancellor Robert Habeck (Greens) preceded the German chancellor to Singapore, where he signed a joint framework on Sunday on the sidelines of the ongoing 17th Asia-Pacific Conference (APC) of German Business.
The interministerial agreement with the Singaporean Minister of Trade and Industry is called the “Germany-Singapore Framework for Sustainability and Innovation.” It lays the foundations for a regular structured exchange between the two ministries on all foreign economic policy issues and for sector-specific discussion formats for and with companies, the German Federal Ministry for Economic Affairs and Technology announced. The aim is to deepen and consolidate economic relations between the two countries. Singapore is an innovation center, investment location and gateway to other markets in the region, especially for the German economy, Habeck said. vis/rtr
Climate protection
Germany
Supply chains
Vietnam
Pirc Musar becomes president of Slovenia
Lawyer Nataša Pirc Musar won the second round of Slovenia’s presidential election on Sunday, becoming the country’s first female head of state. This was the preliminary result on Sunday evening.
According to the results, 54-year-old Pirc Musar received 53.83 percent of the votes in the runoff, while her rival, right-wing politician and former foreign minister Anže Logar, garnered 46.17 percent. This was shown by the Election Commission’s data, which was based on 86.7 percent of the votes counted. Voter turnout was49.9 percent, according to the data.
The new President of Slovenia will replace Borut Pahor, who has been in politics for 30 years. The former model, who served two five-year terms, is often referred to by the public as the Instagram President because of his frequent use of the social network.
Pirc Musar, a former television host turned influential lawyer, championed human rights, the rule of law and social issues. Her 46-year-old rival, Logar, is a member of the right-wing Slovenian Democratic Party (SDS) of former Prime Minister Janez Janša, who lost the April parliamentary elections to Prime Minister Robert Golob’s pro-environment Freedom Movement. rtr
Democracy
European policy
Slovenia
Commission expects hardly any growth in 2023
Due to the energy crisis resulting from the war in Ukraine, the EU Commission is forecasting hardly any economic growth in the coming year – but significantly more inflation than recently. Gross Domestic Product (GDP) in the euro zone is expected to grow by only 0.3 percent in 2023, the Commission announced in its fall economic forecast. In the summer, the EU had still estimated 1.4 percent.
“The economy in Europe is at a turning point,” said EU Economic Affairs Commissioner Paolo Gentiloni. That’s because for the final quarter of 2022, he said, the Commission expects the euro zone and most of its members to slip into recession. GDP is still expected to shrink at the beginning of 2023. The reasons are great uncertainty, high energy prices, loss of purchasing power among private households, the weaker global environment and stricter financing conditions.
EU expects higher inflation
However, due to surprisingly good growth in the first half of 2022, the economy is likely to expand by 3.2 percent over the year as a whole, which is stronger than the 2.6 percent growth forecast in the summer. The inflation rate, meanwhile, is likely to rise even more sharply than already assumed. The Commission now expects 8.5 percent for 2022.
“We believe that the peak of inflation is close,” Gentiloni said. This is likely to happen by the end of this year, he said. In October, inflation in the European Monetary Union had climbed to a record 10.7 percent. That is more than five times the European Central Bank’s (ECB) inflation target of two percent. For 2023, the Commission expects inflation to reach 6.1 percent, easing significantly to 2.6 percent in 2024.
Weak growth in Germany
Germany is lagging behind in terms of economic activity. According to the Commission’s estimates, the German economy is likely to shrink by 0.6 percent in 2023, more than any other country in the EU. Only Latvia will also see its economy shrink next year, but only by 0.3 percent. The EU once again expects Ireland to achieve the highest GDP growth, with an upward trend of 3.2 percent.
The Commission’s forecast for Germany is thus more skeptical than that of the German government and the economic experts, who expect a decline of 0.4 percent and 0.2 percent respectively. Previously, the Commission had forecast growth of 1.3 percent for 2023. In 2024, the German economy is then expected to grow by 1.4 percent. For the current year, GDP is expected to grow by 1.6 percent, slightly more than in the summer.
Despite the strong headwinds for the European economy, Gentiloni fears few negative consequences for the labor market. “The job market is still very strong.” The situation is more robust than it has been in decades, he said, and is unlikely to change. The unemployment rate in the euro zone will rise from 6.8 percent this year to 7.2 percent next year, but then fall back to 7.0 percent in 2024, he stated. rtr
Economy
European policy
Finance
Financial policy
EU mobilizes €1 billion for Solidarity Lanes
The European Commission will fast-track €250 million in financial assistance for the development of Solidarity Lanes for Ukraine. “For the short-term, we will support quick improvements, in particular with mobile equipment, to reduce waiting times and improve movement through the border crossing points and their access routes,” the Commission said in a joint statement with EU countries neighboring Ukraine, as well as the European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD) and the World Bank Group. In total, the signatories are mobilizing €1 billion for the Solidarity Lanes “to improve global food security and provide a lifeline to the Ukrainian economy.”
The Solidarity Lanes were established by the Commission and EU member states bordering Ukraine on May 12, 2022, as part of the Union’s response to Russia’s attack on Ukraine. They are crucial for exports of Ukrainian agricultural products, as well as exports and imports of other goods. “For the medium-term, we are mobilizing the Connecting Europe Facility (CEF) and €50 million to support the infrastructure developments needed to increase further the capacity of the Solidarity Lanes,” the statement added.
In addition, there are the following funds:
The EIB plans to invest up to €300 million in projects aligned with the Solidarity Lanes objectives by the end of 2023.
The EBRD plans to invest €300 million in Solidarity Lanes between 2022 and 2023.
The World Bank Group is preparing an emergency project for the repair of rail and road infrastructure damaged by the war, worth up to $100 million. vis
European policy
Finance
Financial policy
Geopolitics
Weak methane declaration – UN puts pressure with database
The US, EU, Canada, Japan and other countries want to “take immediate action” to reduce greenhouse gas emissions from fossil fuel production. This is according to a joint statement released by the countries on Friday. The statement targets “methane emissions in particular.” The states reaffirm the Global Methane Pledge agreed in Glasgow, which calls for cutting methane emissions by 30 percent by 2030.
The joint statement by the states remained rather vague. However, individual states announced the following measures:
On Friday, US President Biden presented an update on the methane emissions reduction action plan of the United States. The plan includes more than 20 billion dollars in new investments to reduce methane emissions, the White House announced.
The US Environmental Protection Agency (EPA) yesterday expanded a plan to limit methane emissions from oil and gas drilling after environmentalists criticized it as insufficient. However, the plan is not expected to be finalized until next year, Bloomberg reports.
Canada aims to reduce methane emissions by 75 percent by 2030 compared to 2012 levels, according to a government proposal. It would mark the “most comprehensive and most effective set of methane standards anywhere in the world,” Jonathan Banks of the nonprofit Clean Air Task Force told Bloomberg.
Criticism of EU methane regulation
European civil society criticized the joint declaration by states as nothing new. The methane declaration was criticized as “a toothless instrument,” by CAN Europe, Food and Water Action Europe and Deutsche Umwelthilfe:
the declaration is not legally binding,
the EU will not go beyond its plans in the EU Methane Regulation, which is currently negotiated in Parliament and the Council.
The EU methane regulation does not cover methane emissions from imported fossil fuels. But according to the three organizations, 75 to 90 percent of European methane emissions originate along the supply chain, i.e. during the extraction and transport of raw materials.
UN plans to hold companies and governments accountable
Meanwhile, the UNEP announced a public database of global methane leaks at COP27. The so-called Methane Alert and Response System (MARS) will use an existing network of space satellites to track methane plumes around the globe. This will help identify the size of the methane leaks and the company or government responsible, UNEP said. The data will be shared with those responsible to ensure the leak is repaired as quickly as possible.
After 45 to 75 days, the information will be made public – as well as responses from governments or companies to UN notices about methane leaks. This could create public pressure on those responsible to act more quickly. The system will initially be limited to the oil and gas sector, but will gradually be expanded to include the coal, waste and agricultural sectors.
Methane has a much stronger warming effect than carbon dioxide during its short lifetime and is responsible for about a quarter of the global temperature rise so far, scientists say. nib/rtr
Climate & Environment
Climate Policy
Methane
Germany withdraws from the Energy Charter
The coalition delayed its decision for a long time. Since Friday, it has become clear: Germany will withdraw from the Energy Charter Treaty (ECT). The agreement, which dates back to the 1990s, allows investors to sue states in private arbitration courts if their plants and investments are at risk, for example, because of stricter climate laws. The Swedish company Vattenfall, for example, sued Germany for billions in damages because of the accelerated nuclear phase-out.
On Nov. 22, the ECT states will vote on the reform of the charter in Mongolia. But many EU states see this reform as a failure: Spain, the Netherlands, Poland, Slovenia and most recently France have already announcedtheir withdrawal from the mixed treaty. Italy already left in 2015. According to the Munich Environment Institute, the reformed ECT would also violate current European law.
The coalition sees the exit as a concrete further development of Germany’s trade agenda: “By withdrawing from the Energy Charter, we are opening a new chapter to ensure that trade agreements cannot be used to shackle progress and public welfare-oriented policies,” says SPD deputy parliamentary party leader Verena Hubertz.
“It’s an important signal to the Commission: Now the EU must also prepare for withdrawal!” demands Green MEP Anna Cavazzini on Twitter. How the EU will position itself on the controversial text is not yet clear. On Wednesday, the Energy Charter is on the agenda of the Permanent Representatives Committee. Next Friday, a formal vote will take place in the General Affairs Council (GAC). Although Germany wants to withdraw from the treaty, Berlin is expected to abstain in the Council and not veto it. France, for its part, even plans to vote in favor of the reform, although it wants to withdraw from the Energy Charter. Charlotte Wirth
Energy
Energy Charter
Energy policy
Germany
Heads
Werner Stengg – co-creator of the digital agenda
Werner Stengg, Member of the Cabinet of Commissioner and Executive Vice President Margrethe Vestager.
You can familiarize yourself with any subject by reading. Werner Stengg is convinced of that – and has proven it. “Some people laughed and asked why someone from a landlocked country like Austria was suddenly dealing with maritime transport,” Stengg recalls of his first job at the Council in Brussels. On his missions to London, he says, all the officials were former captains. “As a Styrian and a skier, I sat in the middle of sea dogs.”
Stengg has not become a sea dog. In the course of his 27-year career in Brussels, he has read up on many subjects and acquired expertise. Reinventing himself each time has motivated him. His traineeship, as he calls his two-year entry-level job at the Council’s General Secretariat in the maritime field, prepared him well, he says. “I understood how the Brussels system works.” However, he admits, it took him longer than two years.
DSA and DMA bear Stengg’s signature
After his start in the Council, Stengg moved to the Commission, working in the Directorates-General for Enterprise, Budget, Internal Market and Connect, before joining the cabinet of Commission Vice President Margrethe Vestager. There he coordinates digital policy, deals with artificial intelligence, data economy, platform economy, and disinformation. In platform regulation – with the Digital Services Act (DSA) and the Digital Markets Act (DMA) – you can recognize his signature, he says. “I’ve been working on this in various capacities for eleven years now, and I’ve really done all the groundwork.”
Stengg came to Brussels in 1995, when his home country Austria joined the European Union. The timing was just right. He had just finished his dissertation on exchange rate systems in Vienna and was faced with the question of whether to stay in academia or venture into something new. “At the time, I thought it would be something for two years,” he says. That phase has turned into half a lifetime.
The different cultures inspire him
His fellow students would have gone on to careers in finance or marketing. But he said he had less of a need to increase market share than to enjoy solving problems and setting global standards. He has negotiated international textile agreements and tackled postal services, online gambling and e-commerce. “I feel like I’m working on a meaningful project.”
And in every station he learned something that he could use again later. Being inspired day after day by colleagues from all over Europe, getting to know different life stories, points of view, histories and cultures – his whole environment is very much appreciated by Stengg. “Not to mention the work, which is also exciting, of course.” In the process, he has gotten to know many nationalities and found that there is also a bit of truth in the stereotypes. One thing is not true, however: Germans are not as arrogant as he thought back in Vienna. That’s why he doesn’t get angry when someone mistakes him for a German.
‘I know that there are always at least three truths’
One of the things he admires about his boss, Margrethe Vestager, is her stamina and energy. “I would be dead after these three years if I had done her job.” But also her clear values, and that she can communicate complicated issues in a way that the audience in question, from schoolchildren to scientists, understands. “That’s a gift.”
Stengg knows how important communication is. After all, it’s an important part of his job: He has to explain the Commission’s legislative plans – to stakeholders, the Parliament, the Council and colleagues in the Commission. “I have to be persuasive.” He has not always succeeded, he admits. The reform of the Postal Services Directive he proposed still does not exist, for example.
He has also learned to take different perspectives. There is no such thing as the one right suggestion, he says. “I know there are always at least three truths,” Stengg muses. He sees his job as finding the right balance. In addition, he notes, it is important that the commission’s work is transparent and comprehensible. This is something else he has worked hard for in the course of his EU career.
Writing a book on digital transformation
He is jointly responsible for the introduction of the impact assessment – and has pushed it through as a kind of internal management consultant, even against resistance. Before the structured impact assessment was introduced, no one knew on what basis the Commission arrived at its assessments, whom it had consulted and whom it had not. The impact assessment has ensured transparency, says Stengg.
His passion for his work has not diminished over the years. Currently, the 54-year-old gets up at half past five in the morning to write: He is writing a book about digital transformation. In it, he is processing his experiences and observations of the past ten years. “It really drives me because it’s fun to keep finding new connections.”
It is not his first book. Stengg has already written two children’s books, reading material for 11- to 14-year-olds. “Kind of like Harry Potter, only without the commercial success,” he quips. In fact, he enjoys spending time with his four children, ages 9 to 22. The two oldest are already out of the house and studying in Vienna. That’s where he also started his professional career. Corinna Visser
Autumn forecast: Commission expects hardly any growth in 2023
EU mobilizes €1 billion for solidarity corridors
Weak methane declaration – UN puts pressure with database
Germany withdraws from the Energy Charter
Heads: Werner Stengg – co-creator of the digital agenda
Dear reader,
As of today, the EU’s environment ministers and Climate Commissioner Frans Timmermans are sitting at the table at the climate conference in Sharm el-Sheikh. Brussels always praises itself for its ambitious plans, but the Europeans do not only have good news for the global community. The pressure on Timmermans and his team is great. The other participants are asking when and how the EU willincrease its climate target. My colleague Lukas Scheid is on the scene. He analyzed what Europe could propose and also gives an outlook on the second week of COP27.
In Greece, the public is discussing a different topic. Here, Prime Minister Kyriakos Mitsotakis is coming under increasing pressure in the scandal surrounding the use of spyware. Ministers, members of the Prime Minister’s staff, journalists and opposition politicians are alleged to have been spied on. But the EU continues to look the other way – much to the annoyance of the PEGA investigative committee, as Panajotis Gavrilis reports.
Meanwhile, German Chancellor Olaf Scholz is travelingin Asia and will arrive in Singapore today following his visit to Vietnam. There, Vice Chancellor Robert Habeck agreed on Sunday on a joint framework between the Federal Ministry of Economics and Climate Protection, and the Singaporean Ministry of Trade and Industry. Read more in our News.
There you can also read the EU’s fall forecast: In view of the consequences of the Ukraine war, the EU Commission expects only minimal economic growth in the euro zone in 2023. It even expects a recession at the end of the year. At the same time, the inflation rate is likely to rise even more sharply in 2023 than already assumed. This is not good news for the citizens of the EU.
In today’s profile, I introduce you to Werner Stengg. He has worked for the EU for 27 years, currently in the cabinet of Commission Vice President Margrethe Vestager, where he coordinates digital policy and deals with artificial intelligence, the data economy, the platform economy, and disinformation. Important legal acts such as the Digital Services Act and the Digital Markets Act bear his signature.
The most common question this week will be: When and how will the EU increase its climate target? With the trilogue agreement on the LULUCF regulation, Europe is on track to cut more emissions than envisaged in the EU climate law. This would allow EU negotiators at COP27 to implement what they themselves are asking others to do: raise the Nationally Determined Contributions (NDC) deposited with the UN. The EU will certainly not officially announce an NDC increase in Sharm el-Sheikh. But it is likely to put this proposal on the table in negotiations with other countries.
The member states alone would be responsible for a higher climate target. The Commission and Parliament have no influence on this. There are three scenarios for how the EU can deal with the leeway gained from the LULUCF agreement for a higher NDC, a senior EU official told Table.Media.
Scenario 1: no NDC increase
The EU’s Climate Change Act and NDC call for greenhouse gas emissions to be reduced by “at least” 55 percent from 1990 levels by 2030. The word “at least” does not exclude a higher reduction.
A few EU states prefer this scenario. It leaves room for maneuver if the goals of the individual pieces of legislation in the Fit for 55 package are not achieved. However, this is unlikely to go down well internationally. Europe itself is insisting on NDC increases in climate negotiations with other countries. Therefore, this scenario is also considered unlikely.
Scenario 2: only the declaration of the NDC is adjusted
The climate target remains at “at least 55 percent,” but the attached statements to the EU NDC, i.e. the implementation guidance, describe a higher target.
This would be the compromise. However, the political clout of this step in international negotiations would be significantly less than a de facto NDC increase.
Scenario 3: the EU increases its NDC
Europe would thus fulfill a crucial part of the Glasgow Climate Pact and could buildpressure on other nations. The increase is controversial among member states, however, as it would entail even greater commitments.
However, the EU agreed in Glasgow that all countries should revise their NDCs. If Europe takes its role as a self-proclaimed pioneer seriously, it must raise its own target.
No ETS money for international matters
However, another agreement in the trilogue on reforming the EU Emissions Trading System (ETS) is likely to go down less well in Sharm el-Sheikh, if it makes the rounds at all. Barely noticed, the EU Commission, Parliament and Council have dropped an important demand of the Parliament on international climate financing under the table:
The parliamentarians wanted member states to reserve at least 10 percent of their revenues from the ETS for climate protection measures in third countries particularly affected by climate protection. The parliamentarians reduced this to 7.5 percent. Nevertheless, the proposal did not stand a chance in the Council. The trilogue on ETS reform found the woolly wording: “Member states shall take into account the need tofurther increase international climate finance in vulnerable third countries.”
A fixed climate financing quota for ETS revenues would have strengthened the EU position at the COP. Finally, the heated debate on the broken promise of $100 billion annually dominates the discussions. In addition to the compromise-averse member states, EU Climate Commissioner Frans Timmermans is held responsible for this weakened deal.
How well do the Europeans negotiate?
Both the EPP and the Greens criticize the Dutchman for not exerting sufficient pressure on the Council. Timmermans is doing too much at once and is not focused on the important things, said the ETS rapporteur and environmental spokesman of the EPP, Peter Liese.
In addition to European climate legislation, Timmermans is also responsible for international climate negotiations. Liese fears that the commissioner, who is known for taking everything into his own hands, could be overwhelmed with his tasks. With a view to COP27, he is therefore calling for an EU climate ambassador like China or the USA.
Michael Bloss (Greens) also recently expressed disappointment with the EU climate czar on several occasions. “If this climate conference fails, then you are also responsible for it,” Bloss said during a speech in the EU Parliament at the end of October.
Timmermans is, therefore, under enormous pressure this week. It is true that the Commission is not negotiating alone in Sharm el-Sheikh – in fact, the Council is theoretically primarily responsible. But the Czech Environment Minister, Marian Jurečka, has only been in office for two weeks and only temporarily. He is actually Minister of Labor, presumably, therefore, had little time to read up on the issues and will only be in Sharm el-Sheikh for one day. German Foreign Minister Annalena Baerbock could therefore take on a more formative role at the ministerial level. In any case, the Green politician is one of Europe’s most ambitious ministers when it comes to international climate protection.
The euphoria over the new agenda item “loss and damage” has long since faded. After a week of sometimes tough negotiations, disillusionment has now set in at COP27. The negotiating teams are glad that they are now getting a new dynamic with the arrival of the ministers.
Dispute in compensation for loss and damage
In the second week of COP, the following issues will dominate the debate:
Loss and damage financing
Climate finance after 2025
Global climate adaptation target and adaptation fund
Finalization of climate change mitigation work program
Global energy transition
Cover decision of COP27
New momentum is needed, especially on loss and damage financing, because the discussions have become slow. The global South continues to call for a compensation mechanism for loss and damage in the most vulnerable countries as quickly as possible. For the Europeans, however, it is now out of the question that this will be set up or decided in principle as early as Sharm el-Sheikh.
Particularly controversial is the question of whether such financial flows will be organized within existing instruments, such as the Green Climate Fund – or whether a separate structure (facility) will be set up. This is a political question that ministers must clarify, says Jacob Werksman, chief negotiator for the EU Commission. For the time being, Germany and the EU only want to push ahead with the further process of financing loss and damage, they say, in other words, to clarify details: When is there to be a decision, in what format will negotiations take place, how will loss and damage be recorded?
Agreement on loss and damage in the distant future
The person responsible for defining this process is Jennifer Morgan, Climate Commissioner and State Secretary at the German Foreign Office, but above all a mediator on loss and damage. Together with her co-mediator, Chilean Environment Minister Maisa Rojas, she will explore the margins between developed and developing countries this week. The negotiating texts on loss and damage funding are still full of brackets and controversial options. There’s a lot of nagging detail work waiting.
The most vulnerable countries continue to call for concrete action this year. “What vulnerable countries need is a clear outcome that includes the provision of finance through a separate facility. We cannot pretend that procedural outcomes offer hope,” says Eddie Perez of Climate Action Network (CAN).
The Europeans, on the other hand, are positioning themselves as obstacles on that path: Jan Dusík, head of the delegation of the Czech Republic and the EU Council Presidency, did not even rule out the possibility that there will still be no agreement at COP28 next year in an interview with Table.Media. He said that it would first be necessary to clarify what scope and function such an instrument would have to have. Only then could one talk about the form of a facility. “Form follows function.” Providing only a new structure like a facility does not necessarily implement the loss and damage finances effectively. But all of this is a top priority for the EU, Dusík said.
Making good weather: Germany introduces Global Shield
On the other hand, Europeans are sending signals that they are ready to help: The G7, together with the most vulnerable 20 nations (V20), will present the “Global Shield” at COP on Monday. The shield, designed under the German G7 presidency (Table.Media reported), is intended to take effect in the event of climate disasters to pay for damages. The German government is making €170 million available for this purpose. The presentation in Sharm el-Sheikh is intended to win over further supporting countries.
In addition to loss and damage financing issues, other financial topics will also accompany the negotiators until the end of COP27, estimates David Ryfisch, team leader for international climate policy at Germanwatch. The New Collective Quantified Goal on Climate Finance aims to find a successor to the $100 billion promised to developing countries from 2020. How much should it now be from 2025 onwards?
The developing countries already want concrete commitments on sums or, for example, percentage sub-targets for climate adaptation. The industrialized countries are putting on the brakes and would prefer to clarify only formal issues here as well, Ryfisch reports. One open question is: Must all funds be compatible with the 1.5-degree target? The EU has not been able to get the issue of how global financial flows must be redirected for the Paris Agreement under Article 2.1c on the agenda. Now it should at least feature prominently in the political cover decision, Europeans hope.
According to Ryfisch, however, the Latin American countries have already presented a compromise. Although there are to be no concrete commitments for climate financing after 2025 this year, there will be binding commitments next year. The ministers must now negotiate this at the political level.
China: recipient or donor country?
In addition, the industrialized nations would like to expand the circle of donor countries in climate financing. This would mean that not only the richest countries in Europe, North America and East Asia would participate in global climate financing, but also those that already cause a large share of greenhouse gas emissions. “However, they are hitting a snag with China,” says Ryfisch.
The discussion of whether China is a donor or recipient country for financial support comes up again and again at COP27. “Recognizing one’s own polluter role is the hardest part,” says Susanne Dröge, head of the Climate Protection and Energy Department at the Federal Environment Agency. Climate finance, she says, is therefore the most politically charged issue. China is investing money in the form of the “New Silk Road,” but it does not want to give up its status as a G77 country just yet, she says. “And China has a lot of stamina in that regard,” Dröge estimates.
This is also evident in the negotiations on reducing greenhouse gases to a 1.5-degree level (mitigation). The work program is one of the most important issues for the industrialized countries at COP27, because it is about whether the Paris target remains within reach. The industrialized countries want all major emitters to be obliged to reduce their emissions – including the “major emitters” such as China, India and Indonesia. The G77 is facing a strong headwind. This promises to be one of the sticking points of the second week.
Climate & Environment
Climate Policy
EU looks on: spyware scandal in Greece
The reporter Sophie in ‘t Veld (Renew) is disappointed by the clarification efforts so far. On Sunday she demanded: “All evidence must be secured and examined, in Greece, Cyprus and beyond. No stone must be left unturned.” For the liberal, there is no doubt that the use of spyware such as NSO’s Pegasus or Intellexa’s Predator in EU member states is politically motivated. The surveillance scandals are a pan-European problem, she said: “It directly affects the EU institutions. MEPs, Commissioners, Commission staff and ministers have been targets. And at the same time, perpetrators sit in the European Council,” says in ‘t Veld.
She doesn’t speak their names: Government leaders ViktorOrban, KyriakosMitsotakis and AndrzejDuda are suspected of having promoted, ordered or at least tolerated the use of spyware against critics. The European Parliament’s PEGA Special Committee has not yet been able to find a “smoking gun,” but it has been able to connect many individual dots, says in ‘t Veld.
National security, which is regularly used to justify spyware operations, is the responsibility of the member states – and so far the EU has shied away from interfering: For months, the Commission has been answering all questions from MEPs in the same way – with the General Data Protection Regulation and the E-Privacy Directive, there already are strong European rights, the enforcement of which is the responsibility of national authorities. The events in Greece show that both sets of laws have little effect.
Greece: Predator puts Mitsotakis in trouble
In Greece, Prime Minister Mitsotakis (EPP) is coming under increasing pressure. The New Democracy party leader has brought the National Intelligence Service (EYP) under his control at the start of his term in 2019: “The National Intelligence Service will be transferred to the Prime Minister with all its powers, positions and personnel,” the law states. But Mitsotakis claims to have known nothing about it.
Two cases presented themselves at the beginning of the scandal: Opposition politician and MEP Nikos Androulakis (S&D) and financial journalist Thanasis Koukakis became targets of surveillance measures. In both cases, telecommunication providers were ordered to monitor, authorized by a prosecutor. But traces of the Predator spyware were also found on the smartphones of the two victims. It is considered to be similarly aggressive to the better-known Pegasus spyware. As a result of the wiretapping scandal, intelligence chief Panagiotis Kontoleon had to resign at the beginning of August. And Grigoris Dimitriadis, the Prime Minister’s Secretary General, political strategist and Mitsotakis’ nephew, also resigns. He is said to have been in contact with Intellexa – the company that offers the Predator spyware to intelligence services – through several contacts and a complicated corporate network.
But the spyware scandal is spreading from week to week. The left-leaning weekly Documento News first reported that ministers of the current conservative government and prominent party colleagues of Mitsotakis, in some cases even their wives, were attacked with Predator. Documento lists 33 names, citing two informants who are said to have played key roles in the surveillance operations. Among these 33 are said to be ex-Prime Minister Antonis Samaras, acting Foreign Minister Nikos Dendias, and Development Minister Adonis Georgiadis.
The monitoring of Foreign Minister Dendias with Predator is seen as proven by the newspaper To Vima. And the newspaper Ta Nea reported that the 33 names were only the tip of the iceberg: According to the paper, 106 people are said to have been monitored. Documento also adds: Even Mitsotakis employees are said to be among those monitored.
Mitsotakis sees himself as a victim
Greece’s Prime Minister rejects the initial Documento allegations as “unbelievable lies” in an interview with the ANT1 television channel. There is not the “slightest evidence” for the accusations made. Mitsotakis accuses his predecessor and Syriza party leader Alexis Tsipras of being behind the reports and rejects any responsibility: He does not know who carried out the surveillance. Indirectly, however, he admits that the use of Predator did occur: “I never claimed – and neither did the government – that there was no surveillance or that an institution operating the Predator software did not exist.” But in any case, he said, it was not the intelligence agency EYP that was using Predator. And “of course there was no involvement on my part,” he states.
As a consequence, Mitsotakis announced that he will ban the sale of all spyware. Greece will be “the first country to untangle this tangle and vote for a regulation that explicitly bans the sale of such software in our country.” All countries have such problems, Mitsotakis says. Products such as Predator and Pegasus, however, are not sold freely: Vendors provide their software directly and exclusively to intelligence and law enforcement agencies.
No danger from Europe
The Greek opposition, such as the Syriza party, is calling for the Prime Minister’s resignation and early elections. The regular election date would be in summer of 2023. Mitsotakis wants to stick to this, but the pressure is growing.
At the moment, there is no involvement from Europe, as the EU only says that NIS2 and the Cyber Resilience Act will strengthen the security of end devices. And the Media Freedom Act is intended to introduce minimum standards into European law, at least with regard to the monitoring of journalists. Brussels is not resorting to measures like infringement proceedings because of the spyware operations, even if there is much evidence that fundamental principles of the rule of law are being disregarded. For the foreseeable future, the Predator-Pegasus phalanx in the Council must fear the national public more than Brussels. Panajotis Gavrilis, Contributor: Falk Steiner
Cybersecurity
Digital policy
Digitalpolitik
Digitization
Greece
Pegasus
Sophie in 't Veld
News
Scholz seeks closer economic relations with Vietnam
During his visit to Vietnam, German Chancellor Olaf Scholz (SPD) announced his intention to seek closer economic relations with the Asian country. In addition, the transition towards climate neutrality is to be supported, for example through the expansion of metro connections in the metropolis of Hanoi, the SPD politician said on Sunday in the capital of Vietnam. Stronger cooperation in the field of energy was also discussed with Prime Minister Pham Minh Chinh, he said.
Vietnam is playing a role for more and more German industrial groups, because the dependence on China is to be reduced and supply chains are to be placed on a broader foundation. From Vietnam, Scholz will travel on to Singapore. On Tuesday and Wednesday, the chancellor will then attend the G20 summit of leading industrialized and emerging countries on the Indonesian island of Bali.
Habeck signs agreement with Singapore
Vice Chancellor Robert Habeck (Greens) preceded the German chancellor to Singapore, where he signed a joint framework on Sunday on the sidelines of the ongoing 17th Asia-Pacific Conference (APC) of German Business.
The interministerial agreement with the Singaporean Minister of Trade and Industry is called the “Germany-Singapore Framework for Sustainability and Innovation.” It lays the foundations for a regular structured exchange between the two ministries on all foreign economic policy issues and for sector-specific discussion formats for and with companies, the German Federal Ministry for Economic Affairs and Technology announced. The aim is to deepen and consolidate economic relations between the two countries. Singapore is an innovation center, investment location and gateway to other markets in the region, especially for the German economy, Habeck said. vis/rtr
Climate protection
Germany
Supply chains
Vietnam
Pirc Musar becomes president of Slovenia
Lawyer Nataša Pirc Musar won the second round of Slovenia’s presidential election on Sunday, becoming the country’s first female head of state. This was the preliminary result on Sunday evening.
According to the results, 54-year-old Pirc Musar received 53.83 percent of the votes in the runoff, while her rival, right-wing politician and former foreign minister Anže Logar, garnered 46.17 percent. This was shown by the Election Commission’s data, which was based on 86.7 percent of the votes counted. Voter turnout was49.9 percent, according to the data.
The new President of Slovenia will replace Borut Pahor, who has been in politics for 30 years. The former model, who served two five-year terms, is often referred to by the public as the Instagram President because of his frequent use of the social network.
Pirc Musar, a former television host turned influential lawyer, championed human rights, the rule of law and social issues. Her 46-year-old rival, Logar, is a member of the right-wing Slovenian Democratic Party (SDS) of former Prime Minister Janez Janša, who lost the April parliamentary elections to Prime Minister Robert Golob’s pro-environment Freedom Movement. rtr
Democracy
European policy
Slovenia
Commission expects hardly any growth in 2023
Due to the energy crisis resulting from the war in Ukraine, the EU Commission is forecasting hardly any economic growth in the coming year – but significantly more inflation than recently. Gross Domestic Product (GDP) in the euro zone is expected to grow by only 0.3 percent in 2023, the Commission announced in its fall economic forecast. In the summer, the EU had still estimated 1.4 percent.
“The economy in Europe is at a turning point,” said EU Economic Affairs Commissioner Paolo Gentiloni. That’s because for the final quarter of 2022, he said, the Commission expects the euro zone and most of its members to slip into recession. GDP is still expected to shrink at the beginning of 2023. The reasons are great uncertainty, high energy prices, loss of purchasing power among private households, the weaker global environment and stricter financing conditions.
EU expects higher inflation
However, due to surprisingly good growth in the first half of 2022, the economy is likely to expand by 3.2 percent over the year as a whole, which is stronger than the 2.6 percent growth forecast in the summer. The inflation rate, meanwhile, is likely to rise even more sharply than already assumed. The Commission now expects 8.5 percent for 2022.
“We believe that the peak of inflation is close,” Gentiloni said. This is likely to happen by the end of this year, he said. In October, inflation in the European Monetary Union had climbed to a record 10.7 percent. That is more than five times the European Central Bank’s (ECB) inflation target of two percent. For 2023, the Commission expects inflation to reach 6.1 percent, easing significantly to 2.6 percent in 2024.
Weak growth in Germany
Germany is lagging behind in terms of economic activity. According to the Commission’s estimates, the German economy is likely to shrink by 0.6 percent in 2023, more than any other country in the EU. Only Latvia will also see its economy shrink next year, but only by 0.3 percent. The EU once again expects Ireland to achieve the highest GDP growth, with an upward trend of 3.2 percent.
The Commission’s forecast for Germany is thus more skeptical than that of the German government and the economic experts, who expect a decline of 0.4 percent and 0.2 percent respectively. Previously, the Commission had forecast growth of 1.3 percent for 2023. In 2024, the German economy is then expected to grow by 1.4 percent. For the current year, GDP is expected to grow by 1.6 percent, slightly more than in the summer.
Despite the strong headwinds for the European economy, Gentiloni fears few negative consequences for the labor market. “The job market is still very strong.” The situation is more robust than it has been in decades, he said, and is unlikely to change. The unemployment rate in the euro zone will rise from 6.8 percent this year to 7.2 percent next year, but then fall back to 7.0 percent in 2024, he stated. rtr
Economy
European policy
Finance
Financial policy
EU mobilizes €1 billion for Solidarity Lanes
The European Commission will fast-track €250 million in financial assistance for the development of Solidarity Lanes for Ukraine. “For the short-term, we will support quick improvements, in particular with mobile equipment, to reduce waiting times and improve movement through the border crossing points and their access routes,” the Commission said in a joint statement with EU countries neighboring Ukraine, as well as the European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD) and the World Bank Group. In total, the signatories are mobilizing €1 billion for the Solidarity Lanes “to improve global food security and provide a lifeline to the Ukrainian economy.”
The Solidarity Lanes were established by the Commission and EU member states bordering Ukraine on May 12, 2022, as part of the Union’s response to Russia’s attack on Ukraine. They are crucial for exports of Ukrainian agricultural products, as well as exports and imports of other goods. “For the medium-term, we are mobilizing the Connecting Europe Facility (CEF) and €50 million to support the infrastructure developments needed to increase further the capacity of the Solidarity Lanes,” the statement added.
In addition, there are the following funds:
The EIB plans to invest up to €300 million in projects aligned with the Solidarity Lanes objectives by the end of 2023.
The EBRD plans to invest €300 million in Solidarity Lanes between 2022 and 2023.
The World Bank Group is preparing an emergency project for the repair of rail and road infrastructure damaged by the war, worth up to $100 million. vis
European policy
Finance
Financial policy
Geopolitics
Weak methane declaration – UN puts pressure with database
The US, EU, Canada, Japan and other countries want to “take immediate action” to reduce greenhouse gas emissions from fossil fuel production. This is according to a joint statement released by the countries on Friday. The statement targets “methane emissions in particular.” The states reaffirm the Global Methane Pledge agreed in Glasgow, which calls for cutting methane emissions by 30 percent by 2030.
The joint statement by the states remained rather vague. However, individual states announced the following measures:
On Friday, US President Biden presented an update on the methane emissions reduction action plan of the United States. The plan includes more than 20 billion dollars in new investments to reduce methane emissions, the White House announced.
The US Environmental Protection Agency (EPA) yesterday expanded a plan to limit methane emissions from oil and gas drilling after environmentalists criticized it as insufficient. However, the plan is not expected to be finalized until next year, Bloomberg reports.
Canada aims to reduce methane emissions by 75 percent by 2030 compared to 2012 levels, according to a government proposal. It would mark the “most comprehensive and most effective set of methane standards anywhere in the world,” Jonathan Banks of the nonprofit Clean Air Task Force told Bloomberg.
Criticism of EU methane regulation
European civil society criticized the joint declaration by states as nothing new. The methane declaration was criticized as “a toothless instrument,” by CAN Europe, Food and Water Action Europe and Deutsche Umwelthilfe:
the declaration is not legally binding,
the EU will not go beyond its plans in the EU Methane Regulation, which is currently negotiated in Parliament and the Council.
The EU methane regulation does not cover methane emissions from imported fossil fuels. But according to the three organizations, 75 to 90 percent of European methane emissions originate along the supply chain, i.e. during the extraction and transport of raw materials.
UN plans to hold companies and governments accountable
Meanwhile, the UNEP announced a public database of global methane leaks at COP27. The so-called Methane Alert and Response System (MARS) will use an existing network of space satellites to track methane plumes around the globe. This will help identify the size of the methane leaks and the company or government responsible, UNEP said. The data will be shared with those responsible to ensure the leak is repaired as quickly as possible.
After 45 to 75 days, the information will be made public – as well as responses from governments or companies to UN notices about methane leaks. This could create public pressure on those responsible to act more quickly. The system will initially be limited to the oil and gas sector, but will gradually be expanded to include the coal, waste and agricultural sectors.
Methane has a much stronger warming effect than carbon dioxide during its short lifetime and is responsible for about a quarter of the global temperature rise so far, scientists say. nib/rtr
Climate & Environment
Climate Policy
Methane
Germany withdraws from the Energy Charter
The coalition delayed its decision for a long time. Since Friday, it has become clear: Germany will withdraw from the Energy Charter Treaty (ECT). The agreement, which dates back to the 1990s, allows investors to sue states in private arbitration courts if their plants and investments are at risk, for example, because of stricter climate laws. The Swedish company Vattenfall, for example, sued Germany for billions in damages because of the accelerated nuclear phase-out.
On Nov. 22, the ECT states will vote on the reform of the charter in Mongolia. But many EU states see this reform as a failure: Spain, the Netherlands, Poland, Slovenia and most recently France have already announcedtheir withdrawal from the mixed treaty. Italy already left in 2015. According to the Munich Environment Institute, the reformed ECT would also violate current European law.
The coalition sees the exit as a concrete further development of Germany’s trade agenda: “By withdrawing from the Energy Charter, we are opening a new chapter to ensure that trade agreements cannot be used to shackle progress and public welfare-oriented policies,” says SPD deputy parliamentary party leader Verena Hubertz.
“It’s an important signal to the Commission: Now the EU must also prepare for withdrawal!” demands Green MEP Anna Cavazzini on Twitter. How the EU will position itself on the controversial text is not yet clear. On Wednesday, the Energy Charter is on the agenda of the Permanent Representatives Committee. Next Friday, a formal vote will take place in the General Affairs Council (GAC). Although Germany wants to withdraw from the treaty, Berlin is expected to abstain in the Council and not veto it. France, for its part, even plans to vote in favor of the reform, although it wants to withdraw from the Energy Charter. Charlotte Wirth
Energy
Energy Charter
Energy policy
Germany
Heads
Werner Stengg – co-creator of the digital agenda
Werner Stengg, Member of the Cabinet of Commissioner and Executive Vice President Margrethe Vestager.
You can familiarize yourself with any subject by reading. Werner Stengg is convinced of that – and has proven it. “Some people laughed and asked why someone from a landlocked country like Austria was suddenly dealing with maritime transport,” Stengg recalls of his first job at the Council in Brussels. On his missions to London, he says, all the officials were former captains. “As a Styrian and a skier, I sat in the middle of sea dogs.”
Stengg has not become a sea dog. In the course of his 27-year career in Brussels, he has read up on many subjects and acquired expertise. Reinventing himself each time has motivated him. His traineeship, as he calls his two-year entry-level job at the Council’s General Secretariat in the maritime field, prepared him well, he says. “I understood how the Brussels system works.” However, he admits, it took him longer than two years.
DSA and DMA bear Stengg’s signature
After his start in the Council, Stengg moved to the Commission, working in the Directorates-General for Enterprise, Budget, Internal Market and Connect, before joining the cabinet of Commission Vice President Margrethe Vestager. There he coordinates digital policy, deals with artificial intelligence, data economy, platform economy, and disinformation. In platform regulation – with the Digital Services Act (DSA) and the Digital Markets Act (DMA) – you can recognize his signature, he says. “I’ve been working on this in various capacities for eleven years now, and I’ve really done all the groundwork.”
Stengg came to Brussels in 1995, when his home country Austria joined the European Union. The timing was just right. He had just finished his dissertation on exchange rate systems in Vienna and was faced with the question of whether to stay in academia or venture into something new. “At the time, I thought it would be something for two years,” he says. That phase has turned into half a lifetime.
The different cultures inspire him
His fellow students would have gone on to careers in finance or marketing. But he said he had less of a need to increase market share than to enjoy solving problems and setting global standards. He has negotiated international textile agreements and tackled postal services, online gambling and e-commerce. “I feel like I’m working on a meaningful project.”
And in every station he learned something that he could use again later. Being inspired day after day by colleagues from all over Europe, getting to know different life stories, points of view, histories and cultures – his whole environment is very much appreciated by Stengg. “Not to mention the work, which is also exciting, of course.” In the process, he has gotten to know many nationalities and found that there is also a bit of truth in the stereotypes. One thing is not true, however: Germans are not as arrogant as he thought back in Vienna. That’s why he doesn’t get angry when someone mistakes him for a German.
‘I know that there are always at least three truths’
One of the things he admires about his boss, Margrethe Vestager, is her stamina and energy. “I would be dead after these three years if I had done her job.” But also her clear values, and that she can communicate complicated issues in a way that the audience in question, from schoolchildren to scientists, understands. “That’s a gift.”
Stengg knows how important communication is. After all, it’s an important part of his job: He has to explain the Commission’s legislative plans – to stakeholders, the Parliament, the Council and colleagues in the Commission. “I have to be persuasive.” He has not always succeeded, he admits. The reform of the Postal Services Directive he proposed still does not exist, for example.
He has also learned to take different perspectives. There is no such thing as the one right suggestion, he says. “I know there are always at least three truths,” Stengg muses. He sees his job as finding the right balance. In addition, he notes, it is important that the commission’s work is transparent and comprehensible. This is something else he has worked hard for in the course of his EU career.
Writing a book on digital transformation
He is jointly responsible for the introduction of the impact assessment – and has pushed it through as a kind of internal management consultant, even against resistance. Before the structured impact assessment was introduced, no one knew on what basis the Commission arrived at its assessments, whom it had consulted and whom it had not. The impact assessment has ensured transparency, says Stengg.
His passion for his work has not diminished over the years. Currently, the 54-year-old gets up at half past five in the morning to write: He is writing a book about digital transformation. In it, he is processing his experiences and observations of the past ten years. “It really drives me because it’s fun to keep finding new connections.”
It is not his first book. Stengg has already written two children’s books, reading material for 11- to 14-year-olds. “Kind of like Harry Potter, only without the commercial success,” he quips. In fact, he enjoys spending time with his four children, ages 9 to 22. The two oldest are already out of the house and studying in Vienna. That’s where he also started his professional career. Corinna Visser
